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Anavex Life Sciences Corp. (NASDAQ:AVXL) Continues To Run Against The Crowd

Anavex Life Sciences Corp. (NASDAQ:AVXL) Continues To Run Against The Crowd
Written by
Chris Sandburg
Published on
February 8, 2017
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While the majority of our competitors have warned investors away from Anavex Life Sciences Corp. (NASDAQ:AVXL) over the last six months, here at Insider Financial we have repeatedly highlighted the company as having the potential to offer investors strong returns on – what seems at this stage to be – a very controlled degree of risk. Those who fell in line with our analysis have enjoyed a more than 75% gain since August last year. Those who listened to the Motley Fool, on the other hand, have taken an equal sized hit on their short positions.The company just logged 12% on a company update, yet it seems other outlets still aren’t willing to accept its potential as a long term winner.Our position remains unchanged. Anavex has been a runner for the last six months, and we expect this momentum to continue for the next six months and beyond, as the company pushes its lead asset towards commercialization.For those new to this one, it's a development stage biotechnology company with a focus on neurodegenerative and other sorts of neurological disorders. Its three lead target indications are Alzheimer's, Parkinson's disease, and Rett's syndrome. From a target market perspective, these former two, and the latter of these three, conditions couldn’t be more different. Parkinson's is incredibly widespread, affects a range of different people (although heavily skewed towards the elderly, and slightly so towards males). Same with Alzheimer's. Rett's, on the other hand affects primarily girls, and very young ones at that. It's also a rare diseaseWith that said, the conditions are similar in the sense that there is currently no effective treatment for any of them, and there is a large (monetary) market available for any company that comes to the fore with a treatment that has some impact on sequential degradation.That's what Anavex is trying to do, and it's trying to do it with a drug called Anavex 2-73.We've detailed this drug on numerous occasions in the past, so we won't go into too much detail on the MOA here. Readers looking for a bit of information can pick it up at one of our previous articles here.What we will say, is that the drug takes an approach that – right now – no other company is taking, and we feel that this approach is part of the reason many are denouncing Anavex's chances of success. Specifically, if it proves correct, it will basically render other drug candidates in the space as useless, and suggest that some of the largest companies in healthcare have wasted billions of dollars barking up the wrong tree.Anyway, looking specifically at the latest announcement, Anavex has only strengthened our bias.The company has boosted its cash position (currently sitting at a little over $21 million), trimmed its burn rate, and has stated that it is ready to put its asset through placebo controlled studies in the above three indications. Three studies mean a flurry of catalysts, and a flurry of catalysts translates to some near term upside potential as the company continues to prove its shorts wrong.It seems that the smart money is also starting to come around to our take on this company, also. Noble Life Science Partners just initiated coverage at $5.10, with a target price of $16 a share.There's still risk, of course. Not only is this development stage biotechnology, but it's biotechnology in a subsector of healthcare that is notoriously difficult to conquer. Companies have tried and failed to beat Alzheimer's for nearly half a century. As far as potential exposures to the space go, however, we have long seen this as one of the best, and the company has been good to us in return to-date.We expect this mutually beneficial trend to continue.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.

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