Anavex Life Sciences Corp (AVXL)

[Investor2014]

So now that the Excellence trial failed you are at 55% chance of approval, whereas I was at an about 50% too generous chance before the sort of TLR readout.

I also expected the pediatric Rett trial to be a success. It was not the clear success I expected. I gave a 99% probability. Now I give it 55% and that may require an additional trial.

I am now way below 50% chance without a new trial.

Having 99% chance of approval in biotech investing, and even Boi's expected 80%'ish chance from the EMA filing in AD (and yes I know the {inappropriately applied} stats being used to arrive that conclusion), is imo, experience and understanding pure misguided insanity.

Look at the performance of professional biotech analyst, where even the very best ones comes nowhere near any WGT chance. The biotech investing game is not about believing in one's ability to pick unicorns, but skillfully with an open critical mind winning more than loosing. You don't even need an overall > 50% chance per investment, since the winners often have outsized gains and the losers can't cost more than a 100% of your investment and usually cost somewhat less.

Most, including Anavex, believed that success in paediatric Rett patients would be more likely since the damage from the MeCP2 gene defect would be less severe and the younger patient biology more able to restore balances with the help of A2-73 than the adult patients in the two previous trials. Did it surprise this turned out not to be so?

In the past I pointed out that both adult trials had outsized placebo effects and unfortunately in the Excellence trial placebo effect turned out even higher. Not too surprising when caregiver (RSBQ) and physician (CGI-I) subjective scoring is the only available measure of severity and disease progression.

The placebo imbalance in baseline scores that Kaufmann describes below could have been avoided with a larger trial with randomisation more likely to have ensured a better balance. It will be interesting to perhaps later see the baseline scores and how uniform they are. Keeping in mind how unreliable (up to 300% between scoring of same patient) the subjective scorings are hard to work with and results unreliable especially in a too small trial.

Walter E Kaufmann, MD, Chief Scientific Officer of Anavex commented, “We believe that a high placebo response may have masked the therapeutic effect of this innovative orally available molecule. High placebo responses are well documented especially in pediatric clinical studies. Although data analysis is ongoing, the early conclusion is that the placebo rate could have been higher in the study due to a slight imbalance in disease severity at baseline, across the treatment arms, and the 2 to 1 drug to placebo randomization ratio. We intend to further assess the collective results and discuss with the regulatory authorities next steps.”

We also want to know why n=77 and the reason for the 15 dropouts and how distributed between the placebo and dose arm.

Hopefully deeper analysis also of biomarker correlations will help even that GABA/Glutamate along with SIGMAR1 mRNA expression may not be accepted standard biomarkers in Rett, but could provide support to A2-73 making longer treatment more likely to have increasing beneficial effects over placebo. The OLE and Compassionate use Rett population should help this objective analysis regardless of the Open Label setting.