I like the prospectsof Anavex Life Sciences AVXL. I do know from personal experience stocks like AVXL can have explosive moves to the upside. I urge others to read the report put out by PinnacleDigest on this company. I find it very impressive. I particularly like the fact that one of their director's Ms Alison Ayers has a strategic position in Pfizer
A biotech company's journey is a long and costly one that eventually leads to final Phase III Clinical Trials and FDA approval before entering the drug market. If the drug clears Phase III, it is stocked on pharmaceutical shelves, but chances are most of the upside in its share price has come and gone. And, as we explained last week, in many cases, the multi-million and even billion dollar buyouts of the smaller new drug producers happen at the Phase 1 and 2 stages. This is the time period when our team wants to be involved and to wants to own a share position.
Depending on the drug, and the demand associated with that drug, there can be billions of dollars at stake for the pharmaceutical giant that lays claim to it. Our new featured company's Chairman made a very bold statement as his confidence came through in a recent interview with Patrick Cox, where he stated, "I'm absolutely confident that we'll see Big Pharma come out of the woodwork to do a partnership deal."
A very bold statement, and everyone knows a man's word is only as good as his reputation. That's what stopped us dead in our tracks.
Dr. Cameron Durant, MD, MBA, our new Featured Company's Chairman who most recently spent 3 years as Worldwide Vice President, Infectious Diseases, Global Strategic Marketing at Johnson and Johnson (NYSE:J) and the 2005 Ernst & Young 'Entrepreneur of the Year' was the man who made this statement.
Dr. Durant also held executive positions at major global pharmaceutical companies, including Merck & Co., GlaxoSmithKline and Pharmacia Corporation which is now part of Pfizer Inc.
In addition to Dr. Durant, Alison Ayers, MSc, one of our new Featured Company's directors, is the worldwide commercial head of Oncology at Pfizer, the largest drug company ($130 billion market cap), in respect to sales, on the planet. She is responsible for the commercial strategy for Pfizer's oncology department, which had sales of over $2 billion in 2007.
Needless to say, our new Featured Company has the leadership and experience we look for in a company we are putting our name behind and investing in.
After several million dollars in R&D spent as well as years of research, our new Featured Company is quickly approaching Phase 1 trials...
So without further adieu, our first ever Biotechnology Featured Company is ANAVEX Life Sciences Corp. (AVXL:OTCBB).
Simply put, ANAVEX Life Sciences Corp. is a biopharmaceutical company engaged in the discovery and development of new drugs for the treatment of neurological diseases and cancer. It is a relatively new company which IPO'd in 2007, but was privately funded for years in the R&D stages.
The company's four leading drugs target Alzheimer's disease, epilepsy, melanoma and prostate cancer. Their flagship drug, ANAVEX 2-73, targeting Alzheimer's disease (AD), will enter first Human Clinical Trials (HCT) by the end of summer 2010 - primarily the main reason behind the timing of our selection of Anavex. In parallel, the other three compounds will reach final preclinical stage this year.
ANAVEX 2-73 is the company's most advanced drug and the success this drug has had to date is why we have selected Anavex as our first ever Biotech Featured Company. We will elaborate on just how successful the company has been with this drug later in this report.
As mentoned, Anavex is going after Alzheimer's, one of the deadliest and most debilitating diseases in modern history. It's almost a guarantee that someone you know is either suffering from the disease or has died from it. Here are some key facts regarding the Alzheimer's crisis:
- Currently, roughly 30 million diagnosed worldwide
- By 2050 that number is expected to quadruple to 120 million, affecting 1 in every 85 people
- 5 million in the United States
- Alzheimer's is one of the most expensive conditions to treat as it kills very slowly and treatment is constant.
- The direct and indirect costs of Alzheimer's disease are estimated at roughly $100 billion per year in the United States alone. In Great Britain, researchers have said Alzheimer's disease costs more than cardiovascular diseases and cancer combined - the two other largest killers.
- Alzheimer's treatments to date have been disappointing in results and act more of a mask than a cure.
As our population ages and this disease becomes more and more rampant in our society, the pressure to find a cure will rapidly increase; in fact, it already has. The big pharmaceutical companies are getting desperate. And from an investors standpoint there is money to be made in the health care sector with an aging baby boomer population. When we look for investing opportunities, we look for areas of crisis, and at the speed Alzheimer's disease is growing, it is becoming just that.
In an interview on March 9th 2010 hosted by one of our favorite writers, Brian Hicks, Anavex's Chairman, Cameron Durant, weighed in on the current market for Alzheimer's, the players involved and what's at stake.
"The market leader, Aricept, is co-marketed by pharma drug giant Pfizer and by the Japanese company that discovered the drug, Eisai. But Aricept goes off patent this year and the multibillion dollar sales pattern it has built will vanish quickly, as generic versions line up for approval and sale this year. There are three other marketed drugs - Exelon by Novartis; Razadyne by J&J; and Namenda by Forrest - all off patent or coming close to it.
So what do pharma behemoths like this do?
They invest in their own in-house programs and/or turn to outside small companies, biotechs, startups, and academic-types to source innovation."
Pfizer is on the clock. In less than six months it will lose exclusivity of the Alzheimer's drug, Aricept. You can rest assured they are doing everything to find a replacement - a drug that outperforms Aricept. This is a classic scenario in the biotech space as drugs lose their patent protection and become generic. In order for big pharma companies to stay on top they must find new, better drugs. And in respect to Pfizer, Anavex has a major connection to the pharma giant which we will explain in detail shortly.
We'd like to explain a story that relates very much to what Anavex is attempting to do.
In 2008, Pfizer thought they might have found the next Aricept, or even something better, and partnered with a company named Medivation (MDVN:NASDAQ). After Pfizer partnered with Medivation, shareholders in MDVN had their chance to strike it rich; the opportunity we all look for. Here's what happened:
Medivation did much of its pre-clinical trials in Russia and in 2006 its stock was valued between $3 and $5 per share.
In September 2008, Medivation announced a global agreement with Pfizer Inc. to develop and commercialize the drug dimebon (latrepirdine) for the treatment of Alzheimer's and Huntington diseases. The stock went from roughly $10 per share to $35 within a month. The stock drifted up as high as $40 per share (market cap flirted over a billion dollars) and within days of hitting an all time high, just above $40 per share (earlier this year), news that the drug dimebon had failed was released.
On March 3rd of this year Medivation announced results from two Phase 3 trials of the investigational drug dimebon in patients with Alzheimer's disease. In the CONNECTION trial, dimebon did not meet its co-primary or secondary efficacy endpoints compared to placebo. Co-primary endpoints were measures of cognition and global function. Medivation's drug failed Phase 3 and watched its stock lose 75% of its value instantaneously. It currently trades around $11, off its high of over $40 per share just a few short months ago.
It is our strong opinion that Pfizer needs to find a drug and partner with a company to replace Medivation. Most importantly, it needs to re-establish itself with a promising drug in its Alzheimer's treatment pipeline. It's no mystery. They invested an astronomical amount into Medivation's drug only to come up short.
What must be noted, and a key reason behind our selection of Anavex, is that one of Anavex's board members, Ms. Alison Ayers, is a member of Pfizer's Oncology Strategic Plan Leadership Team which manages strategic and investment decisions including licensing and acquisitions.
In addition, Ms. Ayers is currently the Worldwide Commercial Head for Oncology at Pfizer, with responsibility for Pfizer's oncology portfolio. The portfolio includes more than 20 drug candidates in clinical development.
What separates Anavex from Medivation and everyone else for that matter?
In a recent article written by Patrick Cox, he highlighted an excerpt from an interview with Anavex Chairman, Dr. Cameron, where his upfront nature and confidence was blatantly evident.
"Let me talk to you about the evidence," Cameron said:
"In validated standard approach animal models, which everybody does, we've seen an efficacy that far exceeds Aricept (Eisai/Pfizer), and at very low doses. We also have seen actual disease modification. Aricept is the market leader and is a symptomatic treatment only -- there is no disease modification."
"We've also seen additional effect in terms of amnesia and neuro-protection. There's, obviously, a long way to go between animal and human data, but the other interesting thing is affinity of these compounds to the receptor is very strong at very low doses. So our thinking is we may be able to get significant efficacy without having to make the trade-off between tolerability and adverse event profile."
At Pinnacle Digest there is nothing we hold higher in terms of value than a company's management team. We have featured some amazing management teams in the past, but in the case of Anavex, there is simply no comparison.
What Separates Anavex's Management?
It is very rare to find a junior biotech company attracting top talent from the biggest pharmaceuticals in the world. And it isn't a coincidence.
While management will always be the most important component to a company's success, there is no sector that relies on its management more than in the science and biotech industry. This is a field where creative genius and incomprehensible understanding of biology saves lives and in turn, can create great profit opportunities for investors.
It doesn't really matter where we start as the individuals behind Anavex have all had tremendous success in their prestigious careers.
This is a situation where the key members of management and the board have held executive positions in some of the largest pharmaceutical companies in the world. The foundation of our selection of Anavex's chances to make history begins right here.
Let's start with the Chairman of the Board. Be sure to take the time to review the individuals that make up this team. We could not leave any out as they all play an integral role in Anavex's long-term goal.
Dr. Cameron Durant
Dr. Durrant is a medically trained MBA who has a unique entrepreneurial background coupled with major international pharmaceutical and small company CEO experience. Dr. Durrant has held executive positions at major global pharmaceutical companies, including Merck & Co., GlaxoSmithKline and Pharmacia Corporation (now part of Pfizer, Inc.). Most recently, Dr. Durrant spent almost three years as Worldwide Vice President, Infectious Diseases, Global Strategic Marketing at Johnson & Johnson. He has also been CEO of two specialty pharmaceutical companies, PediaMed and Spherics. Dr. Durrant was a regional winner and national finalist for Ernst & Young's Entrepreneur of the Year award in 2005. He holds a MBA from Henley Management College in Oxford, U.K., a DRCOG from the Royal College of Obstetricians and Gynaecologists in London, U.K., a MRCGP from the Royal College of General Practitioners in London, U.K., a DipCH from the Australian Academy, Melbourne, Australia and an MB and BCh (equivalent to the American MD degree) from the Welsh National School of Medicine in Cardiff, U.K.
Alexandre Vamvakides, Ph.D.
Scientific Founder, Chief Scientific Officer, Chairman of Scientific Advisory Board
Dr. Vamvakides has spent 30 years in research, focusing on the therapeutic/pharmacological areas of nootropes, anti-neurodegenerative (anti-Alzheimer's), anti-epileptic, anti-depressive and prototype molecules. The author of 80+ published scientific papers, he has worked at the Institut National de la Sante et de la Recherche Medicale in Paris, France, University of Athens (Greece), Ciba-Geigy (Basel, Switzerland), Sanofi (Montpellier, France), and many other European research labs for the discovery and development of new concepts in the therapeutic areas of CNS, oncology and inflammatory diseases.
Mark Smith, Ph.D., FRCPath
Scientific Advisory Board
A leading researcher and professor in the Department of Pathology at Case Western Reserve University School of Medicine, Dr. Smith is one of the world's most cited researchers in the fields of Alzheimer's disease, free radical biology and neuroscience and behavior. He is Executive Director of the American Aging Association and Editor-in-Chief of the Journal of Alzheimer's Disease. Dr. Smith has authored over 600 peer-reviewed scientific manuscripts and book chapters. He has received a number of notable scientific awards in recognition of his scientific research, which is currently focused on investigating the pathological mechanisms underlying selective neuronal death in neurodegenerative diseases, notably Alzheimer's disease.
Jean-Jacques Bourguignon, Ph.D.
Scientific Advisory Board
Dr. Bourguignon has 30 years experience in medicinal chemistry, including expertise in drug design and optimization as well as organic and physical chemistry and is currently a Research Director (CNRS) at the Faculty of Pharmacy, Strasbourg-Illkrich, France. His background also includes work as a senior scientist at the Center of Neurochemistry (Strasbourg, France) and post-doctoral fellow with the department of chemistry at the State University of New York at Buffalo. Dr. Bourguignon holds a Ph.D. in polymer physical chemistry from the Université Louis-Pasteur in Strasbourg.
Tangui Nicolas Maurice, Ph.D.
Scientific Advisory Board
Dr. Maurice has spent 15 years in the field of neurosciences, including behavioral and molecular neuropharmacology, sigma receptors, neuropeptides, neurosteroids, neurotrophic factors, normal/pathological aging models for Alzheimer's and related disorders, and behavioral phenotyping of rodent models. Previously, Dr. Maurice held research positions with Institut national de la santé et de la recherche médicale (INSERM) U710 at Montpellier, Centre National de la Recherche Scientifique (CNRS), INSERM U336, the department of neuropsychopharmacology and hospital pharmacy at Meijo University (Nagoya, Japan), and Jouveinal Research Institute (Fresnes, France). A past recipient of the CNRS bronze medal, Dr. Maurice holds a Ph.D. in cellular and molecular biology with a specialty in neuropharmacology from Université Montpellier.
Alison Ayers, M.Sc.
Ms. Ayers is currently the Worldwide Commercial Head for Oncology at Pfizer (NYSE: PFE), with responsibility for Pfizer's oncology portfolio, which includes more than 20 drug candidates in clinical development, as well as lifecycle optimization for their leading oncology treatments including Sutent. In addition, she is a member of the leadership team that develops Pfizer's oncology strategic plan and which manages the portfolio, including asset prioritization, development planning, strategic and investment decisions including licensing and acquisitions. She is also responsible for the commercial strategy for Pfizer's oncology department, which had sales of over $2 billion in 2007. She holds a Master of Science with distinction in biopharmacy and a Diploma in Business Studies, both from the University of London, UK, as well as a Bachelor of Science with honors in physiology and biochemistry from the University of Southampton, UK.
Anavex has assembled a world class team and is positioned with strength and experience as it moves towards Phase I Trials.
Anavex Moving Forward Quickly
In September of last year, roughly 8 months ago, Anavex Life Sciences Corp. announced its selection of FORENAP Pharma EURL as the contract research organization (CRO) for Phase I clinical trials of ANAVEX 2-73, the company's lead Alzheimer's drug candidate. FORENAP has been involved in pre-clinical and clinical research for 20 years and is renowned for its expertise in Central Nervous System (CNS) studies, including Alzheimer's disease.
ANAVEX 2-73, a sigma-1 receptor agonist, has been shown in pre-clinical testing to be neuroprotective and anti-amnesic. It is postulated that ANAVEX 2-73 impacts mitochondrial dysfunction, which is thought by many researchers to be one of the hallmarks of Alzheimer's disease, and may be mitochondrial protective. This innovative approach focuses on addressing an underlying cause of Alzheimer's disease, unlike current drugs on the market that provide only symptomatic relief. Based on recent data, sigma receptors are implicated in oxidative stress, through modulation of calcium signaling via the mitochondria.
That's the scientist talk...
Stage of Development:
In the interview with Patrick Cox mentioned above, Anavex's secret sauce gets broken down in layman's terms, for people like us. Dr. Cameron Durant (Anavex Chairman) talks about Anavex's positioning.
"What we are doing at Anavex is scaling up for clinical studies and tidying up the animal studies, the animal tox. Fortunately, we have seen no bad signals so far. We are looking to raise some more money, in a way that is as nondilutive as possible, to get going into Phase I this year.
"When that happens, I'm absolutely confident that we'll see Big Pharma come out of the woodwork to do a partnership deal. You'll understand if you do a filtering of all of the projects that are out there. First, you filter by products that are 'disease modifying,' versus products that are symptomatic only. There's one filter. Chuck out about half of them."
Dr. Durant is a man whose worked in major roles for Big Pharma (the largest pharmaceutical companies on earth) for years. He knows the business and the competition intimately.
On May 4th 2010, just a few weeks ago, Anavex Life Sciences Corp. reported promising results from animal studies with ANAVEX 2-73, the company's lead compound for the treatment and modification of Alzheimer's disease.
Remember that ANAVEX 2-73 is the first of a new class of drugs that target mitochondrial dysfunction thought to be caused by oxidative stress to modify Alzheimer's disease.
Dr. Durant made a few comments at the conclusion of the latest press release. We believe them to be very significant and telling of what the future holds for Anavex. He stated, "On average in the industry, it takes six and a half years for discovery and preclinical testing to yield a potentially viable lead compound." This stage has all been completed. Anavex went public in early 2007, but was privately funded for 11 years before that. Anavex has been in the R&D stages for a total of 14 years and has already spent $10 million by way of private equity, European grants and University research programs.
Anavex's Chairman, Dr. Durant continued "Over 80% of compounds fail in preclinical stages, before arriving at this stage of research. ANAVEX 2-73 is a novel oral disease modification agent that is believed to act at several levels, including the mitochondria(brain cells), and may offer a therapy that could be used as a standalone or in combination with other agents if development proves successful."
Dr. Durrant went on to state that, "Currently available therapies primarily treat the symptoms, as opposed to modifying the disease, and can fade in terms of effectiveness over time. Several experimental therapies being developed will have to be administered as injections or intravenous infusions. ANAVEX 2-73, and the follow-on compounds the company has in its pipeline, may prove to be novel disease-modifying agents that could impact the natural history of Alzheimer's disease, and which may be administered orally."
This is what we meant by a potential game changer.
We cannot stress enough how important timing is in the biotech industry - look no further than Medivation, the company we mentioned earlier in the report who partnered with Pfizer. Imagine owning shares in that company before the partnership when it was trading at $3 or $5 per share. Medivation shareholders had a chance to sell for $40 per share...And the drug failed in Phase III yet there was still amazing profit taking opportunities. This is what the biotech sector has to offer investors - a shot at grand slams.
The Investment Opportunity
Anavex Life Sciences Corp. currently trades at US$3.14 per share, off of its high, before the market crash, of nearly US$5.50. Since that time the company has continued to develop and advance its lead drug ANAVEX 2-73 to the point where it is ready for the ever important Phother junior biotechs at or near the same stage of development. Its market cap is roughly $60 million. For company's like Pfizer, $60 million or even $120 million is a drop in the bucket.ase 1 trials. The company's capital structure has remained very tight with only 21.1 million shares outstanding and roughly 13 million in the float. Anavex's market cap is exceptionally small in respect to many other junior biotechs at or near the same stage of development. Its market cap is roughly $60 million. For company's like Pfizer, $60 million or even $120 million is a drop in the bucket.