Lots of negativity on the board today. This has made me think about why I own this stock and reasons for optimism about this company. Much of this may bore many of you because there are many knowledgeable investors here.
Not only are there greater than 106 peer-reviewed scientific papers on the positive effects of S1R agonists, there is specific preclinical validation of A2-73 in not one but ten neurodegenerative diseases. Anavex has had preclinical financial backing by MJFF, the Rett Foundation and the Fraxa Foundation. The A2-73 P2 trial has been funded largely by the Australian government. The Rett Foundation has agreed to fund the A2-73 P2 Rett trial, a 3 month trial with a price tag of about $1 million. Remember that Retts girls frequently have seizures, so this 3 month trial is in some respects a seizure trial. Jackie French, a world expert on epilepsy and a member the Anavex SAB, has said, "I am extremely impressed with the positive preclinical epilepsy data for 2-73, which demonstrates a significant increase in anti seizure efficacy relative to 3 currently approved epilepsy drugs as well as significant synergy with each of these drugs. " Remember too that A2-73's non sedating feature is very attractive, as most other epilepsy medications are sedating. Also, A2-73's positive cognitive effects are attractive, as epilepsy patients often show cognitive decline. A2-73's use may also be to reduce the dose of the 3 above-mentioned epilepsy drugs and thus decrease the side effects of those medications. Comparing the frequency and magnitude of seizures before and after treatment won't be nearly as ambiguous as analyzing Alzheimer's data.
Harald Hampel, a world expert on AD, said the A2-73's positive effects in AD had "a degree of confidence we did not anticipate" and that this drug deserved to enter a P2/3 trial. This is a high recommendation in that only 25-30 drugs tested for AD ever made it to P3. Of these, only 5 were FDA approved and their efficacy, as we all know, is marginal and they do not affect the course of the disease. I would be much more worried about A2-73 if its MOA were similar to the above mentioned drugs or to the many downstream drugs that have all failed. It seems significant that George Perry, editor of the Journal of AD, said "Although this is an open-label study with 32 patients, I have never seen mild to moderate AD patients maintain near baseline cognitive and ADL function and positive correlation with all other measures over a 41 week trial period in any prior study with an approved or experimental drug. It is quite plausible that complex CNS diseases like AD may require a comprehensive approach, including restoration of cellular homeostasis." This statement seems to me to suggest that Dr. Perry thinks treatment of AD will be multimodal, just as, for example, hypertension frequently requires treatment with 2, 3, or even four agents, and cancer is almost always treatment with multiple drugs, and AIDS is treated with triple drug antiviral compounds. It may be that AD drugs that have already failed may still be useful in combination with other agents and, if A2-73 is successful, BP companies will likely want to study their drugs in combination with A2-73.
Paul Maruff, CSO of Cogitate, said "Cogitate tests measure ability to store and use information. The P2a results show A2-73 improved psychomotor function, attention and working memory. The latter two were drastically significant and their magnitude clinically important. We have not yet seen a drug that has improved quantitatively working memory to such an extent."
Neuronetrix indicated that they had yet to see drug with better EEG/ERP effects than A2-73. Macfarlane said that "these are the kinds of studies that got donepezil approved by the FDA." The P2 study showed "the P300 wave amplitude showed a small initial increase from about 6 microvolts to 7 microvolts by four weeks, and then returned to about 6 microvolts until about week 32. Thereafter it steadily improved to about 8 microvolts by 57 weeks--a level usually seen in healthy age-matched controls. There was a significant separation from the P300 decline seen in a matched historical AD cohort, which decreased to about 4 microvolts over a 52 week period while taking donepezil." The P300 brain waves not only increased in amplitude, but did so faster and higher than donepezil, and the shape of the wave was closer to normal. Consider these comments in the context of a P2 study that was not dose optimized and was designed to fail early.
Part of the drug approval process under the Twenty First Century Cures Act is the patient's and caregiver's perspectives on how the patient is responding to the medication. "Real world evidence and the stronger inclusion of patient perspectives on endpoints are two examples of the shifts that will impact therapy development." In this regard it seems significant that all patients wanted to continue A2-73 after the end of the trial. Also the Australian media exposure supports a positive patient and caregiver response.
Positive characteristics of A2-73: it is a small molecule that penetrates the blood brain barrier, is safe, and has a positive dose response curve in 2 independent cognitive markers. It causes transient headaches and dizziness, which you want to see in a CNS drug. It has a remarkably fast onset of clinical effect. Its maximum tolerated dose is known. Its minimum effective dose is known. It has a potent affinity for the S1R and moderate affinity for the M1-4 muscarinic receptors. It has been shown to decrease inflammation and oxidative stress in cells, correct mitochondrial dysfunction and protect various mitochondrial enzymes (allowing effective generation of ATP), enhance endoplasmic reticulum function (so newly synthesized proteins fold and remain folded, otherwise beta amyloid and tau accumulate), prevent neural apoptosis by up regulating bcl-2 and down regulating capsize, up regulate neurotic outgrowth to increase or maintain brain connectivity, normalize BDNF expression in the hippocampus (BDNF polymorphism correlates with higher seizure frequency and severity in Rett's Syndrome as well as cognitive decline and increased A beta accumulation in AD). It has received ODD for Rett's Syndrome and infantile spasms. Its P2 adaptive trial reduces the chance of a P3 failure. P3 is to be tailored to the strong responder group to decrease the chance of a P3 failure. Genetic testing is being done on trial participants in preparation for upcoming trials. This may help guide patient selection. The extension trial is labelled a "new trial" which should allow dosage adjustments, which should also decrease the chance of a P3 failure.
Positive company issues: Missling is a summa cum laude from the Univ. of Munich and has an MBA from the Kellogg School of Management, where he wrote his thesis on partnership valuations. He has 20 years experience in Big Pharma, Biotech, and investment banking/M&A. The officers are Big Pharma vets. There is no company debt. Missling has stated that his goal is to maximize shareholder value. They have a cash runway for two years. There has been no insider selling. The P2 Rett trial will be funded by the Rett Foundation. He has also received funding from MJFF, FRAXA Foundation and the Australian government. All of these have stated that they want to continue working with Anavex. There is an in-house patent attorney. They recently received approval of the A2-73/donepezil combo patent (according to some on this board). They recently hired Emmanuel Fadiran, who worked for the FDA for 24 years until this year. He will manage regulatory filing for Anavex. The company stated that it has a considerable number of regulatory filings planned. He has also dealt with several novel therapies including first-in-class approvals. A 2-73 is a novel therapy. Annex enjoys the advice of a world class SAB.
Biogen is conducting a differentiation assay to see whether A2-73 promotes differentiation of oligodendrocyte precursor cells (OPC's) into oligodendrocytes (OD's). Note that Tangui Maurice's 2013 study has already shown that A2-73, by agonizing the S1R, promotes neurogenesis and neuroprotection in the hippocampus. He stated that neurogenesis is characterized by proliferation, survival and differentiation of progenitor cells in the brain. So if A2-73 promotes differentiation of neural progenitor cells in the hippocampus, hopefully it will promote differentiation of OPC's into OD's in Biogen's study. Lisa's study from Wayne State has already shown that A2-73 protects OPC's and OD's from molecules known to cause damage in MS.
Gottlieb, the new FDA head, believes in the TCCA, adaptive trials, faster timelines, lower costs, and patient and caregiver input. Annex has worked with the FDA on its trial designs, including adaptive features.
None of this proves A2-73 will be successful. However there are many, many reasons for optimism. The Rett P2, Parkinson's P2, and AD P2/3 trials will all be important, and Missling has recently stated again they will begin this year. The first two are of 3 months duration. In the meantime, hopefully Anavex will not flounder in the maelstrom of Wall Street's mart of economic strife and gain.
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