Anavex - Setting up the Strategy
(aka Anavex and the Second Punic War, or the Peanuts/Bananas Gambit)
The lengthy phase of setting up everything to ensure a favorable deal on our behalf is over for Anavex. Anything else they do from this point on will just yield greater profit...gravy, from here on in. My opinion.
As I see it, Dr. Missling has begun to set 3 balls in motion - 2 are rolling down a ramp (PDD trial, and AD trial) and 1 is sitting at the top - Rett.
Frankly, I believe that we can’t afford to conduct all of these simultaneously even with the green light but it is enough that they have all been set up to run.
(I know we have CF, but we would only use that as a last resort and probably won’t need to at all.) PDD will go forward. AD is waiting until we get early indication from PDD or strike a deal. I still maintain that is why it’s not registered.
Analogy alert: If you are a vendor of concessions, and you sell 2 products, peanuts and bananas (PDD and AD), you tend to the customers in the peanuts line first. So you see how much you make on the peanuts to determine how much you need to mark up the bananas. (Don’t go back and forth) Once you set the price for the peanuts, you can’t change it on the market (customers will know), but you leave room to make up for it on your other product. I think we will get to the bananas customers in a minute after we take care of the customers in line for peanuts. Bananas can wait, they are our bigger mark up, imo. But, the fact that they are ready for rapid succession expansion and approvals is enough power to secure us the desired outcome.
We keep hearing that Anavex is reflective in every way of every other small, non-revenue generating biotech company. Especially, share price. Nothing could be further from the truth. No other company in our field can or should be compared to Anavex to determine what will or will not happen next or how this will play out. That’s because no other company has started 2-3 balls rolling at once. I hope he keeps rolling more: we see patent allowances for 1066 and A2-73 for MS indication. The more the better. Here’s why:
A smart way to take over a country would be to amass an army contingent at the east border and just hold that position. Then the west and hold. Same north. Same south. This takes time to move everything into opportune position. It’s the longer route to bigger ensured victory. You don’t need to invade from one front and battle inward taking casualties. Smarter to surround and get surrender with no casualties on your terms. But if folks aren’t willing to wait for the necessary preparations to be undertaken and put in place...their (our) loss.
That’s why some of us here understand what a brilliant strategist Hannibal was (maybe best, if winning doesn’t count) because he had the solution to the Second Punic War and conquer of Rome - it lay in the place least looked for - the unconventional wisdom...like Anavex. No one expected the trek over land via the circuitous route (Hannibal was from Carthage - port city - they fought naval battles. Direct confrontation.) He tiptoed around the back and over the mountains of Spain - with elephants. This takes a lot of time and preparation before you can undertake. And by the time the Romans saw what was happening, it was almost a done deal. (No joy in the end but that wasn’t Hannibal’s fault - well played by Rome on the counter attack.)
This looks to me like Biogen has wanted and continues to want to license our drug for MS for a small upfront payment and milestones...but they can’t! (I can’t guarantee they won’t, but they know that would be a very bad move.) Now that we have trial approvals and set ups, and Cantor Fitzgerald as a capital source, they can’t afford to announce a license agreement with us. If they do even for a cheap price ($500M) then we can fund AD, PD, Rett, Stroke, all CNS trials...and as each gets approved we gain more and more revenue and it’s game over.
They want us for MS, but at the same time they don’t want to lose all other indications going forward or we will be buying them back in a few years and our MS license will have turned out to be just a “loaner”.
Analogy:
Some people buy a duplex then live in one half and rent the other half which pays for the whole mortgage. So, they get to keep the whole house in the end, with someone else financing. Biogen can’t afford to give us anything which will cost them more later.
They are MS reliant! We have the entire CNS spectrum to ‘rescue for revenue’.
(We have put our tic tac toe X’s in 3 corners!) They can’t win! (See it? What he, M, did there??? Is that way cool? Yes!)
I contend that Biogen has been saying this whole time that they will offer to license cheap, or they will buy it all cheap. So, M had to force this, brilliantly, by putting more X’s on the board in strategic places, which I believe he did. Not minding the daily share price or hurrying to get one trial started, as many impatient folks insisted, he set this up slowly and precisely (precision deals?) so that we can not lose. Time much more shrewdly spent!*
We have completed the set up. It was lengthy and dismal, but so is every avenue where you try to ensure a victory...getting 3 corners in tic tac toe, buying the duplex and finding a tenant on your terms, surrounding a country...and so forth.
I think Biogen got wind of our X’s and the advantage on our side of the chess board when we announced the approval of the AD trial in Australia prior to AAIC.
The tell was that we announced the first ball in motion and they were so quick to engage. That was the moment at a wedding ceremony where the officiating person says, “if anyone knows of any reason why these two should not be wed... or, in our case, why these trials should not go forward,” very boilerplate and never any response. Biogen jumped out of their seat and objected, which is just never seen in public. Their reaction could have been measured on a Richter Scale.
That’s when they blinked and gave away their game. It was either a reaction to a surprise strategy, a rookie mistake and unforced error, or someone in management has been licking the spoons they use to mix their own drugs in the lab and it affected their brain? In any case, it backfired - epically. They suddenly touted this AD drug of theirs with a full court press on what turned out to be very klugey science, and suffered a dramatic share price drop. They tried that counter attack and we announced another trial approval PDD and Cantor Fitz deal in place.
The more fronts M opens and forces them to take note of our potential, the better the chance of taking the country. This is pissing off Anavex long shareholders, I see that. But I am very pleased. He is clearly not trying to win the east side or west side of a country. He’s not looking to win a battle - he wants the victory. Whether it’s a high price to license our drug for MS then go it alone, or if it’s for the whole bottle of ink. That takes patience and unflinching discipline. While many would have blood now! he’s content with a huge surrender and no blood but all the spoils later.
I would look for him to launch lots more research and indications and compounds. It’s just to slowly overwhelm the others. The share price will not gain every day. The company’s value will balloon and they will have to pay or pass. If they pay, or if they pass and we get PDD approved...We go giraffe!
They know this!!! Fun to watch:)
He has options way down low (if we had a deal and SP went up so would his exercise price and...he wants to put as much daylight between them and his ultimate pps for those upon exercise, as possible. This is the strategic way to underwhelm them (not cause a rise in the price) and overwhelm them (cause a rise in the company value, which they can’t ignore...clock is ticking to our first approval. Just genius!)
Another reason they won’t license or can’t is it would allow us to raise capital (as the price would go up on announcement and CF would justify pushing our shares with a better commission) we could then fund more trials and insure an enormous price or go it alone and become the AD PD Stroke CNS SOC - biggest markets. He really spent a lot of time devising this strategy and putting the necessary redundancies in place - this has a lot of safeguards. Their chess king is looking very vulnerable - not many spaces left, I think.
M should start all possible wheels in motion until we have a deal or an approval...it’s the smart move, Tessio would have done it.
People who clamor to get this approved are not seeing the big picture.
We are systematically bringing on bigger guns and raising the value of our company and not entertaining BS offers!
Also, this doesn’t even address other BP competitors...foreign and domestic...
But, we can slow down/stop the arms race anytime they give the signal and I think I see some white flags. So, the end might be nearer and more wheels not necessary. We will know, probably soon, and stand down more wheels, for now.
Is Biogen finally coming around?
Consider:
They know all of this (and more) and behavior has changed as we have seen. Btw, this is Act 2: the Set Up; Act 3 is The Deal. How long they each take is up to the hungrier party.) wink*
Also:
If you start 3 bowling balls rolling down a ramp, person below beware. Very clever idea though!
Like pulling pins from 3 grenades together...1 is worse than iffy - so, yeah, now what? And, the more the better!
I don’t think the 2 years MTA is a failure...it’s stalling. It’s intense. It’s obvious. Analogy: People date and get married or break up...long engagements mean things are not fully worked out. That homeostasis rarely remains...”we dated 30 years but never settled down or parted ways”. It happens but mostly people looking for partners commit or move on. But subtle moves take place during courtship. They just might have blinked by talking to their shareholders. They have abandoned the CTAD - gold sponsor with some researchers giving a presentation before us (keeping things close...like a boyfriend at a dance, never too far away to keep an eye on things but still maintain the implication / hands off fellas she’s mine...)
We are going last and have big guns. Their President won’t be present. No big PR’s from them about next big wonder drug (even though it boosted their share price prior to last time - AAIC greatly - but then came crashing down.)
Also, the dancing around the topic with shareholders about bigger deals late stage...The CFO mentioned this on the earnings call.
The stuff Nidan observed about SMA and precision med and great results - an ODD orphan designated disease which is rare...like our Rett...these are not big markets. These are infantry, not the victims - human heroes indeed all! But in the scheme of buying the company they are the small potatoes.
Bottom line: the tic tac toe ploy where you have three corners and they have one move and you can’t lose? We are there.
So what’s all this bellyaching about share price, tax loss selling, getting a foot in the door in the market...we are building a fortress, a brick at a time.
Short my stock, today, tomorrow, drop my price short term, manipulate. Go ahead. Home runs aren’t hit, they’re pitched.
Keep throwing junk. My pitch is coming (you have to throw a strike eventually...bwahahaha!) I’ll wait!
So, what does Biogen do now? They pivoted off AD emphasis...huge back off. They are either ready to deal (time is running out if one trial gets approved - PDD...hot and heavy) or they have rethought the whole gambit and folded. But that’s not what their CFO said on earning call.
What strategic moves do they have? I’ll let them(!) and others ponder. (I have one, but I sure would never post it. They can join iHub and pm me if they want an answer.... joke. I would never let Anavex fail to get the best deal, plus, they couldn’t afford me!)
Best to all longs who are sitting so pretty - thank your CEO...drop him a line!
Bio Tac Toe
PS
Keep hope alive, anything’s possible...the Steelers won today:) lol.
