Shares of clinical-stage biotechnology company Anavex Life Sciences, Corp. (AVXL) have gained 181.5% over the past year. The company is focused on developing therapeutics for neurodegenerative and neurodevelopmental disorders. These include Alzheimer’s disease, Parkinson’s disease, Rett Syndrome, and other CNS diseases.
In a major positive, Anavex has achieved full enrollment in three Precision Medicine clinical trials. These include the Phase 2b/3 ANAVEX 2-73 trial in Alzheimer’s; the Phase 2/3 ANAVEX 2-73 trial in Rett syndrome; and Phase 1 trial of ANAVEX 3-71.
Further, Anavex is expanding its pipeline with planned studies of ANAVEX 2-73 in an imaging-focused Parkinson’s disease clinical study; a Phase 2/3 study in Fragile X Syndrome; and a Phase 2/3 trial for a new, rare-disease indication.
With these developments in mind, let’s have a look at what’s changed in Anavex’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Anavex’s top two risk categories are Tech & Innovation and Finance & Corporate, contributing 48% and 26%, respectively, to the total 31 risks identified. In its recent annual report, the company has added two key risk factors under the Finance & Corporate risk category.
First, Anavex noted that its stock price has seen gyrations and could be volatile in the future as well. Furthermore, broader market and industry factors may harm the price of the company’s common shares, regardless of Anavex’s operating performance. If litigation is instituted against Anavex due to its share price volatility, then the company may have to incur significant costs. Any diversion in management’s focus could also adversely affect Anavex.
Anavex also highlighted that if its shares become the target of a short squeeze, then investors could potentially lose a significant part of their investment.
Compared to a sector average of 24%, Anavex’s Tech & Innovation risk factor is at 48%.
Hedge Fund Activity
TipRanks data points that Wall Street’s top hedge funds have decreased holdings in Anavex by 780 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock.
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