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I would like to see the voucher sold and used to repurchase shares if the stock price remains low after approval.
How do you get to $50-$100/share for Rett, a rare disease that will likely have multiple available drug treatments within the next few years?
I agree. But the price targets are short-term. The $35 target probably assumes Rett approval and nothing else on any of the other trials.
It's hard to see because so many are blinded by repeated talk of $1000+ per share.
$35 upon FDA approval would represent a 3x gain -- that is significant. The real value won't be recognized until years later when revenue starts coming in and investors can more accurately model future cash flows.
There are a lot of AVXL investors who are married to this stock. I am curious about what price it takes to get them to file for divorce. What may drive the stock price above $35 is if a predominantly retail-owned stock's investors simply refuse to sell shares to funds that were sitting on the sideline until after approval, and Dr. Missling doesn't sell them shares through a private offering. But even under the most extreme supply and demand imbalances, there's no way AVXL is going to hit $1000+ anytime soon. Probably not ever, but as they say let the dreamers continue to dream...
I don’t think we’ll see anything close to 50% market penetration. 10-20% is more realistic until the generic version becomes more available.
Insurance companies are always reluctant to approve new drugs until there are years of real world data(not clinical trials). And in most of the developed world there’s a single payer system that has significant bargaining power to negotiate lower drug prices.
$300-$500 is probably a more realistic best case scenario and even that’s a stretch. $125 and I’ll bet we see Dr. Missling accept a buyout offer.
By the time we have AD data results and trial success or failure news, we will already know if AVXL will survive based on the Rett results.
Even without AD, a solid Rett drug should be worth $15/$20/share.
Thank you!!
What is mod approval?
The problem with trying to trade a stock like Anavex, or timing the market, is that Anavex is asymmetrical to the overall market if/when it announces positive data and FDA approval. I’d rather suffer paper losses now than risk not owning any stock when there’s a surprise PR one morning that the FDA has approved the drug for Rett, etc.
Buy and hold is generally accepted the best strategy for people under the age of 50 or 60. Obviously if you’re at or near retirement, following your advice is prudent — but then again those at or near retirement shouldn’t be heavily invested in a company like Anavex.
If it drops to $2.50 or even $5, AVXL will be trading at 2017 prices but with significantly less risk based on the new data results we have since then. While there’s no promise that the FDA will ever approve Anavex’s lead drug, the odds are much better today than in 2017 and I love these sorts of arbitrage scenarios where I can buy at 2017 prices with 2022 information.
Please stop. If nothing else, talking about $8000 and fancy private jets and all these other caviar freaks will just jinx the stock. Remember the millionaire’s club talk last summer? How’s that working out.
A few comments:
1. Anavex will have to issue a lot more shares to get to a point where it’s capable of mass-producing enough Blarcamesine to the entire US population.
2. Insurance companies aren’t going to pay $11k. That may be an appropriate out-of-pocket price but figure insurance companies negotiating to pay only 35% of that amount annually — they never pay “retail” price. And most patients will be old enough to qualify for Medicare — good luck getting the government to pay full price.
3. Not all US patients will receive Blarcamesine even if it does become the standard of care. It’s the United States — our healthcare system doesn’t provide for everyone equally.
4. If Anavex has an effective drug, expect a buyout offer that Dr. Missling accepts. At the very least expect a partnership for manufacturing and marketing costs.
Point is that your formula is overly optimistic and the variables are not realistic. Put another way — there are lots of blockbuster drugs out there. How many lives have beta blockers saved over the years — look at those companies’ stock prices for comparison. Investors will be rewarded if AVXL has an effective and approved treatment, but not to the tune of $8000k/share. That’s way more absurd than the $1000/share nonsense being spewed back in 2015.
I don't know if Dr. Missling and the other insiders are playing self-serving dilution games. But I've seen some shady CEOs, the ones who truly don't give a [bleep] about shareholders. They don't even try to hide it. I don't see that from Dr. Missling.
There's a scene in the film The Big Short where one trader asks another how he's [bleeping] him on a deal. The accused simply responds: Yeah I'm going to rip your eyeballs out, but you'll be so rich you won't even care.
That's how I look at this. If Blarcamesine works, I don't care about the delays, PR blunders, or a few million extra bucks in options dilution. Most other investors won't care either.
50/50 odds. Up from 5% when I first bought AVXL, and I know many here believe the odds of approval is now closer to 90% but I like to be conservative.
If A273 is the panacea we hope it is, the drug will sell itself and the transformation from baby bio to big time drug company won’t require much direction — Dr. Missling’s most difficult job will pivot to him having to figure out what to do with the revenue avalanche.
I wasn’t initially sold on Dr. Missling. I thought he was too cavalier with going at it alone and when the stock price was in the low $1s I was the one saying he should reduce the risk and partner. Now, a $500mm valuation looks silly in hindsight if A273 is approved even for Rett alone.
I also applaud the decision to focus on these rare diseases that have better odds of approval because there aren’t any alternatives. Most CEOs wouldn’t care to spend their time on Rett, Fragile X, etc — Dr. Missling saw those opportunities and may need up netting a pediatric voucher that can accelerate the Alzheimer’s approval process.
You don’t care for Dr. Missling. Fine. But who do you suggest replaces him?
He’s fine for now. We have several trials in motion, minimal debt, minimal dilution and are starting to attract the attention of institutional investors.
Is he the right CEO for AVXL 5-10 years from now? Maybe, maybe not. His weakness is communication but that’s a skill that comes with experience. His PR mistakes don’t bother me as long as he learns from them and doesn’t repeat them.
Agreed!
What are you talking about? Every “skilled” executive had to start somewhere, and a little secret…every successful executive has had multiple failures, blunders and mistakes on their path to becoming a “skilled top executive.”
Steve Jobs was fired from Apple at one point because frustrated shareholders like you said he lacks vision and the ability to lead, communicate, etc. Where do you think Apple would be today if Steve Jobs never returned?
I know a man who started a small boutique clothing shop inside a typical mall about 25 years ago. Today the company is worth around $20 billion.
I get the frustration of his missteps but I’d love for you to give me one CEO’s name who hasn’t made any mistakes. Put another way, give us the name of Dr. Missling’s replacement.
I don’t know if Dr Missling is the best CEO post-approval but I do know he’s the right guy to get the drug in front of the FDA with its best foot forward.
My take was that those in the trial may continue getting the drug for free, as will those who may have received the placebo.
I do think it may have been a misstep in communication but he’s trying to answer multiple questions rolled into one, and as you pointed out he’s speaking in a non-native language.
Agreed, I think we are saying the same thing but you worded it better.
My point was that shareholders cannot expect $2 billion revenue forever because once other, larger scale diseases are approved for treatment it’s inevitable the cost of the drug will come down.
My fear is more that if insurance companies know that A273 is going to be submitted for other diseases, will that try to stall and avoid paying the Rett costs until the drug is priced cheaper (vs. if A273 only worked for Rett so they don’t have as much leverage in negotiating what they’ll cover?)
Agreed. Once the price is set it’s very hard to raise it any higher than inflation rates, that’s precisely what got Martin Shkreli in trouble.
Just be patient and seek accelerated approval, price the drug in line with other rare diseases and negotiate the best deals with insurance companies.
My concern is that even with FDA approval, insurers will fight tooth and nail to not have to pay.
My other concern is that the Rett cost can’t stay at 200k/year if this is approved for Alzheimer’s at, say, $20/day. Rett patients will understandably ask for it off-label and will do all they can not to pay 10000x more than someone with Alzheimer’s is paying.
Yes. I used to go back and forth with Shkreli on Twitter, he was actually fairly respectful and tried to justify his bias against AVXL with science, as opposed to the banal drivel Feuerstein would post.
I wonder why Shkreli still feels AVXL is a lost cause based on what we know now?
I guess the sign of a narcissist is the inability to admit when you’re wrong?
Not sure if this was posted but Martin Shkreli posted a few weeks ago on his blog that AVXL is a great stock to short.
https://martinshkreli.com/blog/f/117-involuntary-horology
“Looking into AGIO, NTLA, ADCT, BBIO, MRUS, CCCC, ROIV, RVMD, RCKT and many others (small cap foreign biopharma) as long candidates. There are still plenty of shorts, looking into AVXL, SAVA, CMPS, ATAI. This is a really good environment for anyone lucky enough to have zero exposure to the space in the last 6-12 months.”
As of yesterday he’s permanently banned from discussing biotech. As much as I disagree with the guy it seems like a violation of his right to free speech.
Pfizer has a ton of Covid vaccine cash. I could see it making an offer too good to reject if either the Alzheimer’s or Parkinson’s data is positive.
Relax, nothing is wrong even if tomorrow doesn’t provide anything of value to investors. It won’t. It’s a mandatory financial update for a company that isn’t selling anything.
Probably closer to 200mm shares outstanding by then, but the overall point is still valid. If AVXL’s drug works the EPS will increase slowly, then suddenly.
Don’t expect much from the conference call. An update on the financial situation, a rehash of the Rett trial data, and a cautiously optimistic sentiment about Alzheimer’s is about what I’m expecting.
We should see some covering going into tomorrow, but for the info everyone here really wants…just going to have to wait it out a little longer.
End of 2023 sounds good to me. Not sure what all the fuss is about. 20 months isn’t all that long of a wait.
Sure. I agree with that. It would have been nice had Dr. Missling made AF work harder to find a way to distort the positive news of meeting all endpoints.
That said, his mistake wasn’t so egregious that people should demand his resignation over it. Let’s see if he learns from it. So far he’s done a good job of keeping everything alive. A “better” CEO may have sold the company too soon — something I was I favor of and now can admit may have been the wrong instinct on my part to play it safe. We’ll see in 8 or 9 months…
I have no issue with starting it as a joke. It’s the ones who took it to the next level of bragging that bothered me. The nail that sticks up always gets hammered down.
Glad you’re still here and see the long term potential if the risks continue to be mitigated with more persuasive data.
I agree with everything except that Anavex is at the point where it needs to focus on marketing. Let’s get the drug approved first.
Share price is a reflection of the perceived value of a company’s future cash flow. Right now it’s very hard to determine the future cash flow because the drug isn’t even approved yet and if/when it does get approval, there are no assurances that it will become the standard of care. We all hope and expect it will but who knows?
I believe that Dr. Missling is the right CEO for the task of getting A273 approved. I don’t know if he’s the best fit for marketing the drug to physicians, caregivers and patients. But that’s way down the line, and not worth discussing until there is actually a drug available to market.
Good information, Doc. I can’t tell if you’re long, short or neutral / no vested interest in AVXL as an investment but I always appreciate your insight.
My response to your post is general agreement, but do you think if there is an unmet need for a relatively rare disease without any approved treatment the FDA may be more willing to permit a smaller trial given the drug’s positive safety profile?
Could it approve Rett now on a provisional basis with the pediatric study serving more as a P4-style trial to confirm the data? It seems that if the Rett community applies enough pressure the FDA may cave. We saw with Biogen’s AD drug that the FDA is willing to act outside of the norm when there appears to be a significant unmet need.
All IR departments are worthless. I’ve never once had a beneficial interaction. At best they’ll respond with platitudes. At worst they won’t respond at all.
Anavex’s IR is par for the course but it’s a necessary expenditure. Hopefully we aren’t paying too much for their services, but it wouldn’t surprise me if we are. Everyone else is overpaying, too.
Can someone please tell me when everyone here has had their fill? Is a pound of flesh from Dr. Missling not enough?
Nothing has changed. The company is flush with cash, and it has data it feels comfortable presenting to the FDA for a rare pediatric disease without any effective treatment options.
It’s biggest competitor in the Rett race also had positive data but there’s an asterisk of some uncomfortable side effects. I can see both company’s drugs being approved with MDs having the option to choose which to prescribe to patients.
The pediatric rare disease voucher can then be used to accelerate approval of A273 for another CNS disease, or it can be sold for about $1/share — think of it as a one-time dividend.
Dr. Missling is likely to be more careful with his communications now. We saw that today with the PR — meaningless to the share price but his best effort gesture to shareholders acknowledging he’s aware of our concerns.
I guess there is some cathartic effect in regurgitating how he screwed up but some people here are acting like he did something so nefarious that the FDA has no choice but to reject A273.
This simply isn’t the case. If nothing else, I could make the argument that no pre-revenue bio startup should have a MC of $1 billion and AVXL is now fairly valued, but that would just make the wolves here even hungrier for flesh — this time mine, not Dr Missling’s, so I’ll refrain.
I’m not sure I understand why the second option is riskier, other than maybe in terms of delaying approval.
If the FDA doesn’t accept S1R as a biomarker, I’d guess it would be more likely to require an additional trial than to reject A273 outright with no more shots on goal.
The risk is more with the delay in getting ti market than being forced to pivot to another pipeline drug because A273 was deemed ineffective.
More than likely all signs will point to Anavex relying on FDA guidance. Let the lawyers do what they want. Truth is an absolute defense and if Dr. Missling has nothing to hide then yesterday was just a minor inconvenience.
I’d say that Adam F has more to worry about with a pronounced legal battle between disgruntled shareholders and Anavex. What happens when attorneys start digging through his conversations?
(For the record I don’t think he broke any laws. He’s a terrible person but I believe he’s still acting within the limits of the law and his bashing falls short of libel).
The only two questions that must be asked are: 1) does what happened yesterday slow the timeline for FDA review, and 2) does it affect how the FDA will review A273? I think the answer to both is no, and deep down I’d bet Adam F believes the same even if he’ll never admit it.
Exactly. If this drug hits the market it’s not like doctors or caregivers are not going to use it because Adam F tweeted about the trial design…
Investors panic too easily.
Question: to what extent does Duncan have on the FDA’s decision to approve or reject A273? Will the FDA be looking at his revised price targets for guidance?
If so there’s reason to be concerned. If not, his opinions only matter to those who care about the short term outlook.
To those who wanted a PR this morning: do you think Adam F would have just sat silently? Of course not. He’s going to tweet about the PR attacking him and it’ll add more attention and fuel to the fire he started. It’s not going to persuade anyone who sold to buy back their shares, nor will a PR accelerate the approval process.
Anavex refuted Adam F’s statement for the first time. Investors must now decide who they believe. The damage is done. A PR now is like buying insurance after the fire. The best way to handle AF is to ignore him. At some point his opinion won’t matter, when the FDA issues its opinion. At that point if Dr. Missling wants to tell Adam to go f—himself, I’d be fine with that. Until then focus on the end zone. Not the idiot fans in the stands rooting for the other team.
Hindsight is always 20:20. I’m sure there are many who did sell at 30 and buy back at 10, and they deserve to be rewarded for the risk they assumed that selling at 30 was a wise decision at a time when every competitor was trading above $100 and the sky was the limit.
I’m sure there are also lots of people who bought at $2, sold at $6, and hoped to get back in 3x at $2…