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Anavex Life Sciences

Written By Brian Hicks

Posted June 28, 2008

It was June 2008 when we last reiterated a buy on Anavex Life Sciences (AVXL.OB) and for good reason. This is the company that could help treat Alzheimer’s disease.

And if you haven’t bought yet, consider doing so ahead of July 26.

You see, between July 26 and July 31, 2008, the company will present its Anavex 1-41 findings at the International Conference on Alzheimer’s Disease 2008. And if findings are favorable, there’s no telling how much attention this stock and treatment could receive.

What we do know is that Anavex will present that:

"(1) The very low doses of ANAVEX 1-41 (30-100μg/kg, ip) at which we attain neuroprotective results, indicating significantly greater potency than other pharmacological agents."

"The neuroprotection was specifically assessed in the hippocampus, an area highly implicated in Alzheimer’s disease. This very significant neuroprotective activity of ANAVEX 1-41 was found to be related to its combined sigma-1 and muscarinic effects."

"(2) The novel anti-apoptotic mechanism of ANAVEX 1-41 that was attained at extremely low doses of ANAVEX 1-41 (100-fold below the threshold for unwanted muscarinic effects). Apoptosis is the predominant pathophysiological aspect of the brain degeneration in AD, and protection against this process could be an important therapeutic strategy."

"In particular, the inositol triphosphate receptors calcium channels (IP3R) upregulation and endoplasmic reticulum (ER) stress sensors modulation maintained the ER and the mitochondrion in the unfolded protein response (UPR) adaptative status and protected against the triggering of apoptotic processes."

News like that only bolsters our bullish opinion.

If you’re new to the stock, here’s what we originally said on June 14.

Alzheimer’s Drug Stocks: How to Get a Piece of a $9 Billion Market

More than 5.2 million Americans have Alzheimer’s disease. Another 7.7 million Americans will suffer with it by 2030, and another 16 million will suffer by 2050. And there’s a yearly price tag of $148 billion to treat these patients.

No one is quite sure what causes the disease that gradually robs sufferers of memory and the ability to care for one self. There’s no known cure, and current drugs are only temporary pain relievers.

So wouldn’t it be nice if the drug companies got it right?

Hopes are already mounting that an experimental drug from Elan and Wyeth can do the trick. If they can clear out deposits called amyloid plaque, or simply halt the production, they could help millions of patients, and potentially see annual sales of $13 billion.

But such theories of anti-amyloid could be based largely on "theory and hope," says University of Southern California psychiatrist Lon Schneider (as quoted by Forbes). "None of the drugs have shown evidence of efficacy yet. Geneticist John Hardy, one of the first to finger amyloid as a suspect, puts the odds at 50-50 that one of the antiamyloid drugs will work."

Plus, says the Forbes report, people that can function normally also have large amounts of amyloid-beta plaque, which casts doubt on whether the plaque is a cause, a consequence, or simply an indication of an aging brain.

While there’s some hope that Elan and Wyeth can help millions of sufferers, and in the end reap millions for shareholders, some drug developers are turning to the theory of oxidative stress, which damages and destroys cells and is believed to be a primary cause of Alzheimer’s disease.

According to, ‘Involvement of Oxidative Stress in Alzheimer’s Disease’ study leader Dr. Nunomura "pointed to extensive evidence of mechanistic and chronological links between oxidative stress and a number of key characteristics of the disease."

The research also suggested that amyloid beta could be produced by the body as it tries to fight the disease, later turning into an accumulating toxic substance. In other words, there’s a belief that if amyloid was removed during early stages of the disease, it could do more harm.

Alzheimer’s Drug Stock: Anavex Life Sciences (AVXL.OB)

One of the companies basing its Alzheimer’s drug on oxidative stress theories is AVXL.OB. Brian Hicks introduced you to this company in November 2007.

The company’s drug candidate, ANAVEX 1-41, uses sigma receptors to stand guard against oxidative stress and repair cells. And when AV-1-41 goes into Phase I trials, we fully expect the market to re-rate the company upwards to $10 to $12 a share.

The drug is already showing promise in early stages. And in some trials, the drug reportedly provided neurons with protection from oxidative stress, prevented amyloid beta from becoming toxic, and reduced memory deficit in animal tests.

We continue to rate Anavex stock as one of our favorite small cap investments for 2008-2009. And the fact that the stock hasn’t sold off – especially during the recent market turmoil – speaks volumes.

Better, we wouldn’t be shocked if Anavex was a buyout candidate.

One, the company is betting that compounds for Alzheimer’s disease based on its Sigmaceptor platforms will provide it with competitive advantages. Its Anavex 1-41 treatment has demonstrated that the compound "significantly" protects neurons by preventing oxidative stress, which can damage and destroy cells and is strongly believed to be a main cause of many neurodegenerative diseases.

In short, if drugs like Anavex’s can slow or prevent diseases like Alzheimer’s there’s no telling how many buyout offers would flood Anavex offices.

Plus, they’ve got another 11 sigma receptor compounds in pre-clinical development, three of which could soon file for investigational new drug applications this year alone. This includes treatments for epilepsy, colorectal cancer and other solid tumors.

Anavex 7-1037 (for colorectal cancers) preclinical trial treatments, for example, shows a 69% reduction (with minimal adverse effects) in tumor growth.

Two, big pharmaceutical companies may not continue overlooking companies with oxidative stress exposure. And three, the Alzheimer’s drug market could triple to $9 billion by 2017. Why wouldn’t big pharma want a piece of that?

Good Investing,

Ian L. Cooper


In case you missed our other investment opportunity highlights, here’s what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 23, 2008.

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The Big Picture on Q2 2008, Part 2: Commodities and Renewables Charge While Market Tanks
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Brazilian Ethanol: The Break-Out Brazilian Energy Play
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Investing In Safaricom: The Coming African Stock Boom
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Investing in Wind Energy: How to Own 52 Wind Stocks for $30
As oil prices stay high, the wind power and alternative energy themes are becoming increasingly popular, making the latest ETF issue even more enticing at $30.

Investing in Electric Vehicles: The DIY Strategy for Energy Price Hedging
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Microsoft-Yahoo Deal Back On?: Don’t get too excited, though.
TechCrunch is reporting that Yahoo and Microsoft talks are back on. "The information we have is thin, but what one source is saying that Microsoft is talking a price lower than the $33 they were offering when the talks disintegrated in May," the report said.

When Will the Credit Crisis End?: Peak by Q1 2009, says Goldman Sachs
The credit crisis will not peak until the first quarter of 2009, said Goldman Sachs. And, according to the latest Goldman forecast, global financials will need to raise another $65 billion by this time next year to deal with losses.

Dow Does it Again…Tack on Another 25%: Chemical Giant Hikes Prices for a Second Time
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El Paso Calls Heating Up: Why it’s still a buy…
You may want to keep El Paso (EP) on radar. The El Paso August 2008 23 calls are seeing interest with 7,986 call contracts trading hands versus open interest of 69. The spike is being attributed to news that the company has expanded land holdings in the Haynesville shale area. While the stock has since retreated on the comments made at the Wachovia Nantucket Equity Conference, it and the call options are a buy.

How to Protect for Downside
This rally won’t last, we said June 12. Bank earnings are next week. The world is on the edge of severe crises. Israel and Iran are ready to fight. Oil is heading up. Gas is skyrocketing. Thousands of homes are in foreclosures. Global banks are struggling. Home equity loans are the new subprime fiasco. Unemployment is rising. Food riots are daily. Bond insurers are losing ratings. Oh, and then there are the hundreds of trillions in derivatives.