Roth Capital Partners analyst Jotin Marango resumed coverage of Anavex Life Sciences (NASDAQ:AVXL) with a “buy” rating and $10 price target. The stock closed at $1.82 on Jan. 25.
“We like the breadth and optionality of the Anavex pipeline, which blends together a non-traditional neuro target (sigma-1 receptor), biomarker-guided clinical strategy, orphan neurodevelopmental disorders (our focus: Rett syndrome), as well as canonical neurodegenerative diseases (our focus: Alzheimer’s),” Mr. Marango said.
Regarding the company’s Rett program, he views the ongoing proof-of-concept Phase 2 study of Anavex 2-73 as “high risk and high reward.” Rett represents an orphan population with no approved therapy or standard of care, “which in our view could justify an accelerated approval based only on data at hand, and premium orphan [drug] pricing,” he added.
In addition, he said success in Rett could trigger a quick lateral expansion into other neurodevelopmental disorders, multiplying the drug’s orphan commercial opportunity. Citing the FDA’s draft guidance for Alzheimer’s drug development, specifically encouraging biomarker identification and signaling a more flexible regulatory path toward accelerated approval in early disease, Mr. Marango said “we believe Anavex is now a company at the right time and right place.”
He said the ongoing Phase 2b/3 study of Anavex 2-73 in Alzheimer’s is grounded on a “biomarker carve-out emerging from past clinical work, which is expected to control population heterogeneity and flesh out clinical benefit.”
While a readout of the Phase 2b/3 trial is some distance down the road, “we view it as lower risk within the pipeline, and mechanistically differentiated in the larger landscape dominated by amyloid-and tau-targeted approaches,” he added.
