Anavex Life Sciences (NASDAQ:AVXL) shares plunged this week on mixed results from its Rett Syndrome clinical study but analysts at Dawson James still see the stock as a worthwhile investment.
The company reported topline results from its Phase 2/3 EXCELLENCE study in pediatric Rett Syndrome which had enrolled 92 patients aged from five to 17 years.
Rett Syndrome is a rare genetic mutation affecting brain development usually in girls for which there is no cure but symptoms can be managed with medication, physio- and speech therapy and nutritional support.
After 12 weeks, the company’s therapeutic ANAVEX2-73 resulted in an improvement in the key co-primary endpoint Rett Syndrome Behavior Questionnaire, a detailed 45-item questionnaire for assessing the disease’s characteristics completed by the patient’s caregivers.
It also reported positive Real World Evidence feedback from patients under its Compassionate Use Authorization.
The other co-primary endpoint of the study, the Clinical Global Impression Improvement scale, however, was not met.
“We do not see the miss on the second endpoint as ‘doom and gloom,’” the Dawson James analysts wrote in a note to clients.
“It’s a big ask for a very small study in a severe disease. With a larger N value, we expect they could have met the endpoint.”
The analysts maintained their ‘Buy’ rating on the stock which traded hands at about US$6 on Thursday afternoon. It is down about 36% week-over-week.
“Given the safety profile and unmet medical need, we believe there is a discussion to be had with regulators,” the analysts wrote. “As such, we are making no changes to our rating or estimates.”