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Disclaimers .. Disclaimers… But It Has Been Said by Chief Medical Officer That…..
I place a standard disclaimer so that I won’t be sued if somebody loses any money following this blog. Just read for entertainment (isn’t it pretty funny? 😉 ) but don’t invest. LOL. Nevertheless, the Chief Medical Officer on March 14, 2022 has spoken that in Phase 2b/3 Alzheimer’s trial there are patients who have recovered or are recovering from lower cognition or on their daily activities scores. He did not put any number of this outcome. I have presented for years this illustration of my expectations for phace 2b/3. Soon, the results of Alzheimer’s Phase2b/3 will be released as in May 2022 the last patient is to be dosed for full 48 weeks.
The best way to interpret this illustration is to assume that 33% of patients are going to experience “recovery” classified here as “No Decline in MMSE” scores and marked in red color. Next 33% after 4 years will succumb to modest decline. And final 33% in 4 year will “dropout” from the trial, or either deteriorate or die.
The Phase 2b/3 is dosing for 48 weeks where the illustration expects the red coded class of patients to be at sligthly more than 60%. What is the shock value of that happening in the down market as it now stands?
I am not an astute observer.
I have my disabilities. I suffer from short and long memory problems and among others have problems with keeping track of time. Nevertheless, I see that the CNS and Alzheimer’s investment corner of the market for early companies like $AVXL and other similar is primarly playground of retail investors. Consequently, they follow hype and risk a quite some in game of great win vs. limited loss. This is the domain of gambling not investing. Each company in this game lives through short flash of hype leading to peak in price on sheer promise of being 10 or 50 bagger in “near distant” future. The money of the gamblers flows from one company to another on the great expectations.
My attempts at playing the game of hype had failed as it is not my temperament. I was obseving how the speculative juices flowed from one company to another and at every turn the players experience disappointment as the data would never suffices to make them stick around. On the other hand, some players are building on these expectations to shear the sheep which follow the newest false prophet, of their own making. In this crowd the judgement is lacking and the roll of the dice what attracts them.
The Aduhelm succesful aproval has attracted gamblers from different corners of the market. The hype did not spare everybody who was already presenting vaugely good data. The hype contagion gone from one to another. In this game you can either scalp the gamblers or start with 20 or so startups and follow them to success or failure over 10 years. Few can always pan out to different degrees. Few will fall by the wayside. Those scalping know the game, those who stick to such portfolio study their companies and look for signs of future success or failure. Yet, evaluating companies in biotech is extremely difficult as human biology is extremely complex and disappointment are a plenty and seredipity rare.
There has been a moment in the story of Anavex when Dr. Missling has started “giving color” to standard communications. This might be imprudent or migth be a wink wink: “we got results”. For those who tried to elucidate more information from the results of the trials and papers that was just corroboration of their own work.
With the rather uninspiring roll out of Aduhelm the gambling crowd with false prophets has moved somewhere else. Partly, this could have been also the loss of appetite for risk-on. Whatever the reason is the fact is that the game has changed. Alzheimer’s small caps are widow makers. The analysts might see the potential but the fear of failure (probability 98%) hangs over the stock. Notwithstanding the drop in price, the institutional ownership has not moved signaling that there is confidence in the Anavex prospect even if limited to 26,000,000 shares (34% of float).
What will move the share price? Just the 60% recovering Alzheimer’s patients or possible deal with Big Pharma which can come later? Will the share price move decently in down market?
All longs know that these question will be answered still in this year.
Though the share prices are falling, for both $AVXL and $SAVA (31% of float) (see illustration low) the institutional investors hold their shares. If indeed $AVXL delivers what I speculate here is entirely feasible from the published data from phase2a and many papers and some company officers, then the parity in institutional investement confidence between these two companies will be altered to the advantage of $AVXL
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