Anavex Shares Plummet After Company Discloses SEC Investigation and Subpoena
December 29, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Shares of Anavex Life Sciences (AVXL) are down more than 15 percent after the company revealed in a 10-K filing it received a subpoena from the U.S. Securities and Exchange Commission regarding “unusual activity” in the market over company shares.
Anavex said the SEC has launched an investigation relating to the trading and that it is fully cooperating with the federal government. Additionally, Anavex said it “is unable to predict when this matter will be resolved or what further action, if any, the SEC may take in connection with it.”
Company stock saw a morning low of $5.54 per share. In November, stock was as high as $14.33 per share. Shares had been trading as high as $14.89 as the company made headway on its Alzheimer’s treatment.
Unlike other major pharmaceutical companies exploring the buildup of Amyloid plaque as the cause of Alzheimer’s, pint-sized Anavex is focusing on oxidation and nitration in the brain as the driving cause of Alzheimer’s. The company’s lead product is Anavex 2-73, an oral treatment being developed to “modify” Alzheimer’s disease, rather than treat it. The drug candidate “inhibits oxidation, nitration and cell death by inhibiting the cascade which follows NMDA receptor over-activation,” a Seeking Alpha report said. Mouse models have shown positive effects in treating the dementia disease, the company said. A recent Phase I clinical trial determined safe dosage levels and results from a Phase II trial are expected to provide greater efficacy data.
Alzheimer’s disease, a type of dementia, affects 15 million people worldwide, a number that is expected to grow to 75 million by 2030 due, in part, to the lack of effective treatments. In total there are about 50 million people suffering from some form of dementia worldwide. There are currently no drugs that target the cause of Alzheimer’s, the most common form of dementia. There are several drugs on the market that help manage Alzheimer’s, but none treat the primary cause, including Eisai Co.’s Aracept. According to a Bloomberg report, there have been more than 100 failed efforts to develop a treatment for Alzheimer’s disease since 1998, including two from Roche (RHHBY). A 2014 report in Alzheimer’s Research UK showed 244 Alzheimer’s drugs were tested between 2002 and 2012, but only one was approved—Lundbeck A/S’s Ebixa, Bidness Etc. reported.
This morning Anavex reported it had cash on hand of $15.3 million and reported a net loss of $12.1 million for 2015.
“Anavex had a remarkable year in 2015 with the achievement of several clinical and corporate milestones, including significant advancement of ANAVEX 2-73 for the treatment Alzheimer’s disease,” said Christopher Missling, president and chief executive officer of Anavex, said in a statement. “We plan to continue to operate in a fiscally responsible manner and we look forward to providing additional updates in 2016 which include the Company’s plan to advance ANAVEX 2-73 for the treatment of Alzheimer’s disease in a larger double-blinded, randomized, placebo-controlled Phase II/III trial as well as initiating a human clinical trial with ANAVEX 2-73 in an additional indication.”