Maxim Group slashed its price target to Anavex Life Sciences (NASDAQ:AVXL) to $5 from $14, saying the company’s definitive proof-of-concept studies will take time and money. The stock closed at $2.54 on Feb. 13.
“While the company has $28-million in capital today, we believe a lot more capital will be needed as the next phases of clinical development get underway,” writes analyst Jason Kolbert.
The company’s Anavex 2-73 is an orally available small molecule being investigated for the treatment of Alzheimer’s disease (AD) as a potential effective add-on to donepezil.
Anavex 2-73 has the potential to prevent, halt, and/or reverse the course of AD. The drug is based on the theory that protecting against misfolded proteins and oxidative stress are important events in the development of AD. According to Mr. Kolbert, this differs from widely accepted theories, in which the formation of beta-amyloid and/or tau proteins is thought to cause the disease.
“In our view, following the conclusion of the Phase 2a trial in AD, the expectation was that the Phase 2/3 study would initiate later in 2017,” he said. “However, this would have been without incorporating new genomic biomarker data from Anavex 2-73 responders to enrich the trial,” he added.
Mr. Kolbert said the company made a strategic decision to evaluate full genome sequencing from Phase 2a patients to design a better Phase 2/3 program and the trial is expected to start in the first half of 2018.
