Health Sector Stocks

Brian Hicks

Updated March 11, 2008

It was November 30, 2007 when Brian Hicks introduced you to Anavex (AVXL:OTCBB), as it traded at a paltry $3.75. "If it is able to execute its business plan, even a small investment in this stock is going to be an absolute home run." said Brian. "Seven of their drug discoveries are currently working their way through the approval process after very promising early trials."

Today, 80 trading days later, the health sector stock that’s still under the radar is up 39%… thanks to recent advances.

avxl chart

By December 18, 2007, its lead Alzheimer’s drug ANAVEX 1-41 was showing promising results. ANAVEX 2-73 and ANAVEX 19-144, treatments for epilepsy, were showing positive results. There was even news that ANAVEX 7-1037, a treatment for colon cancer, had been shown to kill human HCT 116 colon cancer cells in pre-clinical studies.

Of course, that’s great news for both cancer patients and company investors. But as good as the results have been, word is that more good news was on the way, like the news just released Monday.

The News on this Health Sector Stock

News is that the above-mentioned ANAVEX 7-1037 treatment has demonstrated an ability to "significantly delay the growth of cancerous tumors in patient derived xenografts during advanced pre-clinical trials." And, in comparative pre-clinical studies, the treatment "reduced tumor growth by 69% with minimal side effects."

That offers our $5.23 Anavex stock even more of an upside catalyst.

Near-term, even at $5.23, we believe shares of Anavex still has further upside to $7+ based on the company’s proprietary Sigmaceptor Technology Platform, which represents an area that has yet to be exploited by the big pharmaceutical companies, and the latest news.

Better still, Brian tells me that with current market conditions, "this is a prime time for big pharma to start acquiring small biotechs. It’s one of the reasons why I’m so bullish on Anavex right now. And the stock has held up nicely despite the recent market meltdown."

And it seems as if others agree. It was February 28 when eResearch initiated coverage with a speculative buy rating with one-year and three-year price targets of $6.50 and $21.60. Says the firm, "Seven therapeutic drug candidates in its product development pipeline; three are in the pre-clinical phase and four are just at the drug-discovery stage. These potential drugs are aimed at diseases of the central nervous system and various cancers. Significant capital will be required to fund R&D and cover monthly "burn". If ANAVEX can mitigate this financing risk over the next few years, there could be enormous upside potential."

Like I said, even at $5.23, Anavex has further upside. Small Cap Trading Pit readers are up 39% on the stock since the December 4, 2007 recommendation at $3.08. We’re holding with that $7 near-term target.

At $6.50, you’d realize a 73% gain. But if you’re patient, and it hits $21.60, you stand to rake in 476% gain simply buying an under the radar gem.

Ian L. Cooper




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