H.C. Wainwright & Co. analyst Dr. Ram Selvaraju, in a research report published on October 18, 2024, reiterated a Buy rating on Anavex Life Sciences Corp. (AVXL:NASDAQ) with a price target of US$40.00. The report follows Anavex's announcement of encouraging preliminary electroencephalography (EEG) biomarker results from Part A of the ongoing Phase 2 clinical study of ANAVEX3-71 for schizophrenia treatment.
Selvaraju highlighted the significance of these results, stating, "Preliminary results demonstrated a dose-dependent effect of ANAVEX3-71 on two key EEG biomarkers in patients with schizophrenia. Treatment with ANAVEX3-71 vs. placebo resulted in improvements in 40 Hz Auditory Steady-State Response (ASSR) Inter Trial Coherence (ITC) and Resting State Alpha Power."
The analyst viewed these developments positively, noting, "These results provide evidence of CNS target engagement and potential therapeutic effects of ANAVEX3-71 in schizophrenia. The observed changes reversed known EEG and ERP biomarker abnormalities associated with schizophrenia."
Regarding Anavex's lead candidate, blarcamesine, Selvaraju stated, "Anavex remains committed to completing the Marketing Authorization Application (MAA) submission to the European Medicines Agency (EMA) under the Centralized Procedure petitioning for approval of blarcamesine for treatment of Alzheimer's disease (AD) in 4Q24."
The report also highlighted Anavex's progress with other clinical programs, including a pivotal Phase 2b/3 trial in Parkinson's disease and potential trials in Rett syndrome and Fragile X Syndrome.
Selvaraju's valuation methodology for Anavex Life Sciences is based on a discounted cash flow (DCF) approach. He explained, "We utilize a discounted cash flow (DCF)-driven methodology, which ascribes a total value of roughly US$3.25B to blarcamesine alone without ascribing value to any other pipeline assets. We employ a 50% probability of approval in Rett syndrome; 60% in Parkinson's disease dementia (PDD); and 50% in AD."
The analyst added, "Further, we apply a 12% discount rate and 1% terminal growth rate. We derive a total firm value of ~US$3.4B, which yields a 12-month price objective of US$40 per share, assuming 84.8M shares outstanding as of end-F2Q25."
Selvaraju also outlined several risk factors, including potential negative clinical data, regulatory approval challenges, and commercialization difficulties.
In conclusion, H.C. Wainwright & Co.'s maintenance of a Buy rating and US$40 price target reflects a positive outlook on Anavex Life Sciences' clinical progress and potential in developing treatments for neurological disorders. The share price at the time of the report of US$5.51 represents a potential return of approximately 626% to the analyst's target price, highlighting the significant upside potential if the company's clinical development plans prove successful.
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Disclosures for H.C. Wainwright & Co., Anavex Life Sciences Corp., October 18, 2024.
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H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Anavex Life Sciences Corp. (including, without limitation, any option, right, warrant, future, long or short position). As of September 30, 2024 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Anavex Life Sciences Corp.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Mr. Selvaraju, who is [the][an] author of this report, is the Chairman of and receives compensation from Relief Therapeutics Holding SA, a Swiss, commercial-stage biopharmaceutical company identifying, developing and commercializing novel, patent protected products in selected specialty, rare and ultra-rare disease areas on a global basis ("Relief"). You should consider Mr. Selvaraju's position with Relief when reading this research report. The firm or its affiliates received compensation from Anavex Life Sciences Corp. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Anavex Life Sciences Corp. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Anavex Life Sciences Corp. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.
