Anavex: Outlook For This Drug Company

More than 5.2 million Americans have Alzheimer’s disease. Another 7.7 million Americans will suffer with it by 2030, and another 16 million will suffer by 2050. And there’s a yearly price tag of $148 billion to treat these patients.

No one is quite sure what causes the disease that gradually robs sufferers of memory and the ability to care for one self. There’s no known cure, and current drugs are only temporary pain relievers.

So wouldn’t it be nice if the drug companies got it right?

Hopes are already mounting that an experimental drug from Elan and Wyeth can do the trick. If they can clear out deposits called amyloid plaque, or simply halt the production, they could help millions of patients, and potentially see annual sales of $13 billion.

But such theories of anti-amyloid could be based largely on “theory and hope,” says University of Southern California psychiatrist Lon Schneider (as quoted by Forbes). “None of the drugs have shown evidence of efficacy yet. Geneticist John Hardy, one of the first to finger amyloid as a suspect, puts the odds at 50-50 that one of the antiamyloid drugs will work.”

Plus, says the Forbes report, people that can function normally also have large amounts of amyloid-beta plaque, which casts doubt on whether the plaque is a cause, a consequence, or simply an indication of an aging brain.

While there’s some hope that Elan and Wyeth can help millions of sufferers, and in the end reap millions for shareholders, some drug developers are turning to the theory of oxidative stress, which damages and destroys cells and is believed to be a primary cause of Alzheimer’s disease.

According to PharmaLive.com, ‘Involvement of Oxidative Stress in Alzheimer’s Disease’ study leader Dr. Nunomura “pointed to extensive evidence of mechanistic and chronological links between oxidative stress and a number of key characteristics of the disease.”

The research also suggested that amyloid beta could be produced by the body as it tries to fight the disease, later turning into an accumulating toxic substance. In other words, there’s a belief that if amyloid was removed during early stages of the disease, it could do more harm.

Alzheimer’s Drug Stock: Anavex Life Sciences (AVXL.OB)

One of the companies basing its Alzheimer’s drug on oxidative stress theories is AVXL.OB. Brian Hicks introduced you to this company in November 2007.

The company’s drug candidate, ANAVEX 1-41, uses sigma receptors to stand guard against oxidative stress and repair cells. And when AV-1-41 goes into Phase I trials, we fully expect the market to re-rate the company upwards to $10 to $12 a share.

The drug is already showing promise in early stages. And in some trials, the drug reportedly provided neurons with protection from oxidative stress, prevented amyloid beta from becoming toxic, and reduced memory deficit in animal tests.

We continue to rate Anavex stock as one of our favorite small cap investments for 2008-2009. And the fact that the stock hasn’t sold off - especially during the recent market turmoil - speaks volumes.

Better, we wouldn’t be shocked if Anavex was a buyout candidate.

One, the company is betting that compounds for Alzheimer’s disease based on its Sigmaceptor platforms will provide it with competitive advantages. Its Anavex 1-41 treatment has demonstrated that the compound “significantly” protects neurons by preventing oxidative stress, which can damage and destroy cells and is strongly believed to be a main cause of many neurodegenerative diseases.

In short, if drugs like Anavex’s can slow or prevent diseases like Alzheimer’s there’s no telling how many buyout offers would flood Anavex offices.

Plus, they’ve got another 11 sigma receptor compounds in pre-clinical development, three of which could soon file for investigational new drug applications this year alone. This includes treatments for epilepsy, colorectal cancer and other solid tumors.

Anavex 7-1037 (for colorectal cancers) preclinical trial treatments, for example, shows a 69% reduction (with minimal adverse effects) in tumor growth.

Two, big pharmaceutical companies may not continue overlooking companies with oxidative stress exposure. And three, the Alzheimer’s drug market could triple to $9 billion by 2017. Why wouldn’t big pharma want a piece of that?

P.S. We’re reiterating a buy on iDcentrix Inc. (IDCX.OB) at market. Soon Federal law will require that most people carry these cards if they want to fly on airlines, or even enter a federal building- strict new security measures to protect us from the next 9/11.

Reports show the White House is in the process of bringing in consultants to help figure out how to set up the Real ID distribution process, as well as how to implement new security measures. Sure, the Real ID Act won’t fully kick in until 2011, but the White House needs to jump on the process “that will take a while and cost a lot.” It’s a process that could soon splash the iDcentrix name across national newspapers.

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