Anavex Life Sciences Corp (AVXL)

[Mikesc]

Another hit piece...

Strong misleading statements of efficacy by investors/traders followed Anavex's first interim news release and led to a price run-up. While the company press release stated that their interim biomarker "…increase is approximately 4 times higher than donepezil (Aricept®), the current standard of care, in the same timeframe," this was restated and hyped in message boards as indicating ANAVEX 2-73 is 4 times more effective than donepezil, which is clearly not equivalent in meaning.

Hence, this interim release provided an opportunity for market players to drive prices up from around $4/share to nearly $15/share. An uplisting to NASADAQ followed and gave additional opportunity for price influence by large traders. The price was crashed after the second data release couldn't live up to the hype of the first.

The lesson here is that small companies with multiple data releases during early stages of adaptive trials open up opportunities for both unscrupulous and astute traders. Money can be made by trading into and out of momentum.