Eventual (5-yr) Anavex investment yield estimations.
Purchased, over the years, with discretionary funds in my budget, is my holding of several thousand shares of AVXL, Anavex Life Sciences Corp. These were long-term investments, not short-term trading vehicles. So, from time to time I try to estimate what the future returns from my AVXL position might be. Here’s what I just punched into my spreadsheet. (None of this is intended or should be used as investment advice; merely my personal and interesting value projections.)
In my spreadsheet, in cell A1, I entered the number of AVXL shares I putatively own, 1000. Below that, in A2, I entered the number of outstanding AVXL shares circulating in equity markets, which iHUB states is 76,920,000.
In A3, I enter the number of patients (in the US and Europe) that, in five years, will be taking blarcamesine, for a diversity of indications, Rett syndrome, Parkinson’s disease dementia, and Alzheimer’s. There will be new indications, with perhaps the biggest being general geriatric disease prophylaxis (disease prevention). Of course, the number entered in this cell will vary, depending on whatever I project as rational. Right now, in the US about 6 million have Alzheimer’s. I’ll presume that 4 million have it in all of Europe, giving a patient count of 10 million. Just to stay conservative, I’ve not tried to speculate on the number of Americans and Europeans who will be treated with any form of Parkinson’s disease. There will be a good number of these; several millions. But, for now, I’ll stay solely with Alzheimer’s projections.
Cell A4 has the most contentious number, Anavex’s annual revenues from each blarcamesine patient. To be sure I’m in the ballpark, I’ll presume a mere $1000.
Cell A5 is the resulting annual revenues for Anavex. Multiply A3 x A4. 10,000,000 x $1000 = $1,000,000,000 (one billion dollars).
Cell A6 will be the annual revenues for each Anavex share. Divide A5 by A2. $1,000,000,000 divided by 76,920,000 = $130.03 per share
Cell A7 is a decimal, indicating the percent of revenue drop-down that goes out as a per-share dividend each year. If ten percent of annual revenues goes out in dividends, the entered number is 0.1. If 25%, it’s 0.25.
Cell A8 will be the dollars of dividends distributed for each owned share of AVXL. Multiply A6 x A7. With these entries, $13.00 will be the annual per share dividend I’ll receive.
Finally, A9, the desired number, the number of dollars in annual dividends I will receive. Multiply A8 x A1. If I owned 1000 shares (I have multiples of that), and there were a 10% dividend drop down rate, I’d receive $13.00 x 1000 = $13,000 in dividends every year.
All of these data variables are very conservative. Very likely, far more than 10 million people, globally, will be treated with blarcamesine each year. And Anavex’s income from each patient will probably be greater than $1000.
But even at these conservative, low-range numbers, I will live very well from the dividends my AVXL holding will yield in a few years. When I punch in larger ones, I’m astonished. There could be many millions more than 10 million taking the drug, and annual revenues from each patient may be far beyond $1000. Until blarcamesine gains sales and use approval, I can patiently wait. I, and millions of real patients, will be well rewarded.
What, of course would be the eventual value of my AVXL holding? First, try to estimate the share price of AVXL. With a dividend of $13, what is a reasonable resulting share price? I’m a biologist, not an equity investment expert. I’ll let others give a reasonable resulting share price range.
But, all of this looks out about five years. As a long-term investor, not a stock trader, I gleefully click off of postings lamenting current AVXL share prices, lamentations of corporate media offerings, etc. I’m looking out to 2027. Things will be very different then.
AI
