Anavex Life Sciences Corp. (NASDAQ:AVXL) has been one of our favorite small-cap biotech stocks here at Insider Financial for a while now. We have covered the company on numerous occasions in the past, and while there have been some spikes in its market capitalization – most notably throughout early June and then again throughout late September, the last six weeks or so have seen Anavex’s market capitalization steadily decline to where it now sits just shy of $100 million.We think that it can only be a matter of time before markets reevaluate the company's potential, and we see an upside revaluation in its market capitalization based on this reinterpretation.The problem is, with this sort of company, which focuses primarily on neurodegenerative diseases, the science that underpins its approach can be difficult to get across to investors without a scientific background. Why take a position in a beaten-down sub $100 million biotech targeting Alzheimer's or Parkinson's, when there are bigger players with much more advanced programs on offer?Well, as we just said, it's rooted in the science.Our last coverage went into the difference between the Anavex approach and that of pretty much the entire scope of alternative (read: mainstream) approaches, so it is worth checking out here to get up to speed. By way of a quick introduction, however, current theory and – by proxy – treatments focus on the buildup of amyloid plaque and a protein called tau. Most attempts to reduce the buildup of these two factors, and the hope is that this reduction can stem or reverse the neurodegenerative impact of Alzheimer's.The theory makes sense, since the buildup is correlated with severity, but it doesn't seem to be working.Anavex is shifting away from controlling these buildups to controlling the underlying process that might cause them. Specifically, it is trying to harness a condition called homeostasis, which is basically the body's defensive condition that it switches to when cells become damaged, with the goal being to repair the damaged cells by way of the hemostasis process. We use the term process lightly here, since homeostasis is more a description of the environment found within the cells, but the term does the job for the purpose of this discussion.Anyway, homeostasis is triggered by the activation of receptors called Sigma-1 receptors. Normally, these receptors aren’t activated unless cells are damaged. With its development candidates, Anavex is targeting the activation of these receptors, in an attempt to return the cells that are damaged as part of the neurodegenerative process of Alzheimer's to a homeostatic state.An apt comparison is the use of immunotherapy in oncology. Whereas in immunotherapy, companies are attempting to harness the body's own immune system to attack cancerous cells, Anavex is attempting to harness the bodies restorative system to return damaged cells to a homeostatic state.Alzheimer's is far away the lead program right now, and there is a phase 2a clinical trial in 32 mild-to-moderate Alzheimer’s patients running as we speak. The company will present data from this trial at a conference between December 8-10. Some outlets jumped on early stage data (reported back in July) from this trial as indicative of failure, but any biotech investor worth his or her salt will disregard that opinion right off the bat. All patients on the 2a are advancing into an extension study, at their own request, which to us suggests there is at least some perceived benefit, even though this is basically an exploratory safety trial.There are other ongoing programs in Parkinson's (supported by the Michael J Fox Foundation) and – as we addressed last time – Biogen just took the company's Alzheimer's drug under its wing to see how it works in multiple sclerosis.The bottom line here is that Anavex is a company taking a completely different approach from that which big Pharma has taken for the past 30 years or so, and as such, it is bound to meet with some resistance. The science is sound, however, and data to-date suggests it's well worth keeping an eye on. Financials are in order, with the company capitalized through to the end of all of its ongoing trials (as per the recent CEO interview here) and the biggest downside risk as we see it is markets responding to mainstream media misinterpretation of operations and results as they hit press. Stick with us for our interpretation, however, and we’ll make sure our readers get the full picture.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.