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Anavex Life Sciences Corp. (NASDAQ:AVXL) Is An Undervalued Alzheimer's Play

Anavex Life Sciences Corp. (NASDAQ:AVXL) Is An Undervalued Alzheimer's Play
Written by
Chris Sandburg
Published on
October 18, 2017
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Anavex Life Sciences Corp. (NASDAQ:AVXL) is a stock that we cover pretty regularly here at Insider Financial.The company is a biotechnology play that – we feel – has been overlooked by wider markets over the last twelve months and, in many instances, has been beaten down in response to various bits of news disproportionate to (or even totally in contrast with) the implications of the news in question. AVXL Daily ChartWe have suggested on a number of occasions that this situation has translated to some great opportunities to pick up discount stock ahead of what we see as being an inevitable upside revaluation as and when the company crawls out from under the radar and starts to garner the attention it deserves.This last week, we've yet again got some news as to the progress of the company's development program and, once again, markets have been relatively unreceptive to the development.Here is what happened and what we are looking for next from the company as supportive of our long-term bull thesis.So, the latest news relates to the release of some pharmacokinetic (PK) and pharmacodynamic (PD) data from the company's lead development program, rooted in a drug called Anavex 2-73.For those not familiar with this company, the drug is targeting a condition of mild to moderate Alzheimer's disease and the program recently completed a phase 2 a study, which read out as favorable towards an efficacy and a safety thesis.Right now, Anavex is undertaking an incredibly detailed analysis of the phase 2 a study, with the goal being to derive data from the analysis that allows the company to put together a protocol for a pivotal trial that gives the drug the best chance of success come trial completion.This PK/PD data is part of this aforementioned analysis.So what did the data tell us?Well, importantly, we now know that there exists a clear concentration-effect relationship between the active drug and study measurements, with the latter including cognitive and functional scores as well as a biomarker signal of brain activity, as derived from all patients on the study at 57 weeks post-dosing. We also know that the drug's activity appears to be enhanced by its active metabolite (what's called Anavex 19-144), which also targets the sigma-1 receptor (this targeting is the mechanism of action that underpins 2-73) with a half-life approximately twice as long as the parent molecule.An extended half-life could imply an increased impact on these patients with a reduced dosing schedule.So, while these aren't groundbreaking developments, they do come together to complement the overarching data set and should be useful in putting together the above-described protocol as favorable for the drug's chances come pivotal readout.So what's next?Anavex is conducting an analysis with something called KEM advanced Artificial Intelligence technology, which is a proprietary analysis tool created by a company called Ariana Pharma. There is a conference call scheduled for today (which we will be listening into) and a subsequent data presentation set to hit press during November at the Clinical Trials on Alzheimer’s Disease (CTAD) meeting, both of which should address this KEM outline. Each of these events should serve to further solidify a pivotal trial protocol and, as we move into initiation, there is a good chance that this company will start to attract speculative attention and, in turn, should appreciate to the upside accordingly.Keep in mind here that the end goal is to get this drug to market and that a sound protocol is only one step towards that aim. With that said, however, this is the sort of company that could really move if the protocol is favorable, which makes it one to watch regardless of the ultimate outcome of the investigation, especially for the shorter-term operator.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 Neil Conway via FlickrDisclosure: We have no position in AVXL and have not been compensated for this article.

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