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Anavex Life Sciences Corp. (NASDAQ:AVXL): Another Ignored Presentation, Another Opportunity

Anavex Life Sciences Corp. (NASDAQ:AVXL): Another Ignored Presentation, Another Opportunity
Written by
Chris Sandburg
Published on
November 7, 2017
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Anavex Life Sciences Corp. (NASDAQ:AVXL) is a company that we've looked at on a number of occasions over the past twelve months and on each occasion we've had to put forward an argument for the company's potential success against a backdrop of wider market negativity.This is a company that – it seems – nobody within the biotechnology sector (except its shareholders, of course) wants to see succeed and this has two primary implications. AVXL Daily ChartFirst, that against a backdrop of basically no news, the company has maintained a steady downside trend (i.e. despite no bad news, markets are selling off on it). Second, that we almost always see an under response to any positive development hitting press.We've just seen an example of the latter scenario.On November 4 (so, the Saturday just gone), Anavex management took the stage to present some as yet unreported data from its lead development program. We actually mentioned this presentation the last time we covered this stock, suggesting that it's well worth watching as it should serve up a degree of insight into the likely path forward for the drug under investigation and – in turn – the potential for the drug eventually reaching markets in its target indication in the US.The presentation was strong, the data positive, yet Anavex is trading down on its Monday morning open price.The obvious interpretation here is that there's an opportunity to pick up shares at a discount ahead of a return to pre-presentation pricing. Further, and as we've stated in the past, we like any dips in share price ahead of the pathway coming to a close (i.e. the drug reaching commercialization) as potential entry points.So, what did we learn from the latest data?For those new to this one, the company is developing a drug called ANAVEX2-73 as a potential therapy for patients with Alzheimer's disease. Alzheimer's is a tough indication to go after and most of the drugs that target this condition fail at some point along their respective development pathways – generally earlier rather than later.The data we just saw, however, suggest that ANAVEX2-73 is at least going to make into the later stages of development. In any other indication, that's not a big deal. IN Alzheimer's it is.As per the presentation, data from a phase IIa trial of the drug in 32 patients with mild-to-moderate Alzheimer’s served up a strong primary endpoint hit (with said endpoint rooted in safety and tolerability) and showed that the maximum dose given was tolerable in the patient population. We also learnt that, in the second stage of the study (an extension study), the investigators expanded the dosing to 52 weeks from 26 weeks at the request of patients and caregivers (a strong anecdotal efficacy signal) and that, against numerous exploratory secondary endpoints rooted in cognitive function, quality of life, all the sorts of things that Alzheimer's has a degradative effect on, the drug served up some degree of improvement.Bottom line: this data looks strong enough for the drug to advance into what would likely be a pivotal phase II/III in the Alzheimer's population and to do so with a solid base of efficacy data behind it.This is Alzheimer's of course, and we can't stress enough how difficult it is to get a treatment on shelves in this space. And that's not because the FDA or its counterparts around the world are especially tough on this category of treatment, it's that we still don't really know what causes the disease and – by proxy – what we can do to fix it.This means that, while this data seems to imply efficacy, we've got to keep in mind that it's a relatively small study and there's a long way to go in terms of patients dosed before the company will have enough data in hand to support an NDA.With that said, it's not often that companies even get this close, so that markets have essentially ignored the development is a surprise and – in our eyes – an opportunity.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on AVXL, sign up below!Image courtesy of Tony Hall via FlickrDisclosure: We have no position in AVXL and have not been compensated for this article.

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