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Yes, but it’s a moot point. If Blarcamesine is approved for Rett, it will be available off-label. Ordinarily I’d say it poses an issue with medicare reimbursement but given the expected savings between a pill and an injection, I don’t think insurance companies will have as much of an issue covering it even off-label until the P3/4 trial has concluded
Back in 2015 I remember hearing people talking about Anavex like you speak of SAVA.
I have no position in that company but I do think it has the potential to be a formidable threat if approved.
There are a lot of assumptions in your post, Falconer. You state that there will not be any competition, but this may not be the case. We all hope that it will be, but even Anavex has something in its pipeline that may be superior to Blarcamesine. Don't be too quick to dismiss what other companies will figure out once they, too, pivot their attention toward novel approaches as we're seeing with Anavex, SAVA, and many other startups that have ditched plaque theory.
JoeBear: To hit your $800 target using DCF, you'd need the following:
EPS: $30/share
Discount rate: 10%
25% growth rate over the next 7 years, followed by 0% terminal growth
This would put the intrinsic value around $810.
It's realistic, but not immediately. And the risk is something else comes along that is significantly better than Blarcamesine, especially if research dollars shift toward Sigma-1 and other unconventional theories.
The net margins for our sector average closer to 20%-25% and I don't think we'll see 33% market penetration immediately, unless we have the assistance of a partner which your model doesn't account for, either. There's too much competition in the Alzheimer's space and even if the competition has an inferior drug, it'll take some time to overcome their head start -- especially if people are seeing positive results taking the "-mabs."
I agree that using 100mm to account for future dilution is a good idea. But I'd suggest the discount cash flow instead of trying to use P/E to value the company.
Rett should be approved, and from there we may see some off-label prescriptions written.
Aside from helping a patient population in need of treatment, Rett approval will effectively end all dilution concerns and should provide additional runway for the remaining P3 trials.
His confidence in seeking accelerated approval is most likely based on prior conversations with the FDA. My guess is that he feels good about the chances the FDA will permit a P4 with accelerated approval.
NOLs are not easy to transfer or sell. It's doable but there are all sort requirements that must be met (i.e., acquiring business has to be substantially similar to the existing one, etc).
Section 382 outlines all the options, but I haven't paid much attention to Anavex's operating losses pre-2018 so I don't know how much it has available to offset gains.
To the bigger point that needs to be addressed, Dr. Missling has done a good job of righting the ship and putting Anavex into a financially enviable position compared to most other pre-revenue bio startups.
Not all battles are fought publicly. Most are not.
And who exactly is the "enemy" to continue with the war parlance?
Hint: it's not Adam Feuerstein.
It's the wall that exists between the FDA and approval. The enemy is convincing the skeptics on the FDA panel to vote for approval. And as long as Dr. Missling is conversing with the FDA and understands what they're looking for, he's on the right path.
Engaging in public stunts with hack journalists will help the price short-term but it'll also attract a lot more time and attention away from the goal. What's the end-game, to get them to stop posting nonsense? It's their right to be skeptical, as long as what they write is based on their understanding of the truth and not knowingly meant to spread falsities. That second part makes libel and slander so difficult, especially when someone isn't a public figure (and I doubt AF would qualify).
The moment our CEO starts responding to stupid people on the internet is the moment I will become concerned about my AVXL investment. That's a response tactic someone who doesn't have any other cards to play starts to do. If Anavex has a successful drug, and I believe it does, our CEO doesn't need to worry about what anyone else has to say.
Short selling is necessary in some instances to help create liquidity. It also serves as an incentive for CEOs not to commit fraud or engage in sketchy behavior to the detriment of shareholders.
The issue isn't short-selling, it's the lack of enforcement of current SEC regulations. Naked shorting is already illegal. Hiring more SEC attorneys and investigators would be a good start, but half the country will get into a hissy fit because "it's an expansion of the federal government." The same thing happened when the IRS hired a bunch of new employees to go after tax evaders.
When you say that short-selling is immoral and should be illegal, it represents an overly simplistic understanding of the role short-selling plays in creating liquid markets. Some short-selling should be illegal, but the SEC has to choose between a lot of different targets: the shady CEOs stealing from shareholders, the shady naked shorts, scam promoters, and of course those who engage in pump and dumps.
Some may even argue that constantly pumping a stock on a message board, posting news that is several years old without any sort of context or reference to the original published date, and constantly making outlandish predictions is just as harmful and just as immoral as anything the short-sellers are doing.
The real problem isn't the short sellers or the pumpers. It's the fact that everyone is so convinced they're right all the time, they don't leave any room for the possibility that they're wrong. This is partially why the United States has become so divided lately.
"If you can trust yourself when all men doubt you, but make allowance for their doubting too."
I believe Dr. Missling, I think that Blarcamesine will perform well in every one of its P3 trials, but I accept the possibility that I am wrong and/or that another drug will come along and be more effective than Blarcamesine. I just hope that drug is A-371. In the meantime, I take comfort knowing the short-sellers will run out of time the moment the FDA makes its decision for Rett.
Nobody should be clueless about the reason for the delays. Dr. Missling can release all the data he wants right now, but what good will that do? People will either believe him or they won't. He's not going to change anyone's mind either way. So we wait.
What are we waiting for? Third party, peer-reviewed validation in a respected journal. From there, a larger platform like AAIC to announce trial results. If the data is good, you don't release it on a random Tuesday PR to appease a few retail shareholders.
Is this the best short-term value move? Probably not. Is it best for the long-term? I think so, for the same reason we wait until the 4th of July to shoot off fireworks or Christmas morning to open presents. There's a time and place for everything. Clearly Dr. Missling believes the time to make a big announcement is after this has been peer-reviewed. That way, an attack on him is also an attack on [insert independent, unbiased researchers].
Every time Anavex has a big data announcement, there are certain "journalists" who within two minutes of the press release have already published their thoughts, accusing Dr. Missling of {insert} and saying-without-saying the company is allegedly fraudulent. In not so subtle terms, expect a Hindenburg Research-style short attack every time there's good news to report.
Some conferences allow journalists an embargoed preview of the data, which is how I suspect the pre-written articles are published so quickly. With AI and Chat GPT, it'll be easy to let the bots have fun with the pros and cons of Anavex after each PR. The usefulness of people like Adam Feuerstein will be coming to an end real soon.,
Is Anavex manipulated? Sure, probably no more or no less than any other biotech with a similar market cap and cult-like following. Does it matter? Not in the long-run. At some point the stock is worth what it's worth based on the partnership details and Rett revenue.
Thanks. I'd imagine a partnership would be more balanced and fair to shareholders if both parties have a drug compound whose efficacy is increased when combined with another (or as you say, taken immediately after an initial dosing period).
I remember talking to an ex-NFL player at the Wynn Resort in Las Vegas. The guy was clearly a high-rolling regular, and we started talking about player salaries. At one point I asked him why he pays his agent 10% of all earnings and endorsements. His answer: the agent earns him significantly more than if he tried to negotiate his own deals. It's the same reason boxing promoters exist.
There are benefits beyond dollars to partnering with an established company, even if it means giving up a bigger piece of the pie. The key is making sure not to give up too much. Yes, Anavex can try to go at it alone with manufacturing and distribution but sometimes it's nice to have a heavyweight by your side.
Is Anavex going to be at AAIC? I hadn't seen anything about that on its website.
Thank you for sharing your thoughts. It appear what was once an open market is now becoming crowded with two or three drugs vying for the top spot. Do you have any comments on whether Blarcamesine may work synergistically with Donanemab?
Those estimates are for much larger companies with fixed manufacturing, distribution and marketing budgets. Anavex will end up partnering, so the $20B for Alzheimer's may only end up being in the $8B-$12B range if you're trying to estimate future market cap valuations.
Sorry, but I still fail to see the urgency. It would be nice to have data soon, but is it absolutely necessary? I don't think so.
If the competition has a better drug than Blarcamesine, any competitive advantage of hitting market first would be short-lived. If the other drugs are inferior, there will be demand for Blarcamesine regardless.
Being first (or even second) is not always the best. In fact, sometimes it can create its own unique set of risk and disadvantages.
I'd rather have so much data that it's clear beyond any reasonable doubt that Blarcamesine is superior. Let the drug sell itself, rather than rush it and try to persuade physicians to prescribe it with limited and/or obfuscated rushed data.
If the data weren't good, Dr. Missling wouldn't keep pursuing Blarcamesine. He'd pivot the runway toward investing in the rest of the pipeline, including A371.
The fact he's going full-throttle is reason enough for me to feel confident. Everyone talks about how he's cherry-picking data, hiding the real results, etc., but there's no reason for him to act sketchy when he's got 120 million and no debt. If he felt that A371 was a bust, he'd just use the current cash to acquire another P2 candidate and go from there.
People who have options don't usually resort to shady tactics, because they don't have to.
It's much more likely that he's telling the truth. He probably has the data but he's going to wait for it to be released by a peer-reviewed journal, or he'll announce the deep-dive results at AAIC or a similar conference. And if he doesn't yet have the data, that's okay too. What's the hurry?
Correct. And this is where the potential arbitrage situation exists, should Anavex find itself holding an FDA-approved drug.
Anavex is currently a retail-driven stock. Dr. Missling goes on these roadshows because his goal as CEO is to skew the ratio towards more institutional ownership (i.e., less long-term volatility). The double-edged sword is that in the short-term, funds will sometimes resort to ethically-gray tactics to influence the share price so they can take large positions as cheaply as possible.
At some point if/when Blarcamesine is approved, we're going to see a monumental shift from retail to fund-driven purchases. Until then, the stock price is irrelevant unless you're trading shares.
A hostile takeover would be fairly difficult to accomplish considering the 200mm authorized share expansion, the poison-pill provision, and the cult-like attitude of many early shareholders who hold sizable positions and aren't going to sell until the FDA makes its decision.
Anavex is still primarily retail-owned, so Pfizer or any other company that may want to acquire Anavex will have to pony up significant dollars right now, and there's no CEO willing to commit to that sort of a risk.
I doubt more than 25% of existing shareholders would accept less than a $5 billion valuation.
This is the same group that predicted FDA approval back in 2018?
I don't think many people realize just how long and difficult a process it is to bring a drug to market. On average it's around 10 years and that doesn't factor in a global pandemic. Considering most people here invested 2015 or later, if they go strictly by averages there's still quite a bit of time remaining on the clock.
And yet impatience will always lead to unrealistic expectations and incorrect timing.
To your other point about whether Anavex stock will ever see $8 again? What's so special about $8? To those who are holding until the FDA makes a decision, it doesn't matter if the stock is $8 or 8 cents because both would be massively undervaluing Blarcamesine should it get approved.
What makes you think Anavex is for sale right now? Nobody is going to acquire a pre-revenue company without a marketable asset (yet) for more than .20 on the dollar. The risk/reward is simply too great. At best, a company right now will value Anavex based on its Rett potential and may throw in a sweetener for the rest of the pipeline.
This will all change if/when the Alzheimer's and Parkinson's data comes back positive and the FDA approves Blarcamesine. Until then, I can't imagine any offer that either side will consider fair because it's too difficult to estimate Blarcamesine's value. It's either zero or it's tens of billions.
CEOs don't lose their jobs by passing on blockbusters, they lose their jobs by investing in failures. Let's see where the offers stand if/when Blarcamesine is approved for Alzheimer's -- whether that's in 2024 or 2026.
Re: your second point, I agree. It's index-driven purchasing with perhaps a rogue investment manager taking a small position for a handful of risk-seeking clients.
The Rett readout should produce positive data and become the second approved drug this year. At that point, let the free market decide the better treatment option. Word will eventually spread that one company's product produces better results, or fewer side-effects, easier to administer, or both.
Same with Alzheimer's.
Here's the interesting part: Dr. Missling has shown himself to be a much better operational CEO than many other biotech leaders who have lots of scientific expertise but little in the way of financial acumen. These are the companies with a great product that end up in death spiral financing situations. Dr. Missling has this company's cash runway in a great spot. The money for a P3 trial is there if it's needed, and there should be Rett revenue to help offset any excess costs.
At that point, it's again simply a question of whether Blarcamesine is more effective, safer, and/or easier to administer than the alternatives. If it is, the drug will rise to the top and sell itself. But we're about to leave the part of the growth story where Dr. Missling struggles (FDA communication) and move into an area where he seemingly excels (capital allotment, business acumen and deal-making). As CEO, I care more about Dr. Missling's MBA credentials than his PhD credentials now that we're starting to look past approval and toward monetization.
This is why I laugh when I read posts that begin with, "Why did [name] stop posting here? Did s/he sell and leave a bunch of bagholders?"
Unless [name] works for Anavex or the FDA, I couldn't care less why someone decides to buy or sell a position. Nobody here has any influence whatsoever. It's all fun and games, nothing more. Every so often someone will spot some news a few hours or days before it goes mainstream and this can create a unique arbitrage situation but that's about the extent of the value of this (or any) message board.
Why did he choose Anavex over all the other countless biotech companies in a similar position with lots of cash and time?
With his background there were probably lots of options to choose from, and it makes sense that if he's going to be there for the long haul he may as well pick a company where the stock options are going to be the most valuable.
Here's what hangs me up a bit about the short thesis:
1. What incentive does Dr. Missling have to lie about the data? There's enough cash to run another trial and running a proper P3 trial is nothing to be ashamed of -- it's standard procedure. Dr. Missling is hoping that the current data is sufficient enough for a shot-on-goal attempt, but it's not like the FDA is going to permanently reject Blarcamesine based on this data. At worst it'll ask for more, and that's okay.
2. To that point, if the data were truly terrible, Dr. Missling would have immediately pivoted to one of the other pipeline drugs rather than spend runway cash hiring people whose expertise is more geared toward approval and commercialization.
And if our new FDA hires "just needed a job", why did they choose Anavex? It doesn't make sense to join a company that will be out of business/cash in a few years.
You're one of the more intelligent posters on this forum, TooTall. So when you post, I will read. Always. But that said...
You are also a (semi)-professional trader with your own profit motives, and while you are correct that Anavex should not account for a significant portion of any soon-to-be retiree's portfolio, there's nothing wrong with having a small position as part of a speculative silo within that portfolio. And for those who are young enough to recover from a big loss, Anavex presents a potentially generational risk to reward scenario. As they say, fortune favors the bold.
The truth is none of us know what will happen. Not even MayoMobile, with his detailed write-ups and company interviews, or Doc328 or anyone else who posts here. We're all just waiting for data and playing parlor games on this message board to pass the time.
Plenty of mixed signals and each of us have our own unique way of deciphering them. On one hand, the following is true:
1. The bar is set exceptionally low for Alzheimer's approval because of side effects
2. The bar is set equally low for Rett syndrome approval because of side effects
3. Blarcamesine doesn't appear to have serious side effects.
4. Anavex has enough cash to run another P3 trial.
5. Anavex is not acting like it's in cash preservation mode with its recent hires
6. These new hires most likely wouldn't leave their jobs to join an obvious sinking ship
7. In particular, hiring the lead FDA statistician quells my concern that there's any funny business going on with the data.
On the other hand, 4 months does seem like a long time to wait for the data update.
At this point, all investors have two options: 1) trust Dr. Missling, or 2) trust an anonymous internet message board poster who says that Dr. Missling can't be trusted, and who may have certain profit motives that benefit when others sell their shares. The fact that you are so flippant about this company -- one day it could be the next great thing and the next day you're saying the data is marginal leads me to believe that you trade the stock both ways.
I've seen the same cult-like behavior from message board believers who are 100% certain their investment is a home run, only to be disappointed when the company goes bust. I've seen rookie investors blindly trusting other message board posters without performing due diligence of their own, only to be disappointed when their hero vanishes into the ether leaving the rookie holding a huge bucket. And I've seen bad CEOs -- I know what they look like and how they conduct themselves. Dr. Missling is not perfect but he's also not doing an awful job.
Pump and Dump CEOs:
1. Aren't able to bring drugs to P3
2. Don't fill the coffers with a multi-year cash runway
3. Usually do not have MBAs from Northwestern. They usually look like people you'd swipe left, as the kids say these days.
Why should the shareholders be kept from key information for so long? Because it's entirely possible that Dr. Missling doesn't have any data to report. Sometimes, things take longer than expected. It's also possible that he has the data but doesn't want to report it because he doesn't have to share it. Why give shorts even more ammo to attack the company?
It's not like there's any data in the world that will change Adam Feuerstein's opinion of Blarcamesine. His ego is too great to admit that he was wrong. Find one example, anywhere, where he admitted he was wrong about anything he's ever written. That's what most shorts do: they'll say I told you so if they're correct, and they'll disappear when they're not correct. Sort of like what you do on this message forum. It's in a trader's DNA to be like that.
Or to put it in terms you may understand given your legal training: Dr. Missling is treating this as bench trial with the FDA presiding. That's the only opinion that matters and the only one who gets to see the evidence. Shareholders on this message board are just disappointed they're not serving on the jury.
If I were Dr. Missling I wouldn't release another damn thing. I'd wait however long it takes for Science or another journal to peer review the data, then I'd submit to the FDA and issue a press release that says, "to be continued..."
It takes about a decade to bring a new drug to market. And we had a global pandemic. Patience is a rare thing these days.
Not anymore. Spent a lot of time near Destin though in my younger days.
Correct. Nor do I think there will be a buyout at $30. My point was more that if that's the floor of where this stock is headed, life won't be so bad for the majority of shareholders and by that standard Missling will have done his job.
Would it still be considered a bust? Sure. But there's tons of instances in life that someone or something doesn't live up to its potential. I'd wager that's the norm for most people and things, businesses included.
You have some fair points, but allow me to offer a bit of perspective as I too have been invested in Anavex since the early days, pre-CTAD 2015.
1. What does it benefit Dr. Missling to report more information at this point? No matter what he does, there will be those who call him a liar and accuse him of bending the statistics and we'll see more short attacks fueled by hit pieces from the likes of Adam Feuerstein.
2. There could be strategic reasons for the delays. Many years ago I was involved in a situation where I had access to insider information. Shareholders were frustrated. I wanted to post all that I knew online, but the lawyers made it clear that I was to remain silent. Over the 2.5 year period, I saw a lot of shareholders bail. The patient ones were rewarded with 5000% gains. I'm not saying there's a strategic reason why Dr. Missling isn't providing timely data, but it could be that his hands are tied by the legal department.
3. A $600 million market cap for a company that doesn't have any products for sale, with zero guarantees that it ever will, is pretty impressive, especially at a time when investors are as risk-averse as they have been in a decade. If and when Blarcamesine reaches market and outperforms the current standard of care, it'll be possible for analysts to construct appropriate cash flow models, apply their own discount rate and determine an appropriate valuation. The stock price should eventually reach this market cap as this company transitions from 40% to 85% institutionally owned.
I think at this point, Dr. Missling is content to stay quiet, present the bare minimum to the public, and let the FDA be the final arbiter over whether the trials were successful.
There were a lot of happy millionaires here a few years ago when this hit $30.
What's wrong with $30? A $30 buyout would basically mean anyone who invested in AVXL at worst breaks even. The vast majority will make money. If the buyout price isn't satisfactory to you, that isn't Dr. Missling's fault. Everyone has a different perspective of value. For many, myself included, I am content with doubling up every 5-6 years.
If you're unhappy with the profits that AVXL has delivered, it's your fault for not moving your money into a more lucrative asset.
It amazes me how some people act like nothing is ever good enough.
Everyone is clamoring for more information. Anavex is telling people that more information will be shared at the appropriate time. And it's misconstrued as if all Dr. Missling and his colleagues do all day is sit around the office playing grab-ass.
If Anavex's timeline doesn't suit yours or anyone else's, there are only two options:
1. Put up with it
2. Sell
All the message board venting in the world isn't going to change anything, but it does help investors like me realize the key to making money in the stock market is finding companies with impatient shareholders.
I disagree. It's a nice thought but 1) Chris Hemsworth isn't going to associate his name with a company that doesn't even have a product to sell, and 2) a prophylactic study will take years and until then Anavex isn't going to claim Blarcamesine is suitable for those who haven't been medically diagnosed.
In time, I can see celebrity spokespeople similar to how Raphael Palmeiro endorsed Viagra. But it needs to get approved first. Baby steps.
7.5 years ago the stock was under a dollar. It's now up over $8. Seems like a good long-term hold to me. Not everyone is a trader looking to capture volatility and not everyone wants to pay short-term capital gains taxes. The stock has been a fine buy-and-hold for anyone who bought in pre-CTAD 2015.
This is why I am willing to give Dr. Missling some leeway. Anavex is well-positioned to run the necessary additional trials the FDA may require, with LPC as a backstop just in case trial costs go haywire. The LPC deal is also a signal to potential acquirers that Dr. Missling is willing to go at it alone, at least for some diseases.
Time is a critical issue, but efficacy is most important. We're already seeing new treatments hit the market but I believe these are ultimately stop-gap measures. Over a long enough timeline, Blarcamesine will become a stop-gap, too, as it's replaced by something even better.
All I care about is whether Blarcamesine is more effective than what's currently available, and whether it's better than what SAVA and some of the other P3 competitors have to offer.
Dr. Missling has AVXL at the cusp of getting Blarcamesine approved. Maybe not yet for Alzheimers or PDD but Rett seems likely, and that should produce enough revenue to make further dilution a moot point.
Dr. Missling has zero control over whether Blarcamesine works. His compensation should be for things that are within his control, such as getting a trial initiated and advancing the ball closer to the end zone. Later on, his compensation should be tied to things like sales, net profits, and market cap. Besides, if the trial(s) fail those warrants become worthless regardless of when they were granted or exercised.
It's sort of the same reason why doctors aren't paid when a patient is fully healed, or why pilots aren't paid after each successful landing.
I'd have preferred for Anavex to offer stock to its shareholders first, so that any new issuances would be minimally or non-dilutive. Use LPC as a backstop for what couldn't be raised through a direct offering.
So you don't give any value to the stock being at $30 at the same time the entire market was on fire and Gamestop was the hottest thing in town, going from $4 to $400 in a matter of days and staying there throughout the summer.
Missling isn't perfect but not everything is his fault. How about some credit for what he's accomplished in the last three years. Getting two simultaneous large-scale trials off the ground, hiring some reputable employees, carefully managing the balance sheet, and keeping Blarcamesine in the game while at least a half-dozen competing drugs fell by the wayside.
If anything Missling has been ultra-conservative with his enthusiasm. Not once has he ever been a part of the cheerleading crowd. He uses terms like cautiously optimistic.
Besides, Missling's job isn't to convince the market that Anavex is worthy. At least not yet. That will come, but his only job right now is to focus on convincing the FDA.
Usually, once the FDA is convinced, the market falls in line quickly.