Anavex Life Science Corp: Clinical Drug Potential

Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Contributor Since 2017

Ociter Lumen Capital is dedicated to finding opportunities agnostic of investing strategy or style that present attractive risk adjusted returns. From special situations opportunities to high growth SaaS investing, the fund aims to identify where the best asymmetric investments lie and champion concentration to maximize out sized returns across all market environments. - August 2020


  • Anavex 2-73 in Clinical 2/3 Trial for Alzheimers
  • Successful series 2 clinical trial for 2-73 on healthy patients
  • $-.09 Earnings per share for quarter 3.
  • $24.8 million in cash equivalents compared to $9.2 million a year ago
  • Acquired Andrew J. Cole, M.D. to the scientific advisory board.


Anavex Life Science Corp (AVXL) is a biopharmaceutical company specializing in orally administered drugs to treat Alzheimer’s and Parkinson’s treatments as well as some other rarer diseases. Having gone public October 2015, it is a relatively new company and still in clinical stage phase with of all their treatments. In general, it specializes in cures for neurodegenerative and neurodevelopmental diseases inclusive of the central nervous system such as Alzheimer’s and Parkinson’s.

                                                    Current Clinical Studies

Anavex 2:73 is currently in 2a clinical trial for Alzheimer’s treatment by restoring cellular homeostasis and reversing the effects of Alzheimer’s rather than temporarily impeding the damage. In November, they completed a study on randomly selected healthy volunteers and found no problems and allowed them to proceed to clinical step 2 and an approval for phase2/3 research on Alzheimer patients.

Anavex 3:71 a preclinical drug with a unique ability to activate sigma-1 receptors and M1 muscarinic modulation that enhances neuroprotection and cognition for Alzheimer. It has proven to be very effective while tested in mice. In addition, it is evidenced that it has application in protein-aggregation-related.

                                                        Value Proposition:

The unique aspect of Anavex is that its drugs have multiple application than just Alzheimer’s and Parkinson’s. For example, Anavex 2-73 has applications to Rett Syndrome, Angelman Disease, and Fragile X. Due to the rareness of those diseases, Anavex receives facilitated and more prompt treatment from the FDA being granted Orphan Drug Designation (ODD) for ANAVEXTM 2-73 and a Phase 2, placebo-controlled trial in Parkinson’s disease

As an investor, this is what we look for: Diversification. If one application is not approved or is not proven to help, there are 4 other commercial applications. For this reason, from a pharmaceutical standpoint, I am long

                                                         Financial Overview 

Quarter 3 results were still in the red, but the bleeding has been slowing (-.09 EPS). Increased spending for R&D, acquiring costs, assets, and administrative promote the belief that Anavex (AVXL) is growing and expanding. Ultimately, Anavex is closer to finally releasing the drug, Recently they added Andrew J. Cole, a Harvard Professor and someone who has contributed significantly in this area,  to the scientific advisory board.

  • At the moment, there is 24.8 million in cash equivalents compared to a year ago, 9.2 million.
  • Operating expenses of $3.7 million compared to $2.3 million for the comparative quarter last year. This increase was a result of increased spending on research and development, including clinical trial preparatory activities.
  • Net loss for the quarter of $3.6 million, or $-0.09 per share, compared to a net loss of $2.2 million, or $0.06 per share, for the comparative quarter.
  • Cash used to fund operations was $3.0 million, compared to $2.2 million for the comparative quarter last year. This is in line with the Company’s cash utilization guidance.

Statement from the CEO:

“We are entering the second half of 2017 with our strongest balance sheet to date, which allows the Company to execute the Phase 2 clinical trial in Rett syndrome, for which ANAVEX™ 2-73 has been granted Orphan Drug Designation by the FDA, as well as the Phase 2/3 clinical trial in Alzheimer’s disease and the Phase 2 clinical trial in Parkinson’s disease,” said Christopher U. Missling, PhD, President and Chief Executive Officer of Anavex Life Sciences. “We look forward to initiating these placebo-controlled clinical trials. The respective trial designs are based on broad genomic and biomarker characterization, pharmacokinetic and pharmacodynamic modeling including data from patients in previous ANAVEX™ 2-73 trials, as well as preclinical translational science. To our knowledge, this is the first use of this approach in the design of clinical trials for Alzheimer’s disease, Parkinson’s disease and Rett syndrome, and marks a shift towards advancing implementation of precision medicine for these and other neurodegenerative and neurodevelopmental diseases.”

                                                Conclusion and Investment Thesis:

Anavex (AVXL) is still a long time from becoming a profitable company as evidenced by quarter 3. Yet, there unique drug 2-73 has a lot of potential in various application. I expect the company to hit 4.50 within eight months.   

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.