Anavex Alzheimer's Drug Plays Losing Game Against Placebo Effect

Shares of Anavex Life Sciences (AVXL) plunged Wednesday because the months-long stock promotion campaign claiming a cure for Alzheimer's disease lost its sizzle.

A small group of Alzheimer's patients treated with Anavex's experimental drug Anavex 2-73 are exhibiting signs of memory loss, faltering cognition and inability to take care of themselves over time, according to updated results of a clinical trial presented Wednesday.

Anavex, in a press release, claims the Alzheimer's patients are "stable" over 31 weeks of treatment with 2-73 and that this is a "positive outcome."

But a scientific poster of the study data presented at the Alzheimer's Association International Conference shows 31-week declines in the patients' MMSE score, a measure of memory loss, and the ADCS-ADL, an assessment of daily living activities.

Last fall, Anavex presented data showing Alzheimer's patients treated with 2-73 for five weeks had improvements on five of six cognitive tests. After 31 weeks of treatment, only 3 of the 6 cognitive tests showed improvement.

Anavex shares recently fell 39% to $4.53 after the new 2-73 Alzheimer's data were disclosed Wednesday afternoon. The stock traded over $8 per share, essentially doubling in price, in the days leading up to the updated 2-73 study results.

The stock exhibited the same pump-and-dump trading pattern last fall when results from the 2-73 study were first presented.

Bad clinical trials produce bad data, and Anavex is conducting a garbage study.

The only way to produce credible data in Alzheimer's is to conduct randomized, double-blind, placebo-controlled studies. One group of patients is randomized to receive a drug, the other group of patients received a placebo. Neither the patients nor their doctors know which arm of the study they're in. These studies need to run for at least one year because it takes that long to detect meaningful changes in memory, cognition and functions of daily living of patients.

Even when a company designs an Alzheimer's clinical trial correctly, the failure rate is basically 100%. Ask TauRx Therapeutics.

The Anavex study is small -- just 32 patients enrolled -- and lacks a control arm of any kind. All the patients were selected and enrolled at a single hospital in Australia. All were treated with 2-73.

The handful of Alzheimer's patients in the Anavex study improved over a short period of time, as shown last fall, because they were easily convinced the drug they were taking would help them.

But as shown Wednesday, that placebo effect is wearing off.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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