Replies to post #441499 on Anavex Life Sciences Corp (AVXL)

[falconer66a]

Yes, a 5% Dividend Dropdown is Very Conservative

...the top 20 pharmaceutical companies, who had an average market cap of 129.7B, and their average dividend/revenue was 8.2%.

Thank you for posting that, telling that the average dividend dropdown, the percent of annual revenues going out as dividends for big pharmaceuticals was 8.2%.

Yes, in my calculations of eventual AVXL values, I conservatively suggested that the Anavex dividend dropdown would be only 5% of annual corporate revenues. Given the large value of eventual annual revenues, in the billions, that 3.2% increase you posted is a lot of dollars.

Here’s an important fact: compared to Leqembi or other monoclonal antibody CNS drugs the manufacture, synthesis of the Anavex sigma-1 receptor agonist (activator) molecules is far cheaper. The Anavex molecules, for our example, blarcamesine (Anavex 2-73), is a relatively small molecule. Anavex already owns patents on how it can be efficiently and inexpensively manufactured.

Simply, the manufacturing costs of the Anavex drugs, including blarcamesine, will be very minor fractions of the drugs’ costs to patients or drug insurance providers (or importantly, to government healthcare programs). The manufacture of pills containing 50mg of blarcamesine almost surely will be less than a dollar each; probably just a few nickels.

With that, the dividend dropdown for the Anavex drug revenues may very well be above 8.2%. Ten to 15%, on up to 20 or 25% may be the actual dividend dropdown metrics.

On the potential Anavex metrics estimation spreadsheet on my computer, I didn’t use just a single column of data (which I described in my posting). In numerous columns of cells to the right of the second column, the B column in my posting, I tried a variety of other potential numbers. The three most significant data estimations were a) potential number of patients, b) annual per-patient costs for treatment, and c) the dividend dropdown data. With tens of millions of patients, at a $10 a day treatment cost, with a 10% dividend dropdown, the numbers are too big to post. All of the usuals would proclaim how ridiculous they would be.

So, punch the numbers on your own. But don’t post what comes up. You’ll be made fun of.

[wildcard235]

A dividend clarification: The 8.2% I posted was the top-20 average of total dividends to total revenue, which is not the same as Dividend Yield.

The yield is the dividend related to share price, which is what most investors actually care about, but share price of individual stocks is too volatile to be useful this far in advance. However, according to an article in Forbes in 2018, the average dividend yield for all dividend-paying pharmaceutical companies was around 2.4%.

I agree with others here that Anavex's dividend yield is likely to be higher than average due to lower costs.