Spirit of the Coast Analytics
The SOTC Analytics Mission
SOTC Analytics strives to report medical intelligence pertaining to neurodegenerative & neurodevelopmental disorders to include Alzheimer's Disease, Parkinson's Disease, Rett Syndrome, Angelman Syndrome, Fragile X, and more.
We follow ongoing trends in clinical research, recap important peer-reviewed medical journals, and chronicle ongoing events at Anavex Life Sciences corp. ($AVXL), which we believe may have the most promising emerging therapeutics cross-central nervous system (CNS).
2023: Approaching Commercialization
Bottom-line Up Front: Anavex closed out 2022 with the successful completion of a major milestone - the Alzheimer's 2b/3 trial. SOTC Analytics fully expects the company to expeditiously seek partnership in order to more quickly bring Blarcamesine to market. We assess it is likely Anavex will pursue European approval first and foremost, as they designed the 2b/3 trial to accommodate EMA Alzheimer's guidance, and the European population has the absolute most favorable genomic qualities for effective therapy.
AVXL just completed their long-awaited Alzheimer's 2b/3 trial in Dec 2022 with statistically significant and clinically meaningful results surpassing existing therapeutic compounds to include emerging MAB treatments like the recently approved Aducanumab & Lecanemab.
The company is likely positioned to complete and present top-line data from their ongoing pediatric Rett Syndrome trial (EXCELLENCE) by mid-2023.
Blarcamesine, an S1R & M1-M4 muscarinic agonist is capable of rescuing cellular homeostasis throughout the body, from the CNS to the heart.
Reductions in neuroinflammation, expression of neurotransmitters, protein clearing, oxidative maintenance, restorative autophagy, and mRNA transcription likely prompt cascading beneficial effects.
Anavex Life Sciences Corporation (AVXL) is expecting late-stage Rett Syndrome in 2023 for their lead drug candidate Blarcamesine (Anavex 2-73). Blarcamesine is potentially the most promising remedy for holistic neurodegenerative and neurodevelopmental diseases in development, thanks to its wide-sweeping mechanism of action (MOA) revolving around Sigma-1 receptor (S1R) & muscarinic agonist properties. The confidence in this thesis grew explosively in 2022 as Anavex unveiled the most positive phase 2b/3 Alzheimer's data in history. Considering a >4-year cash runway of ~$149m, no expectation for near-term dilution, and short-term pivotal trial outcomes, the current $875m (~$11.25 per share) market cap is significantly undervalued and should currently surpass $5B (~$64 per share). When taking into account Biogen and Eisai explosive growth post-successful Alzheimer's trial data readouts for Aducanumab and Lecanemab, even $5B is extremely conservative in our opinion. Anavex maintains exceptional room for growth beyond Alzheimer's, featuring an extensive pipeline in large unmet needs, a slew of orphan disorders, an immaculate safety profile, and an entire platform of other early-stage drugs like Anavex 3-71, Anavex 1-41, and Anavex-1066 which provide long-term growth potential.
Wide-Sweeping Therapeutic Potential
Graphic 2: Sigma-1 WT Gene Prevalence by Population Studies
Graphic 3: Hypothesized Revenues for Blarcamesine in U.S. Alzheimer's Market
Alzheimer's Disease 2b/3 Results & Competitor Comparisons
Of course, all of this genomic data and market theorization only matters in the event that Blarcamesine (and the rest of the pipeline) works - so does it? Absolutely it does. In Nov/Dec 2022 Anavex and Eisai both released their latest pivotal trial data at CTAD 2022. Lecanemab data was a marked improvement over its predecessor - Aducanumab (marketed as Aduhelm). Despite these improvements, their CDR-SB primary endpoint and key secondary endpoints including ADAS-COG (cognitive) and ADCS-ADL (activities of daily living) scores failed to meet clinically meaningful thresholds. Lecanemab patients still declined - albeit slower than placebo. Meanwhile, Anavex's co-primary endpoints (ADAS-COG/ADCS-ADL) and key secondary endpoint (CDR-SB) met statistical significant outcomes with clinically meaningful cognitive and functional results - a feat that has never been accomplished in a pivotal trial for Alzheimer's disease. Blarcamesine-dosed patients - especially those on the high dose - improved over baseline. They reversed disease pathology and began to restore their memories and functional abilities. Lecanemab just received accelerated approval by the FDA, even with their lackluster outcomes. Efficacy results aside, it is likely Lecanemab will be at least 4 - 4.5x the cost of Blarcamesine, as Eisai announced a $26,500 annual cost for patients and need for multiple expensive MRI-imaging sessions to confirm ARIA. This expense is above what ICER considers to be cost-effective. Please see graphic 4, 5, & 6 below for TLD and comparative analysis conducted by Anavex and SOTC Analytics. [Additional comparative cost/data analysis is forthcoming]
Anavex approached their trial design deliberately with EMA (European) approval as a primary consideration. Unlike the Aducanumab and Lecanemab trials (ENGAGE, EMERGE & CLARITY), the Anavex Alzheimer's 2b/3 utilized guidance directly from the EMA's 2018 Alzheimer's instruction. This is important because so far, MAB treatments like Aducanumab and Lecanemab have failed to garner approval in Europe and Australia. Reason being, the EMA noted that although Aducanumab reduces amyloid beta in the brain, the link between this effect and clinical improvement had not been established. In addition, the studies did not show that the medicine was sufficiently safe. Therefore, the EMA's opinion was that the benefits did not outweigh the risks.
Anavex has excellent opportunity for approval in Europe due to their deliberate accommodating design. These are some of the items implemented towards this end.
Favors co-primary endpoints with a cognitive outcome (ADAS-COG) and a functional outcome (ADCS-ADL). [Anavex, Eisai/Biogen]
Secondary endpoint with global measure (CDR-SB). [Anavex, Eisai/Biogen]
Company clearly identified the 'responder' criteria. [Anavex, Eisai/Biogen]
Beyond those design considerations, differences between FDA & EMA Alzheimer's guidance is favorable towards Blarcamesine as shown below:
EMA favors disease modification whereas FDA favors a 'persistent effect on disease course.
This is interesting because when Lecanemab patients stopped dosing, the little improvement they had began to once again degenerate.
Blarcamesine is easily identifiable as the only true disease modifying compound to complete pivotal trials.
EMA favors trial designs showing dose dependency (30mg + 50mg).
EMA approves less drugs than the FDA, but the EMA places higher value on high therapeutic value.
From a semi-recent analysis:
Expedited drug approvals requiring high therapeutic value: 45% (FDA), 67% (EMA)
Standard drug approvals requiring high therapeutic value: 13% (FDA), 27% (EMA)
"In mild to moderate AD to accept an effect on cognition it should be clinically meaningful. The clinical relevance should be confirmed by an effect on function or clinical global assessment in a co-primary endpoint approach."
More information can be found here, but as a brief summation, Anavex has postured themselves in clinical design to approach the EMA for approval. Additionally, their 2b/3 outcomes meet approval preferences by the EMA, being an efficacious, inexpensive, and safe drug. In our opinion, Lecanemab still fails to meet many of the criteria set out by the European regulatory agency, and Lecanemab is unlikely to garner approval there; we give an ~20% chance.
Graphic 4: Blarcamesine TLD Showing Large Patient Populations Improving Over Baseline
Graphic 5: Blarcamesine Had Faster and More Efficacious Response on CDR-SB Over Lecanemab [Primary Lecanemab Endpoint Despite Issues with Accuracy]
Graphic 6: Comparing a Number of ADAS-COG Cognitive Datasets to Include Anavex 2a & Lecanemab [Anavex 2b/3 Likely Exceeds the 2a in Responders]
United States Alzheimer's Market Size Conclusion
Unknowns & Assumptions
Most of the analysis within this article is contingent upon the drugs MOA working as intended and as described by the company/peer-reviewed journals. Deviation from this hypothesis would likely change market size, chances of approval, and indication swath. In addition, it is important to note potential partnership and marketing costs which would devalue the best case share price presented above. It is also possible the company ultimately fails its current clinical trials, or fails to maintain its coffers - although unlikely considering its multi-year runway. While it is technically feasible for Anavex to be surpassed in clinical development by a competitor, this seems unlikely as there are few companies running like-trials, and most are not as far in development. Finally, while the author regulated as many variables and biases as possible during the indication prioritization analysis, the author is an expert is aerospace and does not have a formal background in biotechnology - please view this analysis with a level of speculation and set expectation.
Exceedingly Bullish on Long-term & Short-term Company Growth
With the extraordinary reward presented with Anavex’ s potential clinical success, a long position in Anavex appears to be exceptionally warranted. All trials to date have had overwhelming efficacy. Anavex is breaking the mold in precision medicine and in the future has potential to surpass even the largest of existing biopharmaceutical companies in market capitalization (exceeding $100B) over the long-term. In the short-term, Anavex represents an extremely undervalued prospect with an absolute minimal fair value around $55-65 per share. 2023 will be an exciting and pivotal moment for Anavex as they pursue approval for Blarcamesine in Alzheimer's disease, and likely Rett Syndrome later in the year. As other biotech developing S1R agonists continue expanding, it is increasingly likely S1R platforms will become a healthcare staple. Furthermore, it is my strong belief that Blarcamesine’s address of sweeping dysfunction presents the drug as the best catch-all medicine in development today. The current (Jan 2023) Anavex pipeline can be seen below, stay-tuned in the 2023 Compendium section for updates throughout the year and feel free to view archived analysis from 2022 as well.
Anavex Pipeline: Jan 2023