Welcome to the Anavex Life Sciences Corp. Fiscal Second Quarter 2018 Results Conference Call. My name is Vanessa, and I will be your operator for today's call. [Operator Instructions] And I will now turn the call over to your host, Meggie Purcell. You may begin.

Thank you, everyone, and good afternoon. We appreciate you joining us today for the Anavex Life Sciences conference call and webcast. Our agenda is to review the company's financial results for the second quarter of fiscal 2018 and highlight recent corporate developments. A taped replay of this call will be available approximately 2 hours after the call's conclusion and will remain available for 2 weeks. The call will be -- also be available for replay on Anavex' website at www.anavex.com. With us today is Dr. Christopher U. Missling, President and Chief Executive Officer; and Sandra Boenisch, Principal Financial Officer. Dr. Missling and Ms. Boenisch will make prepared remarks, and then we will take questions from analysts. Before we begin, please note that during the course of this conference call, the company will make some projections and forward-looking statements regarding future events. We encourage you to review the company's filings with the SEC. This includes, without limitation, the company's Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, risks inherent to the -- in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights. And with that, I'd like to turn the call over to Dr. Missling.

Thank you, Meggie. I'd like to thank everyone for joining us today's conference call review our second quarter financial results. I'd like to discuss our most recent quarter and share with you our clinical update for ANAVEX2-73. First, we are pleased to report that we were recently informed by the Ethics Committee in Australia that the currently ongoing 104-week Phase IIa Alzheimer extension trial of ANAVEX2-73 has been approved to continue for an additional 2 years, beyond the cumulative more than 3 years consisting of the first 57-week and continued 104-week study. The additional 2 years will now provide over 5 years of cumulative safety and tolerability data for ANAVEX2-73. This further extension was based on continued requests by patients in this study, their caregivers and physicians. The further extension is in addition and independent of the company's planned larger Phase II/III double-blind, placebo-controlled study of ANAVEX2-73 in Alzheimer's disease. Additionally, we are looking forward, focusing on executing 3 new clinical trials using the inclusion of advanced genomic biomarkers into late-stage CNS precision medicine trials, including the Rett syndrome, Parkinson disease dementia and Alzheimer disease trials. With respect to our Phase IIa study -- Phase II study in Rett syndrome, we anticipate initiating this clinical trial in the second half of 2018. The company is also moving forward with the Phase II trial of ANAVEX2-73 in Parkinson disease dementia or PDD, which will study the effect of the compound on both the cognitive and motor impairment of Parkinson disease. The double-blind, randomized, placebo-controlled Phase II study is expected to initiate in the second half of 2018. We are also on track to submitting the planned Alzheimer's Phase II/III study to regulatory authorities. The randomized, double-blind, placebo-controlled study will evaluate the safety, tolerability and efficacy of ANAVEX2-73 in Alzheimer disease patients and will be conducted in both Australia and North America. The study is expected to initiate in the second half of 2018. Additional protocol details of these trials will be shared in more detail as they approach initiation. Finally, as I alluded to earlier, with the recent availability of genome sequencing information from the patients, in the current Phase IIa study, using next-generation sequencing and RNA data, Anavex is able to apply a precision medicine strategy to the development of ANAVEX2-73. Next-generation sequencing or NGS DNA and RNA data from the clinical trial was generated by Eurofins Genomics, one of the world-leading genomics service providers using the Illumina HiSeq 2500 platform and subjected to the highest quality certification standards, including Good Clinical Practice, GCP; Good Laboratory Practice, GLP; and ISO 9001, ISO 17025 and ISO 13485 quality certifications. The choice of accessing both DNA and RNA data enables more complete analysis of the genomic data. The company plans to present data on the genomic analysis at an upcoming scientific meeting. And now I would like to direct the call to Sandra Boenisch, Principal Financial Officer of Anavex, for a brief financial update.

Thank you, Christopher, and good afternoon. Our cash resources at March 31, 2018, were $25.7 million, and we have no debt. We believe we are sufficiently capitalized to fund our objectives for the next 24 months, given the support we receive from the Australian government and other partners. During the quarter, the company used $2.8 million in cash to fund operations. Operating expenses for the quarter were $4.7 million, which included $1.2 million in noncash charges, compared to $3.6 million for the comparative quarter in fiscal year 2017, inclusive of $0.9 million in noncash charges. The increase in operating expenses is primarily attributable to an increase in research and development activities due to an increase in expenses incurred in preparation for the clinical trials that Christopher just discussed, all of which are scheduled to commence during 2018. The net loss for the quarter was $4.8 million or $0.11 per share compared to a net loss of $1.5 million or $0.04 per share for fiscal 2017. With that, I'll turn the call back over to Christopher.

Thank you, Sandra. In summary, we continue to maintain a strong financial position, which will allow us to carry out the planned clinical studies for ANAVEX2-73. We anticipate our efforts will result in several significant key milestones and accomplishments in 2018, with the advancement of 3 clinical trials utilizing a precision medicine approach. We look forward to updating you as advancements are made, and I would like now open the call for questions. Operator, please go ahead.

[Operators Instructions] And it seems that we have our first question from Robert LeBoyer with Roth Capital.

Congratulations on meeting these milestones in -- during the quarter. I had a question on the genomic presentation and whether there have been any meetings that you've identified to present this data at this point.

Yes, we do have identified the meeting where we present, scientific meeting.

Just to rephrase that, is that something that can be announced at this point?

We'll announce it once we have the abstract being approved. It's a process. At scientific meetings, you have to submit an abstract or abstracts. And if they do get approved, then you will be able to present the data. And once that happens, we will then update if that is the case.

Okay, great. And just on the financial side, are you expecting any increases in the quarterly spending this year? Is it something that would be sequential and gradual? Or any inflection points or any guidance for expense levels?

We actually will expect not a real increase or not as significant for 2 factors. First of all, we expect reimbursement from the government in Australia for the prior advanced or repayment of contribution or grants. And the second part is that our payments of the clinical trials is already basically in process because the trial is not paid over the period of when they start actually -- the trial actually initiates. But it's evened out over the entire period of a study. And a study also includes preparation. And for that reason, the budget in the forthcoming quarters will not be much different than the previous quarters.

We have our next question from Caroline Palomeque with the Maxim Group.

So on the Phase IIa extension study, the additional 104 weeks that will be added, my question was about -- will you be stratifying the patients according to the concentration -- the high concentration of drug? As in the past, I know the high -- the patients that had a high concentration had that sustained cognitive benefit. And I'm wondering if that's a stratification -- that's a cohort that you're going to do. Or is that something that's going to be identified in a post-hoc analysis after the fact? That was my first question.

So can you summarize again the question, so to...

Sure. Yes, I'm wondering if the patients will be stratified by their concentration of drug, like the ones that had high concentration in the past had a different result than the ones that didn't. And I don't mean the higher level of drug that was dosed, but I mean their actual concentration of drug that they're able to sustain metabolically. Will that be -- will they be stratified by that?

You're talking about the Phase IIa, right? The...

Right, the Phase IIa, the upcoming extension, yes.

Exactly, right. So since it's a Phase IIa, you can look at, analyze it at any like -- in any shape or form you like. So we can do it based on drug dose, drug based on concentration, in all forms or shapes. So we don't know how we're going to do it, but we will analyze it as we see fit. But the most important thing is -- to keep in mind is that, that extension is a safety study, so -- are focusing really on accumulating data on daily dosing for this extended period of time, which we believe will be beneficial further down the road when we are submitting studies for potential discussion with the agencies, and we are able then to provide extremely long safety data of the drug. And that, I believe, could be a advantage coming forward because of the one thing you can never catch up with is a prolonged exposure of a drug.

Great, that's helpful. Then my other question was just about, how important is the genomic data for the future studies? I mean, will you be -- have -- I mean, how do you expect that to sort of play out? If you could just elaborate more on your genomic data and how that will be incorporated into the future studies, because I'm assuming that you're doing it not only in AD but also in the other studies as well?

That's correct. So we believe that the genomic data of ANAVEX2-73 in the respective patients will be extremely important. And this is for the following reason: we believe that the genomic data, what we have seen, and the data will be presented at scientific meeting, is relevant for the compound in the interaction with the compound. And that means if the impact on all future studies, and that information will be applied -- the stratification will be able to applied in all future studies of ANAVEX2-73. And because of it's known that a biomarker based on gene information has a significant advantage because it makes patient groups more homogeneous, that also result in a higher [ odds ] of succeeding in clinical trials, among other things being equal. And that's been provided in the literature very extensively. And so we are using really the same path of clinical study, of rigor to applying to the CNS indications: Rett syndrome, Parkinson with dementia and Alzheimer disease, which so far has been only applied to oncology. And that's also something which Anavex believes is at the forefront in that regard.

[Operator Instructions] I do not see any further questions at this time.

Thank you all for participating in today's conference call. I hope you are as excited as we are about the great progress and the prospects for the remainder of 2018. Should you need additional information or have any questions, please visit our website at www.anavex.com or call or email us. This concludes our remarks today, operator.

And thank you. And thank you, ladies and gentlemen. This concludes today's conference. We thank you for participating. You may now disconnect.