NASDAQ: AVXL

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.

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Source: Reyes S et al., Sci Rep. 2021 Aug 25; 11(1):17150

Cellular Homeostasis

Many diseases are possibly directly caused by chronic
homeostatic imbalances or cellular stress of brain cells. In pediatric diseases, such as Rett syndrome or infantile spasms, 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 found 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, and 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 (blarcamesine), 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.

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.

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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 in Australia 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. In October 2017, we presented positive pharmacokinetic (“PK”)
and pharmacodynamic (“PD”) data from the Phase 2a clinical trial, which established a concentration-effect relationship between
ANAVEX®2-73 and trial 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 clinical trial appeared
to show that ANAVEX®2-73 activity was enhanced by its active metabolite (ANAVEX19-144), which also targets the SIGMAR1
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 trial to continue taking ANAVEX®2-73, providing
an opportunity to gather extended safety data for a cumulative 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’s compassionate use Special Access Scheme.

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
Australia. Primary and secondary endpoints to assess safety and both cognitive and functional efficacy, were measured through the Alzheimer’s
Disease Assessment Scale – Cognitive Subscale test (“ADAS-Cog”), Alzheimer’s Disease Cooperative Study –
Activities of Daily Living (“ADCS-ADL”) and Clinical Dementia Rating – Sum of Boxes for cognition and function (“CDR-SB”).
In addition to these endpoints, the ANAVEX®2-73 Phase 2b/3 trial design incorporated pre-specified statistical analyses
related to potential genomic precision medicine biomarkers previously identified in the ANAVEX®2-73 Phase 2a clinical trial.
The trial was completed in mid-2022 and, in December 2022, the Company presented topline results from the Phase 2b/3 clinical trial. All
statistical analyses were performed by outside consultancy companies.

Furthermore, all pre-specified clinical endpoints
were analyzed using a mixed model for repeated measures (MMRM). Under the multiplicity control rule, a trial is successful in meeting
the co-primary endpoints if the significance of each endpoint is P < 0.05, or if the significance of only one co-primary endpoint is
P < 0.025. If only one primary endpoint is significant at an α level of 0.025, then the secondary endpoint will be evaluated
at the same level of 0.025. The trial was successful, the differences in the least-squares mean (LSM) change from baseline to 48 weeks
between the ANAVEX®2-73 and placebo groups for ADAS-Cog13 was significant at a level of P < 0.025 and for CDR-SB was
significant at a level of P < 0.025, in the patients with early Alzheimer’s disease.

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The comparison of individual dose groups vs placebo
also supports blarcamesine’s efficacy. For the primary endpoint ADAS-Cog13, blarcamesine is significantly better than placebo (−2.027;
P = 0.0079) as well as for both the 50 mg (−2.149; P = 0.021) and the 30 mg (−1.934; P = 0.026) blarcamesine dosage groups
at Week 48, representing that blarcamesine slowed clinical progression at 48 weeks by 36.3% and by 38.5% and 34.6% in 50 mg and 30 mg
groups vs. placebo, respectively. The functional co-primary endpoint, ADCS-ADL, was trending in a positive direction but did not reach
significance at Week 48. The key secondary endpoint CDR-SB was significantly improved vs. placebo (−0.483, P = 0.0104) as well as
in both 50 mg (−0.465; P = 0.045) and 30 mg (−0.502; P = 0.020) groups at Week 48. Clinical Global Impression – Improvement
(“CGI-I”) was also significantly improved vs. placebo (−0.278, P = 0.004) as well as in both the 50 mg (−0.314;
P = 0.008) and the 30 mg (−0.248; P = 0.024) groups at Week 48. The findings are supported by biomarkers, including plasma Aβ42/40-ratio
and reduction of brain atrophy. Blarcamesine significantly slowed brain atrophy in key regions of interest, including the whole brain
by 37.6%, total grey matter by 63.5%, and lateral ventricles by 25.1%.

In the respective safety population, common treatment-emergent
adverse events included dizziness, which was transient and mostly mild to moderate in severity, and occurred in 120 participants (35.8%)
during titration and in 76 participants (25.2%) during maintenance with ANAVEX®2-73 and 10 (6.0%) during titration and
9 (5.6%) during maintenance with placebo.

In November 2024, we announced the submission of a 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. The MAA,
if approved, would allow direct market access throughout the European Union for oral ANAVEX®2-73 (blarcamesine) for the
treatment of Alzheimer’s disease. A 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. On November 14, 2025, we announced that we were informed by the Committee
for Medicinal Products for Human Use (CHMP) of the EMA of a negative trend vote on the MAA following an oral explanation. The CHMP is
expected to adopt a formal opinion on the MAA at its December 2025 meeting. We plan to request a re-examination of the CHMP opinion
upon its formal adoption.

A long-term open label extension study of ANAVEX®2-73, referred
to as the ATTENTION-AD trial, was initiated for patients who completed the 48-week Phase 2b/3 placebo-controlled trial referenced above.
This trial extension for a duration of up to 96/144 additional weeks was completed in June 2024. The trial extension demonstrated that
blarcamesine-treated patients continued to accrue benefit through up to 192 weeks, as measured by the clinical endpoints ADAS-Cog13
(LS mean difference -3.83; P = 0.0165) and ADCS-ADL (LS mean difference +4.30, P = 0.0206). No new safety findings were observed with
continued blarcamesine treatment over three years, confirming good comparative safety profile and no associated neuroimaging
adverse events. Delayed-start analysis of treatment with oral blarcamesine was significant, reflecting the importance of early treatment initiation.

Additional precision medicine population 48-week data
demonstrates cognitive stabilization in early Alzheimer’s disease. Cognitive outcomes observed in the oral blarcamesine 30 mg precision
medicine cohort move toward normal aging profiles across validated clinical scales. For ADAS-Cog13, blarcamesine showed a 48-week change
from baseline of 0.853 compared to ~1 point typical annual decline in prodromal (pre-dementia) aging adults. For CDR-SB, blarcamesine
demonstrated a change from baseline of 0.465, aligning with the 0-0.5 point annual range seen in prodromal aging. These data are similar
to referenced barely detectable prodromal Alzheimer’s disease decline, in spite of the more advanced stage of Alzheimer’s
disease impairment at baseline of the blarcamesine population.

Further
posthoc analysis demonstrates continued long-term benefit from oral blarcamesine compared to decline observed in the Alzheimer’s
Disease Neuroimaging Initiative (ADNI) control group. Externally matched control participants from the ADNI database were compared with
participants over the 144-week period of ANAVEXÒ2-73-AD-004
and its ATTENTION-AD (ANAVEXÒ2-73-AD-EP-004)
open-label extension (OLE) Phase IIb/III trial.[1] For ADAS-Cog13, total score ranges
from 0 to 85 with higher scores indicating increased cognitive impairment.

[1]
Observed raw data was used. Scheduled visits were [OLE Week 0 = Combined Week 48], [OLE Week 48 = Combined
Week 96], [OLE Week 96 = Combined Week 144]; Combined = DB (double-blind) + OLE (open-label-extension) trials. Up to 144 weeks ADNI control
group data was available.

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In the intent-to-treat (ITT) population, significantly
less cognitive decline was observed for the blarcamesine participants compared to the ADNI control group at 48 weeks with a significant,
and clinically meaningful difference in mean change from baseline ADAS-Cog13 total score of −2.68 points (p < 0.0001).[2]

Over the course of the open-label extension study
at time point 96 weeks, these two groups diverged sharply, with statistically significant differences in mean change in ADAS-Cog13 total
score at 96 weeks of −6.41 points (p < 0.0001). The difference between groups continues to increase at 144 weeks (ADAS-Cog13
total score difference of −12.78 points; p < 0.0001).

The results provide evidence of the significant beneficial
therapeutic effect of blarcamesine, which positively separates from the ADNI control group with duration of treatment.

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.

[2] ADAS-Cog13 scores
LS mean difference between the treatment groups being larger than 2 points are considered clinically meaningful improvements: Muir RT,
Hill MD, Black SE, Smith EE. Minimal clinically important difference in Alzheimer's disease: Rapid review. Alzheimers Dement. 2024;20(5):3352-3363.

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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
objectives. 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
Parkinson’s. 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. This study is currently in the planning stage.

Rett Syndrome

In February 2016, we presented positive preclinical
data for ANAVEX®2-73 in Rett syndrome, a rare neurodevelopmental disease. The data demonstrated dose related significant
improvements in an array of behavioral and gait paradigms in a mouse model with an MECP2-null mutation that causes neurological symptoms
that mimic Rett syndrome. 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. 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. 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 = 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.

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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.

The
second, international trial of ANAVEX®2-73 for the treatment of Rett syndrome, called the AVATAR trial, commenced in June
2019. This trial took place in Australia and the United Kingdom using a higher dose than the U.S. based Phase 2 trial for Rett
syndrome. The trial was a Phase 3 randomized, double-blind, placebo-controlled trial to evaluate the safety and efficacy of ANAVEX®2-73
in 33 adult patients over a 7-week treatment period including ANAVEX®2-73 specific precision medicine biomarkers. Based
upon the input from the successful U.S. Phase 2 Rett syndrome trial (ANAVEX®2-73-RS-001), we updated the endpoints for
the AVATAR trial (ANAVEX®2-73-RS-002) to appropriately assess the clinically meaningful outcome following International
Conference on Harmonization (ICH) guidelines. These updates were approved by the respective regulatory authorities in the U.K. and in
Australia, respectively, where the AVATAR trial was conducted.

The data from the AVATAR trial was released in February
2022. The clinical trial met all primary and secondary efficacy and safety endpoints, with consistent improvements in primary efficacy
endpoint, RSBQ response (p = 0.037), and secondary efficacy endpoints, Anxiety, Depression, and Mood Scale (ADAMS) (p = 0.010) and CGI-I
(p = 0.037) response. Efficacy endpoints demonstrated statistically significant and clinically meaningful reductions in Rett syndrome
symptoms. Convenient once daily oral liquid doses of up to 30 mg of ANAVEX®2-73 were also well tolerated with good medication
compliance. All patients who participated in the trial were eligible to receive ANAVEX®2-73 under a voluntary open label
extension protocol and subsequent Compassionate Use Program.

The very first trial of ANAVEX®2-73
in pediatric Rett syndrome patients, the EXCELLENCE trial, completed enrollment in February 2023. This randomized, double-blind, placebo-controlled
Phase 2/3 trial in pediatric patients with Rett syndrome included trial sites in Canada, Australia, and the United Kingdom. 92 pediatric
patients with Rett syndrome between the ages of 5 through 17 years were treated daily with up to 30 mg ANAVEX®2-73. Participants
were randomized 2:1 (ANAVEX®2-73:placebo) for 12 weeks, followed by a week 16 safety visit and topline results from this
trial were announced in early January 2024.

After 12 weeks, the study showed improvement on the
key co-primary endpoint RSBQ, which is a detailed 45-item questionnaire for assessing multiple Rett syndrome characteristics by the patients’
caregivers. The other co-primary endpoint, the CGI-I, which represents a less granular assessment by the site investigators using a seven-point
scoring (one=“very much improved” to seven=“very much worse”), was not met.

In an ad-hoc analysis, using the predefined mixed-effect
model for repeated measure (MMRM) method, after 12 weeks of treatment, ANAVEX®2-73-treated patients improved LS Mean (SE)
-12.93 (2.150) points on their RSBQ total score compared to LS Mean (SE) -8.32 (2.537) points in placebo-treated patients. The LS Mean
difference (SE) of -4.61 (2.439) points between treated and placebo groups did not reach statistical significance (n=77; p=0.063). ANAVEX®2-73-treated
patients demonstrated a rapid onset of action with improvements at 4 weeks after treatment with a RSBQ total score LS Mean (SE) -10.32
(2.086) points in the drug-treated group compared to a LS Mean (SE) -5.67 (2.413) points in placebo-treated patients. The LS Mean difference
of -4.65 (2.233) points between treated and placebo groups was statistically significant (n=77; p=0.041).

The key secondary endpoint, the ADAMS, trended favorably.
In the same analysis, scores for all RSBQ and ADAMS subscales improved over the course of the study. Collectively, the RSBQ and ADAMS
demonstrated improvements in multiple areas, impacting positively in particular repetitive movements, nighttime disruptive behaviors,
and social avoidance.

A preliminary review of the safety results indicates
there were no new safety signals in the EXCELLENCE study, reinforcing the favorable and manageable safety profile observed with ANAVEX®2-73
to date.

All patients who participated in the trial were eligible
to receive ANAVEX®2-73 under a voluntary open label extension protocol, which was completed in June 2024.

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A high enrollment rate in the Open Label Extension
(“OLE”) of over 91% and the high level of requests for the Compassionate Use Program (93%) provide solid numerical evidence
for the reported positive Real World Evidence (RWE) from patients with Rett syndrome under Compassionate Use Authorization. Families whose
children were previously on drug or placebo in the placebo-controlled trial commented favorably on the improvement of their child’s
daily life due to ANAVEX®2-73 treatment in the Compassionate Use Program.

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. The results
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
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 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. Further,
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.

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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 Frontotemporal Demetia (“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 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. 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
its primary and secondary endpoints of safety, with no serious adverse events (“SAEs”) or dose-limiting toxicities observed.
ANAVEX®3-71 was well tolerated in all cohorts receiving ANAVEX®3-71 in single doses ranging from 5 mg to
200 mg daily with no SAEs and no significant lab abnormalities in any subject. In the trial, ANAVEX®3-71 exhibited linear
PK. Its pharmacokinetics was also dose proportional for doses up to 160 mg. Gender had no effect on the PK of the drug and food had no
effect on the bioavailability of ANAVEX®3-71. The trial also met the secondary objective of characterizing the effect of
ANAVEX®3-71 on electrocardiogram (“ECG”) parameters. There were no clinically significant ECG parameters throughout
the trial. Participant QTcF measures were normal across all dose groups with no difference between ANAVEX®3-71 and placebo.

In October 2023
a peer-reviewed publication in the journal Neurobiology of Aging, titled ‘Early treatment with an M1 and sigma-1 receptor
agonist prevents cognitive decline in a transgenic rat model displaying Alzheimer-like amyloid pathology’, featured the orally
available small molecule ANAVEX®3-71 (AF710B). The preclinical study described the potential disease-modifying properties
of ANAVEX®3-71 on Alzheimer’s disease pathology as a possible drug candidate for a potential once daily oral preventive
strategy for Alzheimer’s disease.

In January 2024,
in another peer-reviewed publication in the journal Clinical Pharmacology in Drug Development, entitled, ‘Population-Based
Characterization of the Pharmacokinetics and Food Effect of ANAVEX3-71, a Novel Sigma-1 Receptor and Allosteric M1 Muscarinic Receptor
Agonist in Development for Treatment of Frontotemporal Dementia, Schizophrenia, and Alzheimer Disease’, reported the population-based
characterization of the PK and food effect of ANAVEX®3-71 as part of the single ascending dose study in healthy participants
with the primary objective of assessing dose proportionality of ANAVEX®3-71, and to characterize the effect of food on
the PK of ANAVEX®3-71. The results from this PK evaluation demonstrated that ANAVEX®3-71, at single ascending
doses of 5 to 200 mg, is linear, dose proportional, and time invariant. Food had no effect on the PK of ANAVEX®3-71. This
data also expands the safety objectives met in this first-in-human study of ANAVEX®3-71, further supporting its drug development
program.

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. The first of these trials is being conducted in schizophrenia.

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Schizophrenia

In March 2024,
we commenced the U.S. FDA-cleared ANAVEX®3-71-SZ-001 clinical trial: a double-blind, placebo-controlled Phase 2 trial in
schizophrenia. The trial consists of two parts to explore multiple ascending doses in individuals with schizophrenia followed by a 28-day
treatment period in a larger cohort. The trial will utilize standard clinical outcome measures for schizophrenia including the Positive
and Negative Symptoms Scale (PANSS), and novel fluid and electrophysiological biomarkers will also be assessed, leveraging several advances
in electroencephalography/event-related potential (EEG/ERP) biomarkers in schizophrenia developed in collaboration with the industry-led
ERP Biomarker Qualification Consortium. In addition to the electrophysiological biomarkers, we are also applying novel neuroinflammatory,
metabolomic, and transcriptomic biomarkers at the intersection of schizophrenia pathophysiology and ANAVEX®3-71’s
novel, dual mechanism of action.

Preliminary
results from Part A of the ANAVEX®3-71-SZ-001 clinical trial, consisting of a multiple ascending dose study in 16 participants,
demonstrated a dose-dependent effect of ANAVEX®3-71 on two key EEG biomarkers in patients with schizophrenia. The effects
were most pronounced in the higher dose group indicating a dose-dependent pharmacodynamic effect. The observed changes reversed known
electroencephalography (EEG) and ERP biomarker abnormalities associated with schizophrenia. These EEG biomarkers correlate with positive,
negative, and cognitive symptoms of schizophrenia.

In May 2025
we announced the completion of enrollment of Part B of the study, which included more participants and a longer treatment duration. The
top-line data of the Phase 2 ANAVEX®3-71-SZ-001 clinical was announced in October 2025. The study successfully achieved
its primary endpoint, demonstrating that ANAVEX®3-71 was safe and well-tolerated. The safety profile was consistent with
previous studies of ANAVEX®3-71 in healthy volunteers, with no serious treatment-emergent adverse events (TEAEs) and no
severe TEAEs reported in either Part A or Part B of the study. In addition to meeting the primary safety endpoint, secondary and exploratory
analyses revealed encouraging trends in several outcome measures. The study demonstrated positive trends in objective electroencephalography
(EEG) and event-related potential (ERP) biomarkers of schizophrenia. Furthermore, neuroinflammatory biomarker assessments showed that
glial fibrillary acidic protein (GFAP), a marker of neuroinflammation, was reduced in participants receiving ANAVEX®3-71
compared to placebo. This reduction in neuroinflammatory markers suggests a potential disease-modifying effect that may become more pronounced
with longer treatment durations.

ANAVEX®1-41

ANAVEX®1-41 is a sigma-1 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 SIGMAR1 systems through
a novel mechanism of action.

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

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.

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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, we believe our drug candidates may play an important role in inhibiting
the processes of metastasis (spreading of cancer cells from the original site to other parts of the body), angiogenesis (the formation
of new blood vessels) and tumor cell proliferation.

ANAVEX®1037 is currently in the pre-clinical
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 increase stockholder 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 are developing compounds with potential application
to two broad categories and several specific indications, including:

Central Nervous System Diseases

●

Alzheimer’s disease – An estimated 7.2
million Americans aged 65 and older are living with Alzheimer’s dementia in 2025, according to the Alzheimer’s Association®.
The Alzheimer’s Association® estimates that the annual number of new cases of Alzheimer’s and other dementias
is projected to double by 2050. Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the
ability to stop its onset or its progression. We believe that there is an urgent and unmet need for both a disease modifying cure for
Alzheimer’s disease as well as for better symptomatic treatments.

●

Parkinson’s disease – Parkinson’s
disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement. It is associated
with degeneration of the basal ganglia of the brain and deficiency of the neurotransmitter dopamine. Parkinson’s disease currently
is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people. The Parkinson’s disease
market is expected to reach $11.5 billion by 2029, according to GlobalData.

●

Rett syndrome – Rett syndrome is a rare X-linked
genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered
and as a result leads to severe disruptions in neuronal homeostasis. It is considered a rare, progressive neurodevelopmental disorder
and is caused by a single mutation in the MECP2 gene. Because males have a different chromosome combination from females, boys who have
the genetic MECP2 mutation are affected in devastating ways. Most of them die before birth or in early infancy. For females who survive
infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect of the child’s life: severe mental retardation,
their ability to speak, walk and eat, sleeping problems, seizures and even the ability to breathe easily. Rett syndrome affects approximately
1 in every 10,000-15,000 females.

●

Schizophrenia - Schizophrenia is a persistent
and often disabling mental illness impacting how a person thinks, feels, and behaves, and affects nearly 24 million people worldwide,
including 2.8 million people in the U.S., according to the World Health Organization. It is characterized by three symptom domains: positive
symptoms (hallucinations and delusions), negative symptoms (difficulty enjoying life and withdrawal from others), and cognitive impairment
(deficits in memory, concentration, and decision-making). In part due to limitations with current treatments, people living with schizophrenia
often struggle to maintain employment, live independently, and manage relationships. While current treatments can be effective in managing
select symptoms, approximately 34% of people do not respond to therapy, with an additional 50-60% experiencing only a partial improvement
in symptoms or unacceptable side effects.

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●

Fragile X – Fragile X syndrome (FXS) is the
most prevalent genetic form of intellectual disability and autism spectrum disorder, primarily affecting boys. As with most neurodevelopmental
disorders, FXS is considered a condition of synaptic development and function. The disease has a range of clinical presentations depending
on the specific genetic changes associated with an “expansion” of the FMR1 gene. The disease is characterized by deficits
in long-term potentiation and homeostatic plasticity. FXS has been detected in all populations and ethnic groups. Researchers do not know
the exact number for how many Americans could have full mutation FXS. Studies estimate that the disease affects approximately 1:4,000
males and 1:6,000 females. Worldwide, more than 1,400,000 people could be affected by FXS.

●
Depression – Depression is a major cause of morbidity worldwide according to the World Health Organization. The global antidepressant drug market is projected to reach $21 billion by 2030 according to Allied Market Research. Pharmaceutical treatment for depression has been historically dominated by blockbuster brands. However, the dominance of the leading brands is waning, largely due to an increase in the number of approvals for antidepressant drugs.

●

Epilepsy – Epilepsy is a common chronic neurological
disorder characterized by recurrent unprovoked seizures. These seizures are transient signs and/or symptoms of abnormal, excessive or
synchronous neuronal activity in the brain. According to the Centers for Disease Control and Prevention, data from 2021 and 2022 suggest
epilepsy affects roughly 3.4 million Americans. Today, epilepsy is often controlled, but not cured, with medications that are categorized
as older traditional anti-epileptic drugs and second-generation anti-epileptic drugs. Because epilepsy afflicts sufferers in different
ways, there is a need for drugs used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic drugs.

●
Neuropathic Pain – We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of the body. Neuralgia is more difficult to treat than some other types of pain because it does not respond well to normal pain medications. 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 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. the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029.

●

Prostate Cancer – Specific to men, prostate
cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system. Cancer cells may metastasize from the
prostate to other parts of the body, particularly the bones and lymph nodes. Drug therapeutics for prostate cancer are expected to increase
to nearly $10.1 billion by the end of 2030 according to Market Research Future.

●
Pancreatic Cancer – Pancreatic cancer is a malignant neoplasm of the pancreas. In the United States, approximately 67,000 new cases of pancreatic cancer will be diagnosed this year and approximately 52,000 patients will die as a result of their cancer, according to the American Cancer Society. Sales predictions by Market Data Forecast predict that the market for the global pharmaceutical treatment of pancreatic cancer will increase to $3.7 billion by 2027.

Competition

The drug discovery and development industry is very
competitive, characterized by rapid advancements in technology, where protection of proprietary advancements is essential. Any product
candidates that we may successfully develop and commercialize, may compete with existing therapies, or new therapies that may become available
in the future. Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that
are more effective, have fewer side effects, are more convenient or are less expensive than any products that we may develop.

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We believe our approach to the treatment of Alzheimer’s
disease and other CNS diseases differs from our competitors. Our platform may offer a disease-modifying approach in neurodegenerative
and neurodevelopmental diseases by activation of SIGMAR1. In our preclinical studies, when activated by SIGMAR1 agonists, such as ANAVEX®2-73,
SIGMAR1 demonstrated reduced cellular stress before and after RNA gene transcription. Our studies confirm the potential existence of a
predictive biomarker of response established through SIGMAR1 mRNA expression that could be used in future clinical trials. Because of
its role in maintaining neuronal homeostasis, we believe sigma receptors show significant promise as viable targets for therapeutic molecules
in an effort to treat Alzheimer’s disease and other CNS diseases and disorders by restoring healthy gene expression.

At this time, our competitors are primarily other
biomedical development companies that are aiming 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. We also face competition from academic institutions and government agencies,
both in the United States and abroad.

Our competitors may have significantly greater financial
resources, an established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing,
or may be in the process of obtaining regulatory approvals and marketing of approved products. These competitors also compete with us
in recruiting and retaining qualified scientific and technical personnel, establishing clinical trial sites and patient registration for
clinical trials, as well as in acquiring or developing technologies complementary to, or necessary for, our programs. Smaller or early-stage
companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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 thirty (30)
issued U.S. patents, seventeen (17) pending U.S. patent applications, and numerous PCT and ex-U.S. patents and 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,” which claims a composition of matter of ANAVEX®2-73,
a synergistic neuroprotective compound, combined with donepezil and other cholinesterase inhibitors. This patent is expected to expire
in June 2034, absent any patent term extension for regulatory delays.

We own another issued U.S. patent entitled “A2-73
crystalline polymorph compositions of matter and methods of use thereof”. It claims crystals of A2-73 freebase or its fumarate salt,
dosage forms and pharmaceutical formulations. This patent is expected to expire in July 2039, absent any patent term extension for regulatory
delays.

We own five issued U.S. patents each with claims directed
to crystalline forms of ANAVEX®2-73. The first of these five patents claims crystalline forms of ANAVEX®2-73,
dosage forms and compositions containing crystalline ANAVEX®2-73, and methods of treatment for Alzheimer’s disease
using them. This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays. The second of these
five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX®2-73, and methods of treatment
for Alzheimer’s disease using the compositions. This patent is expected to expire in June 2036, absent any patent term extension
for regulatory delays. The third of these five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX®2-73,
and methods of treating for Alzheimer’s disease using the compositions. This patent is expected to expire in June 2037, absent any
patent term extension for regulatory delays. The fourth patent claims method of making certain crystalline forms of ANAVEX®2-73.
This patent is expected to expire in October 2036, absent any patent term extension for regulatory delays. The fifth patent claims crystalline
forms of the dihydrogen phosphate salt of ANAVEX®2-73 and dosage forms (including transdermal and oral dosage forms) and
pharmaceutical compositions containing the same. This patent is expected to expire in July 2039, absent any patent term extension for
regulatory delays.

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We also own three issued U.S. patents for seizure
treatment. The first of these three patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose
anti-epilepsy drug combined with either: (i) ANAVEX®2-73 and its active metabolite ANAVEX®19-144; or (ii)
ANAVEX®19-144. The second of these three patents further claims a combination seizure treatment involving administration
of an anti-epilepsy drug combined with (i) ANAVEX®19-144, or (ii) ANAVEX®19-144 and ANAVEX®2-73.
The third of these three patents claims a dosage form for seizure reduction, comprising (i) ANAVEX®19-144, (ii) ANAVEX®2-73,
or (iii) a combination of ANAVEX®19-144 and ANAVEX®2-73; and optionally further comprising a low-dose anti-epilepsy
drug. All three patents are expected to expire in October 2035, absent any patent term extension for regulatory delays.

We also own four issued U.S. patents with claims directed
to treating neurodevelopmental disorders. These patents claim methods for treating a neurodevelopmental disorder, multiple sclerosis,
their related biochemical and functional abnormalities, or loss-of-function associated with a neurodevelopmental disorder, by administering
ANAVEX®2-73, ANAVEX®19-144, and/or ANAVEX®1-41 (another sigma receptor ligand similar to
ANAVEX®2-73), or compositions thereof. All four patents are expected to expire in January 2037, absent any patent term
extension for regulatory delays.

In addition, we own one issued U.S. patent with claims
directed to methods of treating melanoma with a compound related to ANAVEX®2-73. This patent is expected to expire in February
2030, absent any patent term extension for regulatory delays.

We also own an issued U.S. patent that claims crystalline
forms of ANAVEX®19-144, dosage forms and compositions containing the crystalline forms of ANAVEX®19-144,
and methods of treatment for Alzheimer’s disease. This patent is expected to expire in July 2036, absent any patent term extension
for regulatory delays.

Further, we own two issued U.S. patents with claims
directed to methods of treating cardiac dysfunction with ANAVEX®2-73. These patents are expected to expire in July 2038,
absent any patent term extension for regulatory delays. Additionally, we own 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 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
delays.

In addition, we own one issued U.S. patent with claims
directed to a method of treating Alzheimer’s disease based upon selection of particular responders to ANAVEX®A2-73
treatment based upon the absence of certain genetic polymorphisms.

Further, we own one issued U.S. patent with claims
directed to a method of treating systolic hypertension using ANAVEX®2-73. This patent is expected to expire in July 2039,
absent any patent term extension for regulatory delays. Additionally, we own one issued U.S. patent with claims directed to pharmaceutical
dosage forms of the (-) enantiomer of ANAVEX®2-73. This patent is expected to expire in July 2036, absent any patent term
extension for regulatory delays.

We also own three issued U.S. patents related to ANAVEX®1066.
The first of these three patents claims methods for treating or preventing pain using the (+) ANAVEX®1066 isomer. The second
patent claims methods for treating or preventing pain using the (-) ANAVEX®1066 isomer. The third patent claims dosage
forms and pharmaceutical compositions comprising the (+) ANAVEX®1066 isomer. All three patents are expected to expire in
November 2036, absent any patent term extension for regulatory delays.

For ANAVEX®2-73, ANAVEX®19-144,
ANAVEX®1-41, and ANAVEX®1066, we also have granted or pending applications in Australia, Canada, China,
Europe, Japan, and Hong Kong, which are expected to expire after 2035.

With regard to ANAVEX®3-71, we own
exclusive rights to two issued U.S. patents with claims respectively directed to the ANAVEX®3-71 compound and methods of
treating various diseases including Alzheimer’s with the same. These patents are expected to expire in April 2030, and January 2030,
respectively, absent any patent term extension for regulatory delays. We also own exclusive rights to related patents or applications
that are granted or pending in Australia, Canada, China, Europe, Japan, Korea, New Zealand, Russia, and South Africa, which are expected
to expire in January 2030.

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We also own other patent applications and certain
granted foreign patents directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional
protection for one or more of our product candidates.

We regard patents and other intellectual property
rights as corporate assets. Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy
including the selective development, protection, and exploitation of our intellectual property rights. In addition to filings made with
intellectual property authorities, we protect our intellectual property and confidential information by means of carefully considered
processes of communication and the sharing of information, and by the use of confidentiality and non-disclosure agreements and provisions
for the same in contractor’s agreements. While no agreement offers absolute protection, such agreements provide some form of recourse
in the event of disclosure, or anticipated disclosure.

Our
intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions
for which important legal principles are unresolved. For more information regarding challenges to our existing or future patents, see
“Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Government regulation

Government authorities in the United States, at the
federal, state and local levels, and in other countries extensively regulate, among other things, the research, development, testing,
manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing
and export and import of products such as those we are developing. A new drug must be approved by the local regulatory authority through
an NDA, MAA or other regulatory process before it may be legally marketed in each jurisdiction. We are subject to various government regulations
in connection with the development of our pipeline.

U.S. Drug Development and Regulation

In the United States, the FDA regulates drugs under
the Federal Food, Drug, and Cosmetic Act and its implementing regulations (“FDCA”). The process of obtaining regulatory approvals
and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial
time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process,
approval process or post approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the
FDA’s refusal to approve pending applications, withdrawal of an approval, import refusal, a clinical hold, warning letters, product
recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts,
restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect
on us.

Once a drug candidate is identified for development,
it enters the preclinical testing stage and an Investigational New Drug Application (“IND”) may be opened for the regulatory
development of the product. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as
other preclinical studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and
analytical data, to the FDA as part of the IND to conduct clinical trials. The sponsor must also include a protocol detailing, among other
things, the objectives of the clinical trials, the parameters to be used in monitoring the safety of the trial, and the effectiveness
criteria to be evaluated should the trial include an efficacy evaluation. Some preclinical testing may continue even after the IND is
filed. The IND automatically becomes effective thirty (30) days after receipt by the FDA, unless the FDA, within the 30-day time period,
places the clinical trial on a clinical hold. Clinical holds also may be imposed by the FDA at any time before or during clinical trials
due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may
not begin or continue until the FDA notifies the sponsor that the hold has been lifted.

All clinical trials must be conducted under the supervision
of one or more qualified investigators in accordance with FDA good clinical practice (“GCP”) requirements, which include a
requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical
trials must be conducted under protocols detailing the objectives of the trial, dosing procedures, subject selection inclusion and exclusion
criteria and the safety and/or effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND,
and timely safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events. An Institutional
Review Board (“IRB”) at each institution participating in the clinical trial must review and approve each protocol before
a clinical trial may commence at the institution and must also approve the information regarding the trial as well as the informed consent
form that must be provided to each trial participant or his or her legal representative, monitor the study until completed and otherwise
comply with all applicable IRB regulations.

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Human clinical trials are typically conducted in three
sequential phases that may overlap or be combined in certain cases:

Phase 1: The compound is initially introduced into
healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to
gain an early indication of its effectiveness. In most cases, initial Phase 1 clinical trials are conducted with healthy volunteers. However,
where the compound being evaluated is for the treatment of severe or life-threatening diseases, such as cancer, and especially when the
product may be too toxic to ethically administer to healthy volunteers, the initial human testing may be conducted on patients with the
target disease or condition. Sponsors sometimes subdivide their Phase 1 clinical trials into Phase 1a and Phase 1b clinical trials. Phase
1b clinical trials are typically aimed at confirming dosage, PK and safety in a larger number of patients. Some Phase 1b clinical trials
evaluate biomarkers or surrogate markers that may be associated with efficacy in patients with specific types of diseases or conditions.

Phase 2: This phase involves clinical trials in a
limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product
for specific targeted diseases or conditions and to confirm dosage tolerance and appropriate dosage.

Phase 3: Phase 3 clinical trials are undertaken to
further evaluate dosage, clinical efficacy and safety in an expanded patient population, generally at geographically dispersed clinical
trial sites. These clinical trials, often referred to as “pivotal” or “confirmatory” clinical trials, are intended
to establish the overall risk-benefit ratio of the compound and provide, if appropriate, an adequate basis for product approval and labeling.

The FDA or the sponsor may suspend a clinical trial
at any time on various grounds, including any finding that the research subjects or patients are being exposed to an unacceptable health
risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted
in accordance with the IRB’s requirements or if the drug has been associated with unexpected, serious harm to study subjects. In
addition, clinical trials may be overseen by an independent group of qualified experts organized by the sponsor, known as a data safety
monitoring board or committee. Depending on its charter, this board or committee may determine whether a trial may move forward at designated
check points based on access to certain data from the trial.

Phase 4: Phase 4 or post-approval trials may also
be conducted after a drug receives initial marketing approval. These trials, often referred to as “Phase 4” trials, are used
to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may
mandate the performance of such clinical trials as a condition of approval of continued marketing of the product.

During the development of a new drug, sponsors are
given several opportunities to meet with the FDA. These meetings can provide an opportunity for the sponsor to share information about
the progress of the application or clinical trials, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement
on the next phase of development. These meetings may occur prior to the submission of an IND, at the end of Phase 2 clinical trials, or
before an NDA is ultimately submitted. Sponsors typically use the meetings at the end of the Phase 2 trials to discuss Phase 2 clinical
results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug. Meetings at
other times may be made upon request and are subject to approval by the FDA.

Concurrent with clinical trials, companies typically
complete additional, animal or other non-clinical studies, develop additional information about the chemistry and physicochemical characteristics
of the drug, and finalize a process for manufacturing the product in commercial quantities in accordance with the FDA’s current
Good Manufacturing Practices (“cGMP”) requirements. The manufacturing process must consistently produce quality batches of
the drug and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the
final drug. In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate the
effectiveness of the packaging and that the compound does not undergo unacceptable deterioration over its shelf life.

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While the IND is active, progress reports summarizing
the results of ongoing clinical trials and nonclinical studies performed since the last progress report must be submitted on at least
an annual basis to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected adverse
events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal
or in vitro testing suggesting a significant risk to humans, and any clinically important, increased incidence of a serious adverse reaction
compared to that listed in the protocol or investigator brochure.

There are also requirements governing the submission
of certain clinical trials and completed trial results to public registries. Sponsors of certain clinical trials of FDA-regulated products
are required to register and disclose specified clinical trial registration and results information, which is made publicly available
at www.clinicaltrials.gov. Failure to properly report clinical trial results can result in civil monetary penalties. Disclosure of clinical
trial results can often be delayed until the new product or new indication being studied has been approved.

U.S. review and approval process

The results of product development, preclinical and
other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the
chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of a New Drug Application (“NDA”).
The submission of an NDA is subject to the payment of substantial user fees; a waiver of which may be obtained under certain limited circumstances.

The FDA reviews NDAs to determine, among other things,
whether the product is safe and effective for its intended use and whether it is manufactured in a cGMP-compliant manner, which will assure
and preserve the product’s identity, strength, quality and purity. Under the Prescription Drug User Fee Act (“PDUFA”),
the FDA has a goal of ten months from the date of “filing” of a standard, completed NDA for a new molecular entity to review
and act on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has
approximately two months to make a “filing” decision after the application is submitted. The FDA conducts a preliminary review
of all NDAs within the first sixty days after submission, before accepting them for filing, to determine whether they are sufficiently
complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event,
the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts
it for filing.

The FDA may refer an application for a new drug to
an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that
reviews, evaluates and provides a recommendation as to whether and under what conditions the application should be approved. The FDA is
not bound by the recommendations of such an advisory committee, but it considers advisory committee recommendations carefully when making
decisions.

Before approving an NDA, the FDA will also inspect
the facility where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes
and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required
specifications. Before approving an NDA, the FDA may also inspect one or more clinical trial sites to assure compliance with GCP requirements
and inspect the clinical trial records.

After the FDA evaluates an NDA, it will issue an approval
letter or a Complete Response Letter. A Complete Response Letter indicates that the review cycle of the application is complete, and the
application will not be approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the NDA
identified by the FDA and may require additional clinical data, such as an additional pivotal Phase 3 trial or other significant and time-consuming
requirements related to clinical trials, nonclinical studies or product manufacturing. If a Complete Response Letter is issued, the sponsor
must resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and
information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval. An approval letter authorizes commercial
marketing of the drug with prescribing information for specific indications.

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The Pediatric Research Equity Act (“PREA”),
requires IND sponsors to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form,
new dosing regimen or new route of administration. Under PREA, original NDAs and supplements must contain a pediatric assessment unless
the sponsor has received a deferral or waiver. The required assessment must evaluate the safety and effectiveness of the product for the
claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for
which the product is safe and effective. The sponsor or the FDA may request a deferral of pediatric clinical trials for some or all of
the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for
use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before
the pediatric clinical trials begin. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment,
keeps a deferral current or fails to submit a request for approval of a pediatric formulation.

If a drug receives FDA approval, the approval may
be limited to specific diseases and dosages, which could restrict the commercial value of the product. In addition, the FDA may require
testing and surveillance programs to monitor the safety of approved products which have been commercialized and may require a sponsor
to conduct post-marketing clinical trials (Phase 4 clinical trials), which are designed to further assess a drug’s safety and effectiveness
after NDA approval. The FDA may also place other conditions on approval, including a requirement for a risk evaluation and mitigation
strategy (“REMS”) to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit
a proposed REMS. The FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician
communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization
tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescribing or dispensing
of products. Marketing approval may be withdrawn for non-compliance with REMS or other regulatory requirements, or if problems occur following
initial marketing.

Post-approval requirements

Once an approval is granted, the FDA may withdraw
the approval if compliance with regulatory standards is not maintained or if problems occur after the drug reaches the market. Later discovery
of previously unknown problems with a drug may result in restrictions on the drug or even complete withdrawal of the drug from the market.
After approval, some types of changes to the approved drug, such as adding new indications, certain manufacturing changes and additional
labeling claims, are subject to further FDA review and approval. Manufacturers and other entities involved in the manufacture and distribution
of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations.

Any drug product manufactured or distributed by us
pursuant to FDA approval will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements,
reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution
requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.
FDA strictly regulates labeling, advertising, promotion and other types of information regarding approved drugs that are placed on the
market, and imposes requirements and restrictions on drug manufacturers, such as those related to direct-to-consumer advertising, the
prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known
as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.
Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions
on the marketing of a product for a certain indication or withdrawal of the product from the market as well as possible civil or criminal
sanctions. Failure to comply with the applicable governmental requirements at any time during the product development process, approval
process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse
publicity. The FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-marketing
clinical trials, enforcement letters, import refusals, product recalls, product seizures, total or partial suspension of production or
distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment,
restitution, disgorgement of profits, or civil or criminal penalties.

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Expedited development and review programs

The FDA has a fast track designation program that
is intended to expedite or facilitate the process for reviewing new drug products that meet certain criteria. Specifically, new drugs
are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate
the potential to address unmet medical needs for the disease or condition. With regard to a fast track product, the FDA may consider for
review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the
submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and
the sponsor pays any required user fees upon submission of the first section of the NDA.

Any product submitted to the FDA for approval, including
a product with a fast track designation, may also be eligible for other types of FDA programs intended to expedite development and review,
such as priority review and accelerated approval.

A product is eligible for priority review if it is
intended to treat a serious condition, and if approved, would provide a significant improvement in safety or efficacy compared to currently
marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for
priority review in an effort to facilitate the review. The FDA endeavors to review applications with priority review designations within
six months of the filing date, as compared to ten months for review of NDAs under its current PDUFA review goals.

In addition, a product may be eligible for accelerated
approval. Drugs intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination
that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on a clinical endpoint
that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible
morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability
or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval
perform adequate and well-controlled post-marketing clinical trials. Drugs receiving accelerated approval may be subject to expedited
withdrawal procedures if the sponsor fails to conduct the required post-marketing trials or if such trials fail to verify the predicted
clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval, pre-approval of promotional materials,
which could adversely impact the timing of the commercial launch of the product.

The Food and Drug Administration Safety and Innovation
Act (“FDASIA”) established a category of drugs referred to as “breakthrough therapies” that may be eligible to
receive breakthrough therapy designation. A sponsor may seek FDA designation of a compound as a “breakthrough therapy” if
the product is intended, alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition
and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or
more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes
all of the fast track program features, as well as more intensive FDA interaction and guidance. The breakthrough therapy designation is
a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria
are met. If a product is designated as breakthrough therapy, the FDA will work to expedite the development and review of such drug.

Fast track designation, priority review and breakthrough
therapy designation do not change the standards for approval but may expedite the development or approval process. However, even if a
product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification
or decide that the time period for FDA review or approval will not be shortened.

Orphan drug designation

Under the Orphan Drug Act, the FDA may grant orphan
designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals
in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the
cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from
sales of the product. Orphan designation must be requested before an NDA is submitted. After the FDA grants orphan designation, the identity
of the therapeutic agent and its potential orphan use are publicly disclosed by the FDA. Orphan designation does not convey any advantage
in or shorten the duration of the regulatory review and approval process.

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If a product that has orphan designation subsequently
receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product
exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven
years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability
to manufacture the product in sufficient quantities. The designation of such drug also entitles a party to financial incentives such as
opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. However, competitors may receive approval
of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for
a different indication for which the orphan product has exclusivity. Orphan exclusivity also could block the approval of one of our compounds
for seven years if our compound is determined to be contained within the competitor’s product for the same indication or disease,
or if a competitor obtains approval of the same drug as defined by the FDA. In addition, if an orphan designated product receives marketing
approval for an indication broader than what is designated, it may not be entitled to orphan exclusivity.

Abbreviated New Drug Applications, 505(b)(2) Applications,
and Marketing exclusivity

In seeking approval for a drug through an NDA, applicants
are required to list with the FDA each patent with claims that cover the applicant’s drug or an approved method of use of the drug.
Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug
Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book.” Drugs listed in the Orange Book can,
in turn, be cited by competitors in support of approval of an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) application.
In this case, the original NDA (the so-called pioneer drug) is known as the “listed” drug or “reference-listed”
drug. An ANDA provides for marketing of a drug that has the same active ingredient and the same strength, route of administration and
dosage form as the listed drug and has been shown through testing to be bioequivalent to the listed drug or receives a waiver from bioequivalence
testing. ANDA applicants are generally not required to conduct or submit results of preclinical or clinical tests to prove the safety
or effectiveness of their drug, other than the requirement for bioequivalence testing. Drugs approved in this way are considered therapeutically
equivalent and are commonly referred to as “generic equivalents” to the listed drug. These drugs then generally can be substituted
by pharmacists under prescriptions written for the original listed drug.

A 505(b)(2) application is a type of NDA that relies,
in part, upon data the applicant does not own and to which it does not have a right of reference. Such applications often are submitted
for changes to previously approved drug products and rely on the FDA’s prior findings of safety and effectiveness for a third party’s
NDA to abbreviate the showings the sponsor of the 505(b)(2) application must make to establish that its product is safe and effective.

The ANDA or 505(b)(2) applicant is required to
certify to the FDA concerning any patents listed for the referenced approved drug in FDA’s Orange Book. Specifically, for each listed
patent, the applicant must certify that: (1) the required patent information has not been filed; (2) the listed patent has expired;
(3) the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration; or (4) the
listed patent is invalid, unenforceable or will not be infringed by the new drug. A certification that the new drug will not infringe
the already approved drug’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
If the ANDA or 505(b)(2) applicant does not include a Paragraph IV certification, the ANDA or 505(b)(2) application will not
be approved until all of the listed patents claiming the referenced drug have expired, except for any listed patents that only apply to
uses of the drug not being sought by the ANDA or 505(b)(2) applicant.

If the ANDA or 505(b)(2) applicant has made a
Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent holders once the
ANDA or 505(b)(2) application has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement
lawsuit in response to the notice of the Paragraph IV Notice Letter. The filing of a patent infringement lawsuit within 45 days of
the receipt of notice of a Paragraph IV Notice Letter automatically prevents the FDA from approving the ANDA until the earlier of 30 months,
expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is favorable
to the ANDA or 505(b)(2) applicant. As discussed below, the ANDA or 505(b)(2) application also will not be approved until any
applicable non-patent exclusivity listed in the Orange Book for the reference-listed drug has expired.

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Market exclusivity provisions under the FDCA can delay
the submission or approval of certain marketing applications. The FDCA provides a five-year period of non-patent marketing exclusivity
within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity
if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible
for the action of the drug substance. During the exclusivity period, the FDA may not approve or even accept for review an abbreviated
new drug application (“ANDA”), or an NDA submitted under Section 505(b)(2) (a “505(b)(2) NDA”), submitted by another
company for another drug containing the same active moiety, regardless of whether the drug is intended for the same indication as the
original innovative drug or for another indication, where the applicant does not own or have a legal right of reference to all the data
required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or
non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA alternatively provides three years of marketing
exclusivity for an NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were
conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, as, for example, new
indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the modification for which the drug received
approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs
containing the active ingredient for the original indication or condition of use. Five-year and three-year exclusivity will not delay
the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of
reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric exclusivity is another type of marketing
exclusivity available in the United States. Pediatric exclusivity provides for an additional six months of marketing exclusivity attached
to another period of exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA. The
issuance of a written request does not require the sponsor to undertake the described clinical trials. In addition, orphan drug exclusivity,
as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances.

United States Patent Term Restoration

Depending upon the timing, duration and specifics
of FDA approval of our future product candidates, some of our United States patents may be eligible for limited patent term extension
under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman
Amendments permit restoration of the patent term of up to five years as compensation for patent term lost during the FDA regulatory review
process for a drug that has not been previously approved for commercial marketing. Patent-term restoration, however, cannot extend the
remaining term of a patent beyond a total of 14 years from the product’s approval date and only those claims covering such approved
drug product, a method for using it or a method for manufacturing it may be extended. The patent-term restoration period is generally one-half the
time between the effective date of an IND and the submission date of an NDA plus the time between the submission date of an NDA and the
approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.
Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior
to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application
for any patent term extension or restoration. In the future, we may apply for restoration of patent-term for our currently owned or licensed
patents to add patent life beyond their current expiration dates, depending on the expected length of the clinical trials and other factors
involved in the filing of the relevant NDA.

Foreign Regulatory Requirements

In addition to regulations in the U.S., our business
is subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products. Irrespective
of whether it concerns an FDA approved or investigational drug, the commencement of clinical trials and the subsequent marketing of a
drug product in foreign countries are subject to preliminary approvals from the corresponding regulatory authorities of such countries.
For example, the conduct of clinical trials in the EU is governed by the Clinical Trials Regulation (EU) No 536/2014 (the “CTR”)
and the principles and guidelines on GCP.

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Before any clinical trial can begin, the sponsor must
obtain approval from both a national ethics committee and the relevant National Competent Authority (NCA) in each country where the trial
will take place. Since the implementation of the EU Clinical Trials Regulation (Regulation (EU) No. 536/2014), these applications are
submitted through the central Clinical Trials Information System (CTIS), which harmonizes and streamlines trial approvals across Member
States.

One NCA (the reporting EU member state selected by
the sponsor) takes the lead in validating and evaluating the application, as well as consulting and coordinating with the other concerned
member states in which the clinical trial is to be conducted. If an application is rejected, it may be amended and resubmitted through
CTIS. A concerned member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical
trial from being conducted in that member state.

Once sufficient evidence has been gathered to demonstrate
that the medicine is safe and effective, a sponsor prepares a Marketing Authorisation Application (MAA). This application includes comprehensive
information on quality, nonclinical, and clinical aspects, compiled in the Common Technical Document (CTD) format.

Most innovative medicines — particularly those
for serious or rare diseases or involving novel mechanisms of action — are evaluated through the centralised procedure, which is
administered by the European Medicines Agency (EMA). Under this route, the EMA’s Committee for Medicinal Products for Human Use
(CHMP) conducts a scientific assessment of the application. The evaluation process typically takes 210 active days, during which rapporteurs
and co-rapporteurs review the data and issue questions to the sponsor. The sponsor may also be invited to an oral explanation meeting
to clarify aspects of the data or the scientific rationale supporting the application.

At the conclusion of its review, the CHMP issues an opinion — positive
or negative — on whether the medicine should be authorised. If the CHMP issues a negative opinion, the applicant has the right to
request a re-examination within fifteen days. In this process, new rapporteurs are appointed to reassess the case, often considering additional
analyses, such as updated clinical findings, that may address earlier concerns.

When the CHMP adopts a positive opinion, the file
is forwarded to the European Commission, which issues the final legally binding decision on marketing authorisation, typically within
67 days. A centrally granted marketing authorisation is valid in all EU Member States, as well as Iceland, Liechtenstein, and Norway.

After approval, the sponsor enters the post-authorisation
phase, which involves continuous monitoring of the medicine’s safety and efficacy through pharmacovigilance activities. Sponsors
must submit periodic safety update reports, comply with Good Pharmacovigilance Practice (GVP) requirements, and may be required to conduct
post-authorisation safety or efficacy studies. The MA can also be varied, renewed, or, in rare cases, withdrawn, depending on emerging
data.

Failure to comply with the EU member state laws implementing
the EU Community Code on medicinal products, and EU rules governing the promotion of medicinal products, interactions with physicians,
misleading and comparative advertising and unfair commercial practices, with the EU Member State laws that apply to the promotion of medicinal
products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements can result in enforcement
action by the relevant EU Member State authorities. This may include any of the following sanctions: fines, imprisonment, orders forfeiting
products or prohibiting or suspending their supply to the market, orders to suspend, vary, or withdraw the marketing authorization or
requiring the manufacturer to issue public warnings, or to conduct a product recall.

The approval process in other countries outside the
U.S. and the EU varies from country to country, and the time may be longer or shorter than that required for the FDA approval. In addition,
the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement for market access vary greatly
from country to country. In all cases, clinical trials are conducted in accordance with GCP and the applicable regulatory requirements
and the ethical principles that have their origin in the Declaration of Helsinki.

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Foreign Sales

Sales outside the United States of potential drug
compounds we develop will also be subject to foreign regulatory requirements governing human clinical trials and marketing for drugs.
The requirements vary widely from country to country, but typically the registration and approval process takes several years and requires
significant resources. In most cases, if the FDA has not approved a potential drug compound for sale in the United States, the potential
drug compound may be exported for sale outside of the United States, only if it has been approved in any one of the following: the European
Union or a country in the European Economic Area (the countries in the European Union and the European Free Trade Association) if the
drug or device is marketed in that country or the drug or device is authorized for general marketing in the European Economic Area, Canada,
Australia, New Zealand, Japan, Israel, Switzerland and South Africa. There are specific FDA regulations that govern this process.

U.S. coverage and reimbursement

Significant uncertainty exists as to the coverage
and reimbursement status of any compound for which we may seek regulatory approval. Sales in the United States will depend in part on
the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such
as Medicare, Medicaid, CHIP, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers.
Prices at which we or our customers seek reimbursement for our therapeutic compounds can be subject to challenge, reduction or denial
by payors.

The process for determining whether a payor will provide
coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product.
A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available. Additionally,
in the United States there is no uniform policy among payors for coverage or reimbursement. Third-party payors often rely upon Medicare
coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and
approval processes. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. If coverage and adequate
reimbursement are not available, or are available only at limited levels, successful commercialization of, and obtaining a satisfactory
financial return on, any product we develop may not be possible.

Third-party payors are increasingly challenging the
price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need to conduct expensive studies
in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costs expended
to obtain regulatory approvals. Third-party payors may not consider our compounds to be medically necessary or cost-effective compared
to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost
or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Additionally,
we or our collaborators may develop companion diagnostic tests for use with our product candidates. Companion diagnostic tests require
coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products.
Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion
diagnostics.

Fraud and Abuse Laws

Federal and state health care laws and regulations
restrict business practices in the biopharmaceutical industry. In the biopharmaceutical industry, there are a number of federal and state
health care regulatory requirements that apply to entities, including, but not limited to, the federal and state fraud and abuse laws.
These laws include, but are not limited to, anti-kickback and self-referral law, civil false claims act law, criminal false statement
law, civil monetary penalty laws, exclusion law, and other civil, criminal, and administrative laws. Health care laws, regulations, and
guidance continuously evolve and are thereby subject to constant change.

The federal Anti-Kickback Statute, 42 U.S.C. §
1320a-7b(b), among other things, prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration,
whether directly or indirectly and overtly or covertly in cash or in kind, in return for, or to induce the referral of an individual for
the:

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●
furnishing or arranging for the furnishing of items or services reimbursable in whole or in part under Medicare, Medicaid or other federal healthcare programs; or

●
purchase, lease, or order of, or the arrangement or recommendation of the purchasing, leasing, or ordering of any item or service reimbursable in whole or in part under Medicare, Medicaid or other federal healthcare programs.

There are a number of narrow safe harbors to the Federal
Anti-Kickback Statute. Such safe harbors permit certain payments and business practices that, although they would otherwise potentially
implicate the Federal Anti-Kickback Statute, are not treated as an offense under the same if all of the requirements of the specific applicable
safe harbor are met. Actual knowledge of the statute or specific intent to violate it is not required in order for a person or entity
to have committed a violation.

The Federal Anti-Kickback Statute applies to certain
arrangements with healthcare providers, product end users and other parties, including marketing arrangements and discounts and other
financial incentives offered in connection with the sales of our products. Regulatory authorities may determine that certain marketing,
pricing, or other activities violate the Federal Anti-Kickback Statute or other applicable laws. Noncompliance with the Federal Anti-Kickback
Statute can result in civil, administrative and/or criminal penalties, restrictions on the ability to operate in certain jurisdictions,
and exclusion from participation in Medicare, Medicaid or other federal healthcare programs. In addition, non-compliance can result in
the need to curtail and/or restructure operations. Any penalties, damages, fines, exclusions, curtailment or restructuring of operations
could adversely affect the ability to operate a business, financial condition, and results of operations. A violation of the Federal Anti-Kickback
Statute can serve as a false or fraudulent claim for purposes of the civil False Claims Act and the civil monetary penalties statute.

The federal Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”) among other things, enacted numerous provisions that prohibit knowingly and willfully executing, or
attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses,
representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program,
regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly
and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious
or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare
matters. These provisions include 18 U.S.C. §§ 286, 287, 669, 1035, 1347, and 1518, all as described further below.

The Ethics in Patient Referrals Act, commonly known
as the “Stark Law,” 42 U.S.C. § 1395nn, prohibits a physician from making referrals for certain “designated health
services” payable by Medicare to an entity in which the physician or an immediate family member of such physician has an ownership
or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
There are a number of exceptions to the Stark Law. Such exceptions permit certain payments and arrangements that, although they would
otherwise potentially implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific exceptions
are met. Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements received under a noncompliance arrangement,
civil penalties, damages and exclusion from Medicare or other governmental programs. These requirements are highly technical and there
can be no guarantee that regulatory authorities will not determine or assert that arrangements are in violation of the Stark Law and do
not otherwise meet applicable Stark Law exceptions.

The federal false statements statute, 42 U.S.C. §
1320a-7b(a), prohibits knowingly and willfully falsifying, concealing, or omitting a material fact or making any materially false statement
in connection with the delivery of health care benefits, items, or services. Similarly, 18 U.S.C. § 1035 prohibits a person or entity,
in any matter involving a health care benefit program, from knowingly or willfully falsifying, concealing, or covering up by any trick,
scheme, or device a material fact; making any materially false, fictitious, or fraudulent statements or representations; or making or
using any materially false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or
entry. In addition to criminal penalties, violation of these statutes may result in collateral administrative sanctions, including exclusion
from participation in Medicare, Medicaid and other federal health care programs.

18 U.S.C. § 669 prohibits knowingly and willfully
embezzling, stealing, or otherwise without authority converting to the use of any person or entity other than the rightful owner, or intentionally
misapplying any of the moneys, funds, securities, premiums, credits, property, or other assets of a health care benefit program. In addition
to criminal penalties, violation of this statute may result in collateral administrative sanctions, including exclusion from participation
in Medicare, Medicaid and other federal health care programs.

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The criminal health care fraud statute, 18 U.S.C.
§ 1347, establishes criminal liability for whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice
to defraud any health care benefit program, or to obtain, by means of false or fraudulent pretenses, representations, or promises, any
of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery
of or payment for health care benefits, items, or services. In addition to criminal penalties, violation of this statute may result in
collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other federal health care programs.
A person or entity need not have actual knowledge of this law or specific intent to commit a violation of this law.

18 U.S.C. § 1518 establishes criminal liability
for whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, obstruct, mislead, or delay the communication of information
or records relating to a violation of a Federal health care offense to a criminal investigator. In addition to criminal penalties, violation
of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid and other
federal health care programs.

18 U.S.C. § 286 establishes criminal liability
for whoever enters into any agreement, combination, or conspiracy to defraud the United States, or any department or agency thereof, by
obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim. In addition to criminal penalties,
violation of this statute may result in collateral administrative sanctions, including exclusion from participation in Medicare, Medicaid
and other federal health care programs.

18 U.S.C. § 287 establishes criminal liability
for whoever knowingly makes or presents a false, fictitious or fraudulent claim to the United States Government, including any department
or agency thereof. In addition to criminal penalties, violation of this statute may result in collateral administrative sanctions, including
exclusion from participation in Medicare, Medicaid and other federal health care programs.

The Federal False Claims Act, 31 U.S.C. § 3729,
et seq., provides, in part, that the federal government—or a private party on behalf of the government—may bring a lawsuit
against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent claim for payment, or who
has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation to pay money to the
federal government or who has knowingly retained an overpayment. Knowledge under the Federal False Claims Act means actual knowledge,
deliberate indifference, or reckless disregard. In addition, amendments in 1986 to the Federal False Claims Act have made it easier for
private parties to bring whistleblower lawsuits against companies.

The civil monetary penalties law, 42 U.S.C. §
1320a-7a, provides, in part, that the federal government may seek civil monetary penalties against any person who presents or causes to
be presented claims to a Federal health care program that the person knows or should know is for an item or services that were not provided
as claimed or is false or fraudulent, or the person has made a false statement or used a false record to get a claim paid. The federal
government may also seek civil monetary penalties for a wide variety of other conduct, including offering remuneration to influence a
Medicare or Medicaid beneficiary’s selection of providers and violations of the Federal Anti-Kickback Statute.

Violations of the Federal False Claims Act and/or
the Civil Monetary Penalties Law can result in penalties ranging from $12,537 to $25,076 for each false claim violation of the Federal
False Claims Act and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount
of damages that the federal government sustained. In addition, the federal government may also seek exclusion from participation in all
federal health care programs.

42 U.S.C. Section 1320a-7 provides that individuals
and entities can be mandatorily or permissively excluded from participation in federal health care programs. The grounds for mandatory
exclusion include, but are not limited to, conviction for a criminal offense related to the delivery of an item or service reimbursed
under a federal or state health care program, and a conviction related to health care fraud. The grounds for permissive exclusion include,
but are not limited to, criminal offenses relating to fraud inside and outside of health care, convictions related to obstruction of an
investigation or audit, and/or failure to disclose certain required information. Exclusion from federal health care programs—whether
mandatory or permissive—may mean that our customers may not be able to get reimbursed by federal and/or state health care programs
for use or dispensing of our products.

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State Fraud and Abuse Provisions

Many states have also adopted some form of anti-kickback
and anti-referral laws and false claims acts and civil monetary penalties and other fraud and abuse provisions that apply regardless of
payer, in addition to items and services reimbursed under Medicaid and other state programs. A determination of liability under such laws
could result in fines, penalties, and exclusion, as well as restrictions on the ability to operate in these jurisdictions.

Corporate liability can be present as a result of
the illegal activities of employees, representatives, contractors, collaborators, agents, subsidiaries, or affiliates, even if they were
not explicitly authorized. There can be no assurance that all employees, representatives, contractors, collaborators, agents, subsidiaries
or affiliates will comply with the foregoing laws at all times. Violation of the aforementioned and other laws could result in whistleblower
complaints, investigations, sanctions, settlements, prosecution, government oversight and reporting, other enforcement actions, disgorgement
of profits, significant fines, damages, other civil and criminal penalties or injunctions or other administrative remedies, suspension
and/or debarment from contracting with certain governments or other persons, the loss of privileges, reputational harm, contract damages,
adverse media coverage and other collateral consequences. In addition, corporate directors, officers, employees, and other representatives
who engage in violations of these and other laws may face imprisonment, fines, and penalties. If any subpoenas or investigations are launched,
or governmental or other sanctions are imposed, or if a company does not prevail in any possible civil or criminal litigation, business,
financial condition, and results of operations could be materially harmed. In addition, responding to any action will likely result in
a materially significant diversion of management’s attention and resources and significant defense costs and other professional
fees. Enforcement actions and sanctions could further harm business, financial condition, and results of operations. Any of the consequences
contained in this paragraph and section could adversely affect the ability to operate the business, financial condition, and the results
of operations.

Sunshine Act

The Sunshine Act requires manufacturers of products
reimbursed by Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”) to collect and annually report
detailed data to the Centers for Medicare and Medicaid Services (“CMS”) regarding payments or other transfers of value to
physicians, certain other health care providers (such as physicians assistants and nurse practitioners) and teaching hospitals (“covered
recipients”), as well as any ownership or investment interest held by physicians and their immediate family members. The reporting
data must be accompanied by an attestation as to the accuracy of the data and failure to timely and accurately submit required information
may result in civil monetary penalties.

Health Insurance Portability and Accountability
Act

Besides enacting the program integrity provisions
described above, HIPAA, also created a new set of privacy and security requirements. As amended by the Health Information Technology for
Economic and Clinical Health Act, and implementing regulations thereunder, HIPAA requires certain healthcare providers, health plans and
healthcare clearinghouses who conduct specified electronic healthcare transactions (“covered entities”), as well as their
independent contractors and agents who conduct certain activities involving protected health information on their behalf (“business
associates”) to comply with enumerated requirements relating to the privacy, security and transmission of protected health information.
Failure to comply with HIPAA can result in corrective action, as well as civil fines and penalties and government oversight. Among other
changes, HITECH made HIPAA security standards directly applicable to business associates, increased the tiered civil and criminal fines
and penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general
new authority to file actions to enforce HIPAA. Further, the breach notification rule implemented under HITECH requires covered entities
to notify affected individuals, the U.S. Department of Health and Human Services Office of Civil Rights (“OCR”), the agency
that enforces HIPAA, and for breaches affecting more than 500 individuals, the media, of any breaches of unsecured protected health information.
HIPAA does not create a private right of action for individuals, though individuals may submit complaints related to HIPAA to OCR.

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Legislative Activities Aimed at Controlling Drug
Costs

In the United States, there have been, and continue
to be proposed and enacted legislation at the federal and state levels designed to, among other things, bring more transparency to drug
pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform
government program reimbursement methodologies for drugs. For example, in July 2021, the Biden administration released an executive order,
“Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s
executive order, on September 9, 2021, the U.S. Department of Health and Human Services (“HHS”) released a Comprehensive Plan
for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies
that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. In addition, the Inflation
Reduction Act (“IRA”) passed on August 16, 2022. The IRA, among other things, (1) directs HHS to negotiate the price of certain
highly-utilized single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part
D to penalize price increases that outpace inflation. These provisions will take effect progressively starting in fiscal year 2023, although
they may be subject to legal challenges. It is currently unclear how the IRA will be implemented but is likely to have a significant impact
on the pharmaceutical industry. Further, the Biden administration released an additional executive order on October 14, 2022, directing
HHS to submit a report within 90 days on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models
for lowering drug costs for Medicare and Medicaid beneficiaries. We expect that additional U.S. federal healthcare reform measures will
be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services,
which could result in reduced demand for our product candidates or additional pricing pressures.

Research and Development Expenses

Historically, a significant portion of our operating
expenses related to research and development. See our Consolidated Financial Statements contained elsewhere in this Annual Report for
costs and expenses related to research and development, and other financial information for fiscal years 2025, 2024 and 2023.

Scientific Advisors

We are advised by scientists and physicians with experience
relevant to our Company and our product candidates. Our scientific advisors include clinicians and scientists who are affiliated with
a number of highly regarded medical institutions.

Employees

We currently have approximately thirty-four full-time
employees, and we retain several independent contractors on a regular or as-needed basis. We believe that we have good relations with
our employees.

Available Information

Our internet website address is www.anavex.com. Our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished
pursuant to section 13(a) or 15(d) of the Exchange Act are available there free of charge. We include our website address in this report
only as an inactive textual reference and do not intend it to be an active link to our website. The contents of our website are not incorporated
into this report.