Anavex Life Sciences Corp (AVXL)

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https://seekingalpha.com/article/4330580-anavex-2minus-72-and-neurological-disorders-possible-path-forward?utm_medium=email&utm_source=seeking_alpha&mail_subject=avxl-anavex-2-72-and-neurological-disorders-a-possible-path-forward&utm_campaign=rta-stock-article&utm_content=link-2

Anavex 2-72 And Neurological Disorders: A Possible Path Forward
Mar. 9, 2020 8:05 AM ET|12 comments | About: Anavex Life Sciences Corp. (AVXL)
Lane Simonian
Lane Simonian
Biotech, alternative energy
(642 followers)
Summary
Anavex 2-73 may be a peroxynitrite scavenger and as such may help in the treatment of various neurological conditions, including Rett syndrome, multiple sclerosis, and Alzheimer's disease.

Anavex 2-73 has enough cash to complete trials on Alzheimer's disease, Parkinson's disease dementia, and Rett syndrome.

Some investment in Anavex may be worth the limited risk.

Anavex (AVXL) has received some positive news this year that may portend bigger news in the months ahead. First, the FDA has fast tracked Anavex 2-73 for Rett syndrome. Second, a study suggests that Anavex 2-73 may be an effective drug for multiple sclerosis.

Rett syndrome is a genetic neurological disorder that almost always affects girls. It is included as part of the autism spectrum disorder. Those with Rett syndrome suffer from seizures, severe impairments in speech and gait, and repetitive hand movements. Rett is caused by a mutation in the MeCPT2 gene the upshot of which is an excessive amount of glutamate in the brain. Glutamate then triggers a pathway that leads hydrogen peroxide production and peroxynitrite formation. The key to treating Rett and other autism spectrum disorders may well involve the scavenging of peroxynitrite. For peroxynitrite via oxidation and nitration contributes to DNA damage, inflammation, mitochondrial dysfunction, and neuronal cell death in autism spectrum disorders (peroxynitrite in autism spectrum disorders).

While this has yet to be proved, it is possible that Anavex 2-73 may help those with Rett syndrome and other autism spectrum disorders by scavenging peroxynitrite.

A similar etiology may exist for multiple sclerosis. Once again glutamate excitotoxicity leads to DNA damage, inflammation, mitochondrial dysfunction, and neuronal cell death (glutamate excitotoxicity in multiple sclerosis, peroxynitrite in multiple sclerosis). A different set of neurons appears to be affected in Rett’s and multiple sclerosis, but the pathway and culprits appear to be the same.

In multiple sclerosis, oxidation and nitration damage oligodendrocytes and prevent their regeneration (oxidation and oligodendrocytes, nitration in a MS model). The harm done to oligodendrocytes inhibits the formation of myelin sheaths which disrupts communication between nerve cells and provokes an autoimmune response which results in further nerve damage. As a result of these processes, multiple sclerosis patients often experience severe fatigue, muscle weakness, pain, difficulties in walking, vision problems, and sometimes paralysis.

The conjecture is that peroxynitrite scavengers can be used to treat multiple sclerosis as well (inosine for multiple sclerosis).

In the recent study, Anavex 2-73 seems to limit the damage to oligodendrocytes and allows for the regeneration of oligodendrocytes (effects of Anavex 2-73). This suggests that the drug not only limits oxidative and nitrostative damage but also partially reverses this damage. Maybe it acts as a peroxynitrite scavenger in the case of multiple sclerosis just as it does (or may do) in the case of Rett syndrome.

From an investment perspective, Anavex is a company that requires considerable patience. Depending on how one looks at, its CEO Christopher Missling has either been unnecessarily slow and cautious in rolling out clinical trials for various neurological conditions (Rett syndrome, Parkinson’s disease dementia and Alzheimer’s disease) or he has been prudentially methodical. Whichever it is, there is enough money available to complete all of these trials. This critical point largely offsets concerns about the company's cash burn rate, of which the following analysis is fairly representative:

On this analysis of Anavex Life Sciences’ cash burn, we think its cash burn relative to its market cap was reassuring, while its increasing cash burn has us a bit worried. Even though we don’t think it has a problem with its cash burn, the analysis we’ve done in this article does suggest that shareholders should give some careful thought to the potential cost of raising more money in the future (financial analysis).

Within the next year we should find out if Anavex 2-73 effectively counteracts the damage done by oxidation and nitration in various neurological diseases. For those already invested in the company stay invested; for those not invested consider at least a small investment. And be sure to keep a close eye out for pre-result news and studies that yield additional clues as to just how effective Anavex 2-73 may be in treating a series of neurological conditions.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.