Jolly_Rancher's  Instablog

Anavex Life Sciences Corp. (AVXL.OB) last appeared on Seekingalpha in a March 12, 2008 article by H.S. Ayuob entitled "Anavex Life Sciences Takes Cues from FDA in Combating Major Diseases" detailing how Anavex's then pre-clinical Sigmaceptor ^TM platform compounds work and their potential. Since then there have been several promising developments in the areas of Alzheimers, Cancer, Epilepsy, and Depression.

Central Nervous System: Epilepsy, Alzheimers and Depression - 2-73

Currently, 2-73 is the lead Alzheimers candidate and is entering phase 1 study. Preclinical study completed in September 2008. In mouse studies it was shown to protect neurons in the hippocampus from oxidative stress which Anavex believes is the cause of Alzheimers. There are two theories as to how to treat Alzheimers: 1) reduce oxidative stress; 2) reduce amyloid beta buildup. Anavex has discovered that by reducing oxidative stress, the plaque caused by amyloid beta is prevented, thus concluding that oxidative stress is a precursor to amyloid beta plaque. 2-73 reduced learning deficits and reversed both short and long term memory loss caused by injection of Alzheimers inducing peptides. Furthermore, with respect to epilepsy, 2-73 exhibited extremely significant anticonvulsive action by providing almost complete protection from tonic seizures. This was accomplished without causing any memory deficits (amnesic effect) or mood disturbances (depression). Memory deficits and depressive phenomena are usually observed with the anti-epileptic drugs available today. The company plans to officially begin phase 1 trial in the fourth quarter 2009, and has contracted with Syntagon for that purpose. Of course, other biotechs are developing Alzheimers drugs. Elan (ELN) with Wyeth is developing Bapineuzumab (AAB-001), a monoclonal antibody Amyloid inhibitor in phase 3 trial, which so far has yielded only tepid results and seems a reasonable shoe-in for FDA approval, ostensibly for use in conjunction with existing therapies. Medivation is developing Dimebon which probably isn't useful for anything except duping investors and prying $225 million from a star-struck Pfizer. Pfizer also has many drugs of its own (if you include Wyeth) one of which may become a blockbuster.  Eli Lily has solanezumab, a Amyloid beta inhibitor, in phase III trial, which looks very promising. But presently, there isn't an approved drug which is very useful at fighting Alzheimers.

Cancer 7-1037

7-1037 is the lead cancer compound targeting clear cell carcinoma, a difficult to treat cancer for which there is no effective treatment. 7-1037 reduced tumor mass by 69%, clearly more than the 42% recommended as suggested threshold by the National Cancer Institute. The result is impressive, but the company has not released other results or given a timeline for further development.

Low cash burn, but low cash on hand

The structure of the company has allowed it to develop these compounds with a fairly low cash burn of roughly $3.5 million per year to date. The company anticipates that cash burn will increase to $5 million in 2009, so with only $78,000 in cash on hand, it is logical to assume that it will need to find a partner to continue development of this platform or continue to issue equity. Really, Anavex is a long shot that, if phase 1 results are stellar, may be acquired by a large pharmaceutical company looking to fill out its Alzheimers drug offering in order to remain competitive.

Disclosure: Author purchased AVXL.OB at $2.50 but does not own shares of any other stock mentioned.