Anavex Life Sciences Corp (AVXL)

[Gator328]

Maybe it goes to $40, maybe it doesn't. I can think of a good reason why to do an offering before a read out of the data: protection.

If the data is good, there won't be an offering. There will be a partnership or a buyout for billions of dollars. Missling knows he doesn't have the time or money to build the entire distribution and marketing and manufacturing by himself, and it's more cost-efficient to partner or sell in the short-term. Because there is a patent expiration and AVXL has no other source of recurring revenue, the short-term is the priority.

But if the data is bad, I think anyone would agree that it's better to do an offering at $5 than at .50. If Dr. Missling believes that A371 is the superior compound, as its rumored to be, taking out some insurance now may not be a bad strategy. Worst case he has funds to pursue a new path, best case he still becomes insanely rich even with another round of dilution.

So no, I don't think that it's out of the realm of possibility and to conservative investors, it would be a preferrable strategic decision than to gamble the company's entire existence on the readout of Rett data -- because we all know that the market will use Rett as a litmus for whether A273 will work for Alzheimer's and Parkinsons.