Anavex Life Sciences Corp (NASDAQ:AVXL): Misinformation Is Our Opportunity

At the start of this week, we put together a piece addressing our thoughts on Anavex Life Sciences Corp (NASDAQ:AVXL), and specifically, it's latest agreement with biotech giant Biogen Inc (NASDAQ:BIIB). Our main point was this: the so called experts at outlets like The Street and Motley Fool have completely misinterpreted the implications of the agreement (that, or there's someone telling them to overlook, or outright reverse, them) and as such, are putting out garbage analysis as to what it means for Anavex and Biogen.We've covered Anavex numerous times in the past, and are very familiar with the company and its science. For many of our competitors, who seem to think there's nothing but downside risk on anything below a $1 billion capitalization, it might be the first time they are coming across the company. If so, there misinterpretations are understandable, but not really excusable.Since we made our opinions clear, another Fool article hit press comparing Ionis Pharmaceuticals Inc (NASDAQ:IONS) with Anavex – which is the better buy? – by reasoning of their both having some sort of agreement with Biogen. Of course, the article settled on Ionis as the better call. Again, nonsense.To serve up some balance, we're going to take this opportunity to explain why Biogen is so interested in Anavex, and why this agreement is just one small pixel in a bigger, neurodegenerative disease picture.It's all about the science.For fifty years or more, scientists at companies big and small have been trying to cure Alzheimer's. Nearly all have focused on the build up of what's called amyloid plaque, and more recently, a protein called the Tau protein. The justification for this focus is that the seeming severity of the condition is correlated with the volume of the amyloid plaque and Tau.There's a raging ongoing discussion in the scientific space right now as to which of these elements is the cause of the disease. Are they both causal? Is one a higher contributor than the other? Nobody knows – but there is one thing we do know, and that's that whatever drugs have been able to do to reduce plaque or tau buildup, none have been able to show any reversal or inhibitory properties. None beyond the clinic, that is.Anavex has recognized this, and is one of the first companies to say "look, what we're doing isn’t working – perhaps the tau or plaque buildup is correlative, but not causative."In response to this, it's going after something completely different – a process called cell distress that occurs cumulatively as a result of protein misfolding. Scientists have referred to Alzheimer's as Diabetes type III, because of the belief that diet, exercise, sleep etc can all play a factor, over time, in its severity. This is what Anavex is looking at, and it's doing it before anybody else.Specifically, the company is using its 2-73 asset to target, and agonize, a receptor called sigma-1. Early stage trials have shown that activation of sigma-1 can strengthen cells that are under duress as a result of the protein misfold, and this strengthening can halt or even reverse neurodegenerative conditions.Interestingly, the activation of these receptors has concurrently demonstrated a reduction in amyloid plaque in Alzheimer's patients, which suggests that far from being causative, amyloid is actually a byproduct. If this is the case, billions of dollars have been spent trying to create drugs that clear up Alzheimer's mess, rather than target its cause.Biogen has taken on the drug to try and apply the concept to MS. The company believes that sigma-1 activation can strengthen the myelin cells that are under duress, and re-myelate the neurons using this strengthened cells.Yes, there isn’t any cash exchanging hands just yet, and yes, it's ex vivo right now. This is a potentially game changing approach, however, and that Biogen is looking at incorporating it into its neurodegenerative fold is validation in itself of the approach at this stage.When Biogen collects evidence that this approach works towards its endpoint in the assay it is about to perform, and decides to carry forward with a mice model, it's those who looked beyond the ill informed mainstream commentary that will benefit from Anavex's upside revaluation.Subscribe below and we will make sure you get the most accurate interpretation of biotech deals delivered direct to your inbox completely free. Don't settle for the ill informed commentary everybody else is happy to rely on.Disclosure: We have no position in AVXL or BIIB and have not been compensated for this article.