Anavex Life Sciences Corp (AVXL)

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https://insiderfinancial.com/heres-what-were-looking-for-from-anavex-life-sciences-corp-nasdaqavxl-near-term

Regular readers will know that Anavex Life Sciences Corp. (NASDAQ:AVXL) is one we’ve repeatedly come back to over the last twelve months plus. The company is a development stage biotechnology play that hasn’t had the easiest ride of late, with the difficulties primarily rooted in some unjustified (and in many cases outright incorrect) coverage of the stock across the financial press.

Against these headwinds, however, and in line with our coverage, Anavex has slowly but steadily appreciated in value.

In September last year, the company went for $2.51. By the start of this year, it had broken $4 a piece. At the end of May, Anavex hit session-close highs of $6.14 and has since corrected to current levels at $5.37.

We think this dip is a nice opportunity for current shareholders to load up on a few extra shares or, for those not yet in the stock, to pick up an exposure. Further, we’re looking at a couple of near-term events as potentially closing the gap on highs and getting this one moving back in line with the overarching upside momentum.



For those new to the company, Anavex’s development program is rooted in an asset called ANAVEX 2-73. The mechanism of action is something we’ve looked at in detail in the past but by way of a quick refresher, is an orally available drug candidate that restores cellular homeostasis by targeting sigma-1 and muscarinic receptors. The idea is that by restoring homeostasis, the drug can halt the degeneration of the cells associated with neurological conditions (Rett’s, Alzheimer’s, Fragile-X etc.) and potentially even reverse the conditions in question.

So, the latest news detailed some preclinical results from an investigation into the potential application of ANAVEX 2-73 in a condition called Angelman syndrome. This one’s an autism spectrum disorder that occurs in one in 15,000 live births and it’s characterized by severe cognitive and physical impairments, including ataxia, intellectual disability, speech impairment, sleep disorders, and seizures.

It’s a big unmet need and the latest data suggests that ANAVEX 2-73 could be effective in treating it. The results indicated that ANAVEX 2-73 administration significantly reduced audiogenic-induced seizures, which are a debilitating symptom that affect more than 80% of sufferers.

This is the deep pipeline, of course. What we’re looking at as really driving value is the near term initiation of a pivotal study in an Alzheimer’s indication and – shortly before this initiation – some expanded data derived from a phase II study in the same indication.

Alzheimer’s is an incredibly tough condition to target. Most treatments go after protein buildup in one form or another and, with its attempt to return brain cells to homeostasis, Anavex is turning conventional theory on its head. This is one of the primary reasons (we suspect) that the company has taken so much media flak along its development pathway.

If the data reads out as positive when it hits press, it’s going to be a game changer. There’s probably already enough evidence in hand to justify a pivotal initiation, but some supportive long-term data would definitely shore up the existing numbers and potentially pave the saw for a Special Protocol Assessment (SPA) for the trial with the FDA in the US.

So that’s what we want to see – strong long-term follow-up data followed by a successful pivotal protocol submission (ideally with an SPA involved) and – beyond that – the initiation of the pivotal that’s really going to start drawing speculative volume towards Anavex.

Cash is strong (around $23 million at March 31), the balance sheet is nice and clean and there is a raft of big name institutions (Blackrock, Vanguard, Park West, Knoll) with a stake in Anavex’s, and 273’s, success.

Catch up with the whole story: check out our previous coverage of AVXL here.

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Image courtesy of AJC1 via Flickr

Disclosure: We have no position in AVXL and have not been compensated for this article.