Anavex Life Sciences Corp. (NASDAQ:AVXL) shares are on a 10% rise after biotech firm Lilly’s drug Solanezumab (“Sola”) just failed its third Phase 3 EXPEDITION 3 trial in early-stage Alzheimer’s Disease (AD), which very well could terminate all clinical development.
Maxim analyst Jason McCarthy reiterates a Buy rating on shares of AVXL with a $15 price target, which represents just under a 261% increase from current levels.
From the analyst’s perspective, this could also signal the end of the line for the “Amyloid Hypothesis” of AD, the idea that Aβ plaques stemming from faulty cells in the brain drive AD progression. However, one drug maker’s failure could be another’s path to success, and Lilly’s “Sola” failure could bode well in clearing the path for AVXL’s Anavex 2-73.
AVXL’s AD drug Anavex 2-73 which is “well-tolerated and has better brain penetration than an antibody” and in an ongoing Phase 2a trial is anticipated to produce a 12-month data read-out by the first half of 2017. At 9 months, the patients are already maintaining stabilized cognitive and functional measures from baseline. The analyst adds, “Pending continued positive data, Anavex plans to move 2-73 into a larger doubleblinded, randomized, placebo-controlled P2/3 study.”
“The remaining question was how would this impact patient cognition and function? We now know that the impact is/was not significant. This suggests that Aβ plaques may be just a piece of the puzzle and it may be necessary to target more broadly upstream to restore proper CNS cell function, which includes proper elimination of misfolded Aβ proteins. This is where Anavex’s 2-73 has shown promising early data so far…and as a reminder has attracted the interest of Biogen (in vitro experiments underway),” McCarthy contends.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Jason McCarthy is ranked #4,148 out of 4,245 analysts. McCarthy has a 30% success rate and faces a loss of 12.4% in his yearly returns.
TipRanks analytics indicate AVXL as a Buy. Out of two analysts polled by TipRanks in the last 3 months, 100% are bullish on Anavex stock. With a return potential of nearly 202%, the stock’s consensus target price stands at $12.50.