Anavex Life Sciences Corp (AVXL)

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Some Anavex Arithmetic

From MayoMobile’s post, on projected Anavex annual revenues from the sale of blarcamesine to treat Alzheimer’s in the US:

Low end 67 Billion and High end 225 Billion

Ok, let’s run some numbers on this. Just on the low-end sales figure ($67 billion), nothing higher.

Presently there are about 78,030,000 AVXL shares in trade. I’ll presume that that number won’t change by the time blarcamesine is approved for sale and Alzheimer’s treatment therapy.

With an annual blarcamesine sales revenue of $67,000,000,000 ($67 billion), that equals $858.64 coming in for each AVXL share.

What, then, might be the AVXL share price? That takes some guesswork. How much of the per-share revenue stream drops down and goes out as per-share dividends? Who can know? Before any dividends go out Anavex has to cover all of its costs; drug manufacture, drug sales costs, employee salaries, other corporate overhead costs. To be conservative, I’m going to presume that only 10% of annual revenues go out as dividends. That would amount to $58.86. But, it might be only half that, $29.43.

What, then, would be the AVXL share price? Pick your own P/E ratio, price to earnings ratio. Multiply that times either of the two (or your own calculated) AVXL per-share revenues.

After you have those data entered on your spreadsheet, then do some “what-if” multiplications. What if instead of only $67 billion Anavex takes in Mayo’s high-end $225 billion each year? The multiplication factor is 3.35. To make it easy, just triple the per-share revenues, etc.

At an average cost basis of $4.48, I have accumulated over the years a few thousand shares of AVXL. All with discretionary funds in my household financial budget. If, as the majority of posters here project, Anavex goes bust, my financial security will in no way be jeopardized. On the other hand, should Anavex revenues approach in any way Mayo’s low-end figure of $67 billion, I and my estate (my children) will be well-rewarded. Eighth-grade arithmetic.