Anavex Life Sciences Corp (AVXL)

[falconer66a]

In A Year, No More Controversies

((...No matter how conservative you figure the revenue, if the drug receives approval then the revenue will be record breaking in the CNS space; and quite likely WW considering all the indications treated, like Parkinson and Rett; and the ubiquitous rare diseases with no current treatments. That is my personal take)).

RedShoulder,

You, of course, are not alone in taking this perspective on Anavex Life Sciences Corp (AVXL). But readers of this stock investing message board will note that the majority of the posts express a contrary view; that the company is operated by an ineffective chief executive officer (CEO); and that the company’s proprietary new drug candidates simply can’t and won’t be approved anywhere in the world for any medical indication, least of which for severe central nervous system (CNS) diseases such as Alzheimer’s disease or Parkinson’s disease.

The specifics supporting those naysaying perspectives will have to be discerned by reading the multitude of naysaying posts themselves. For most, posters stating naysayings against Anavex or AVXL are very clear. No mysteries as to what they are contending. Simply, both corporate management and the potential drugs owned by the company have, are, and will be failures. Anavex from its start has been a loser and there is no prospect that it could ever achieve any sort of commercial success. End of story...which continues to linger, nonetheless.

The story lingers because of what we Anavex supporters know. The only thing that will count or control Anavex’s eventual commercial success is whether or not its sigma-1 receptor agonist (activator) molecules will convince drug regulatory agencies, such as Food and Drug Administration (FDA), the European Medicines Agency (EMA), or the Therapeutic Goods Administration (TGA), Australia’s drug approval agency, that the Anavex drugs should be approved for sale and therapeutic use.

Such approval requires that proper clinical trials show conclusively the Anavex drugs are both safe (no obviating adverse events; side effects) and efficacious (actually reduce, suppress or reverse disease symptoms). A number of preliminary trials with Anavex drugs have been conducted, but full and detailed results have not yet been revealed to the public — or to any drug approval agency. With this prolonged or extended delay the Anavex naysayers are ever more confident that Anavex Life Sciences Corp will fail; and its shareholders will be left “holding the (empty) bag.”

But those of us who can comprehend the unique restorative or preventative cellular biology that we know (from both animal and human clinical trials) are certain that when the full clinical results are revealed, they will validate the drugs’ safety and efficacies. Simply, some time in the future, an Anavex drug will get regulatory approval, will be sold to treat, as no other drug can, any one of the several CNS diseases targeted by Anavex.

Even the smallest of those markets, the treating of girls with Rett syndrome, will bring substantial revenues to the company. With approval for either of the Big Two CNS diseases, Alzheimer’s or Parkinson’s diseases, tiny Anavex will become a major pharmaceutical, with billions of dollars of annual revenues.

Anyone owning or contemplating the acquisition of AVXL shares needs to do some determining diligence calculations. How many patients will the Anavex drug (probably, to start, blarcamesine) treat each year? Then, estimate the drug’s annual purchase cost. Presume (to be very conservative) that there will be 100,000,000 outstanding AVXL shares to which annual dividends will be distributed. Estimate the dividend “drop down,” the percent of annual revenues that will go out to shareholders. If a year’s treatment with blarcamesine costs a patient (or his or her health insurance company), say, $10,0000 each year, how much of that will go out as dividends. A ten percent drop down is not unreasonable.

With those calculations, one must then assess the risk/reward ratio. Most of us with AVXL positions that we’ve accumulated over many years, continue to punch these numbers. For us, the risk/reward ratio continues to be very favorable. Sooner or later (now, probably sooner), Anavex will be making a formal New Drug Application (NDA) to the FDA, or a similar application to the EMA.

Concurrent or close to either of these events should be the publication of a peer-reviewed medical or science journal article detailing the safety and efficacy of blarcamesine. Anavex has previously made reference to such an article, still in press.

The naysayers are confident that Anavex will prove to be the failure they’ve predicted from the start. Those of us with well-considered AVXL positions, supported by the abundance of clinical evidence in both murines (lab rodents) and real humans, in various clinical trials, along with expanding understandings of the Anavex drugs’ MOA, mechanisms of action — how they actually work in nerve and other cells — are confident with our holdings of AVXL shares.

Everyone else is invited to stand by and watch to see how all of this turns out. A year from now there will be no controversies. The matter will be settled.