Anavex Life Sciences Corp (AVXL)

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There is no asymmetric rule. Materiality has been a subject of several Supreme Court rulings and the SEC has put out fairly liberal guidance to allow companies to decide materiality. The SEC seems more concerned about materiality that affect financial statements compared to events like study results - . The Supreme court (Thurgood Marshall) had this to say in TSC vs Northway: a fact is material if there is “a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote…Put another way, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” this was confirmed years later by the Supreme Court in Basic vs Levinson " something is material if there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” --- Supreme Court majority words, not mine.

According to one legal analysis," Instead, the SEC has said that it is up to you, the issuers, other obligated persons and industry professionals, to assess your disclosure obligations and decide what is material and when disclosure is necessary."

I consider myself a reasonable investor - the total mix I want to see in the TLD PR include primary endpoint analysis and important safety information. I expect to see enough analysis information to inform an investment decision - I need to decide if the results are positive or negative to decide whether I will buy or enlarge a position or sell/reduce one. Some details of the analysis are needed as CEOs are legally allowed to bend their statements and to hype related data. I expect to see n, I expect to see the method of the statistical analysis and would like to see imputation method mentioned. Maybe it's just me but that

Years ago, I felt that good or bad news should rapidly be reported for phase 2 and 3 studies after data is analyzed enough to report the documented topline data (primary and key outcomes and key safety) However, I have learned that companies can pretty much disclose what and when they want. The SEC does not police clinical data materiality with the level of aggressiveness they use for financial materiality. CEO's can't outright lie but the SEC has never prosecuted a CEO for partial disclosure of study results or switching endpoints. Missling has misled about results, Missling has released incomplete data but he has stayed on the legal side of the line. He has not misrepresented financial statements so the SEC will not get involved. I have lost respect for him (and by extension AVXL) but have never called for jail time. Regulatory results/outcomes are different than Clinical results outcomes --- a CEO better rapidly report a CRL and should report whether an NDA is accepted (which sets the PDUFA date). They are free to keep internal any FDA communications to help guide studies and when an NDA is submitted. Maybe Missling just does not think that any of us are reasonable investors. He doesn't seem to hold current or potential future shareholders in high regards.

Materiality also can mean different things to different companies. I think missing an endpoint for a 800MM dollar company with one drug in advanced studies is a big deal and should be part of the 'total mix' . Maybe if AVXL was a 100B company with 20 active drugs in the pipeline, missing a 2/3 endpoint would not be material. Not reporting the actual primary endpoint of ADCS-ADL change in mean and switching to a related endpoint (OR) further down in the SAP statistical hierarchy is sleazy but with careful choice of words in the PR, not illegal. It was sleazy enough for me to reduce my position considerably. No one is going to jail but reputation takes a deserved hit.

If Boi or Steady actually have references that state there is asymmetric materiality (bad news must report, good news up to company) please post a link and not just an opinion. I looked and found none. Is it logical to report "good" news o an affiliation with an AI marketing firm but neglect good news from a study that could lead to billions in revenues?



Just for kicks I looked at Lilly that had a large PDD phase 2 study(LY3154207) same time as AVXL PDD trial. The study failed. Lilly never had a PR. There was a void and then data showed up on clinicaltrials.gov about a year later and a peer reviewed article last year. So bad news - no PR - no one goes to jail. https://pubmed.ncbi.nlm.nih.gov/34859493/

Couple nice links to materaility
https://www.mcneeslaw.com/what-is-material-the-sec-says-you-decide/

TSC vs Nothway page 426 US449

https://supreme.justia.com/cases/federal/us/485/224/" rel="nofollow" target="_blank" >https://supreme.justia.com/cases/federal/us/485/224/[tagBasic vs. Levinson[/tag]