Anavex Life Sciences Corp (NASDAQ:AVXL) Facing Numerous Headwinds

A disappointing earnings report is the last thing that Anavex Life Sciences Corp. (NASDAQ:AVXL) needed, after plummeting to all-time lows. Investors’ confidence in the stock has hit all-time lows, amidst concerns about the company’s clinical programs and financial position. Anavex Sell-Off A sell-off of the stock that began mid-last year is showing no signs of slowing down as Anavex continues to aim at new record lows. The stock is currently languishing near its 52-week low, as short sellers remain in full control. Given the strength of the downtrend, the stock could find itself at loggerheads with the NASDAQ on plummeting below the $1 a share mark. AVXL Daily ChartWith the stock languishing near all-time lows, it needs to close above the $3.5 a share if investors are to consider it a bounce back play.Before we carry out a detailed analysis of what could be ailing Anavex Life Sciences sentiments on Wall Street, let us first review its core business.Anavex Life Sciences Profile Anavex Life Sciences is a clinical biopharmaceutical company focused on the development of drug candidates for the treatment of Alzheimer disease. The company’s pipeline also includes drugs for the treatment of central nervous system diseases and various cancers as well as for the management of pain.Its lead candidate drug is ANAVEX2-73, currently undergoing trials for the treatment of Alzheimer disease. It is also being tested for the treatment of Parkinson disease, epilepsy, and Rett Syndrome.Recent DevelopmentsA wider than expected net loss for the first fiscal quarter of 2018 continues to raise concerns in the investment community about the company’s long-term prospects. The biopharmaceutical company reported a net loss of (-$4.1) million or (-$0.09) a share compared to a net loss of (-$3.1) million or (-$0.08) reported a year earlier.A wider than expected net loss is not the only thing that investors have to worry about Anavex Life sciences. Operating expenses in the first quarter rose to $4.1 million from $3.2 million reported the previous year, attributed to an increase in research and development activities.The company’s cash balance is yet again another burning issue, amidst concerns whether it will be sufficient to finance crucial clinical trial programs that the company is banking on to reinvigorate its growth prospects.The clinical biopharmaceutical company entered the New Year with $27.4 million in cash and cash equivalent, down from $28 million as of December 31, 2017.Clinical Trials Amidst the disappointing financial results, Anavex Life Sciences is remaining upbeat about its most advanced clinical programs for ANAVEX 2-73. The company has already completed both RNA and whole exam DNA genome sequencing, while utilizing HiSeq 2, 5 Next Generation Sequencing technology.Anavex Life Sciences plans to submit an Investigational New Drug Application to the FDA in the first half of the year for the planned Phase 2/3 study.

“It was a strategic decision to start the new clinical trials after genetic data were collected and analyzed. We are expecting to leverage these important findings to more precisely target patients based on specific genomic profiles that may be highly responsive to ANAVEX®2-73,” said Christopher U Missling, Ph.D., President and Chief Executive Officer of Anavex.

During the fourth quarter, Anavex Life Sciences filed an IND for ANAVEX2-73 in Rett syndrome. The FDA consequently granted the company an orphan drug designation and is currently in negotiation with the regulator over the clinical trial protocol for the study. Anavex has also identified clinical trial sites in anticipation of the go-ahead to begin dosing of the first patient.Bottom LineAnavex Life Sciences was touted as one of the top buys in the biotech space last year. The company was expected to grow at an 11.9% rate, more than the medical biomedical and genetics industry. That has not been the case, as the company has underperformed the overall industry seen by the stock’s performance in the market.The company finds itself in a precarious position as it needs to achieve important milestones in the development of its most promising candidate drugs. Failure to do so could result in a further slid of the stock as investors continue to question whether the programs will ever result in drugs capable of gaining regulatory approval.Taking into consideration the value of the clinical programs should trial results turn out positive, then the stock appears undervalued at the current levels. However, that cannot be said at the moment, given that Anavex is yet to achieve key milestones.Investing in Anavex while taking into consideration where it is in clinical trials and financial position would be taking a big risk. The stock is under immense selling pressure and until the company is able to sort out some of the underlying issues, taking a back seat would be a good idea.We will be updating our subscribers as soon as we know more. For the latest updates on AVXL, sign up below!Disclosure: We have no position in AVXL and have not been compensated for this article.