Anavex Life Sciences Corp (AVXL)

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The Anavex 3-71 Production Cost Factor

It appears that 50mg of blarcamesine will be a standard daily dose for Alzheimer’s. Anavex has patents on the manufacture of this molecule. Unlike many drugs, it is not a complex molecule; the production cost of a daily blarcamesine pill should not be excessive. Fifty cents? Five dollars? I have no idea if it’s in that range. But not likely to be in the hundreds of dollars.

But, then, what about Anavex 3-71? Unlike blarcamesine (Anavex 2-73), it is works in microgram quantities. One microgram is one one-thousandth of a milligram; 1.0 microgram = 0.001 milligrams. There are a thousand micrograms in a milligram. (A milligram is a thousandth of a gram.) “Milli-” means “one-thousandth.” “Micro-” means one millionth. Orders of magnitude stuff.

Does this mean anything? Well, if manufacturing costs are a significant fraction of the total purchase costs of a drug, it would certainly appear that Anavex 2-73 will not be expensive, at least as to its manufacturing costs.

Therefore, Anavex’s profit margin will be large. Make the drug for a few cents or dollars for a daily dose, and sell it at “market rates.” What will be the “market rate” for a drug that successfully treats (I’ll whisper the real term — hold on! — cures) Alzheimer’s or Parkinson’s disease?