Anavex Life Sciences Corp (AVXL)

[Gator328]

Nah. I think it's more likely Rett is a small market and there's already an approved drug for it. Assuming best case $500mm gross revenue from Rett, and a 20% profit margin, that's about $100mm revenue, or somewhere in the neighborhood of $1.20 EPS.

Using DCF modeling, if we assume a discount rate of 12% and a growth rate of 15% for Rett over the next 7 years, the future growth value is worth around $9 and some change. Terminal value may add another few dollars.

Rett is not a condition that Wall Street is going to pony up the big bucks for. Alzheimer's is, and I believe the FDA's decision on Rett will be a canary in the coal mine for Alzheimer's approval either next year or in 2026 if another trial is required.