After the news broke last week that Biogen Inc (NASDAQ: BIIB) and development partner Eisai (OTCMKTS: ESALY) decided to terminate two late-stage studies, ENGAGE and EMERGE, evaluating aducanumab in patients with mild cognitive impairment due to Alzheimer’s disease and mild Alzheimer’s disease dementia, markets have turned to their attention to what the biotech giant will do next. Smart biotech traders have been bidding up Anavex Life Sciences Corp (NASDAQ: AVXL) since the first of the year and could see a huge windfall if Biogen turns its attention to AVXL. Taking a closer look, it makes a lot of sense for Biogen to have a close look at AVXL. Here’s why.
First up, a little background info for those that are not familiar with AVXL. Anavex Life Sciences Corp. (Nasdaq: AVXL) is a publicly traded biopharmaceutical company dedicated to the development of differentiated therapeutics for the treatment of neurodegenerative and neurodevelopmental diseases including Alzheimer’s disease, Parkinson’s disease, Rett syndrome, and other central nervous systems (CNS) diseases, pain and various types of cancer.
Anavex’s lead drug candidate, ANAVEX®2-73, recently completed a successful Phase 2a clinical trial for Alzheimer’s disease. ANAVEX®2-73 is an orally available drug candidate that restores cellular homeostasis by targeting sigma-1 and muscarinic receptors. Preclinical studies demonstrated its potential to halt and/or reverse the course of Alzheimer’s disease.
ANAVEX®2-73 also exhibited anticonvulsant, anti-amnesic, neuroprotective and anti-depressant properties in animal models, indicating its potential to treat additional CNS disorders, including epilepsy.
The Michael J. Fox Foundation for Parkinson’s Research previously awarded Anavex a research grant, which fully funded a preclinical study to develop ANAVEX®2-73 for the treatment of Parkinson’s disease.
ANAVEX®3-71, which targets sigma-1 and M1 muscarinic receptors, is a promising preclinical drug candidate demonstrating disease-modifying activity against the major hallmarks of Alzheimer’s disease in transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies. In preclinical trials, ANAVEX®3-71 has shown beneficial effects on neuroinflammation and mitochondrial dysfunction.
Huge failure for Biogen
Certain sell-side analysts were predicting that aducanumab would be a big winner for BIIB. Now that it’s no longer viable, Biogen needs a win and a fast one. Just read what Biogen CEO Michel Vounatsos said about Alzheimer’s.
“This disappointing news confirms the complexity of treating Alzheimer’s disease and the need to further advance knowledge in neuroscience. We are incredibly grateful to all the Alzheimer’s disease patients, their families and the investigators who participated in the trials and contributed greatly to this research. Biogen’s history has been based on pioneering innovation, learning from successes and setbacks. Driven by our steadfast commitment to patients and our strong business foundation, we will continue advancing our pipeline of potential therapies in Alzheimer’s disease and innovative medicines for patients suffering from diseases of high unmet need.”
Why AVXL makes sense for Biogen
Look at what happened to BIIB on the news.
Biogen lost $20 billion in market cap. This is an enormous hit for the company to take and no doubt CEO Michel Vounatsos’ job is on the line. He needs to fix it and fix it fast. With a current market cap of just $162 million, AVXL might be the cure. As we said in our last write-up on AVXL:
With the recent independent study being completed, more people in the medical community are starting to pay closer attention to AVXL. We have said repeatedly that most biotechs and researchers have missed the root cause of Alzheimer’s and as a result, have approached treatment in the wrong manner. Anavex is the only biotech with a pathway for a cure. We believe 2019 will be a big year for AVXL.
While we don’t know for sure whether Biogen will buy Anavex or not, we do know that the market is finally starting to pay attention to AVXL again. The stock is up 15% this month alone and up 120% since the beginning of 2019. With or without Biogen, 2019 is looking like the year for Anavex Life Sciences Corp. So far, 2019 has been money in the bank for AVXL shareholders. The big payday many are banking on might just be around the corner. For those that doubt us, I suggest taking a look at our history on AVXL.
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Disclosure: We have no position in AVXL and have not been compensated for this article.