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Jan 2025 $10 call option bid/ask currently is 3.30/4.60 and almost negligible volume. Might cost you more than $4.00.
I prefer to sell out of the money covered call options. Rarely buy calls but when I do, I buy deep in the money calls. I'd rather gamble on Jan 2024 $5 call options. The bid/ ask is 3.70/4.00. Now your breakeven becomes $9 instead of $14.
Options are leverage and adding leverage to a speculative stock is very risky. I only buy calls with money that I'm prepared to completely lose.
Since you still believe in the company, just hang on and keep praying. I have a couple of stocks that have been hammered and I still like the companies so I'm hanging on to them and expect them to recover, eventually!.
The last CC was an exception. Stock actually went up that day. I was shocked because when Missling refused to state that 2b/3 data would be released in or before 2H23, I thought the stock would plummet that day. Fortunately it went up and I sold all my stock at $11.30.
Back then, with no positive news expected for the next 2-3 months at least, I thought we would see $8.30. That was when I was planning to buy back in. Now I think we might see $6.50 within the next 60 days so I'll wait before buying back in. Hard to resist a bargain but I keep remembering the adage about not catching a falling knife. Need to resist the FOMO and wait for a bottom to form.
If Missling exercises his 500,000 options and sells them all, that will definitely be spun as a big negative and put more downward pressure on the SP.
Hopefully he only sells 300,000. That would be understandable because it would cover the tax cost of exercising the options. For financial planning reasons, it would probably be good for him to sell all the newly acquired shares, but at this time it would be nice if he sent a message that he believes in the stock as fervently as his legion of followers.
If Missling keeps to the stated goal of using a distribution partnership with BP for AD, then 2-73 approval will generate lots of cash and enable him to hire even more talent to fill in the gaps. The question then becomes does he have the willingness or aptitude to evolve into a manager of managers.
Or maybe we're looking at another example of the Peter Principle that you referred to and we'll have to wait until the board realizes that he needs encouragement to find his niche.
Many founders have grown their concepts into vibrantly growing companies that start to falter because the founder(s) don't possess the skill set or the desire to learn to manage. For some people it is much more fun (challenging) to start and build a business than it is to manage the day to day operations. When I got to that point I sold my business, but it's hard to sell a business you gave birth to and spent many long hours nurturing and growing.
Who said AVXL is sinking?
I outlined 1 possible reason why Jin might have joined AVXL. Another could be the frequently mentioned one that he was thrilled at the data.
Your bizarre analogy of a sinking ship has nothing to do with Jin's possible motivation for joining AVXL. Even if the phase 2b/3 trial isn't deemed insufficient for FDA approval doesn't mean that the ship is sinking. This is an excellent career choice for Jin.
Perhaps a better skill set?
Missling was the CFO at Curis and ImmunoGen before joining Anavex. After his PhD in Chemistry, he got his MBA and basically became a bean counter. Maybe Jin's hands-on knowledge of what it takes to get drugs approved is actually more valuable?
Of course it would be smart of him to join because he would be the person that fixed the problems. Makes his resume even more impressive.
"Demonstrated ability to fix royally screwed up management and install professional standards"
In the highly unlikely chance that AVXL is hit with a class action, then he adds maneuvering through that to his skill/knowledge set and his asking price as CEO goes up much higher.
Restoring microbiome diversity
While I agree with your opinion that he isn't slow playing the release of the data, there is an actual financial benefit to do it.
He has options that will soon expire if he doesn't exercise them. Cost of those options is $1.68. If the stock is at $11.68 when he exercises the options, he has to pay tax on the $10 profit at ordinary income tax levels. If the stock is at $8.68 he only has to pay tax on a $7 profit.
The reason I agree with you is that he has so many options that the small (comparatively) increase in current taxes would be dwarfed by the future profit resulting from FDA approval.
Interesting takes have been expressed as to why Jin joined AVXL
I can think of both positive and negative ones. Here's a positive one:
AVXL: Dr Jin, please review our phase 2b/3 data and tell us if you think it is good enough to get FDA approval
JIN: Odds of approval are slim to none
AVXL: Would you consider joining us and accepting a position where you get to design, implement and completely manage (including budget) a new phase 3 trial.
JIN: (after thinking about it for 5 seconds) Yes, sounds like a great opportunity.
Even if the new phase 3 trial doesn't meet endpoints, then adding this experience to his FDA background will qualify Jin for a CEO role at a biotech company. Excellent career choice for him.
Thanks for the info. Just started following AVXL last March.
Found the original presentation, http://www.arianapharma.com/wp-content/uploads/2019/07/Anavex-Microbiota-Presentation-AAIC-July-2019-FINAL-1.pdf and https://clinicaltrials.gov/ct2/show/NCT02244541.
Hope that the 2b/3 trial compares placebo with both arms re microbiome differences.
This article, https://academic.oup.com/jambio/article/127/4/954/6715074?login=false, was an interesting review of studies, but I question this statement: "In brief, the present hypothesis accounts for several common questions confronting all major theories of Alzheimer's dementia. One explanation is that there is a relationship between the biology of ageing and the biology of AD in that ageing can increase intestinal inflammation and change bacterial taxa." (I bolded). This statement was also in the Ariana presentation. There have been studies that show that some areas of the world that haven't been exposed to a "western diet" (highly processed foods) have double the microbiome diversity of those who are eating a western diet. Could it be the long term effect of this diet as opposed to ageing?
The microbiome topic has been getting increasing research attention over the last 10 years. Now it seems it's a hot topic. So Missling has now decided to jump on this bandwagon?
This report is what is wrong with so much "research" being done now. State a fact and draw a completely unproven conclusion.
Inflammation in the brain is widely perceived to be ONE of the leading causes of Alzheimer's. There are bad bacteria in the gut that release chemicals that are implicated in increasing that inflammation. It's highly likely that people who eat lots of dietary fiber are also eating a healthy diet that is high on fiber but also very low on processed foods. There are many substances in that processed food that the bad bacteria use to proliferate and release toxins.
Also highly likely that people who eat high amounts of fiber are also less likely to to be diabetic. Type 2 diabetics have been shown to have much higher rates of Alzheimer's and dementia. Alzheimer's has also been called Diabetes type 3 because of the high correlation.
I've read that there are 10X as many bacteria in the microbiome as in the entire human body. That bacteria is supposed to weigh more than the human brain, Very fascinating research is taking place on how all those different types of bacteria function in the body and what chemicals we put into our bodies that effect the microbiome.
Much earlier today, I posted about an interesting Phase 2 trial. It used a combination of 4 over the counter "nutritional supplements". The cost of these supplements would be around $100/month. Please note that the study is using mega doses and only lasted 7 weeks so there is NO long term safety data using these mega doses. The nice thing about the study is the very in-depth report that was released detailing MOAs and over 140 links to reference studies.
I'm in the camp that believes that AD will be controlled and possibly cured by a group of medications. So I welcome any additional approaches that can add to the cure. Hopefully a major teaching hospital will pursue this approach with a larger, longer Phase 3 trial.
Meanwhile, people popping little blue pills seem to have an edge in terms of lessening the risk of getting Alzheimer's. https://www.nih.gov/news-events/nih-research-matters/viagra-associated-reduced-risk-alzheimers-disease. So Viagra, a med that was originally tested for hypertension, then discovered to work wonders for the "little head", might actually do good things for the "big head"?
New Phase 2 AD study with interesting results:
"randomised, double-blinded, placebo-controlled phase-II clinical trial and studied the effect of CMA administration on the global metabolism of AD patients"
"We showed a significant decrease of AD Assessment Scale-cognitive subscale (ADAS-Cog) score on day 84 vs day 0 (P?=?0.00001, 29% improvement) in the CMA group. Moreover, there was a significant decline (P?=?0.0073) in ADAS-Cog scores (improvement of cognitive functions) in the CMA compared to the placebo group in patients with higher ADAS-Cog scores. Improved cognitive functions in AD patients were supported by the relevant alterations in the hippocampal volumes and cortical thickness based on imaging analysis."
Results are reported in amazing detail: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9879258/#MOESM2. Lots of discussion about various MOA.
Will we ever see a report like this from AVXL? As I mentioned before, there are thousands of researchers investigating hundreds of pathways. Would be nice if Missling showed a sense of urgency in releasing the Phase 2b/3 data.
Approved vs. Alt Meds
Missling obviously decided that this was important enough for the CEO to go.
I doubt that these 2 factors contributed to the decision:
1. It's 50F in NYC and 80F in Sydney
2. Here is what Emirates first class looks like: https://www.seatmaestro.com/wp-content/uploads/2015/03/A380-singapore-first-class.jpg. And they have a shower in first class: https://www.thescottishsun.co.uk/wp-content/uploads/sites/2/2019/04/Emirates_-Shower-Spa.png.
I've been lucky enough to use frequent flyer miles to travel in first class on JAL and Cathay. Awesome experience. If I was the CEO that's the way I would travel, but, once again, TGD is probably too busy to care about such mundane creature comforts.
Such a bizarre statement from someone claiming extensive experience in this field. When Big Pharma has a blockbuster drug that is facing the patent expiration cliff, they are under pressure to get deals done to keep their pipeline robust. That is the opposite of being risk adverse.
"Biotech investors might be longing for an uptick in M&A to lift spirits, but at least licensing deal activity remains healthy. More than $9bn in up-front fees has changed hands so far this year, and 2021 is not yet over." https://www.evaluate.com/vantage/articles/analysis-insights/licensing-deals-rack-2021
"2021 was another banner year for dealmaking in the life sciences
sector. Biopharma therapeutics and discovery platform companies
led the way in licensing and venture capital attraction" Note slide 8 of this JPMorgan presentation: https://www.jpmorgan.com/content/dam/jpm/commercial-banking/insights/life-sciences/pdf-dealforma-2022-Annual-outlook-final-ada.pdf
More good info here: https://www.alacrita.com/whitepapers/pharma-licensing-trends-and-wishlist
There is currently a lot of focus on Microbiome and "leaky gut". It isn't just about dietary fiber but how certain foods help and hurt the good bacteria in the gut and the effect that has on inflammatory diseases.
Now look at diabetes. Diabetics have a much higher rate of dementia and Alzheimer's. The earlier the onset of diabetes, the greater the risk of Alzheimer's. Look up the topic: is Alzheimer's really Diabetes Type 3? Some research has been done on insulin but is the problem insulin resistance?
There are many thousands of researchers investigating many hundreds of potential ways to slow down or stop ALZ.
Has AVXL requested and been granted rolling review status?
When will we get all the data after the trial is completed? In 2 months? 3 months? How much time is required before the AVXL team can prepare that part of the submission provided that rolling submission was requested and approved.
If we get Rett approval before March, 2024, then Jin is a miracle worker.
If you want proof of their sales look at their 10K.
FDA had also granted trofinetide fast track status as well as orphan drug and rare pediatric disease designations. Note their timeline.
NONSENSE!!!!
NDA process is that the FDA must notify company within 2 months if the NDA will be accepted. Then accelerated approval would take an additional 8 months.
How long before the study is concluded that AVXL will be able to submit the NDA? 2 months would be a miracle. Minimum total time is 12 months starting July 2023.
So after AVXL announces Rett top line results, expect at least 2 months to file an NDA, 2 months for FDA to accept the NDA, and then at least 8 months for approval. So my original optimistic 12-15 month projection was incorrect. It's more like 15-18 months before approval.
A few months? 12-15 months is what you consider a few months?
Acadia's Phase 3 Lavender concluded October, 2021. Almost all patients entered the extended 9 month Lilac study. Acadia filed the NDA in July 2022 based on Lavender study results and the NDA was just approved.
This is Acadia's 2nd approved drug, and in 2022 they sold over $500M of Nuplazid. They have an established sales force. AVXL will be lucky if they are able to get 1000 Rett patients by end of 2025.
At the last CC, when asked by the analyst, Missling refused to commit to data release in 2H23, so for once he won't miss a self imposed deadline.
There are tax complications with stock options. I am not a CPA and anyone who is going to exercise options needs to talk to a tax professional. My last employer before I retired was bought out and my options all vested and were exercised and sold so I'm slightly familiar with the topic.
Are the options ISO or Non-statutory? Most likely ISO. If they are ISO, it is incorrect to assume that the only cost is the strike price. There is an AMT tax that will be triggered. If Missling exercises the options when the stock is at 9.60, then he'll have a "paper profit" of 9.60 - 1.60 x 500,000 = $4,000,000. Since AMT also excludes normal deductions like state and local taxes, the 28% rate is effectively higher than that. So he might be faced with a $1.2 M federal tax bill in addition to paying the exercise price. I don't know if NY state also taxes those "paper profits". If he sells any stock within a year of exercise those proceeds become ordinary income.
If the options are non-statutory, then the $4M is ordinary income. Which in his case, with NYC, NY State and Federal taxes, his rate might be well over 60%.
I'd be very surprised if he didn't sell at least 300,000 shares. Might even sell all of them. The shorts will of course spin this as something more than tax management even though Missling still has over 4 million more options. Expect to see some negative headlines.
Good info here: https://www.chase.com/personal/investments/learning-and-insights/article/incentive-stock-options-and-the-amt
Disagree with the last sentence: "Once we accept the above, everything else will make sense (including, pps)."
If Missling had stated that the trial failed, then the stock would have fallen below $5, maybe even to the $2 range. That's the motive that supports your thesis.
Bourbon, these are all excellent questions and I hope MissinginAction does a better job of answering them than the cringe-worthy response he gave in the last call when he refused to even state that the P2/3 results would be released in 2H23. Here is my guess of what he'll say if he properly prepares for the meeting.
How long will it take to file an NDA for Rett after the trial is done? Will he be filed by Sept. 30?
Response: “Once we complete this final trial, we will very careful assimilate all the data into a comprehensive filing that clearly shows the overwhelming efficacy of Blarcamesine. Because of Covid, timelines have been so elongated that we don't know how long it will take the FDA to approve the NDA.”
Translation: Rather than get pinned to when AVXL decides to actually file an NDA, let's muddy the situation by alluding to the possible length of time it will take the FDA to approve the NDA.
Why were only one of the 6 stated goals for 2022 achieved?
Response: expect to hear the same answer as in the last call. “The company was very aggressive in it's stated goals and we will be much more focused in 2023.”
Translation: We over-promised and under-delivered but now we're going to be extra careful to use vague reassurances so that we aren't held accountable for our words or lack of actions.
When will we get the 50mg topline data? Why is this taking so long?
Response: “Originally this was designed as a 3 arm study, but because we are able to use precision medicine, we titrated both up and down. This gave us a very robust data set that needs to be very carefully analyzed to determine the exact parameters of our precision medicine approach. The ability to precisely define the super responders from the very good responders from the above average responders will be a crucial component of the data that we will use when we meet with the FDA to discuss the next steps in getting 2-73 approved.”
Translation: We're doing our best to massage the numbers to provide some sort of justification for our claim that we met our endpoints. We have no intention of wasting our money in filing for an NDA because we know that the FDA is going to require a phase 3 trial. We are alluding to next steps so our faithful followers will think we are very close to getting FDA approval for AD when in fact we're at least 2 years away. The “data set will be reviewed” and published is turning out to be a very successful smokescreen.
You asked what the difference was between Cantor and LP. I clearly spelled it out but I'm not surprised that you refuse to acknowledge it. Why the need to waste 75,000 shares up front (effectively waste $750,000)? The LP deal is very good if there is an intention to utilize the stock sale. Otherwise, a 3% deal with Cantor would be better.
We know that the data release and peer review will happen SOON!
As for NDA filing, isn't Missling going to first meet with the FDA to see how to proceed? So an NDA filing might be a little bit later than SOON?
I wonder how Missling defines SOON. 2024? 2025? He wouldn't commit to 2H23.
1. For the June 7, 2019 Purchase Agreement with Lincoln Park up to $50.0 million, LP received 324,383 shares as a fee for its commitment to purchase shares of our common stock. Also a fee of up to 162,191 shares if Lincoln Park purchased, at AVXL discretion, the $50.0 million aggregate commitment.
2. On May 1, 2020, AVXL entered into an Amended and Restated Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. The Sales Agents will act as agents on a commercially reasonable efforts basis. AVXL will pay the Sales Agents’ commissions for their services of 3.0% of the gross proceeds.
3. For the latest agreement with LP, it appears AVXL gave them 75,000 shares up front with the ability to earn 75,000 more shares if the entire $150 M is placed.
If you're not sure you'll need the money, then paying 3% of stock sales seems to be the better deal. If you're sure that you'll release at least half the shares, then the LP deal looks better. Guess Missling thinks that he'll need a lot more money in the next 2 years than he already has.
You again miss the point. I just checked 10 random companies and they all provide links to their SEC reports. This includes a tiny biotech with only 3 employees. Why is AVXL different? Perhaps incompetence in their IR department?
My original post also highlighted a misleading slide purportedly from their current deck that alludes to non-diluting financing when it's only a tiny part of their financing over the last 2 years. Any comments about that?
Nobody is "weaponizing SEC reports" but your first response to me was "New to investing? Initial swing and miss. Most others here are seasoned investors and understand the basics of trading and accessing filings. Funny." Typical pumper response by attacking the messenger while avoiding 2 valid comments about the company's operations.
JoeBear - thanks for that thoughtful reply. I knew the info you posted because I usually (unfortunately not always) do my research. I pulled up Missling's LindedIn page and also read about company's past.
I chose to invest in AVXL because: 1. They had a molecule with multiple late stage trials and they had another coming along; 2. They are very careful with maintaining a good balance sheet; and 3. Missling, PhD, MS, MBA has outstanding credentials plus a background in the financial analysis of biotech companies.
I know that in Germany people are very fond of paragraph long titles. I introduced 2 German PhDs at multiple conferences. The first wanted to be introduced as CEO and company cofounder. The 2nd wanted to be introduced as Chief Science Officer and company cofounder. While both were exceptional, the later had received the top industry prize in his field. Neither felt the need to be called doctor.
In the US, I found that many PhDs don't want to be called doctor, except for a small pretentious group who are usually trying to sell something. Are you aware that a lawyer is a "doctor"? Only 1 lawyer I know that calls himself a doctor and that is because he has both MD and JD degrees. Why do so many persist in called Missling a Dr or TGD?
Having a "Sales Agreement" with ATM facilities is the smart thing for a biotech. Missling did a great job of controlling costs during multiple trials and insuring AVXL has a good balance sheet.
Obviously you care but I already posted excerpts from the latest Annual report. If most companies have direct links but AVXL doesn't, then why don't they? Seems like I stirred up some pumpers who are looking for anything to try to refute the idea that when it comes to communications, AVXL isn't very good.
The big question is that are these communication oversights by choice or a result of incompetence. At this time I don't know the answer to that question but fervently hope they are only being incompetent.
First there is the misleading slide. No comments about that?
Then most companies provide direct links to their SEC filings. Even SAVA does that!