AVXL US Equity☆

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

(Mark

One)

☒ ANNUAL

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For

the fiscal year ended September 30, 2020

☐ TRANSITION

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For

the transition period from ______________ to________________

Commission

file number: 001-37606

ANAVEX LIFE SCIENCES CORP.

(Exact

name of registrant as specified in its charter)

51 W 52nd Street, 7th Floor, New York, NY USA 10019

(Address of principal executive offices) (Zip Code)

Registrant’s

telephone number, including area code 1-844-689-3939

Securities

registered under Section 12(b) of the Act:

Common Stock, $0.001 par value AVXL NASDAQ Stock Market LLC

Title of each class Trading Symbol Name of each exchange on which registered

Securities

registered pursuant to Section 12(g) of the Act:

Common

Stock, $0.001 par value

(Title

of class)

Indicate

by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐

No ☒

Indicate

by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes ☐

No ☒

Indicate

by checkmark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒

No ☐

Indicate

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant

to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that

the registrant was required to submit and post such files).

Yes ☒

No ☐

Indicate

by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,

“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated Filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

☐

Indicate

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐

No ☒

State

the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price

at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day

of the registrant’s most recently completed second fiscal quarter: $177,399,544 based on a price of $3.15 per share, being

the closing price of the registrant’s common stock on March 31, 2020.

Indicate

the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date

66,962,957issued

and outstanding as of December 28, 2020.

DOCUMENTS

INCORPORATED BY REFERENCE

None.

TABLE

OF CONTENTS

PART I 1

ITEM 1. BUSINESS 1

ITEM 1A. RISK FACTORS 22

ITEM 1B. UNRESOLVED STAFF COMMENTS 36

ITEM 2. PROPERTIES 36

ITEM 3. LEGAL PROCEEDINGS 36

ITEM 4. MINE SAFETY DISCLOSURES 36

ITEM 6 SELECTED FINANCIAL DATA 37

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 42

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 42

ITEM 9A. CONTROLS AND PROCEDURES 43

ITEM 9B OTHER INFORMATION 43

PART III 44

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 44

ITEM 11. EXECUTIVE COMPENSATION 47

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 53

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 55

ii

Forward

Looking Statements.

This

Annual Report on Form 10-K includes forward-looking statements. All statements other than statements of historical facts contained

in this Annual Report on Form 10-K, including statements regarding our anticipated future clinical and regulatory milestone events,

future financial position, business strategy and plans and objectives of management for future operations, are forward-looking

statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,”

“intend,” “expect” “should,” “forecast,” “could,” “suggest,”

“plan” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such forward-looking

statements include, without limitation, statements regarding:

• the impact of the COVID-19 outbreak and its effect on us;

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

• our ability to obtain the support of qualified scientific collaborators;

• our ability to identify and obtain additional product candidates;

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

• our ability to defend against product liability claims;

• our ability to safeguard against security breaches;

• our ability to comply with our intellectual property licensing agreements;

• our ability to defend against claims of intellectual property infringement;

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

• competition;

• the anticipated designs of our future clinical studies;

• our anticipated future cash position.

We

have based these forward-looking statements largely on our current expectations and projections about future events, including

the responses we expect from the U.S. Food and Drug Administration, (“FDA”), and other regulatory authorities and

financial trends that we believe may affect our financial condition, results of operations, business strategy, preclinical 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 this Annual Report on Form

10-K. These risks are not exhaustive. Other sections of this Annual Report on Form 10-K 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. 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 Annual Report on Form 10-K, the terms “we,” “us,” “our,”, “Company”

and “Anavex” mean Anavex Life Sciences Corp., unless the context clearly requires otherwise.

iii

PART

I

ITEM

1. BUSINESS

Overview

and Strategy

Anavex

Life Sciences Corp. is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics by

applying precision medicine to central nervous system (“CNS”) diseases with high unmet need. We analyze genomic data

from clinical studies to identify biomarkers, which we use to select patients that will receive the therapeutic benefit for the

treatment of neurodegenerative and neurodevelopmental diseases.

Our

lead compound, ANAVEX®2-73, 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”).

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.

The

following table summarizes key information about our programs:

Anavex

has a portfolio of compounds varying in sigma-1 receptor (S1R) binding activities. The SIGMAR1 gene encodes the S1R protein, which

is an intracellular chaperone protein with important roles in cellular communication. S1R 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 S1R, 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

target engagement or receptor occupancy (RO) with S1R in the brain.

Cellular

Homeostasis

Many

diseases are possibly directly caused by chronic homeostatic imbalances or cellular stress of brain cells. In pediatric diseases

like Rett syndrome or infantile spasms, the chronic cellular stress is possibly caused by the presence of a constant genetic mutation.

In neurodegenerative diseases, such as Alzheimer’s and Parkinson’s diseases, chronic cellular stress is possibly caused

by age-correlated buildup of cellular insult and hence chronic cellular stress. Specifically, defects in homeostasis of protein

or ribonucleic acid (“RNA”) lead to the death of neurons and dysfunction of the nervous system. The spreading of protein

aggregates resulting in a proteinopathy, a characteristic finding in Alzheimer’s and Parkinson’s diseases that results

from disorders of protein synthesis, trafficking, folding, processing or degradation in cells. The clearance of macromolecules

in the brain is particularly susceptible to imbalances that result in aggregation and degeneration in nerve cells. For example,

Alzheimer’s disease pathology is characterized by the presence of amyloid plaques, neurofibrillary tangles, which are aggregates

of hyperphosphorylated Tau protein that are a marker of other diseases known as tauopathies as well as inflammation of microglia.

With the SIGMAR1 activation through SIGMAR1 agonists like ANAVEX®2-73, our approach is to restore cellular balance,

i.e. homeostasis. Therapies that correct defects in cellular homeostasis might have the potential to halt or delay neurodevelopmental

and neurodegenerative disease progression.

ANAVEX®2-73-specific

Biomarkers

A

full genomic analysis of Alzheimer’s disease (AD) patients treated with ANAVEX®2-73 resulted in the identification

of actionable genetic variants. A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX®2-73

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

biomarker hypothesis. It is expected that excluding patients with these two identified biomarker variants (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,

which are considered independent of AD pathology, as well as multiple endpoints and time-points, provides support for precision

medicine clinical development of ANAVEX®2-73 by using genetic biomarkers identified within the study population

itself to target patients who are most likely to respond to ANAVEX®2-73 treatment in AD as well as indications

like Parkinson’s disease dementia (PDD) or Rett syndrome (RTT) in which ANAVEX®2-73 is currently studied.

Clinical

Studies Overview

Alzheimer’s

Disease

In

November 2016, we completed a Phase 2a clinical trial, consisting of PART A and PART B, which lasted a total of 57 weeks, for

ANAVEX®2-73 in mild-to-moderate Alzheimer’s patients. This open-label randomized trial met both primary and

secondary endpoints and was designed to assess the safety and exploratory efficacy of ANAVEX®2-73 in 32 patients.

ANAVEX®2-73 targets sigma-1 and muscarinic receptors, which have been shown in preclinical studies to reduce stress

levels in the brain believed to restore cellular homeostasis and to reverse the pathological hallmarks observed in Alzheimer’s

disease. The Phase 2a trial demonstrated positive pharmacokinetic (PK) and pharmacodynamic (PD) data, which established a concentration-effect

relationship between ANAVEX®2-73 and study measurements. These measures obtained from all patients who participated

in the entire 57 weeks include exploratory cognitive and functional scores as well as biomarker signals of brain activity. Additionally,

the study appears to show that ANAVEX®2-73 activity is enhanced by its active metabolite (ANAVEX19-144), which

also targets the sigma-1 receptor and has a half-life approximately twice as long as the parent molecule.

Two

consecutive trial extensions for the Phase 2a trial have allowed participants who completed the 52-week PART B of the study to

continue taking ANAVEX®2-73, providing an opportunity to gather extended safety data for a cumulative time period

of five years. In August 2020, patients completing these Phase 2a trial extensions were granted continued access to treatment

with ANAVEX®2-73 through the Australian Government Department of Health – Therapeutic Goods Administration

(TGA) compassionate use Special Access Scheme.

A

larger Phase 2b/3 double-blind, placebo-controlled study of ANAVEX®2-73 in Alzheimer’s disease

commenced in August 2018. The Phase 2b/3 study will enroll approximately 450 patients for 48 weeks, randomized 1:1:1 to two

different ANAVEX®2-73 doses or placebo. The trial commenced in Australia; and during fiscal 2020 additional

regions were added in the United Kingdom, The Netherlands, Germany and Canada. The ANAVEX®2-73 Phase 2b/3

study design incorporates genomic precision medicine biomarkers identified in the ANAVEX®2-73 Phase 2a study.

Primary and secondary endpoints will assess safety and both cognitive and functional efficacy, measured through

Alzheimer’s Disease Assessment Scale – Cognition (ADAS-Cog), ADCS-ADL and Clinical Dementia Rating – Sum of

Boxes for cognition and function (CDR-SB).

In

October 2019, we initiated a long-term open label extension study of ANAVEX®2-73, entitled the ATTENTION-AD study,

for patients who have completed the 48-week Phase 2b/3 placebo-controlled trial referenced above. This study is expected to last

two years and will give patients the opportunity to continue their treatment.

Rett

Syndrome

In

February 2016, we presented positive preclinical data for ANAVEX®2-73 in Rett syndrome, a rare neurodevelopmental

disease. The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”). In January 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 planned Rett syndrome program of ANAVEX®2-73 for

the treatment of Rett syndrome. The studies will be conducted in a range of patient age demographics and geographic regions.

The first Phase 2 study, which took place

in the United States, was completed in December 2020. This trial was a randomized double-blind, placebo-controlled safety, tolerability,

pharmacokinetic and efficacy study of oral liquid ANAVEX®2-73formulation 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 convenient oral liquid once-daily dosing of 5 mg ANAVEX®2-73

was well-tolerated and demonstrated dose-proportional PK (pharmacokinetics). All secondary efficacy endpoints of the trial showed

statistically significant and clinically meaningful, drug exposure-dependent response in the Rett Syndrome Behaviour Questionnaire

(RSBQ) Total scores, when compared to placebo, in the ITT cohort (all participants, p = 0.048). 66.7% of ANAVEX®2-73

treated subjects showed a statistically significant improvement in drug exposure-dependent 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 Clinical Global Impression Improvement (CGI-I) scores throughout the 7-week study, when compared to placebo in

the ITT cohort (all participants, p = 0.014). 86.7% of ANAVEX®2-73 treated subjects showed a statistically significant

CGI-I response, defined as sustained improvement to treatment, as compared to 40% of the subjects on 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.

The second Phase 2 study of ANAVEX®2-73

for the treatment of Rett syndrome, called the AVATAR study, commenced in June 2019. This study is taking place in Australia and

the United Kingdom using a convenient once-daily oral liquid ANAVEX®2-73 formulation at a higher dose than the

U.S. based Phase 2 study for Rett syndrome. The study will evaluate the safety and efficacy of ANAVEX®2-73 in approximately

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

who participate in the study will be eligible to receive ANAVEX®2-73 under a voluntary open label extension protocol.

In

July 2020, we commenced the third study of ANAVEX®2-73 for the treatment of Rett syndrome, called the EXCELLENCE

study. This Phase 2/3 study in pediatric patients with Rett syndrome is using a convenient once-daily oral liquid ANAVEX®2-73

formulation. The study will evaluate the safety and efficacy of ANAVEX®2-73 in at least 69 pediatric patients,

aged 5 to 18, over a 12-week treatment period incorporating ANAVEX®2-73 specific precision medicine biomarkers.

All patients who participate in the study will be eligible to receive ANAVEX®2-73 under a voluntary open label

extension protocol.

Parkinson’s

Disease

In

September 2016, we presented positive preclinical data for ANAVEX®2-73 in Parkinson’s disease, which demonstrated

significant improvements on all measures: behavioral, histopathological, and neuroinflammatory endpoints. The study was funded

by the Michael J. Fox Foundation. Additional data was announced in October 2017 from the model for experimental parkinsonism.

The data presented indicates that ANAVEX®2-73 induces robust neurorestoration in experimental parkinsonism. The

encouraging results we have gathered in this model, coupled with the favorable profile of this compound in the Alzheimer’s

disease trial, support the notion that ANAVEX®2-73 is a promising clinical candidate drug for 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 (PDD), to study the effect of the compound on both the cognitive and motor impairment of

Parkinson’s disease. The Phase 2 study enrolled approximately 132 patients for 14 weeks, randomized 1:1:1 to two different

ANAVEX®2-73 doses, 30mg and 50mg, or placebo. The ANAVEX®2-73 Phase 2 PDD study design incorporated

genomic precision medicine biomarkers identified in the ANAVEX®2-73 Phase 2a study.

The

study found that ANAVEX®2-73 was safe and well tolerated in oral doses up to 50mg once daily. The results show

clinically meaningful, dose-dependent, and statistically significant improvements in the Cognitive Drug Research (CDR) computerized

assessment system analysis. The study confirmed the precision medicine approach of targeting SIGMAR1 as a genetic biomarker in

response to ANAVEX®2-73.

In

August 2020, we announced a financial commitment by Shake It Up Australia Foundation for Parkinson’s Research to fund up

to 50% of the costs of an Australian clinical study to develop ANAVEX®2-73 for the disease modifying treatment

of Parkinson’s disease. The financial commitment would be made through private placement purchases of our common stock at

200% of the fair market value on the purchase date and will be contingent upon the completion of certain clinical trial milestones

relating to the proposed clinical trial. The proposed clinical trial will use a convenient, once-daily oral ANAVEX®2-73

formulation to confirm the previously established potential disease modifying features of ANAVEX®2-73 in an animal

model of Parkinson’s disease. Safety and efficacy will be investigated in an appropriately powered placebo-controlled clinical

study of Parkinson’s disease patients over at least 48-weeks including ANAVEX®2-73-specific precision medicine

biomarkers.

Frontotemporal

Dementia

In

July 2020, we commenced the First-in-Human Phase 1 clinical trial of ANAVEX®3-71, which 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.

The

Phase 1 clinical trial will be a prospective double-blind, randomized, placebo-controlled study. A total of at least 36 healthy

male and female subjects will be included. Single escalating doses of ANAVEX®3-71 will be administered in order

to evaluate the safety, tolerability, and pharmacokinetics (PK) of ANAVEX®3-71 and the effects of food and gender

on its PK in healthy volunteers. This study is expected to be followed by longer duration dosing including patients with FTD or

other dementia indications with unmet medical need, incorporating exploratory efficacy and disease biomarker measures.

Our

Pipeline

Our

research and development pipeline includes ANAVEX®2-73 currently in three different clinical study indications,

and several other compounds in different stages of clinical and pre-clinical study.

Our

proprietary SIGMACEPTORTM 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 S1R 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)

ANAVEX®2-73

may offer a disease-modifying approach in neurodegenerative and neurodevelopmental diseases by activation of sigma-1 receptors.

In

Rett syndrome, administration of ANAVEX®2-73 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 mouse. 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 model.

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. This study, which took place in the United States, was completed in December 2020, however two

other clinical trials in Rett syndrome, the AVATAR study and the EXCELLENCE study, are still underway. The studies are being conducted

in a range of patient age demographics and geographic regions, as more fully described above under Clinical Studies Overview

– Rett Syndrome.

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 to ANAVEX®2-73 the Rare Pediatric Disease

(RPD) designation for the treatment of Rett syndrome. The RPD designation provides priority review by the FDA 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 (PDD), to study the effect of the compound

on both the cognitive and motor impairment of Parkinson’s disease. The Phase 2 study enrolled approximately 132 patients

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

Phase 2 PDD study design incorporated genomic precision medicine biomarkers identified in the ANAVEX®2-73 Phase

2a study.

The

study found that ANAVEX®2-73 was safe and well tolerated in oral doses up to 50mg once daily. The results show

clinically meaningful, dose-dependent, and statistically significant improvements in the Cognitive Drug Research (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 study to the FDA to obtain regulatory guidance.

In

Alzheimer’s disease (AD) 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 sigma-1 receptors and moderate affinities to M1-4 type muscarinic receptors. In addition, ANAVEX®2-73

has shown a potential dual mechanism which may impact both amyloid and tau pathology. In a transgenic AD 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 AD. There were no significant changes in laboratory or electrocardiogram

(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 AD.

In

December 2014, a Phase 2a clinical trial was initiated 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. ANAVEX®2-73 targets sigma-1 and muscarinic receptors,

which have been shown in preclinical studies to reduce stress levels in the brain believed to restore cellular homeostasis and

to reverse the pathological hallmarks observed in Alzheimer’s disease. The Phase 2a study met both primary and secondary

objectives of the study.

In

July 2018, we presented the results of a genomic DNA and RNA evaluation of the participants in the Phase 2a study. More than 33,000

genes were analyzed using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA &

RNA data in patients exposed to ANAVEX®2-73. The analysis identified genetic variants that impacted response to

ANAVEX®2-73, among them variants related to the Sigma-1 receptor (SIGMAR1), the target for ANAVEX®2-73.

Results showed that study participants with the common SIGMAR1 wild type gene variant, which is about 80 percent of the population

worldwide, demonstrated improved cognitive (MMSE) and the functional (ADCS-ADL) scores. The results from this evaluation have

been used to establish a precision medicine approach in subsequent clinical trials, since these signatures can now be applied

to neurological indications tested in clinical studies with ANAVEX®2-73 including Alzheimer’s disease, Parkinson’s

disease dementia and Rett syndrome.

ANAVEX®2-73

data presented met prerequisite information in order to progress into a Phase 2b/3 placebo-controlled study. 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 study design incorporates inclusion of

genomic precision medicine biomarkers identified in the ANAVEX®2-73 Phase 2a study. The Phase 2b/3 study, which

is expected to enroll approximately 450 patients, randomized 1:1:1 to either two different ANAVEX®2-73 doses or

placebo, commenced in October 2018.

Preclinical

data also validates ANAVEX®2-73 as a prospective 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, more recently, tuberous sclerosis complex (TSC). ANAVEX®2-73 demonstrated significant

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

In

a study sponsored by the Foundation for Angelman Syndrome, ANAVEX®2-73 was assessed in a mouse model for the development

of audiogenic seizures. The results indicated that ANAVEX®2-73 administration significantly reduced audiogenic-induced

seizures. 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 pathologies. 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 data observed

in both neurodevelopmental and neurodegenerative disorders like Angelman and Fragile X syndromes.

Preclinical

data presented also indicates that ANAVEX®2-73 demonstrates 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.

Preclinical

data on ANAVEX®2-73 related to multiple sclerosis indicates that ANAVEX®2-73 may promote remyelination

in multiple sclerosis disease. Further, data also demonstrates that ANAVEX®2-73 provides protection for oligodendrocytes

(“OL’s”) and oligodendrocyte precursor cells (“OPC’s”), 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 new preclinical data demonstrates that treatment with ANAVEX®2-73 significantly

increases survival and reduces seizures.

ANAVEX®3-71

ANAVEX®3-71

is a clinical drug candidate with a novel mechanism of action via sigma-1 receptor 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. It is highly effective in very small doses

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 sigma-1 receptor 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 Frontotemporal dementia

(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. Additional preclinical data presented also indicates that

in addition to reducing oxidative stress, ANAVEX®3-71 demonstrates 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, with focus on the treatment of Frontotemporal

Dementia (FTD) and other dementia indications with unmet medical need. The study

is more fully described above under Clinical Studies Overview – Frontotemporal Dementia.

ANAVEX®1-41

ANAVEX®1-41

is a sigma-1 receptor agonist. Pre-clinical tests revealed significant neuroprotective benefits (i.e., protects nerve cells from

degeneration or death) through the modulation of endoplasmic reticulum, mitochondrial and oxidative stress, which damages and

impairs cell viability. In addition, in animal models, ANAVEX®1-41 prevented the expression of caspase-3, an enzyme

that plays a key role in apoptosis (programmed cell death) and loss of cells in the hippocampus, the part of the brain that regulates

learning, emotion and memory. These activities involve both muscarinic and sigma-1 receptor systems through a novel mechanism

of action.

Preclinical

data presented also indicates that ANAVEX®1-41 demonstrates 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.

ANAVEX®1066

ANAVEX®1066,

a mixed sigma-1/sigma-2 ligand is designed for the potential treatment of neuropathic and visceral pain. ANAVEX®1066

was tested in two preclinical models of neuropathic and visceral pain that have been extensively validated in rats. In the chronic

constriction injury model of neuropathic pain, a single oral administration of ANAVEX®1066 dose-dependently restored

the nociceptive threshold in the affected paw to normal levels while leaving the contralateral healthy paw unchanged. Efficacy

was rapid and remained significant for two hours. In a model of visceral pain, chronic colonic hypersensitivity was induced by

injection of an inflammatory agent directly into the colon and a single oral administration of ANAVEX®1066 returned

the nociceptive threshold to control levels in a dose-dependent manner. Companion studies in rats demonstrated the lack of any

effects on normal gastrointestinal transit with ANAVEX®1066 and a favorable safety profile in a battery of behavioral

measures.

ANAVEX®1037

ANAVEX®1037

is designed for the treatment of prostate and pancreatic cancer. 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, 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.

Our

compounds are in the pre-clinical and clinical testing stages of development, and there is no guarantee that the activity demonstrated

in pre-clinical models will be shown in human testing.

We

continue to identify and initiate discussions with potential strategic and commercial partners to most effectively advance our

programs and realize maximum shareholder value. Further, we may acquire or develop new intellectual property and assign, license,

or otherwise transfer our intellectual property to further our goals.

Our

Target Indications

We

have developed compounds with potential application to two broad categories and several specific indications. including:

Central

Nervous System Diseases

Alzheimer’s

disease – In 2020, an estimated 5.8 million Americans were suffering from Alzheimer’s disease. The Alzheimer’s

Association® estimates that by 2050, this number will rise to nearly 14 million Americans. 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. 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

dopamine. Parkinson’s disease afflicts more than 10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease market is expected to expand to $3.2 billion by 2021, according to business intelligence provider

GBI Research.

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.

Depression

- Depression is a major cause of morbidity worldwide according to the World Health Organization. Pharmaceutical treatment for

depression is dominated by blockbuster brands, with the leading nine brands historically accounting for approximately 75% of total

sales. However, the dominance of the leading brands is waning, largely due to the effects of patent expiration and generic competition.

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

medication that is 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. Special medications have become more specific to neuralgia and typically fall under the category of membrane

stabilizing drugs or antidepressants.

Cancer

Malignant

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

melanoma accounts for 75% of all deaths associated with skin cancer. The treatment includes surgical removal of the tumor, adjuvant

treatment, chemo and immunotherapy, or radiation therapy. According to IMS Health the worldwide malignant melanoma market is expected

to grow to $4.4 billion by 2022.

Prostate

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

system. The 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 $13.5 billion in 2024 according to Datamonitor Healthcare.

Pancreatic

Cancer - Pancreatic cancer is a malignant neoplasm of the pancreas. In the United States, approximately 55,000 new cases of pancreatic

cancer will be diagnosed this year and approximately 44,000 patients will die as a result of their cancer, according to the American

Cancer Society. Sales predictions by GBI Research forecast that the market for the pharmaceutical treatment of pancreatic cancer

in the United States and five largest European countries will increase to $2.9 billion by 2021.

Competition

The

pharmaceutical industry is intensely competitive.

At

this time, our competitors are other biomedical development companies that are trying to discover and develop compounds to be

used in the treatment of Alzheimer’s disease and other CNS diseases, and those companies already doing so. Those companies

include Biogen (NASDAQ:BIIB), Pfizer Inc. (NYSE:PFE), Abbvie Plc (NYSE:ABBV), Novartis AG (NYSE:NVS), GlaxoSmithKline Plc (NYSE:GSK),

Merck & Co. Inc. (NYSE:MRK), Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE:JNJ) and Roche Holding AG (VTX:ROG).

For additional discussion of the risks related to competition, see Item 1A “Risk Factors.”

Patents,

Trademarks and Intellectual Property

We

hold ownership or exclusive rights to nine U.S. patents, ten 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

own one issued U.S. patent entitled “ANAVEX®2-73 and certain anticholinesterase inhibitors composition and

method for neuroprotection” claims a composition of matter of ANAVEX®2-73 directed to a novel and 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 two issued U.S. patents each with claims directed

to crystalline forms of ANAVEX®2-73. The first of these two 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 two 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 2037, absent

any patent term extension for regulatory delays. We also own an issued U.S. patent that 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. This patent is expected to expire in October

2035, absent any patent term extension for regulatory delays. We also own an issued U.S. patent that claims methods for treating