Anavex Life Sciences Corp (AVXL)

[Bourbon_on_my_cornflakes]

Here's why you're wrong, George

I believe that within 10 years Anavex will be able to still make a profit selling blarcamesine for 50 cents per pill.

Once it is off patent, any pharma manufacturer can make it. So immediately the pharma companies in India that make generics will be cranking it out. They have low cost structure and already have the manufacturing infrastructure in place.

AVXL has no manufacturing capability. None. So let's assume that will under patent, the partner gives us 50% of revenues as a royalty. That means, even if they are exactly as efficient as the Indian competition, they would have to charge twice as much. Unlikely insurers will pay double for an off patent drug when there are 1,2,3 generics manufacturers charging have as much.

So what that means is either AVXL has to become a manufacturer (a low cost one), or a smart management does a deal like Genentech did with Roche, where initially they buy a minority stake, and then buy the rest circa 2030 when sales of 273 are fully developed and there is still some patent time left.