Anavex Life Sciences Corp (AVXL)

[Doc328]

I agree with some of your points. After several trials with A273 that imply mild benefit without offering definite proof of that benefit and with an even more interesting drug on deck, Anavex is in an interesting place.

IMO, there will be no approval (AA/conventional; EMA/FDA/TGA) in 2024 or 2025 based on the trials to date. That's why I have given only a 1% likelihood for these. Improbable but not impossible. Of course I could be wrong (1% chance) and investors more convinced of revenue 'soon' have their perspective that I disagree with but do not ignore.

Anavex has limited resource (150 MM) and cannot do everything without a large influx of capital via partnership, sale of one asset or significant dilution. No-trial expenses (salary [many PhD and MD], travel expenses, legal fees, rent, etc) are likely a minimum of 10 MM annually.

So, if I am right what will be necessary for A273 to cross the finish line.
1. AD - If Anavex chooses to proceed with A273 in AD, they will need an 800+ patient trial 50:50 ONE dose or dosing regimen of A273 vs. placebo with patients allowed to continue SOC. Best endpoint may be CDR-SB in MMSE 20-28 with proof of amyloid (consider slightly higher) for 72-78 weeks. A trial like this would cost about 80 million and need to be multinational (no 5 site in AU x a year before expanding). Outside of AU, there is no 42% 'tax rebate' so per subject is higher than last trial. Perhaps a sub-study of amyloid PET removal large enough to support the endpoint as a biomarker, . Of course htere is no guarantee of success.
2. Rett - Because they designed the sample size with data from the US Rett trial and did not adjust N after Avatar, they had only a trend for RSBQ. N=180 would likely have led to a p<0.05 for RSBQ though CGI may still have failed ---- winning on the more important outcome at end of study might have led to a chance to get FDA approval for this orphan indication. Missing both unfortunately is more unlikely. Now they can design a 1:1 A273:placebo trial (what dose?) with N=180, keep the endpoints and 12 weeks. Need to go international at the outset with about 12-15 sites. Cost of trial only about 15 MM.
3. PD - The PET trial is likely mostly funded by MJFF but has little regulatory importance - may help to pick the right dose (If $ already taken as revenue then this is only 1-2 MM). A P3 for PD with MDS-UPDRS total or possibly only UPDRS part 3 or 2 and 3 co-primary endpoints. The trial could be N=500-800 for 12 to 24 weeks and need to be international at the outset. Probably 30-40 MM

For A371
1. Schizophrenia P2 with 5-6 week duration using PANSS as primary clinical endpoint (as P2, safety is actual primary endpoint). Here Missling will have to break with his cheap pattern - do a 150-160 patient trial with placebo and 2 or 3 doses of A371 and actually design a trial that will tell you the right dose to bring to P3. About 10 MM.

All other trials including the "undisclosed indication" are probably off the table until any success
So if all the above is funded then over the next 3 years, including other expenses that will only grow if more staff needed, Anavex spends well over 150 MM. Raising through dilution could be painful at $6 a share but necessary if another method is not used. Alternatively a hard decision needs to be made --- re-try Rett, definitely do schizo but hold on on either PD or AD.

IMO, A273 is at most is mediocre --- maybe it can match trofinetide in Rett with a better profile enabling some success and revenue. For AD it is likely equal to donepezil but with a different tolerability profile (less GI, more dizzy). Should A273 just be cut and do a large P2 for A371 in AD? I think a pivot to A371 (though repeating Rett with A273 in a right sized trial) is more exciting and more investable than keeping 273 alive for AD. I just sold some puts to possibly buy more A273 near the recent channel bottom. $5.5-5.6 is more compelling than 8-10.

For Baked

If a weaker competitor sold for $14 billion recently, I'd like to know what A-371 is worth (if anything). Promising preliminary prophylactic data and P2 data and a P3 pipeline for Blarcamesine that has a puncher's chance of approval could be worth $10 billion or more,

Look at KarXT data - results are quite strong with good tolerability/safety. Besting them will be a challenge. 14B seems dear but this drug has blockbuster potential - maybe until something better comes along. Shame that Missling didn't do more with A371 earlier (Licensed in 2014 TEN years ago) - P1 started in 2020. A positive (by standard method not Missling last second moved endpoints) P2 , IF N IS LARGE ENOUGH, could get MC > 2 B. If Missling does another crappy N=32 I may need to finally sell those last shares.