Anavex Life Sciences Corp (AVXL)

[boi568]

I agree with Mayomobile that we have entered partnership and buyout season now that blarcamesine is up for approval with the EMA.

I think that, more through happenstance than planning, we soon will enter an NDA process that will conclude on about the same timetable as the MAA process. This would be a favorable development, particularly as it may affect buyout offers.

But it's much more likely to me that a partnership deal would occur first, perhaps as soon as 1Q2025, but almost surely 1H2025. Anavex definitely wants one, the terms of a partnership compared to a buyout at this stage are going to be less contentious, and a partnership would strengthen our hand in any subsequent buyout scenario. The partnership may not be global; there could even be a couple of partnerships, e.g., US and ROW.

This strong possibility is now baked into share price dynamics, and it will drive a continuing bull move in AVXL -- particularly fueled by short covering. Institutional shorts will not want to wake up one morning to an Anavex with a BP partnership deal. Expect continuing short message board posts and Seeking Alpha articles, but also brace for false rumors about the company, the drug, and/or the approval process(es).

I am less concerned with our somewhat diminished cash hoard, because I think Missling will, if useful, sell shares into an elevated share price in the coming months. If there's a partnership, which is very likely, Anavex will be swimming in cash.

As for the buyout possibility, I don't think Anavex would make the first move -- first, because I still think they prefer independence and, second, because it would put them one down in any negotiations. Given the two massive AD markets we are targeting, collectively worth well over $50B in annual sales, only major BP players should apply.

Anavex will have the best understanding of whether their approval chances are more 3 to 4 percent or 99 percent when any buyout offer develops. Assuming as I do that it leans more to the latter, the company would want to avoid a deal before an approval, and they should have the legal and financial wherewithal to delay. (The counter strategy by a suitor would be to make an open market bear hug offer to shareholders at a very attractive price.)

At this stage I can't see a deal going through for less than hundreds of dollars per share, assuming that there remain strong prospects for drug approval. Of course, any deal before an approval will be cheaper than a deal after an approval.

Good times.