Replies to post #27104 on Anavex Life Sciences Corp (AVXL)

[scottsmith]

On point Dok. I'm gonna enjoy watching the euphoria and panic tomorrow. Meanwhile I'll just be sitting back, waiting until the 7th, waiting for the A plus patent, waiting for the ind, waiting for P2 for Epilepsy, waiting for Breakthrough therapy.

[Millstone]

Well said - We should also point out that though Dr. Missling is not an M.D., his PhD and MSc are in Chemistry, summa cum laude, from Ludwig-Maximilians-University in Munich. This is a businessman with a doctorate in Chemistry. Seems like a great fit for a biotech testing chemical compounds.

(His MBA is from the Kellogg Graduate School of Management - quite a good reputation).

I have researched the backgrounds of the Scientific Advisory Board. Stellar resumes and very active recent work in the fields of Alzheimers and Epilepsy. These are scientists who presumably want to be involved with potential drugs to help fight terrible diseases. Their reputations are on the line, and I will stack their resumes and degrees against some of the short-sellers' CVs any day.

Now, I think it is quite possible that a few of the short sellers truly believe that AVXL is not for real, yet they are cherry-picking information without regard for its veracity, or chronology. Frankly, in the world of reverse-merger biotech it is not hard to find 'unseemly' beginnings. That is why, as an odds game, short sellers can often win. Adding to their strongly held beliefs is a holier-than-thou (often represented as smarmy) attitude, a personal financial interest and egotistical interest in being right. Whether or not their attacks from their personal blogs, financial publications or sites such as seekingalpha are "coordinated", I think one would be hard-pressed not to recognize a piling-on effect. The short-sellers know that they can take advantage of the financial "writers'" attacks at appropriate moments.

More attacks will undoubtedly come, as they always do. For those that say good companies don't have to worry because the truth and the data will win in the end, I say usually yes. However, a short-seller with a Robin Hood complex is a dangerous thing, convinced as they are that they are righteous. They will call doctors, patients enrolled in trials, their families. They will feed doubts to companies in partnering talks with the biotech target, contact the FDA, tweet and "report" things out of context and with malice aforethought. It is something like a cop who shoots a former juvenile delinquent but then plants a gun in his hand since 'he was surely guilty of something.'

I have high regard for certain short-sellers: Andrew Left, John Hempton to name two of the best. There are others have uncovered some big frauds as well: John Carnes (Alfred Little byline), Muddy Waters - though I hate to mention them since they successfully took the other side of one of my stocks a few years back and it hurt.

In summary, I want to say that based on my experience, the road ahead will not be without bumps. Sometimes there will be potholes. The dirty and one-sided tweets and articles will no doubt continue, but Anavex has assembled a very solid team of scientists with published papers going back into the 1990's regarding Alzheimers and the Sigma-1 receptor. The scientists are reputable and honest. The data is compelling. In my opinion, the sole valid argument that anybody could have is based on valuation at this stage. If the data continues to be compelling, then we are undervalued by 3 times + as the trials continue. If the data is inconclusive, then Anavex's value is inconclusive. If the data is bad, then we are overvalued.

It is a simple proposition, and if certain short-sellers were honest, they wouldn't need to rely on half-truths or smears. They would wait for the data and then explain their scientifically-based rationale for why a biotech is overvalued. What is the rush? Maybe some shorts are stuck in AVXL right now and upside-down? That could be a reason to start up the attack machine.

Best of luck to all honest purveyors of information.

Millstone

[Doktornolittle]

Obligated to correct my numbers regarding the recent arrangement for share sales option.

Twice now I have posted on the topic and made errors in the numbers. The SEC filing isn't very complicated, so I am embarrased. Other correct assesments were posted, but nobody specifically pointed out my errors. Polite I guess.

I said Missling was a genius in business, I didn't say I was.

Still see the deal was very smart. But Missling did pay quite a bit for the freedom of control of the funding. I see the value of that control at this point in the growth of the company as invaluable. So, I still think it was a great deal.

Rather than 90% efficient funding, it is more like 81%, if they sell all the shares, when you take into account the up front payment and subsequent bonus payment. Still, that compares pretty well to 65% efficient for the first small cap biotech I pulled up in a search. And that biotech did not get control of the funding rate as part of the deal.

Maybe the plan is as simple as "get funds when you can"... but even if that was the case, there are clearly side benefits. One is very fast control of OS in case of a hostile takeover if super good data is announced. Another would be the ability to negotiate a partnership. A partner might offer to match, X-fold, funds for a P3. Avanex might have to come up with a fair amount of money as their part of the deal, up front, and they probably want to be able to say with confidence that such would not be a problem.

With a small float, Missling needs to be careful how he moves. This gives him that fine and fast control. This beast's motor (Anavex 2-73 etc) might be very powerful, but this deal gives it a (running) Jaguar's transmission and a BMW's suspension to boot. Well worth the price.