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Item 2. Management’s Discussion and Analysis

2025-02-12 compared with 2024-08-06 · 381 added, 442 removed, 682 unchanged (55% of the section changed)

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without limitation, statements regarding:

volatility in our stock

price and in the markets in general;

our ability to successfully

conduct preclinical studies and clinical trials for our product candidates;

our ability to raise additional

capital on favorable terms and the impact of such activities on our stockholders and stock price;

our ability to generate

any revenue or to continue as a going concern;

our ability to execute

our research and development plan on time and on budget;

our products candidates’

ability to demonstrate efficacy or an acceptable safety profile;

our ability to obtain the

support of qualified scientific collaborators;

our ability, whether alone

or with commercial partners, to successfully commercialize any of our product candidates that may be approved for sale;

our ability to identify

and obtain additional product candidates;

our reliance on third parties

in non-clinical studies and clinical trials;

our ability to defend against

product liability claims;

our ability to safeguard

against security breaches;

our ability to obtain and

maintain sufficient intellectual property protection for our product candidates;

our ability to comply with

our intellectual property licensing agreements;

our ability to defend against

claims of intellectual property infringement;

our ability to comply with

the maintenance requirements of the government patent agencies;

our ability to protect

our intellectual property rights throughout the world;

the anticipated start dates,

durations and completion dates of our ongoing and future clinical trials;

the anticipated designs

of our future clinical trials;

our ability to attract

and retain qualified employees;

the impact of Fast Track

designation on receipt of actual FDA approval;

our anticipated future

regulatory submissions and our ability to receive regulatory approvals to develop and market our product candidates, including any

orphan drug or Fast Track designations;

our anticipated future

cash position and ability to obtain funding for our operations.

volatility in our stock price and in the markets in general;

our ability to successfully conduct preclinical studies and clinical trials for our product candidates;

our ability to raise additional capital on favorable terms and the impact of such activities on our stockholders and stock price;

our ability to generate any revenue or to continue as a going concern;

our ability to execute our research and development plan on time and on budget;

our product candidates’ ability to demonstrate efficacy or an acceptable safety profile;

our ability to obtain the support of qualified scientific collaborators;

our ability, whether alone or with commercial partners, to successfully commercialize any of our product candidates that may be approved for sale;

our ability to identify and obtain additional product candidates;

our reliance on third parties in non-clinical studies and clinical trials;

our ability to defend against product liability claims;

our ability to safeguard against security breaches;

our ability to obtain and maintain sufficient intellectual property protection for our product candidates;

our ability to comply with our intellectual property licensing agreements;

our ability to defend against claims of intellectual property infringement;

our ability to comply with the maintenance requirements of the government patent agencies;

our ability to protect our intellectual property rights throughout the world;

the anticipated start dates, durations and completion dates of our ongoing and future clinical trials;

the anticipated designs of our future clinical trials;

our ability to attract and retain qualified employees;

the impact of Fast Track designation on receipt of actual U.S.

Food and Drug Administration (“FDA”) approval;

our anticipated future regulatory submissions and our ability to receive regulatory approvals to develop and market our product candidates, including any orphan drug or Fast Track designations;

our anticipated future cash position and ability to obtain funding for our operations.

We have based these forward-looking statements largely

on our current expectations and projections about future events, including the responses we expect from regulatory authorities and financial

trends that we believe may affect our financial condition, results of operations, business strategy, preclinical studies and clinical

trials, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions including

without limitation the risks described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the

Securities and Exchange Commission on November 27, 2023.

on our current expectations and projections about future events, including the responses we expect from the FDA and other regulatory authorities

and financial trends that we believe may affect our financial condition, results of operations, business strategy, preclinical studies

and clinical trials, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions

including without limitation the risks described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed

with the Securities and Exchange Commission on December 23, 2024.

These risks are not exhaustive.

Other sections of this Quarterly Report on Form

10-Q include additional factors which could adversely impact our business and financial performance.

Moreover, we operate in a very competitive

and rapidly changing environment.

New risk factors emerge from time to time, and it is not possible for our management to predict all

risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors,

may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking

statements as predictions of future events.

We cannot assure you that the events and circumstances reflected in the forward-looking statements

will be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

required by applicable laws including the securities laws of the United States, we assume no obligation to update or supplement forward-looking

Other sections of this Quarterly Report

on Form 10-Q include additional factors which could adversely impact our business and financial performance.

Moreover, we operate in a

very competitive and rapidly changing environment.

New risk factors emerge from time to time, and it is not possible for our management

to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination

of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely

upon forward-looking statements as predictions of future events.

We cannot assure you that the events and circumstances reflected in the

forward-looking statements will be achieved or occur and actual results could differ materially from those projected in the forward-looking

Except as required by applicable laws including the securities laws of the United States, we assume no obligation to update

or supplement forward-looking statements.

As used in this Quarterly Report on Form 10-Q, the

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Corp., unless the context clearly indicates otherwise.

Our Current Business

Overview and Strategy

Anavex Life Sciences Corp.

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clinical trials.

Our lead product candidate, ANAVEX ® 2-73

(blarcamesine), is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous

system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in

the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).

The Company’s focus is on developing innovative

treatments for Alzheimer’s disease, Parkinson’s disease, schizophrenia, neurodevelopmental, neurodegenerative, and rare diseases,

including Rett syndrome, and other central nervous system (CNS) disorders.

We currently have two core programs and two seed programs.

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in the brain.

Reyes S et al.,

Reyes S et al., Sci Rep.

Cellular Homeostasis

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We may in the future utilize

such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia or Rett syndrome in which

ANAVEX ® 2-73 (blarcamesine) is currently being studied.

such an approach in Alzheimer’s disease as well as indications like Parkinson’s disease dementia in which ANAVEX ® 2-73

(blarcamesine) is currently being studied.

Clinical Trials Overview

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of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme.

A larger Phase 2b/3 double-blind, placebo-controlled trial of ANAVEX ® 2-73

in Alzheimer’s disease commenced in August 2018.

The Phase 2b/3 trial enrolled 509 patients, which were treated with a convenient

once-daily oral formulation of ANAVEX ® 2-73 for 48 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73

doses or placebo.

A larger Phase 2b/3 double-blind, placebo-controlled

trial of ANAVEX ® 2-73 in early Alzheimer’s disease commenced in August 2018.

The Phase 2b/3 trial enrolled 508 patients,

which were treated with a convenient once-daily oral formulation of ANAVEX ® 2-73 for 48 weeks, randomized 1:1:1 to two different

ANAVEX ® 2-73 doses or placebo.

The trial took place at 52 sites across North America, Europe and Australia.

Primary and secondary endpoints to assess

safety and both cognitive and functional efficacy, were measured through the Alzheimer’s Disease Assessment Scale – Cognitive

Subscale test (“ADAS-Cog”), Alzheimer’s Disease Cooperative Study – Activities of Daily Living (“ADCS-ADL”)

and Clinical Dementia Rating – Sum of Boxes for cognition and function (“CDR-SB”).

In addition to these endpoints, the

ANAVEX ® 2-73 Phase 2b/3 trial design incorporated pre-specified statistical analyses related to potential genomic precision

medicine biomarkers previously identified in the ANAVEX ® 2-73 Phase 2a clinical trial.

The trial was completed in mid-2022

and, in December 2022, the Company presented topline results from the Phase 2b/3 clinical trial.

All statistical analysis were performed

by outside consultancy companies.

Furthermore, all pre-specified

clinical endpoints were analyzed using a mixed model for repeated measures (MMRM).

Under the multiplicity control rule, a trial is successful

in meeting the co-primary endpoints if the significance of each endpoint is P < 0.05, or if the significance of only one co-primary

endpoint is P < 0.025.

If only one primary endpoint is significant at an α level of 0.025, then the secondary endpoint will be

evaluated at the same level of 0.025.

The trial was successful, since the differences in the least-squares mean (LSM) change from baseline

to 48 weeks between the ANAVEX ® 2-73 and placebo groups for ADAS-Cog13 was significant at a level of P < 0.025 and for

CDR-SB was significant at a level of P < 0.025, in the patients with early Alzheimer’s disease.

comparison of individual dose groups vs placebo also supports blarcamesine’s efficacy.

For the primary endpoint ADAS-Cog13, blarcamesine

is significantly better than placebo for both the 50 mg (−2.149;

secondary endpoints to assess safety and both cognitive and functional efficacy, were measured through the Alzheimer’s Disease Assessment

Scale – Cognitive Subscale test (“ADAS-Cog”), Alzheimer’s Disease Cooperative Study – Activities of Daily

Living (“ADCS-ADL”) and Clinical Dementia Rating – Sum of Boxes for cognition and function (“CDR-SB”).

addition to these endpoints, the ANAVEX ® 2-73 Phase 2b/3 trial design incorporated pre-specified statistical analyses related

to potential genomic precision medicine biomarkers previously identified in the ANAVEX ® 2-73 Phase 2a clinical trial.

trial was completed in mid-2022 and, in December 2022, the Company presented topline results from the Phase 2b/3 clinical trial.

All statistical

analyses were performed by outside consultancy companies.

Furthermore, all pre-specified clinical endpoints

were analyzed using a mixed model for repeated measures (MMRM).

Under the multiplicity control rule, a trial is successful in meeting

the co-primary endpoints if the significance of each endpoint is P < 0.05, or if the significance of only one co-primary endpoint is

If only one primary endpoint is significant at an α level of 0.025, then the secondary endpoint will be evaluated

at the same level of 0.025.

The trial was successful, the differences in the least-squares mean (LSM) change from baseline to 48 weeks

between the ANAVEX ® 2-73 and placebo groups for ADAS-Cog13 was significant at a level of P < 0.025 and for CDR-SB was

significant at a level of P < 0.025, in the patients with early Alzheimer’s disease.

The comparison of individual dose groups vs placebo

also supports blarcamesine’s efficacy.

For the primary endpoint ADAS-Cog13, blarcamesine is significantly better than placebo (−2.027;

P = 0.0079) as well as for both the 50 mg (−2.149;

P = 0.021) and the 30 mg (−1.934;

P = 0.026) blarcamesine

dosage groups at Week 48, representing that blarcamesine slowed clinical progression at 48 weeks by 38.5% and 34.6% in 50 mg and 30 mg

P = 0.026) blarcamesine dosage groups

at Week 48, representing that blarcamesine slowed clinical progression at 48 weeks by 36.3% and by 38.5% and 34.6% in 50 mg and 30 mg

placebo, respectively.

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The key secondary endpoint CDR-SB was significantly improved vs.

placebo in both 50 mg (−0.465;

and 30 mg (−0.502;

placebo (−0.483, P = 0.0104) as well as

in both 50 mg (−0.465;

P = 0.045) and 30 mg (−0.502;

P = 0.020) groups at Week 48.

Clinical Global Impression – Improvement

(“CGI-I”) was also significantly improved vs.

placebo in both the 50 mg (−0.314;

placebo (−0.278, P = 0.004) as well as in both the 50 mg (−0.314;

P = 0.008) and the 30 mg (−0.248;

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Blarcamesine significantly slowed brain atrophy in key regions of interest, including the whole brain

by 37.6%, total grey matter by 63.5%, and lateral ventricles

by 37.6%, total grey matter by 63.5%, and lateral ventricles by 25.1%.

In the respective safety population, common treatment-emergent

adverse events included dizziness, which was transient and mostly mild to moderate in severity, and occurred in 120 participants (35.8%)

during titration and in 76 participants (25.2%) during maintenance with ANAVEX®2-73 and 10 (6.0%) during titration and 9 (5.6%) during

maintenance with placebo.

A subsequent long-term open label extension study

of ANAVEX ® 2-73, referred to as the ATTENTION-AD trial, was initiated for patients who completed the 48-week Phase 2b/3

placebo-controlled trial referenced above.

during titration and in 76 participants (25.2%) during maintenance with ANAVEX ® 2-73 and 10 (6.0%) during titration and

9 (5.6%) during maintenance with placebo.

In November 2024, we announced the submission of a

Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA) for ANAVEX ® 2-73 for the treatment of Alzheimer’s

disease and, in December 2024, the EMA accepted the submission for scientific review.

The MAA, if approved, would allow direct market

access throughout the European Union for oral ANAVEX ® 2-73 (blarcamesine) for the treatment of Alzheimer’s disease.

A long-term open label extension study of ANAVEX ® 2-73,

referred to as the ATTENTION-AD trial, was initiated for patients who completed the 48-week Phase 2b/3 placebo-controlled trial referenced

This trial extension for a duration of up to 96/144 additional weeks was completed in June 2024.

The trial will provide additional longer-term safety and efficacy data of ANAVEX ® 2-73 in persons with Alzheimer’s

The trial extension demonstrated

that blarcamesine-treated patients continued to accrue benefit through up to 4 years, as measured by the clinical endpoints

ADAS-Cog13 and ADCS-ADL.

Delayed-start analysis of treatment with oral blarcamesine was significant, reflecting the importance of

early treatment initiation.

No new safety findings were observed with continued blarcamesine treatment over three years, confirming

good comparative safety profile and no associated neuroimaging adverse events.

Rett Syndrome

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which commenced during fiscal 2018.

In March 2019, we commenced the first Phase 2 clinical

trial in a planned Rett syndrome program of ANAVEX ® 2-73 for the treatment of Rett syndrome.

The clinical trials are being

conducted in a range of patient age demographics and geographic regions, utilizing an oral liquid once-daily formulation of ANAVEX ® 2-73.

In March 2019, we commenced the first Phase 2 clinical trial in a Rett syndrome

program of ANAVEX ® 2-73 for the treatment of Rett syndrome.

The clinical trials were conducted in a range of patient age

demographics and geographic regions, utilizing an oral liquid once-daily formulation of ANAVEX ® 2-73.

The first Phase 2 trial, (ANAVEX ® 2-73-RS-001),

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ANAVEX ® 2-73 treatment resulted in a sustained

improvement in Clinical Global Impression Improvement (CGI-I) response throughout the 7-week clinical trial, when compared to placebo

in the ITT cohort (all participants, p = 0.014).

Consistent with previous ANAVEX ® 2-73 clinical trials, patients carrying

the common form of the SIGMAR1 gene treated with ANAVEX ® 2-73 experienced stronger improvements in the prespecified efficacy

improvement in CGI-I response throughout the 7-week clinical trial, when compared to placebo in the ITT cohort (all participants, p =

Consistent with previous ANAVEX ® 2-73 clinical trials, patients carrying the common form of the SIGMAR1 gene treated

with ANAVEX ® 2-73 experienced stronger improvements in the prespecified efficacy endpoints.

No other clinical trials with

ANAVEX ® 2-73 related to Rett syndrome have been conducted in the United States.

second, international trial of ANAVEX ® 2-73 for the treatment of Rett syndrome, called the AVATAR trial, commenced in June

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All patients who participated in the trial were eligible

to receive ANAVEX ® 2-73 under a voluntary open label extension protocol.

to receive ANAVEX ® 2-73 under a voluntary open label extension protocol, which was completed in June 2024.

A high enrollment rate in the Open Label Extension

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The OLE trial assessed safety, tolerability and efficacy, measuring among others, MDS-Unified Parkinson’s Disease Rating Scale Parts

I, II, III, REM Sleep Behavior Disorder Screening Questionnaire (RBDSQ), Clinical Global Impression – Improvement (CGI-I), as well

as cognitive efficacy endpoint Montreal Cognitive Assessment (MoCA) over a 48-week period.

I, II, III, REM Sleep Behavior Disorder Screening Questionnaire (RBDSQ), CGI-I, as well as cognitive efficacy endpoint Montreal Cognitive

Assessment (MoCA) over a 48-week period.

In March 2023, we reported the preliminary ANAVEX2-73-PDD-EP-001

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The two endpoints, MDS-UPDRS Part II + III and CGI-I measured in this

study are the planned primary and key secondary endpoints in our forthcoming pivotal 6-month Parkinson’s disease study.

study are the planned primary and key secondary endpoints in our forthcoming >6-month Parkinson’s disease study.

In January 2021, we were awarded a research grant

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In October 2023

a peer-reviewed publication in the journal Neurobiology of Aging, titled “Early treatment with an M1 and sigma-1 receptor agonist

prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology”, featured the orally available

small molecule ANAVEX ® 3-71 (AF710B).

The preclinical study described the potential disease-modifying properties of ANAVEX ® 3-71

on Alzheimer’s disease pathology as a possible drug candidate for a potential once daily oral preventive strategy for Alzheimer’s

a peer-reviewed publication in the journal Neurobiology of Aging , titled ‘ Early treatment with an M1 and sigma-1 receptor

agonist prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology ’, featured the orally

available small molecule ANAVEX ® 3-71 (AF710B).

The preclinical study described the potential disease-modifying properties

of ANAVEX ® 3-71 on Alzheimer’s disease pathology as a possible drug candidate for a potential once daily oral preventive

strategy for Alzheimer’s disease.

In January 2024,

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we commenced the U.S.

FDA cleared ANAVEX ® 3-71-SZ-001 clinical trial, a double-blind, placebo-controlled Phase 2 trial in

FDA-cleared ANAVEX ® 3-71-SZ-001 clinical trial:

a double-blind, placebo-controlled Phase 2 trial in

schizophrenia.

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novel, dual mechanism of action.

results from Part A of the ANAVEX ® 3-71-SZ-001 clinical trial, consisting of a multiple ascending dose study in 16 participants,

demonstrated a dose-dependent effect of ANAVEX ® 3-71 on two key EEG biomarkers in patients with schizophrenia.

were most pronounced in the higher dose group indicating a dose-dependent pharmacodynamic effect.

The observed changes reversed known

electroencephalography (EEG) and ERP biomarker abnormalities associated with schizophrenia.

These EEG biomarkers correlate with positive,

negative, and cognitive symptoms of schizophrenia.

The currently

ongoing Part B of the placebo-controlled Phase 2 study, which includes more participants and a longer treatment duration, will provide

more comprehensive data on the efficacy and safety of ANAVEX ® 3-71 in schizophrenia.

Our research and development pipeline includes ANAVEX ® 2-73

currently in three different clinical trial indications, and several other compounds in different stages of clinical and pre-clinical

currently in three different clinical trial indications, and ANAVEX ® 3-71 currently in one clinical trial and several other

compounds in different stages of clinical and pre-clinical development.

Our proprietary SIGMACEPTOR™ Discovery Platform

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We anticipate conducting further clinical trials of ANAVEX ® 2-73

in Parkinson’s disease dementia after submitting the results of the trial to the FDA to obtain regulatory guidance.

in Parkinson’s disease dementia after submitting the results of the trial to regulatory authorities to obtain regulatory guidance.

In Alzheimer’s disease animal models, ANAVEX ® 2-73

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beyond Alzheimer’s disease, Parkinson’s disease or Rett syndrome, more specifically, epilepsy, infantile spasms, Fragile X

syndrome, Angelman syndrome, multiple sclerosis, and, more recently, tuberous sclerosis complex (TSC).

ANAVEX ® 2-73 demonstrated

significant improvements in all of these indications in the respective preclinical animal models.

syndrome, Angelman syndrome, multiple sclerosis, and tuberous sclerosis complex (TSC).

ANAVEX ® 2-73 demonstrated significant

improvements in all of these indications in the respective preclinical animal models.

In a preclinical study sponsored by the Foundation

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ANAVEX ® 3-71

ANAVEX ® 3-71 is a clinical drug candidate

with a novel mechanism of action via SIGMAR1 activation and M1 muscarinic allosteric modulation, which has been shown to enhance neuroprotection

and cognition in Alzheimer’s disease models.

ANAVEX ® 3-71 is a CNS-penetrable potential disease modifying treatment

for cognitive impairments.

We believe it is effective in very small doses against the major Alzheimer’s hallmarks in transgenic

ANAVEX ® 3-71 is an orally available

clinical drug candidate with a novel mechanism of action via SIGMAR1 activation and M1 muscarinic allosteric modulation, which has been

shown to enhance neuroprotection and cognition in Alzheimer’s disease models.

ANAVEX ® 3-71 is a CNS-penetrable potential

disease modifying treatment for cognitive impairments.

We believe it is effective against the major Alzheimer’s hallmarks in transgenic

(3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, and also has beneficial effects on inflammation and mitochondrial

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of prostate and pancreatic cancer.

It is a low molecular weight, synthetic compound exhibiting high affinity for SIGMAR1 at nanomolar

levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels.

In advanced pre-clinical studies, this compound

revealed antitumor potential.

It has also been shown to selectively kill human cancer cells without affecting normal/healthy cells and

also to significantly suppress tumor growth in immune-deficient mice models.

Scientific publications highlight the possibility that these

ligands may stop tumor growth and induce selective cell death in various tumor cell lines.

Sigma receptors are highly expressed in different

tumor cell types.

It is a low molecular weight, synthetic compound exhibiting high affinity for sigma-1 receptors at

nanomolar levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels.

In advanced pre-clinical studies,

this compound revealed antitumor potential.

It has also been shown to selectively kill human cancer cells without affecting normal/healthy

cells and also to significantly suppress tumor growth in immune-deficient mice models.

Scientific publications highlight the possibility

that these ligands may stop tumor growth and induce selective cell death in various tumor cell lines.

Sigma receptors are highly expressed

in different tumor cell types.

Binding by appropriate sigma-1 and/or sigma-2 ligands can induce selective apoptosis.

In addition, through tumor cell

membrane reorganization and interactions with ion channels, we believe our drug candidates may play an important role in inhibiting the

processes of metastasis (spreading of cancer cells from the original site to other parts of the body), angiogenesis (the formation of

new blood vessels) and tumor cell proliferation.

In addition, through

tumor cell membrane reorganization and interactions with ion channels, we believe our drug candidates may play an important role in inhibiting

the processes of metastasis (spreading of cancer cells from the original site to other parts of the body), angiogenesis (the formation

of new blood vessels) and tumor cell proliferation.

ANAVEX ® 1037 is currently in the pre-clinical

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to two broad categories and several specific indications, including:

Central Nervous System Di seases

Alzheimer’s disease

– In 2024, an estimated 6.9 million Americans are suffering from Alzheimer’s disease according to the Alzheimer’s

Association ® .

The Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s

and other dementias is projected to double by 2050.

Medications on the market today treat only the symptoms of Alzheimer’s

disease and do not have the ability to stop its onset or its progression.

We believe that there is an urgent and unmet need for both

a disease modifying cure for Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease

– Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow,

imprecise movement.

It is associated with degeneration of the basal ganglia of the brain and a deficiency of the neurotransmitter

Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide, typically middle-aged

and elderly people.

The Parkinson’s disease market is expected to reach $11.5 billion by 2029, according to GlobalData.

syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain develops,

including protein transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.

It is considered

a rare, progressive neurodevelopmental disorder and is caused by a single mutation in the MECP2 gene.

Because males have a different

chromosome combination from females, boys who have the genetic MECP2 mutation are affected in devastating ways.

Most of them die before

birth or in early infancy.

For females who survive infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect

of the child’s life;

severe mental retardation, their ability to speak, walk and eat, sleeping problems, seizures and even the

ability to breathe easily.

Rett syndrome affects approximately 1 in every 10,000-15,000 females.

Schizophrenia - Schizophrenia

is a persistent and often disabling mental illness impacting how a person thinks, feels, and behaves, and affects nearly 24 million

people worldwide, including 2.8 million people in the U.S., according to the World Health Organization.

It is characterized by three

symptom domains:

positive symptoms (hallucinations and delusions), negative symptoms (difficulty enjoying life and withdrawal from

others), and cognitive impairment (deficits in memory, concentration, and decision-making).

In part due to limitations with current

treatments, people living with schizophrenia often struggle to maintain employment, live independently, and manage relationships.

While current treatments can be effective in managing select symptoms, approximately 30% of people do not respond to therapy, with

an additional 50% experiencing only a partial improvement in symptoms or unacceptable side effects, according to the World Health

Organization.

X – Fragile X syndrome (FXS) is the most prevalent genetic form of intellectual disability

and autism spectrum disorder, primarily affecting boys.

As with most neurodevelopmental disorders,

FXS is considered a condition of synaptic development and function.

The disease has a range

of clinical presentations depending on the specific genetic changes associated with an “expansion”

of the FMR1 gene.

The disease is characterized by deficits in long-term potentiation and

homeostatic plasticity.

Central Nervous System Diseases

Alzheimer’s disease – In 2024, an estimated

6.9 million Americans were suffering from Alzheimer’s disease according to the Alzheimer’s Association ® .

Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s and other dementias is

projected to double by 2050.

Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the

ability to stop its onset or its progression.

We believe that there is an urgent and unmet need for both a disease modifying cure for

Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease – Parkinson’s

disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.

It is associated

with degeneration of the basal ganglia of the brain and deficiency of the neurotransmitter dopamine.

Parkinson’s disease currently

is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease

market is expected to reach $11.5 billion by 2029, according to GlobalData.

Rett syndrome – Rett syndrome is a rare X-linked

genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered

and as a result leads to severe disruptions in neuronal homeostasis.

It is considered a rare, progressive neurodevelopmental disorder

and is caused by a single mutation in the MECP2 gene.

Because males have a different chromosome combination from females, boys who have

the genetic MECP2 mutation are affected in devastating ways.

Most of them die before birth or in early infancy.

For females who survive

infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect of the child’s life;

severe mental retardation,

their ability to speak, walk and eat, sleeping problems, seizures and even the ability to breathe easily.

Rett syndrome affects approximately

1 in every 10,000-15,000 females.

Schizophrenia - Schizophrenia is a persistent and

often disabling mental illness impacting how a person thinks, feels, and behaves, and affects nearly 24 million people worldwide, including

2.8 million people in the U.S., according to the World Health Organization.

It is characterized by three symptom domains:

positive symptoms

(hallucinations and delusions), negative symptoms (difficulty enjoying life and withdrawal from others), and cognitive impairment (deficits

in memory, concentration, and decision-making).

In part due to limitations with current treatments, people living with schizophrenia often

struggle to maintain employment, live independently, and manage relationships.

While current treatments can be effective in managing select

symptoms, approximately 34% of people do not respond to therapy, with an additional 50-60% experiencing only a partial improvement in

symptoms or unacceptable side effects.

Fragile X – Fragile X syndrome (FXS) is the

most prevalent genetic form of intellectual disability and autism spectrum disorder, primarily affecting boys.

As with most neurodevelopmental

disorders, FXS is considered a condition of synaptic development and function.

The disease has a range of clinical presentations depending

on the specific genetic changes associated with an “expansion” of the FMR1 gene.

The disease is characterized by deficits

in long-term potentiation and homeostatic plasticity.

FXS has been detected in all populations and ethnic groups.

do not know the exact number for how many Americans could have full mutation FXS.

estimate that the disease affects approximately 1:4,000 males and 1:6,000-8,000 females.

Researchers do not know

the exact number for how many Americans could have full mutation FXS.

Studies estimate that the disease affects approximately 1:4,000

males and 1:6,000 females.

Worldwide, more than 1,400,000 people could be affected by FXS.

Depression – Depression

is a major cause of morbidity worldwide according to the World Health Organization.

The global antidepressant drug market is projected

to reach $21 billion by 2030 according to Allied Market Research.

Pharmaceutical treatment for depression has been historically dominated

by blockbuster brands.

However, the dominance of the leading brands is waning, largely due to an increase in the number of approvals

for antidepressant drugs.

Epilepsy – Epilepsy

is a common chronic neurological disorder characterized by recurrent unprovoked seizures.

These seizures are transient signs and/or

symptoms of abnormal, excessive or synchronous neuronal activity in the brain.

According to the Centers for Disease Control and Prevention,

in 2015 epilepsy affected 3.4 million Americans.

Today, epilepsy is often controlled, but not cured, with medications that are categorized

as older traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Because epilepsy afflicts sufferers in different

ways, there is a need for drugs used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic

Neuropathic Pain –

We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of the body.

Depression – Depression is a major cause of

morbidity worldwide according to the World Health Organization.

The global antidepressant drug market is projected to reach $21 billion

by 2030 according to Allied Market Research.

Pharmaceutical treatment for depression has been historically dominated by blockbuster brands.

However, the dominance of the leading brands is waning, largely due to an increase in the number of approvals for antidepressant drugs.

Epilepsy – Epilepsy is a common chronic neurological

disorder characterized by recurrent unprovoked seizures.

These seizures are transient signs and/or symptoms of abnormal, excessive or

synchronous neuronal activity in the brain.

According to the Centers for Disease Control and Prevention, in 2015 epilepsy affected 3.4

million Americans.

Today, epilepsy is often controlled, but not cured, with medications that are categorized as older traditional anti-epileptic

drugs and second-generation anti-epileptic drugs.

Because epilepsy afflicts sufferers in different ways, there is a need for drugs used

in combination with both traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Neuropathic Pain – We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of the body.

Neuralgia is more difficult to treat than some other types of pain because it does not respond well to normal pain medications.

medications have become more specific to neuralgia and typically fall under the category of membrane stabilizing drugs or antidepressants.

Malignant Melanoma –

Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and the eye.

Malignant melanoma

accounts for a large majority of skin cancer deaths.

The treatment includes surgical removal of the tumor, adjuvant treatment, chemo

and immunotherapy, or radiation therapy.

Special medications have become more specific to neuralgia and typically fall under the category of membrane stabilizing drugs or antidepressants.

Malignant Melanoma – Predominantly a skin

cancer, malignant melanoma can also occur in melanocytes found in the bowel and the eye.

Malignant melanoma accounts for a large majority

of skin cancer deaths.

The treatment includes surgical removal of the tumor, adjuvant treatment, chemo and immunotherapy, or radiation

According to iHealthcareAnalyst, Inc.

the worldwide malignant melanoma market is expected

to grow to $7.5 billion by 2029.

Prostate Cancer –

Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.

cells may metastasize from the prostate to other parts of the body, particularly the bones and lymph nodes.

Drug therapeutics for

prostate cancer are expected to increase to nearly $10.1 billion by the end of 2030 according to Market Research Future.

Pancreatic Cancer –

Pancreatic cancer is a malignant neoplasm of the pancreas.

In the United States, approximately 62,000 new cases of pancreatic cancer

will be diagnosed this year and approximately 50,000 patients will die as a result of their cancer, according to the American Cancer

Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical treatment of pancreatic

cancer will increase to $3.7 billion by 2027.

the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029.

Prostate Cancer – Specific to men, prostate

cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.

Cancer cells may metastasize from the

prostate to other parts of the body, particularly the bones and lymph nodes.

Drug therapeutics for prostate cancer are expected to increase

to nearly $10.1 billion by the end of 2030 according to Market Research Future.

Pancreatic Cancer – Pancreatic cancer is a malignant neoplasm of the pancreas.

In the United States, approximately 62,000 new cases of pancreatic cancer will be diagnosed this year and approximately 50,000 patients will die as a result of their cancer, according to the American Cancer Society.

Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical treatment of pancreatic cancer will increase to $3.7 billion by 2027.

Patents, Trademarks and Intellectual Property

We hold ownership or exclusive rights to twenty-five

patents, twenty-five U.S.

patent applications, and various PCT or ex-U.S.

patent applications relating to our drug candidates,

methods associated therewith, and to our research programs.

We hold ownership or exclusive rights to twenty-six

(26) issued U.S.

patents, nineteen (19) pending U.S.

patent applications, and numerous PCT and ex-U.S.

patent applications relating to

our drug candidates, methods associated therewith, and to our research programs.

We own one issued U.S.

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and certain anticholinesterase inhibitors composition and method for neuroprotection,” which claims a composition of matter of ANAVEX ® 2-73,

directed to a novel and synergistic neuroprotective compound combined with donepezil and other cholinesterase inhibitors.

is expected to expire in June 2034, absent any patent term extension for regulatory delays.

We own one issued U.S.

a synergistic neuroprotective compound, combined with donepezil and other cholinesterase inhibitors.

This patent is expected to expire

in June 2034, absent any patent term extension for regulatory delays.

We own another issued U.S.

patent entitled “A2-73

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This patent is expected to expire in July 2039, absent any patent term extension for regulatory

We own four issued U.S.

patents each with claims directed to crystalline forms of ANAVEX ® 2-73.

The first of these

four patents claims crystalline forms of ANAVEX ® 2-73, dosage forms and compositions containing crystalline ANAVEX ® 2-73,

and methods of treatment for Alzheimer’s disease using them.

This patent is expected to expire in July 2036, absent any patent term

extension for regulatory delays.

The second of these four patents claims pharmaceutical compositions containing a crystalline form of

ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.

This patent is expected to

expire in June 2036, absent any patent term extension for regulatory delays.

The third of these four patents claims pharmaceutical compositions

containing a crystalline form of ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2036, absent any patent term extension for regulatory delays.

The fourth of these four patents

claims method of making certain crystalline forms ANAVEX ® 2-73.

This patent is expected to expire in October 2036, absent

any patent term extension for regulatory delays.

We own five issued U.S.

patents each with claims directed

to crystalline forms of ANAVEX ® 2-73.

The first of these five patents claims crystalline forms of ANAVEX ® 2-73,

dosage forms and compositions containing crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease

This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays.

The second of these

five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment

for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2036, absent any patent term extension

for regulatory delays.

The third of these five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73,

and methods of treating for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2037, absent any

patent term extension for regulatory delays.

The fourth patent claims method of making certain crystalline forms of ANAVEX ® 2-73.

This patent is expected to expire in October 2036, absent any patent term extension for regulatory delays.

The fifth patent claims crystalline

forms of the dihydrogen phosphate salt of ANAVEX ® 2-73 and dosage forms (including transdermal and oral dosage forms) and

pharmaceutical compositions containing the same.

This patent is expected to expire in July 2039, absent any patent term extension for

regulatory delays.

We also own three issued U.S.

patents for seizure treatment.

The first of these three

patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose anti-epilepsy drug combined with

patents for seizure

The first of these three patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose

anti-epilepsy drug combined with either:

(i) ANAVEX ® 2-73 and its active metabolite ANAVEX ® 19-144;

or (ii) ANAVEX ® 19-144.

second of these three patents further claims a combination seizure treatment involving administration of an anti-epilepsy drug combined

with (i) ANAVEX ® 19-144,

or (ii) ANAVEX 19-144 ® and ANAVEX 2-73 ® .

The third of these three

patents claims a dosage form for seizure reduction, comprising (i) ANAVEX ® 19-144, (ii) ANAVEX ® 2-73, or (iii)

a combination of ANAVEX ® 19-144 and ANAVEX ® 2-73;

ANAVEX ® 19-144.

The second of these three patents further claims a combination seizure treatment involving administration

of an anti-epilepsy drug combined with (i) ANAVEX ® 19-144, or (ii) ANAVEX ® 19-144 and ANAVEX ® 2-73.

The third of these three patents claims a dosage form for seizure reduction, comprising (i) ANAVEX ® 19-144, (ii) ANAVEX ® 2-73,

or (iii) a combination of ANAVEX ® 19-144 and ANAVEX ® 2-73;

and optionally further comprising a low-dose anti-epilepsy

All three patents are expected to expire in October 2035, absent any patent term extension for regulatory delays.

We also own four

patents with claims directed to treating neurodevelopmental disorders.

These patents claim methods for treating a neurodevelopmental

disorder, multiple sclerosis, their related biochemical and functional abnormalities, or loss-of-function associated with a neurodevelopmental

disorder, by administering ANAVEX ® 2-73, ANAVEX ® 19-144, and/or ANAVEX ® 1-41 (another sigma

receptor ligand similar to ANAVEX ® 2-73), or compositions thereof.

All four patents are expected to expire in January 2037,

absent any patent term extension for regulatory delays.

We also own four issued U.S.

patents with claims directed

to treating neurodevelopmental disorders.

These patents claim methods for treating a neurodevelopmental disorder, multiple sclerosis,

their related biochemical and functional abnormalities, or loss-of-function associated with a neurodevelopmental disorder, by administering

ANAVEX ® 2-73, ANAVEX ® 19-144, and/or ANAVEX ® 1-41 (another sigma receptor ligand similar to

ANAVEX ® 2-73), or compositions thereof.

All four patents are expected to expire in January 2037, absent any patent term

extension for regulatory delays.

In addition, we own one issued U.S.

patent with claims directed to methods of

treating melanoma with a compound related to ANAVEX ® 2-73.

This patent is expected to expire in February 2030, absent any

patent term extension for regulatory delays.

patent with claims

directed to methods of treating melanoma with a compound related to ANAVEX ® 2-73.

This patent is expected to expire in February

2030, absent any patent term extension for regulatory delays.

We also own an issued U.S.

patent that claims crystalline forms of ANAVEX ® 19-144,

dosage forms and compositions containing the crystalline forms of ANAVEX ® 19-144, and methods of treatment for Alzheimer’s

This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays.

Further, we own one issued

patent with claims directed to methods of treating cardiac dysfunction with ANAVEX ® 2-73.

This patent is expected to

expire in July 2038, absent any patent term extension for regulatory delays.

patent that claims crystalline

forms of ANAVEX ® 19-144, dosage forms and compositions containing the crystalline forms of ANAVEX ® 19-144,

and methods of treatment for Alzheimer’s disease.

This patent is expected to expire in July 2036, absent any patent term extension

for regulatory delays.

Further, we own two issued U.S.

patents with claims

directed to methods of treating cardiac dysfunction with ANAVEX ® 2-73.

These patents are expected to expire in July 2038,

absent any patent term extension for regulatory delays.

Additionally, we own two issued U.S.

patent for the treatment

of insomnia, anxiety, or agitation.

The first of the two patents claims methods of treating insomnia or anxiety with ANAVEX ® 2-73,

ANAVEX ® 19-144, and/or ANAVEX ® 1-41.

patents for the treatment of insomnia, anxiety,

or agitation.

The first of the two patents claims methods of treating insomnia or anxiety with ANAVEX ® 2-73, ANAVEX ® 19-144,

and/or ANAVEX ® 1-41.

This patent is expected to expire in September 2038.

The second of the

two patents claims a dosage form comprising any of, or any combination of ANAVEX ® 2-73, ANAVEX ® 19-144, and/or

ANAVEX ® 1-41.

The second of the two patents claims a dosage

form comprising any of, or any combination of ANAVEX ® 2-73, ANAVEX ® 19-144, and/or ANAVEX ® 1-41.

This patent is expected to expire in July 2037, absent any patent term extension for regulatory delays.

we own one issued U.S.

patent with claims directed to a method of treating systolic hypertension using ANAVEX ® 2-73.

patent is expected to expire in July 2039, absent any patent term extension for regulatory delays.

Further, we own one issued U.S.

patent with claims

directed to a method of treating systolic hypertension using ANAVEX ® 2-73.

This patent is expected to expire in July 2039,

absent any patent term extension for regulatory delays.

Additionally, we own one issued U.S.

patent with claims directed to pharmaceutical dosage forms of (-) enantiomer of ANAVEX ® 2-73.

This patent is expected to

expire in July 2036, absent any patent term extension for regulatory delays.

patent with claims directed to pharmaceutical

dosage forms of the (-) enantiomer of ANAVEX ® 2-73.

This patent is expected to expire in July 2036, absent any patent term

extension for regulatory delays.

We also own three (3) issued U.S.

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to ANAVEX ® 1066.

The first of these two patents claims methods for treating or preventing pain using (+) ANAVEX ® 1066

The second patent claims methods for treating or preventing pain using (-) ANAVEX ® 1066 isomer.

The first of these three patents claims methods for treating or preventing pain using the (+) ANAVEX ® 1066

The second patent claims methods for treating or preventing pain using the (-) ANAVEX ® 1066 isomer.

The third patent

claims dosage forms and pharmaceutical compositions comprising (+) ANAVEX ® 1066 isomer.

All three patents are expected to

expire in November 2036, absent any patent term extension for regulatory delays.

claims dosage forms and pharmaceutical compositions comprising the (+) ANAVEX ® 1066 isomer.

All three patents are expected

to expire in November 2036, absent any patent term extension for regulatory delays.

For ANAVEX ® 2-73, ANAVEX ® 19-144,

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For more information regarding challenges to our existing or future patents, see

“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on November

“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December

Financial Overview

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(CRO) expenses in support of these clinical trials.

Personnel costs include salaries and wages, benefits, and non-cash stock-based compensation

Personnel costs include salaries and wages, benefits, and non-cash share-based compensation

charges associated with options and other equity awards granted to employees and consultants who are directly engaged in support of our

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Personnel costs consist

of salaries and wages, benefits and stock-based compensation for general and administrative personnel.

of salaries and wages, benefits and share-based compensation for general and administrative personnel.

Outside professional services and

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expenses and professional services.

Comparison of the three and nine months ended June

Comparison of the three months ended December 31,

2024 and 2023

Operating Expenses

Total operating expenses for the quarter ended June

30, 2024 were $14.7 million, compared to $13.5 million for the comparable quarter ended June 30, 2023.

Total operating expenses for the

nine-month period ended June 30, 2024 were $38.5 million, compared to $43.1 million for the comparable nine-month period ended June 30,

Our research and development expenses for the three

months ended June 30, 2024 were $11.9 million, as compared to $10.3 million for the three months ended June 30, 2023.

Total operating expenses for the three-months ended

December 31, 2024 were $13.6 million, compared to $11.4 million for the comparable three-months ended December 31, 2023.

Our research and development expenses for the three-months

ended December 31, 2024 were $10.4 million, as compared to $8.7 million for the three-months ended December 31, 2023.

The increase in

research and development expenses during the three-month period is primarily related to the following:

(i) an increase in personnel costs of $1.3 million mostly related to the addition of several new consultants

engaged to assist in the preparation of the submission of our Marketing Authorisation Application (MAA) to the European Medicines Agency

(i) an increase in personnel costs of $0.9 million related to the addition of new staff engaged in research

and development and in driving our clinical programs forward, and for new consultants engaged to assist in these objectives as well as

to assist in the preparation of the submission of our Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA);

(ii) an increase of approximately $1.5 million over the comparable period relating to manufacturing activities

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These increases were partially offset by (i) a decrease

in stock-based compensation expense of $0.9 million in the three-month period, as a result of the vesting of previous option awards (ii)

a decrease of approximately $1.0 million in the three-month period relating to our Rett syndrome program as a result of the completion

of the EXCELLENCE trial and the respective open label extension of the AVATAR trial and (iii) a decrease of approximately $0.9 million

in the three-month period in expenditures over the comparable period relating to our Alzheimer’s program, as a result of the completion

of the Phase 2b/3 clinical trial.

Our research and development expenses for the nine

months ended June 30, 2024 were $30.3 million, as compared to $33.7 million for the comparable nine month period ended June 30, 2023.

The decrease in research and development expenses during the nine-month period is primarily related to the following:

(i) a decrease in stock-based compensation expense of $4.2 million in the nine-month period, as a result of

the vesting of previous option awards and the extended timeline of milestone based vesting awards;

(ii) a decrease of approximately $3.1 million in the nine-month period in expenditures over the comparable

periods relating to our Rett syndrome program as a result of the completion of the EXCELLENCE trial and the respective open label extension

of the AVATAR trial;

(iii) a decrease of approximately $2.3 million in the nine-month period in expenditures over the comparable

periods relating to our Alzheimer’s program as a result of the completion of the Phase 2b/3 clinical trial.

These decreases were partially offset by (i) an increase

of $1.4 million in nine-month period relating to expenditures on the ANAVEX ® 3-71-SZ-001 clinical trial, which trial commenced

in the second quarter of fiscal 2024, (ii) an increase of $1.2 million over the comparable period relating to startup costs associated

with our planned Phase 2/3 clinical trial in Parkinson’s disease, (iii) an increase of approximately $2.8 million over the comparable

period relating to manufacturing activities of ANAVEX ® 2-73 for potential commercial use and to the support the MAA and

(iv) an increase of approximately $1.2 million related to the addition of several new consultants engaged to assist in the preparation

for the submission of our MAA.

of approximately $0.6 million in the three-month period relating to our Rett syndrome program as a result of the completion of the EXCELLENCE

trial and the respective open label extension of the AVATAR trial;

and (iii) a decrease of approximately $0.6 million in the three-month

period in expenditures over the comparable period relating to our Alzheimer’s program, as a result of the completion of the Phase

2b/3 clinical trial open label extension.

The following table summarizes our research and development

expenses for the three- and nine-months ended June 30, 2024 (in thousands):

Three months ended June 30,

Nine months ended June 30,

expenses for the three-months ended December 31, 2024 (in thousands):

Cost of external service providers

Personnel costs

Stock-based compensation

Share based compensation

Other common costs

Total research and development costs

During the three- and nine-months ended June 30, 2024

and 2023, external service providers cost by product candidate was as follows (in thousands):

Three months ended June 30,

Nine months ended June 30,

During the three-months ended December 31, 2024 and

2023, external service providers cost by product candidate was as follows (in thousands):

ANAVEX ® 2-73

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General and administrative expenses were $3.1 million

for the three months ended June 30, 2024, as compared to $3.2 million for the same quarter of fiscal 2023.

General and administrative

expenses were $8.3 million for the nine months ended June 30, 2024, as compared to $9.4 million for the same period of fiscal 2023.

primary reason for the decrease in general and administrative expenses was a reduction in stock-based compensation charges of $0.5 million

for the three month period and $1.5 million for the nine month period, as a result of the vesting of previous option awards and the extended

timeline of milestone based vesting awards.

We expect to see our research and development expenditures

increase from current levels as we advance our clinical programs, including advancement of ANAVEX ® 3-71 trial in Schizophrenia,

preparation of our MAA submission to the EMA, planned advancement of ANAVEX ® 2-73 for Parkinson’s disease, planned

initiation of an ANAVEX ® 2-73 for a Fragile X clinical trial, and as we continue to add additional staffing to manage and

support these clinical initiatives.

for the three months ended December 31, 2024, as compared to $2.7 million for the same quarter of fiscal 2023.

The primary reason for

the increase in general and administrative expenses is an increase in legal and professional fees.

Other income (net)

The net amount of other income for the three months

ended June 30, 2024 was $2.4 million as compared to $2.3 million for the comparable three months ended June 30, 2023.

The net amount of

other income for the nine months ended June 30, 2024 was $7.3 million as compared to $5.8 million for the comparable nine month period

ended June 30, 2023.

The increase in other income for the year-to-date period is primarily related to a one-time financing charge of $0.9

million recognized in the comparable nine-month periods associated with entering into the 2023 Purchase Agreement (as described below),

and an increase in interest income associated with an increase in interest rates.

Net loss for the three months ended June 30, 2024,

The net amount of other income for the three-months ended December 31, 2024 was $1.5 million as compared to $2.8 million for the comparable

three-months ended December 31, 2023.

The increase in other income is primarily related to a decrease in interest income associated with

a change in market wide rates and principal balances held, as well as an increase in foreign exchange losses as a result of the fall of

the Australian dollar against the US dollar during the current period.

Net loss for the three-months ended December 31, 2024,

was $12.1 million, or $0.14 per share, as compared to $8.6 million, or $0.11 per share in the comparative quarter of fiscal 2023.

net loss for the nine months ended June 30, 2024 was $31.4 million, or $0.38 per share, as compared to $37.4 million, or $0.47 per share

in the comparative nine month period.

The decrease in net loss for the year-to-date period is primarily related to a decrease in research

and development expenditures and an increase in other income, as discussed above.

increase in net loss for the year-to-date period is primarily related to an increase in research and development expenditures and a decrease

in other income, as discussed above.

Liquidity and Capital Resources

Working Capital (in thousands)

December 31, 2024

September 30, 2024

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Working Capital

On June 30, 2024, we had net current assets of $141.5

On December 31, 2024, we had net current assets of

$110.9 million, a decrease of approximately $9.3 million from our year ended September 30, 2024.

The decrease in net current assets primarily

relates to cash utilized in operations, partially offset by $11.9 million in cash generated under the 2023 Purchase Agreement.

During the first nine months of fiscal 2024, we utilized

cash and cash equivalents of $24.2 million to fund our operations, compared to $21.9 million during the same period of fiscal 2023.

cash position was $138.8 million on June 30, 2024 compared to $151.0 million at our fiscal year ended September 30, 2023.

relates to cash utilized in operations during the period.

continue to use our capital resources to advance our clinical trials for ANAVEX ® 2-73 and ANAVEX ® 3-71, and

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The following

table summarizes cash flows during the nine months ended June 30, 2024 and 2023 (in thousands):

cash flows used in operating activities

cash flows from financing activities

table summarizes cash flows during the three-months ended December 31, 2024 and 2023 (in thousands):

Net cash flows used in operating activities

Net cash flows from financing activities

Decrease in cash and cash equivalents

Cash flow used in operating activities

Net cash used in operating activities for the nine

months ended June 30, 2024 was $24.2 million, compared to $21.9 million during the comparable period ended June 30, 2023.

The principal

reason for this is an increase in net cash expenses, after taking into account non-cash stock-based compensation, over the comparable

period of approximately $0.7 million, as well as positive changes in other working capital accounts in the current nine-month period,

as compared to the comparable nine-month period.

Net cash used in operating activities for the three-months ended December 31,

2024 was $12.1 million, compared to $7.3 million during the comparable period ended December 31, 2023.

The principal reason for this is

an increase in net cash expenses, after taking into account non-cash share-based compensation, over the comparable period of approximately

$3.7 million, as well as positive changes in other working capital accounts in the current three-month period, as compared to the comparable

three-month period.

Cash flow provided by financing activities

Cash provided by financing activities for the nine-month

period ended June 30, 2024 was $11.9 million, compared to $27.6 million during the comparable nine-month period ended June 30, 2023.

provided by financing activities in both periods is primarily attributable to cash received from the issuance of common shares at various

market prices under the 2023 Purchase Agreement.

Cash provided by financing activities for the three-month

period ended December 31, 2024 was $0.7 million, compared to $0.06 million during the comparable three-month period ended December 31,

Cash provided by financing activities in both periods is primarily attributable to cash received from the exercise of stock options

by our employees.

Other Financings

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the “commitment shares”), when and if, Lincoln Park purchased, at the Company’s discretion, the $150.0 million aggregate

During the nine-month period ended June 30, 2024,

the Company issued to Lincoln Park an aggregate of 2,455,646 shares of Common Stock under the 2023 Purchase Agreement, including 2,450,000

shares of Common Stock for an aggregate purchase price of $11.3 million and 5,646 commitment shares.

During the nine-month period ended

June 30, 2023, the Company issued to Lincoln Park an aggregate of 3,138,348 shares of Common Stock under the 2023 Purchase Agreement,

including 3,125,000 shares of Common Stock for an aggregate purchase price of $26.7 million and 13,348 commitment shares as well as the

75,000 initial commitment shares.

On June 30, 2024, an amount of $110.8 million remained

available under the 2023 Purchase Agreement.

Controlled Equity Offering Sales Agreement

On May 1, 2020, we entered into an Amended and Restated

Sales Agreement (the “2020 Sales Agreement”) with Cantor Fitzgerald & Co.

and SVB Leerink LLC (the “Sales Agents”),

pursuant to which we could offer and sell shares of Common Stock registered under an effective registration statement from time to time

through the Sales Agents (the “At-the-Market Offering”).

Upon delivery of a placement notice based on our instructions

and subject to the terms and conditions of the 2020 Sales Agreement, the Sales Agents could sell shares of Common Stock by methods deemed

to be an “at the market offering”, in negotiated transactions at market prices prevailing at the time of sale or at prices

related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to our prior

written consent.

We were not obligated to make any sales of shares under the 2020 Sales Agreement.

We or the Sales Agents could suspend

or terminate the At-the-Market Offering upon notice to the other party, subject to certain conditions.

The Sales Agents would act as agents

on a commercially reasonable efforts basis consistent with their normal trading and sales practices, applicable state and federal law,

and rules and regulations and the rules of Nasdaq.

We agreed to pay the Sales Agents’ commissions

for their services of 3.0% of the gross proceeds from the sale of shares of Common Stock pursuant to the 2020 Sales Agreement.

agreed to provide the Sales Agents with customary indemnification and contribution rights.

No shares were sold during the nine months ended June

30, 2024 and 2023 under the 2020 Sales Agreement.

The Company terminated the 2020 Sales Agreement on July 24, 2024.

During the three-months ended December 31, 2024 and

2023, the Company did not issue any shares of common stock under the 2023 Purchase Agreement.

On December 31, 2024, an amount of $110.8 million

remained available under the 2023 Purchase Agreement.

Off-Balance Sheet Arrangements

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changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended September 30,

2023, as filed with the SEC on November 27, 2023.

2024, as filed with the SEC on December 23, 2024.

RECENT ACCOUNTING PRONOUNCEMENTS

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

There have been no material

changes in our exposure to market risk from that disclosed in Item 7A of our Annual Report on Form 10-K for the year ended September 30,

Not required for smaller reporting companies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis