Anavex Life Sciences Corp common stock (NASDAQ: AVXL)
Anavex Life Sciences ripped higher by over 19% at the market open on an update that its phase 2a study to treat mild-to-moderate Alzheimer’s disease using ANAVEX 2-73 has provided positive data in targeting cellular homeostasis.
Is The Gain Warranted?
AVXL reported that after 41 weeks, Alzheimer patients that were taking a daily oral dose of ANAVEX 2-73 in the exploratory, not yet optimized phase 2a clinical trial, showed a stabilization of cognitive and functional measures. The treatment was well-tolerated with no serious adverse events.
George Perry, PhD, Dean and Professor at the University of Texas at San Antonio and Editor-in Chief of the Journal of Alzheimer’s Disease, commented, “Although this is an open label study with 32 patients, I have never seen mild-to-moderate Alzheimer’s patients maintain near baseline cognitive and activities of daily living function and positive correlation with all other measures over a 41-week trial period in any prior study with an approved or experimental drug. It is quite plausible that complex CNS diseases like Alzheimer’s may require a comprehensive approach, including restoration of cellular homeostasis.”
While the news put out by AVXL reads as a significant validation, investors are already reading between the lines, with AVXL already giving back a substantial portion of the early morning gains, now up only 11% (9:51am), on heavy volume.
Contradiction In Opinion
While AVXL is trading higher on the news, investors that follow AVXL have expressed doubt in the drug’s efficacy and have been throwing cold water on the rally.
AVXL is also providing a bit of caution to investors. Christopher Missling, President and CEO of Anavex, told the market, “We are encouraged, however, we should be reminded that these endpoints are exploratory and need to be confirmed in a larger study, for which planning is underway.”
With the stock trading at $3.70 a share right now (10:00am), AVXL has been in battle mode to protect its gains. With both analysts as well as the CEO offering a cautious view, investors might want to watch the action from the sidelines until a clear analysis and additional data from AVXL is released.
Disclosure: I have no position in any stock mentioned and no plans to initiate any positions within the next 72 hours.
I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.
[Image Courtesy of Wikipedia]