Anavex Life Sciences Corp (NASDAQ:AVXL): Here's What We're Watching

In contrast to a number of our competitors, here at Insider Financial we've championed Anavex Life Sciences Corp (NASDAQ:AVXL) on a number of occasions in the recent past. The company is developing an Alzheimer's therapy with a mechanism of action (MOA) that is unique in the space when compared to pretty much the entire development landscape, and the disparity is polarizing markets.Well, Anavex just put out an update that reinforces our bull thesis, and the company is up a few percentage points as a result. Volume spiked to four or five times average, highlighting the fact that there's plenty of interest in the company if it can carry its candidate through to late stage efforts.With this in mind, let's catch up on the latest news, and see where the next major catalyst is coming from.So, the drug is called Anavex 2-73, and it's currently in a phase IIa trial investigating safety and efficacy against a spectrum of endpoints in the above mentioned Alzheimer's indication. The drug attempts to harness cell homeostasis through triggering the activation of receptors called Sigma-1 receptors. Normally, these receptors aren’t activated unless cells are damaged. By activating them against the grain, Anavex is hoping its drug can halt the progression of, or perhaps even reverse, Alzheimer's degeneration. Current in-development treatments focus on the buildup of amyloid plaque and a protein called tau, but as the fact that the condition still affects so many in the US and globally, and to such a degree, highlights, a new approach is needed.So Anavex is taking this new approach, and the latest reports from the front line suggest its working.The trial in question is exploratory, and open label, so the data should be taken with that in mind (basically, it's suggestive, rather than confirmatory) but even with this in mind, it's still very strong.At 41 weeks, across a sample of of 32 mild-to-moderate Alzheimer’s patients taking oral daily dosing between 10mg and 50mg of the drug, data showed a stabilization of cognitive and functional measures. Specifically, a continued stabilization of both cognitive (MMSE) and functional (ADCS-ADL) measures in patients treated was observed, and this correlation was positive with all measured scores (MMSE, ADCS-ADL, Cogstate, HAM-D and EEG/ERP).We won't go into these specific measures for the purposes of this discussion, but suffice to say they are industry standard scales used to assess severity and rate of decline in patients with neurodegenerative conditions, and in particular Alzheimer's.The implications of this data can't be understated. Yes, it's a small sample, and yes, it's exploratory, but no approved therapy is able to halt progression across a time frame this extensive. They may be able to slow progression, or halt it for a short time, but 41 weeks is big news.So what's next?Well, the trial was split in to two parts, with the first being a five-week study and the second a planned 26 weeks. At the request of the patients, however, the 26 weeks extended to 52 weeks, and the latest report comes 41 weeks in. So, the next natural data point to look for is the 52-week closeout.If at 52 weeks, the numbers reinforce the progression halt thesis, then the company is going to have a considerable efficacy base with which to shift in to late stage studies. In turn, we should see a pretty substantial upside revaluation, as speculative volume flows into Anavex ahead of a phase III, likely pivotal, investigation.It's still early days, but this is an approach that no one is taking other than Anavex, and in a space desperate for something to fill its currently massive unmet need, this one is well worth keeping an eye on.We will be updating our subscribers as soon as we know more. For the latest updates on AVXL, sign up below!Disclosure: We have no position in AVXL and have not been compensated for this article.