Last Saturday, the New York Times ran a rather lengthy piece on the Alzheimer’s epidemic. The article came on the heels of the high-profile failure of Lilly’s late-stage AD drug, Semagacestat.
Titled “Years Later, No Magic Bullet Against Alzheimer’s Disease,” it chronicled drug failure after drug failure.
I recently spoke with Anavex Chariman Dr. Cameron Durrant for a comment on the NYT piece…
According to Dr. Durrant:
Anavex Life Sciences has generated evidence of improving and reversing the memory and learning deficits of animals with Alzheimer’s in its animal studies. Human trials are schedule to start later this year. There is evidence that ‘neuroprotection’ — in other words brain cells that ordinarily would be lost through Alzheimer’s — are preserved.
Experts are increasingly agreeing that the process of Alzheimer’s begins very early — perhaps in our thirties — though clinical signs that do not typically manifest until much later in life.
So, tackling upstream causes, which is the Anavex approach, may offer potential in prevention strategies, especially in high risk groups. This is different than the majority of pharmaceutical interventions which have all failed.
Many of them attempt to intervene much later in the process, after amyloid plaque has been laid down in the brain. We have to forget about amyloid plaque being the cause. It is more likely to be a consequence, not a cause of Alzheimer’s processes, and we must move research interventions upstream in the process of the disease.
(I also want to mention that last week, Dr. Durrant was named by PharmaVOICE as one of the 100 most inspiring people in the pharmaceutical industry for 2010. Dr. Durrant was recognized by colleagues and peers in the pharmaceutical industry in this prestigious annual ranking for his innovative approach and leadership ability.)
With all the recent high-profile failures in the Alzheimer’s space, Anavex stands out as one of the only bright spots in the race to find a cure for a disease that is affecting more and more people every day.
As Western populations age, this disease will continue to command a huge amount of attention.
Indeed, for major pharmaceutical companies, it’s a space that cannot be ignored.
The market — depending on which metrics you use — is currently worth north of $5 billion. Of course the major companies want a presence, and they’re willing to pay for it.
In Lilly’s case, it’s heading for a huge patent cliff in the next three years, as some of its biggest drugs will lose patent protection and cheaper generics will be competing directly.
If this makes you think of AVXL as a potential takeover candidate, you’re on the right track…
As you’re aware, there’s currently no cure for the disease. Once contracted, it’s a slow death sentence; a walk into oblivion.
And it scares the hell out of the baby boomers, in particular.
There’s going to be a torrent of news coming from the company throughout the fourth quarter, starting with the beginning of patient trials possibly as early as September and continuing throughout next year.
A company like Anavex — coming off a successful Phase I program, with efficacy data from the Phase I, IIA portion, and fully Phase II-ready — should command a market cap of between $250 million to $500 million.
To put that in perspective, the company currently commands a $75 million market cap. That’s a share price of between $9 and $16. (You can currently pick up Anavex for less than $4 a share.)
Now, this isn’t some pie-in-the-sky exercise…
The chances of this company exiting the Phase I study with positive results are excellent. I’m even tempted to say it’s a lock cinch.
That’s why the excitement level at our meetings was so high. And when the Lilly announcement came through, it just hammered home the point that this tiny company is on the brink of something huge. The odds of success are as good as they get.
And there are a lot of desperate companies out there looking for partners. The big pharma companies are getting nervous, and their drugs have been failing left and right.
There’s a quiet race going on right now. And things are about to heat up.
The thing is, there just aren’t that many viable candidates out there — partly evidenced by the number of spectacular flameouts we’ve seen just this year.
It’s an urgent situation — and for us, that means the excitement is just getting started.
And it’s why Anavex is such a strong buy at current levels.
Long-time readers know we’ve been waiting for this for a few years now…
Congratulations. Your patience is about to pay off.
Profitably yours,
Brian Hicks
