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Item 2. Management’s Discussion and Analysis

2025-05-13 compared with 2025-02-12 · 434 added, 470 removed, 593 unchanged (60% 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 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.

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.

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;

the timing and likelihood

of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives,

including the timing of a decision by the European Medicines Agency, or EMA, regarding whether to approve the Marketing Authorization

Application, or MAA, for blarcamesine for the treatment of Alzheimer’s disease;

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

We have based these forward-looking statements largely

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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.

with the Securities and Exchange

Commission on December 23, 2024.

These risks are not exhaustive.

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

We currently have two core programs and two seed programs.

Our core programs are at various stages of clinical and preclinical development, in neurodegenerative and neurodevelopmental diseases.

Our research and development pipeline includes ANAVEX ® 2-73

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.

The following table summarizes key information about our programs:

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receptor (SIGMAR1) binding activities.

The SIGMAR1 gene encodes the SIGMAR1 protein, which is an intracellular chaperone protein with

important roles in cellular communication.

SIGMAR1 is also involved in transcriptional regulation at the nuclear envelope and restores

homeostasis and stimulates recovery of cell function when activated.

In order to validate the ability of our compounds to activate quantitatively

the SIGMAR1, we performed, in collaboration with Stanford University, a quantitative Positron Emission Tomography (PET) imaging scan in

mice, which demonstrated a dose-dependent ANAVEX ® 2-73 (blarcamesine) target engagement or receptor occupancy with SIGMAR1

in the brain.

Reyes S et al., Sci Rep.

Sigma receptors may be targets for therapeutics to combat many human diseases, both of neurodegenerative

nature, including Alzheimer’s disease, as well as of neurodevelopmental nature, like Rett syndrome.

When bound by the appropriate

ligands, sigma receptors influence the functioning of multiple biochemical signals that are involved in the pathogenesis (origin or development)

Multiple viruses including SARS-CoV-2 (COVID-19) induce cellular stress by intrinsic mitochondrial apoptosis and other related

cellular processes, in order to ensure survival and replication.

Hence, it is possible that SIGMAR1 could also play a role in modulating

the cellular response to viral infection and ameliorate pathogenesis.

The SIGMAR1 gene encodes the SIGMAR1 protein, which

is an intracellular chaperone protein with important roles in cellular communication.

SIGMAR1 is also involved in transcriptional regulation

at the nuclear envelope and restores homeostasis and stimulates recovery of cell function when activated.

In order to validate the ability

of our compounds to activate quantitatively the SIGMAR1, we performed, in collaboration with Stanford University, a quantitative Positron

Emission Tomography (PET) imaging scan in mice, which demonstrated a dose-dependent ANAVEX ® 2-73 (blarcamesine) target engagement

or receptor occupancy with SIGMAR1 in the brain.

Reyes Setal.,

Cellular Homeostasis

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delay neurodevelopmental and neurodegenerative disease progression.

ANAVEX ® 2-73 (blarcamesine)-specific

As part of some of our clinical trials, we have incorporated

a genomic analysis to better understand potential populations for whom our clinical programs might benefit.

In our clinical trials, a

full genomic analysis of Alzheimer’s disease patients treated with ANAVEX ® 2-73 (blarcamesine) has helped us identify

actionable genetic variants.

A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 (blarcamesine)

and COMT, a gene involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73

(blarcamesine) specific biomarker hypothesis.

We believe that excluding patients with SIGMAR1 identified biomarker variant (approximately

10%-20% of the population) in prospective studies would identify approximately 80%-90% patients that would display clinically significant

improved functional and cognitive scores.

The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73

(blarcamesine), which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points,

provides support for the potential precision medicine clinical development of ANAVEX ® 2-73 (blarcamesine) by using genetic

biomarkers identified within the trial population itself to either confirm the mechanism of action of ANAVEX ® 2-73 (blarcamesine)

or target patients who are most likely to respond to ANAVEX ® 2-73 (blarcamesine) treatment.

We may in the future utilize

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

Clinical Program Overview

ANAVEX®2-73 (blarcamesine)

We believe ANAVEX ® 2-73 may offer a

disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of SIGMAR1.

ANAVEX ® 2-73 is

being developed as well as an oral once-daily capsule formulation for diseases such as Alzheimer’s disease and Parkinson’s

disease, and in an oral liquid once-daily formulation for rare diseases such as Rett syndrome and Fragile X.

Alzheimer’s Disease

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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 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.

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.

In July 2018, we presented

the results of a genomic DNA and RNA evaluation of the participants in the Phase 2a clinical trial.

More than 33,000 genes were analyzed

using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA and RNA data in patients treated

with ANAVEX ® 2-73.

The analysis identified genetic variants that impacted response to ANAVEX ® 2-73, among

them variants related to the SIGMAR1, the target for ANAVEX ® 2-73.

Results showed that trial participants with the common

SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive (MMSE)

and functional (ADCS-ADL) scores.

The results from this evaluation supported the continued evaluation of genomic information in subsequent

clinical trials, since these signatures can now be applied to neurological indications tested in future clinical trials with ANAVEX ® 2-73

including Alzheimer’s disease, Parkinson’s disease dementia and Rett syndrome.

ANAVEX ® 2-73

data met prerequisite information in order to progress into a Phase 2b/3 placebo-controlled trial.

This larger Phase 2b/3 double-blind,

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

The 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

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.

statistical analyses were performed by outside consultancy companies.

Furthermore, all pre-specified clinical endpoints

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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.

Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA), under the centralized procedure, for ANAVEX ® 2-73

for the treatment of Alzheimer’s disease and, in December 2024, the EMA accepted the submission for scientific review.

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 company seeking to market a new pharmaceutical product through the centralized procedure must

file safety data and efficacy data as part of the MAA.

After the EMA evaluates the MAA, it provides a recommendation to the European Commission

(“EC”) and the EC then approves or denies the MAA.

Throughout the scientific review process with the EMA, we may receive feedback

or comments which, while not a conclusive decision, could suggest the application provided is insufficient to support the marketing authorization.

We may not be able to sufficiently address these comments or requests.

Alternatively, these comments or requests could lead us to decide,

after consultation with our advisors or the regulatory authorities, to withdraw our MAA for blarcamesine.

The Company plans to announce

the results when the EMA review and decision-making is finished and does not plan to provide interim updates.

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

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good comparative safety profile and no associated neuroimaging adverse events.

Parkinson’s Disease

In September 2016, we presented positive preclinical

data for ANAVEX ® 2-73 in an animal model of Parkinson’s disease, which demonstrated significant improvements on behavioral,

histopathological, and neuroinflammatory endpoints.

The study was funded by the Michael J.

Fox Foundation.

Additional data announced in

October 2017 indicated that ANAVEX ® 2-73 induced robust neurorestoration in experimental Parkinsonism.

We believe the encouraging

results we have gathered in this preclinical model, coupled with the favorable profile of this product candidate in the Alzheimer’s

disease trial, support the notion that ANAVEX ® 2-73 has the potential to treat Parkinson’s disease dementia.

In October 2020, we completed a double-blind, randomized,

placebo-controlled proof-of-concept Phase 2 trial with ANAVEX ® 2-73 in Parkinson’s disease dementia in Spain and

Australia, to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.

The trial enrolled

approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses, 30 mg and 50 mg, or placebo.

The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers

identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial.

The trial demonstrated that ANAVEX ® 2-73

was safe and well tolerated in oral doses up to 50 mg once daily.

The results showed clinically meaningful, dose-dependent, and statistically

significant improvements in the Cognitive Drug Research (“CDR”) computerized assessment system analysis.

Treatment with ANAVEX ® 2-73

also resulted in clinically meaningful improvements as measured by the global composite score of Parkinson’s disease symptom severity,

MDS-Unified Parkinson’s Disease Rating Scale (“MDS-UPDRS”) total score on top of standard of care including dopaminergic

therapy, levodopa and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX ® 2-73’s potential capability

of slowing and reversing symptoms that progress in Parkinson’s disease.

In addition, the trial confirmed the precision medicine

approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ® 2-73 may result in improved clinical outcomes.

A 48-week OLE ANAVEX2-73-PDD-EP-001 Phase 2 trial

was offered to participants after completion of the double-blind placebo-controlled ANAVEX2-73-PDD-001 Phase 2 trial discussed above.

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), 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

OLE trial data, which demonstrated longitudinal beneficial effects of ANAVEX ® 2-73 on the pre-specified primary and secondary

Preliminary analysis reveals that ANAVEX ® 2-73 was found to be generally safe and well tolerated, and safety

findings in this trial were consistent with the known safety profile of ANAVEX ® 2-73.

In respect to efficacy, across all

efficacy endpoints, patients performed better while on ANAVEX ® 2-73.

While all patients were on drug holiday due to COVID-19

between the DB EOT and the OLE Baseline, the respective efficacy endpoints, including the MDS-UPDRS Part II + III and CGI-I, measured

at the end of trial of the double-blind study (DB EOT) and the OLE Baseline, were worsening, as expected in a progressive disease like

However, when patients resumed daily oral ANAVEX ® 2-73 treatment, a consistent improvement was observed

during the extension phase from OLE Baseline through OLE Week 24, and OLE Week 48, respectively.

These results are consistent with the

pattern observed for all efficacy measures in the extension phase.

We anticipate conducting further clinical trials of

ANAVEX ® 2-73 in Parkinson’s disease dementia after submitting the results of the trial to regulatory authorities to

obtain regulatory guidance.

Also with respect to Parkinson’s disease, in

January 2021, we were awarded a research grant of $1.0 million from The Michael J.

Fox Foundation for Parkinson’s Research to

explore utilization of PET imaging biomarkers to enable measurement of target engagement and pathway activation of the SIGMAR1 with clinically

relevant doses including in people with Parkinson’s disease.

Rett Syndrome

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that mimic Rett syndrome.

The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”).

2017, we were awarded a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter

Phase 2 clinical trial of ANAVEX ® 2-73 for the treatment of Rett syndrome.

This award was received in quarterly instalments

which commenced during fiscal 2018.

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),

which took place in the United States, was completed in December 2020.

This trial was a randomized double-blind, placebo-controlled safety,

tolerability, PK and efficacy trial of oral liquid ANAVEX ® 2-73 formulation in 25 adult female patients with Rett syndrome

over a 7-week treatment period including ANAVEX ® 2-73-specific genomic precision medicine biomarkers.

The primary endpoint

of the trial was safety.

The dosing of 5 mg ANAVEX ® 2-73 was well-tolerated and demonstrated dose-proportional PK.

All secondary

efficacy endpoints of the trial showed statistically significant and clinically meaningful response in the Rett Syndrome Behaviour Questionnaire

(“RSBQ”) response, when compared to placebo, in the intent to treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73 treated subjects showed a statistically significant improvement in RSBQ response as compared to 10%

of the subjects on placebo in the ITT cohort (all participants, p = 0.011).

ANAVEX ® 2-73 treatment resulted in a sustained

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.

The study was funded by the International Rett Syndrome Foundation.

Our Rett syndrome program includes several clinical

trials that were conducted in a range of patient age demographics and geographic regions, utilizing an oral liquid once-daily formulation

of ANAVEX ® 2-73.

The FDA has granted Orphan Drug Designation and the Rare Pediatric Disease (RPD) designation for the treatment

of Rett syndrome.

The RPD designation is intended to encourage the development of treatments for rare pediatric diseases.

Additionally,

the FDA has granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett syndrome.

The FDA Fast Track program is designed to facilitate and expedite the development and review of new drugs to address unmet medical needs

in the treatment of serious and life-threatening conditions.

An earlier application for a proposed Rett syndrome study in the United States

resulted in the FDA requesting additional information.

The resulting clinical hold and subsequent partial clinical hold have since been

removed after the Company satisfactorily provided the additional information requested.

At the present time, the Company does not plan

to conduct a clinical trial in the United States.

The following is a summary of clinical trials conducted by the Company in Rett Syndrome.

The first Phase 2 trial, (ANAVEX ® 2-73-RS-001), took place in the United States, and was completed in December 2020.

trial was a randomized double-blind, placebo-controlled safety, tolerability, PK and efficacy trial of oral liquid ANAVEX ® 2-73

formulation in 25 adult female patients with Rett syndrome over a 7-week treatment period including ANAVEX ® 2-73-specific

genomic precision medicine biomarkers.

The primary endpoint of the trial was safety.

The dosing of 5 mg ANAVEX ® 2-73 was

well-tolerated and demonstrated dose-proportional PK.

All secondary efficacy endpoints of the trial showed statistically significant and

clinically meaningful response in the Rett Syndrome Behaviour Questionnaire (“RSBQ”) response, when compared to placebo, in

the intent to treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73 treated subjects showed

a statistically significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the ITT cohort (all participants,

ANAVEX ® 2-73 treatment resulted in a sustained improvement in 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 endpoints.

This clinical trial was funded, in part, by a financial

grant from the International Rett Syndrome Foundation of $0.6 million.

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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daily life due to ANAVEX ® 2-73 treatment in the Compassionate Use Program.

Parkinson’s Disease

In September 2016, we presented positive preclinical

data for ANAVEX ® 2-73 in an animal model of Parkinson’s disease, which demonstrated significant improvements on behavioral,

histopathological, and neuroinflammatory endpoints.

The study was funded by the Michael J.

Fox Foundation.

Additional data announced in

October 2017 indicated that ANAVEX ® 2-73 induced robust neurorestoration in experimental Parkinsonism.

We believe the encouraging

results we have gathered in this preclinical model, coupled with the favorable profile of this product candidate in the Alzheimer’s

disease trial, support the notion that ANAVEX ® 2-73 has the potential to treat Parkinson’s disease dementia.

In October 2020, we completed a double-blind, randomized,

placebo-controlled proof-of-concept Phase 2 trial with ANAVEX ® 2-73 in Parkinson’s disease dementia in Spain and Australia,

to study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.

The Phase 2 trial enrolled

approximately 132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses, 30 mg and 50 mg, or placebo.

The ANAVEX ® 2-73 Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers

identified in the ANAVEX ® 2-73 Phase 2a Alzheimer’s disease trial.

The trial demonstrated that ANAVEX ® 2-73

was safe and well tolerated in oral doses up to 50 mg once daily.

The results showed clinically meaningful, dose-dependent, and statistically

significant improvements in the Cognitive Drug Research (“CDR”) computerized assessment system analysis.

Treatment with ANAVEX ® 2-73

also resulted in clinically meaningful improvements as measured by the global composite score of Parkinson’s disease symptom severity,

MDS-Unified Parkinson’s Disease Rating Scale (“MDS-UPDRS”) total score on top of standard of care including dopaminergic

therapy, levodopa and other anti-PD medications after 14 weeks of treatment, suggesting ANAVEX ® 2-73’s potential capability

of slowing and reversing symptoms that progress in Parkinson’s disease.

In addition, the trial confirmed the precision medicine

approach of targeting SIGMAR1 as a genetic biomarker in response to ANAVEX ® 2-73 may result in improved clinical outcomes.

A 48-week OLE ANAVEX2-73-PDD-EP-001 Phase 2 trial

was offered to participants after completion of the double-blind placebo-controlled ANAVEX2-73-PDD-001 Phase 2 trial discussed above.

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), 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

OLE trial data, which demonstrated longitudinal beneficial effects of ANAVEX ® 2-73 on the pre-specified primary and secondary

Preliminary analysis reveals that ANAVEX ® 2-73 was found to be generally safe and well tolerated, and safety

findings in this trial were consistent with the known safety profile of ANAVEX ® 2-73.

In respect to efficacy, across all

efficacy endpoints, patients performed better while on ANAVEX ® 2-73.

While all patients were on drug holiday due to COVID-19

between the DB EOT and the OLE Baseline, the respective efficacy endpoints, including the MDS-UPDRS Part II + III and CGI-I, measured

at the end of trial of the double-blind study (DB EOT) and the OLE Baseline, were worsening, as expected in a progressive disease like

However, when patients resumed daily oral ANAVEX ® 2-73 treatment, a consistent improvement was observed

during the extension phase from OLE Baseline through OLE Week 24, and OLE Week 48, respectively.

These results are consistent with the

pattern observed for all efficacy measures in the extension phase.

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 >6-month Parkinson’s disease study.

In January 2021, we were awarded a research grant

of $1.0 million from The Michael J.

Fox Foundation for Parkinson’s Research to develop ANAVEX ® 2-73 for

the treatment of Parkinson’s disease.

The award will explore utilization of PET imaging biomarkers to enable measurement of target

engagement and pathway activation of the SIGMAR1 with clinically relevant doses including in people with Parkinson’s disease.

Schizophrenia, Frontotemporal Dementia and Alzheimer’s

Other indications

We believe preclinical data from our studies also

supports further research into the use of ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative diseases

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

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

for Angelman Syndrome, ANAVEX ® 2-73 was assessed in a mouse model for the development of audiogenic seizures.

indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures in mice.

In a study sponsored

by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX ® 2-73 restored hippocampal brain-derived

neurotrophic factor (BDNF) expression to normal levels.

BDNF under-expression has been observed in many neurodevelopmental and neurodegenerative

BDNF signaling promotes maturation of both excitatory and inhibitory synapses.

ANAVEX ® 2-73 normalization of

BDNF expression could be a contributing factor for the positive preclinical data observed in both neurodevelopmental and neurodegenerative

disorders like Angelman and Fragile X syndromes.

In addition, preclinical data to-date also indicates

that ANAVEX ® 2-73 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological

conditions, which, if impaired, may play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.

In addition, preclinical data on ANAVEX ® 2-73

related to multiple sclerosis indicates that ANAVEX ® 2-73 may promote remyelination in multiple sclerosis disease.

our data also demonstrates that ANAVEX ® 2-73 has the potential to provide protection for oligodendrocytes and oligodendrocyte

precursor cells (“OPCs”), as well as central nervous system neurons in addition to helping repair by increasing OPC proliferation

and maturation in tissue culture.

In March 2018, we presented preclinical data of ANAVEX ® 2-73

in a genetic mouse model of tuberous sclerosis complex (“TSC”).

TSC is a rare genetic disorder characterized by the growth

of numerous benign tumors in many parts of the body with a high incidence of seizures.

The preclinical data demonstrated that treatment

with ANAVEX ® 2-73 significantly increased survival and reduced seizures in those mice.

ANAVEX ® 2-73

(blarcamesine)-specific Biomarkers

As part of some of our clinical trials, we have incorporated

a genomic analysis to better understand potential populations for whom our clinical programs might benefit.

A full genomic analysis of

Alzheimer’s disease patients treated with ANAVEX ® 2-73 (blarcamesine) has helped us identify actionable genetic variants.

A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 (blarcamesine) and COMT, a gene

involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73 (blarcamesine)

specific biomarker hypothesis.

We believe that excluding patients with SIGMAR1 identified biomarker variant (approximately 10%-20%

of the population) in prospective studies would identify approximately 80%-90% patients that would display clinically significant improved

functional and cognitive scores.

The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73 (blarcamesine),

which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides support

for the potential precision medicine clinical development of ANAVEX ® 2-73 (blarcamesine) by using genetic biomarkers identified

within the trial population itself to either confirm the mechanism of action of ANAVEX ® 2-73 (blarcamesine) or target patients

who are most likely to respond to ANAVEX ® 2-73 (blarcamesine) treatment.

We may in the future utilize such an approach in

certain indications in which ANAVEX ® 2-73 (blarcamesine) is being studied.

ANAVEX ® 3-71

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

dysfunctions.

ANAVEX ® 3-71 indicates extensive therapeutic advantages in Alzheimer’s and other protein-aggregation-related

diseases given its ability to enhance neuroprotection and cognition via SIGMAR1 activation and M1 muscarinic allosteric modulation.

A preclinical study examined the response of ANAVEX ® 3-71

in aged transgenic animal models and showed a significant reduction in the rate of cognitive deficit, amyloid beta pathology and inflammation

with the administration of ANAVEX ® 3-71.

The FDA has granted Orphan Drug Designation to ANAVEX ® 3-71

for the treatment of FTD.

During pathological conditions ANAVEX ® 3-71

demonstrated the formation of new synapses between neurons (synaptogenesis) without causing an abnormal increase in the number of astrocytes.

In neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease, synaptogenesis is believed to be impaired.

preclinical data presented also indicates that in addition to reducing oxidative stress, ANAVEX ® 3-71 has the potential

to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed to

play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.

In July 2020, we commenced the First-in-Human Phase

1 clinical trial of ANAVEX ® 3-71.

ANAVEX ® 3-71 was previously granted orphan drug designation for the treatment

of Frontotemporal Dementia (“FTD”) by the FDA.

ANAVEX ® 3-71 is an orally administered small molecule targeting

sigma-1 and M1 muscarinic receptors that is designed to be beneficial for neurodegenerative diseases.

In preclinical studies, ANAVEX ® 3-71

demonstrated disease-modifying activity against the major hallmarks of Alzheimer’s disease in transgenic (3xTg-AD) mice, including

cognitive deficits, amyloid and tau pathologies, as well as beneficial effects on mitochondrial dysfunction and neuroinflammation.

clinical trial was a prospective double-blind, randomized, placebo-controlled trial in Australia.

A total of 36 healthy male and female

subjects were included.

Single escalating doses of ANAVEX ® 3-71 were administered in order to evaluate the safety, tolerability,

and PK of ANAVEX ® 3-71 and the effects of food and gender on its PK in healthy volunteers.

The Phase 1 clinical trial was a prospective double-blind,

randomized, placebo-controlled trial conducted in Australia.

A total of 36 healthy male and female subjects were included.

Single escalating

doses of ANAVEX ® 3-71 were administered in order to evaluate the safety, tolerability, and PK of ANAVEX ® 3-71

and the effects of food and gender on its PK in healthy volunteers.

The trial met

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Based on these

results, and ANAVEX ® 3-71’s pre-clinical profile, we intend to advance ANAVEX ® 3-71 into a biomarker-driven

results, and ANAVEX ® 3-71 pre-clinical profile, the Company intends to advance ANAVEX ® 3-71 into a biomarker-driven

clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect

of treatment with ANAVEX ® 3-71.

The first of these trials is being conducted in Schizophrenia.

Schizophrenia

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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 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

produced small molecule drug candidates with unique modes of action, based on our understanding of sigma receptors.

Sigma receptors may

be targets for therapeutics to combat many human diseases, both of neurodegenerative nature, including Alzheimer’s disease, as well

as of neurodevelopmental nature, like Rett syndrome.

When bound by the appropriate ligands, sigma receptors influence the functioning

of multiple biochemical signals that are involved in the pathogenesis (origin or development) of disease.

Multiple viruses including SARS-CoV-2

(COVID-19) induce cellular stress by intrinsic mitochondrial apoptosis and other related cellular processes, in order to ensure survival

and replication.

Hence, it is possible that SIGMAR1 could play a role in modulating the cellular response to viral infection and ameliorate

pathogenesis.

Compounds that have been subjects of our research

include the following:

ANAVEX ® 2-73 (blarcamesine)

We believe ANAVEX ® 2-73 may offer a

disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of SIGMAR1.

ANAVEX ® 2-73 is

being developed in an oral liquid once-daily formulation for rare diseases such as Rett syndrome as well as an oral once-daily capsule

formulation for diseases such as Alzheimer’s disease.

In Rett syndrome, administration of ANAVEX ® 2-73

in liquid form resulted in both significant and dose-related improvements in an array of behavioral paradigms in the MECP2 HET Rett syndrome

disease model.

In addition, in a further experiment sponsored by Rettsyndrome.org, ANAVEX ® 2-73 was evaluated in automatic

visual response and respiration tests in 7-month-old mice, an age at which advanced pathology is evident.

Vehicle-treated MECP2 mice demonstrated

fewer automatic visual responses than wild-type mice.

Treatment with ANAVEX ® 2-73 for four weeks significantly increased

the automatic visual response in the MECP2 Rett syndrome disease mice.

Additionally, chronic oral dosing daily for 6.5 weeks of ANAVEX ® 2-73

starting at ~5.5 weeks of age was conducted in the MECP2 HET Rett syndrome disease mouse model assessed the different aspects of muscular

coordination, balance, motor learning and muscular strengths, some of the core deficits observed in Rett syndrome.

Administration of ANAVEX ® 2-73

resulted in both significant and dose related improvements in an array of these behavioral paradigms in the MECP2 HET Rett syndrome disease

In May 2016 and June 2016, the FDA granted Orphan

Drug Designation to ANAVEX ® 2-73 for the treatment of Rett syndrome and infantile spasms, respectively.

In November 2019,

the FDA granted ANAVEX ® 2-73 the Rare Pediatric Disease (RPD) designation for the treatment of Rett syndrome.

The RPD designation

is intended to encourage the development of treatments for rare pediatric diseases.

Further, in February 2020, the FDA granted Fast Track

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

The FDA Fast Track program

is designed to facilitate and expedite the development and review of new drugs to address unmet medical needs in the treatment of serious

and life-threatening conditions.

For Parkinson’s disease, data demonstrates significant

improvements and restoration of function in a disease modifying animal model of Parkinson’s disease.

Significant improvements were

seen on all measures tested:

behavioral, histopathological, and neuroinflammatory endpoints.

In October 2020, we completed a double-blind,

randomized, placebo-controlled proof-of-concept Phase 2 trial with ANAVEX ® 2-73 in Parkinson’s disease dementia, to

study the effect of the compound on both the cognitive and motor impairment of Parkinson’s disease.

The Phase 2 trial enrolled approximately

132 patients for 14 weeks, randomized 1:1:1 to two different ANAVEX ® 2-73 doses, 30 mg and 50 mg, or placebo.

The ANAVEX ® 2-73

Phase 2 Parkinson’s disease dementia trial design incorporated genomic precision medicine biomarkers identified in the ANAVEX ® 2-73

Phase 2a Alzheimer’s disease trial.

The trial demonstrated that ANAVEX ® 2-73

was safe and well tolerated in oral doses up to 50 mg once daily.

The results showed clinically meaningful, dose-dependent, and statistically

significant improvements in the CDR computerized assessment system analysis.

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

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

has shown pharmacological, histological and behavioral evidence as a potential neuroprotective, anti-amnesic, anti-convulsive and anti-depressive

therapeutic agent, due to its potent affinity to SIGMAR1 and moderate affinities to M1-4 type muscarinic receptors.

In addition, ANAVEX ® 2-73

has shown a potential dual mechanism which may impact amyloid, tau pathology and inflammation.

In a transgenic Alzheimer’s disease

animal model Tg2576, ANAVEX ® 2-73 induced a statistically significant neuroprotective effect against the development of

oxidative stress in the mouse brain, as well as significantly increased the expression of functional and synaptic plasticity markers that

is apparently amyloid-beta independent.

It also statistically alleviated the learning and memory deficits developed over time in the animals,

regardless of sex, both in terms of spatial working memory and long-term spatial reference memory.

Based on the results of pre-clinical testing, we initiated

and completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX ® 2-73.

In this Phase 1 SAD trial, the maximum

tolerated single dose was defined per protocol as 55-60 mg.

This dose is above the equivalent dose shown to have positive effects in mouse

models of Alzheimer’s disease.

There were no significant changes in laboratory or ECG parameters.

ANAVEX ® 2-73 was

well tolerated below the 55-60 mg dose with only mild adverse events in some subjects.

Observed adverse events at doses above the maximum

tolerated single dose included headache and dizziness, which were moderate in severity and reversible.

These side effects are often seen

with drugs that target CNS conditions, including Alzheimer’s disease.

In November 2016, we completed a Phase 2a clinical

trial for ANAVEX ® 2-73, for the treatment of Alzheimer’s disease.

The open-label randomized trial was designed to

assess the safety and exploratory efficacy of ANAVEX ® 2-73 in 32 patients with mild-to-moderate Alzheimer’s disease.

The Phase 2a trial met both primary and secondary objectives of the trial.

In July 2018, we presented

the results of a genomic DNA and RNA evaluation of the participants in the Phase 2a clinical trial.

More than 33,000 genes were analyzed

using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA and RNA data in patients treated

with ANAVEX ® 2-73.

The analysis identified genetic variants that impacted response to ANAVEX ® 2-73, among

them variants related to the SIGMAR1, the target for ANAVEX ® 2-73.

Results showed that trial participants with the common

SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive (MMSE)

and functional (ADCS-ADL) scores.

The results from this evaluation supported the continued evaluation of genomic information in subsequent

clinical trials, since these signatures can now be applied to neurological indications tested in future clinical trials with ANAVEX ® 2-73

including Alzheimer’s disease, Parkinson’s disease dementia and Rett syndrome.

ANAVEX ® 2-73

data met prerequisite information in order to progress into a Phase 2b/3 placebo-controlled trial.

On July 2, 2018, the Human Research

Ethics Committee in Australia approved the initiation of our Phase 2b/3, double-blind, randomized, placebo-controlled 48-week safety and

efficacy trial of ANAVEX ® 2-73 for the treatment of early Alzheimer’s disease.

Clinical trial sites in Canada, the

United Kingdom, the Netherlands and Germany were also added.

This Phase 2b/3 trial design incorporates inclusion of genomic precision

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

We believe preclinical data from our studies also

supports further research into the use of ANAVEX ® 2-73 as a potential platform drug for other neurodegenerative diseases

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

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

for Angelman Syndrome, ANAVEX ® 2-73 was assessed in a mouse model for the development of audiogenic seizures.

indicated that ANAVEX ® 2-73 administration significantly reduced audiogenic-induced seizures in mice.

In a study sponsored

by FRAXA Research Foundation regarding Fragile X syndrome, data demonstrated that ANAVEX ® 2-73 restored hippocampal brain-derived

neurotrophic factor (BDNF) expression to normal levels.

BDNF under-expression has been observed in many neurodevelopmental and neurodegenerative

BDNF signaling promotes maturation of both excitatory and inhibitory synapses.

ANAVEX ® 2-73 normalization of

BDNF expression could be a contributing factor for the positive preclinical data observed in both neurodevelopmental and neurodegenerative

disorders like Angelman and Fragile X syndromes.

In addition, preclinical data to-date also indicates

that ANAVEX ® 2-73 has the potential to demonstrate protective effects of mitochondrial enzyme complexes during pathological

conditions, which, if impaired, may play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.

In addition, preclinical data on ANAVEX ® 2-73

related to multiple sclerosis indicates that ANAVEX ® 2-73 may promote remyelination in multiple sclerosis disease.

our data also demonstrates that ANAVEX ® 2-73 has the potential to provide protection for oligodendrocytes and oligodendrocyte

precursor cells (“OPCs”), as well as central nervous system neurons in addition to helping repair by increasing OPC proliferation

and maturation in tissue culture.

In March 2018, we presented preclinical data of ANAVEX ® 2-73

in a genetic mouse model of tuberous sclerosis complex (“TSC”).

TSC is a rare genetic disorder characterized by the growth

of numerous benign tumors in many parts of the body with a high incidence of seizures.

The preclinical data demonstrated that treatment

with ANAVEX ® 2-73 significantly increased survival and reduced seizures in those mice.

ANAVEX ® 3-71

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

dysfunctions.

ANAVEX ® 3-71 indicates extensive therapeutic advantages in Alzheimer’s and other protein-aggregation-related

diseases given its ability to enhance neuroprotection and cognition via SIGMAR1 activation and M1 muscarinic allosteric modulation.

A preclinical study examined the response of ANAVEX ® 3-71

in aged transgenic animal models and showed a significant reduction in the rate of cognitive deficit, amyloid beta pathology and inflammation

with the administration of ANAVEX ® 3-71.

In April 2016, the FDA granted Orphan Drug Designation to ANAVEX ® 3-71

for the treatment of FTD.

During pathological conditions ANAVEX ® 3-71

demonstrated the formation of new synapses between neurons (synaptogenesis) without causing an abnormal increase in the number of astrocytes.

In neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease, synaptogenesis is believed to be impaired.

preclinical data presented also indicates that in addition to reducing oxidative stress, ANAVEX ® 3-71 has the potential

to demonstrate protective effects of mitochondrial enzyme complexes during pathological conditions, which, if impaired, are believed to

play a role in the pathogenesis of neurodegenerative and neurodevelopmental diseases.

In July 2020, we commenced the first Phase 1 clinical

trial of ANAVEX ® 3-71.

The trial took place in Australia and was a double-blind, randomized, placebo-controlled, Phase

1 trial to evaluate safety and tolerability, and PK of oral escalating doses of ANAVEX ® 3-71

including effects of food and gender in healthy volunteers.

The trial met its primary and secondary

endpoints of safety, respectively, with no serious adverse events (SAEs) or dose-limiting toxicities observed, as more fully described

above under Clinical Trials Overview – Schizophrenia, Frontotemporal Dementia and Alzheimer’s disease .

Based on these

results, and ANAVEX ® 3-71 pre-clinical profile, the Company intends to advance ANAVEX ® 3-71 into a biomarker-driven

clinical development dementia program for the treatment of schizophrenia, FTD and Alzheimer’s disease, evaluating longitudinal effect

of treatment with ANAVEX ® 3-71.

We believe the results of this clinical trial and preclinical study could serve as a basis

for advancing into respective registration trials in the U.S.

these trials, the ANAVEX ® 3-71-SZ-001 clinical trial, commenced in March 2024 and is more fully described above under

Clinical Trials Overview – Schizophrenia.

we announced the completion of enrollment of Part B of the placebo-controlled Phase 2 study, which includes more participants and a longer

treatment duration, and will provide more comprehensive data on the efficacy and safety of ANAVEX ® 3-71 in schizophrenia.

We expect to report top-line data of the Phase 2 ANAVEX ® 3-71-SZ-001 clinical trial in the second half of 2025.

ANAVEX ® 1-41

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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.

disease – In 2024, an estimated 6.9 million Americans were 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.

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

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.

males have a different chromosome combination from females, boys who have the genetic MECP2 mutation are affected in devastating

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.

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

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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

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.

According to iHealthcareAnalyst, Inc.

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Patents, Trademarks and Intellectual Property

We hold ownership or exclusive rights to twenty-six

We hold ownership or exclusive rights to twenty-seven

(27) issued U.S.

patents, nineteen (19) pending U.S.

patents, twenty-two (22) 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.

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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absent any patent term extension for regulatory delays.

Additionally, we own two issued U.S.

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.

Additionally, we own three issued U.S.

patents for the treatment of insomnia,

anxiety, or agitation.

The first of the three 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.

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

The second and

third of the three patents claim dosage forms comprising any of, or any combination of ANAVEX ® 2-73, ANAVEX ® 19-144,

and/or ANAVEX ® 1-41.

These patents are expected to expire in July 2037, absent any patent term extension for regulatory

Further, we own one issued U.S.

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expenses and professional services.

Comparison of the three months ended December 31,

2024 and 2023

Comparison of the three- and six- months ended

March 31, 2025 and 2024

Operating Expenses

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 $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

of ANAVEX ® 2-73 for potential commercial use, and to support the MAA;

(iii) an increase of $1.5 million over the comparable period relating to expenditures on the ANAVEX ® 3-71-SZ-001

clinical trial, which trial commenced in the second quarter of fiscal 2024.

March 31, 2025 were $12.5 million, compared to $12.6 million for the comparable three months ended March 31, 2024.

Total operating expenses

for the six months ended March 31, 2025 were $26.1 million, compared to $24.0 million for the comparable six months ended March 31, 2024.

Our research and development expenses for the three

months ended March 31, 2025 were $9.9 million, as compared to $9.7 million for the three months ended March 31, 2024.

Our research and

development expenses for the six months ended March 31, 2025 were $20.3 million, compared to $18.4 million in the comparable six months

ended March 31, 2024.

The increase in research and development expenses

during the three- and six-month periods is primarily related to the following:

(i) an increase of approximately $2.1 million in the three-month period and $3.7 million in the six-month

period over the comparable periods 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 in personnel costs of $0.9 million for the six-month period related to the addition of new

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

Agency (EMA);

(iii) an increase of approximately $1.2 million in the six-month period over the comparable period relating

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

These increases were partially offset by (i) a decrease

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.

of approximately $0.6 million in the three-month period and $1.2 million in the six-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 open label extension and (ii)

a decrease in stock based compensation charges of $0.8 million in the three-month period and $0.9 million in the six-month period due

to a change in estimates associated with milestone-based options.

The following table summarizes our research and development

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

expenses for the three- and six-months ended March 31, 2025 and 2024 (in thousands):

Three months ended March 31,

Six months ended March 31,

Cost of external service providers

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Total research and development costs

During the three-months ended December 31, 2024 and

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

During the three- and six-months ended March 31, 2025

and 2024, external service provider costs by product candidate was as follows (in thousands):

Three months ended March 31,

Six months ended March 31,

ANAVEX ® 2-73

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Total external service provider costs

General and administrative expenses were $3.1 million

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.

General and administrative expenses were $2.6

million for the three months ended March 31, 2025, as compared to $2.9 million for the same quarter of fiscal 2024.

administrative expenses were $5.8 million for the six months ended March 31, 2025, as compared to $5.6 million for the six months

ended March 31, 2024.

In both periods, increases in legal fees were offset by a decrease in stock

based compensation charges.

Other income (net)

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,

Net other income for the three-months ended March

31, 2025 was $1.3 million, as compared to $2.1 million for the comparable three-months ended March 31, 2024.

The decrease 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 decrease in research and development incentive income, as a result of the completion of the open label extensions of our Australian

clinical trials.

Net other income for the six months ended March 31,

2025 was $2.8 million as compared to $4.8 million for the comparable six months ended March 31, 2024.

The decrease in other income for

the six-month period is also primarily related to a decrease in interest income associated with a change in market wide rates and principal

balances held, as well as decrease in research and development incentive income, as a result of the completion of the open label extensions

of our Australian clinical trials

Net loss for the three-months ended March 31, 2025,

was $11.2 million, or $0.13 per share, as compared to $10.5 million, or $0.13 per share in the comparative quarter of fiscal 2024.

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.

Net loss for the six-months ended March 31, 2025,

was $23.3 million, or $0.27 per share, as compared to $19.2 million, or $0.23 per share for the six-months ended March 31, 2024.

in net loss for the quarter and year-to-date periods 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 December 31, 2024, we had net current assets of

On March 31, 2025, we had net current assets of $99.8

million, a decrease of approximately $20.5 million from our year ended September 30, 2024.

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The following

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

table summarizes cash flows during the six months ended March 31, 2025 and 2024 (in thousands):

Net cash flows used in operating activities

Net cash flows from financing activities

Net cash flows provided by financing activities

Decrease in cash and cash equivalents

Cash flow used in operating activities

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.

Net cash used in operating activities for the six-months

ended March 31, 2025 was $18.0 million, compared to $19.0 million during the comparable period ended March 31, 2024.

The principal reason

for this is due to changes in working capital as a result of (i) the receipt of the annual research and development incentive tax refund

during the current quarter, whereas such amount was received in third quarter of fiscal 2024 and (ii) an increase in accrued liabilities

related to activities associated with a large manufacturing run for ANAVEX ® 2-73, which work was not yet invoiced at March

Cash flow provided by financing activities

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.

Cash flows from financing activities for the six-month

period ended March 31, 2025 was $1.6 million, compared to cash provided from financing activities of $7.3 million during the comparable

six-month period ended March 31, 2024.

During the six months ended March 31, 2025, we received

$1.6 million in cash from the exercise of stock options by our employees.

During the six months ended March 31, 2024, cash provided

by financing activities was primarily attributable to cash received from the issuance of common shares at various market prices under

the 2023 Purchase Agreement.

Other Financings

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in value of its shares of Common Stock from time to time over a three-year period until February 3, 2026.

On any business day and subject to certain customary

conditions, the Company may direct Lincoln Park to purchase up to 200,000 shares of Common Stock (such purchases, “Regular Purchases”).

The amount of a Regular Purchase may increase under certain circumstances based on the market price of the Common Stock;

provided, however,

that Lincoln Park’s committed obligation under any Regular Purchase shall not exceed $4.0 million.

The purchase price of shares

of Common Stock will be based on the then prevailing market prices of such shares at the time of sales as described in the 2023 Purchase

There are no limits on the price per share that Lincoln Park may pay to purchase Common Stock under the 2023 Purchase Agreement.

In addition, if the Company has directed Lincoln Park to purchase the full amount of Common Stock available as a Regular Purchase on a

given day, it may direct Lincoln Park to purchase additional amounts as “accelerated purchases” and “additional accelerated

purchases,” each as set forth in the 2023 Purchase Agreement.

On any business day and subject to having an effective

registration statement and subject to certain customary conditions, the Company may direct Lincoln Park to purchase up to 200,000 shares

of Common Stock (such purchases, “Regular Purchases”).

The amount of a Regular Purchase may increase under certain circumstances

based on the market price of the Common Stock;

provided, however, that Lincoln Park’s committed obligation under any Regular Purchase

shall not exceed $4.0 million.

The purchase price of shares of Common Stock will be based on the then prevailing market prices of such

shares at the time of sales as described in the 2023 Purchase Agreement.

There are no limits on the price per share that Lincoln Park

may pay to purchase Common Stock under the 2023 Purchase Agreement.

In addition, if the Company has directed Lincoln Park to purchase

the full amount of Common Stock available as a Regular Purchase on a given day, it may direct Lincoln Park to purchase additional amounts

as “accelerated purchases” and “additional accelerated purchases,” each as set forth in the 2023 Purchase Agreement.

The 2023 Purchase Agreement limits the Company’s

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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 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.

During the six-months ended March 31, 2025, the Company

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

During the six-month period ended March 31, 2024, the Company

issued to Lincoln Park an aggregate of 1,503,707 shares of Common Stock under the 2023 Purchase Agreement, including 1,500,000 shares

of Common Stock for an aggregate purchase price of $7,411,700 and 3,707 commitment shares.

On March 31, 2025, there was an unused amount of $110.8

million under the 2023 Purchase Agreement.

The Company will need to obtain effectiveness of a new registration statement in order to access

funds under the 2023 Purchase Agreement.

Off-Balance Sheet Arrangements

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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