Avexa - AVX

[Damo79]

Here's a heads up on a company I've just bought into. Avexa is developing an AIDS antiretroviral drug called Apricitabine (ATC). Google it, there's a fair bit of info out there. AVX owns the rights to market ATC worldwide, and has just finished Phase 2B clinical trials.

For those that aren't to sure about the clinical trial process, here's a quick explanation. First you have pre-clinical data. ie. someone discovers a compound that can stop the HIV virus replicating in a test tube situation. Phase 1 is carried out on healthy individuals to make sure they don't drop dead from toxic shock (i'm exagerating a bit), so they start with a very small dose and gradually increase it while monitoring the patients very closely. This sort of trial is usually carried out on struggling uni students :p Then you have the Phase 2A trials which are carried out on people who actually have the disease. They are done on small numbers of people, and it is these that give you the first indication of whether the drug is actually going to work. Of course they're still monitoring for any adverse effects very carefully. For Phase 2B, the number of patients is generally increased, different doses are tested and it is carefully compared against equivalent medication. Finally you have Phase 3 trials, where a much larger patient group is used over a longer term. Each stage of the trial process passed succesfully increases the probability that the drug will make it to the market.

Now here's an important point: every anti HIV drug that has passed Phase 2B trials to date (about 30) has eventually made it to the market. This is a bit different to medication for other less serious conditions. Anti-HIV drugs are also rushed through the system, so to speak, so lag times can be shorter.

Now as to where Avexa is up to. They finished the Phase 2B trials and are preparing for Phase 3. They have reported VERY successful results from the 21 day time point of the 2B trials, and will soon be ready to report the 24 weeks results. Every indication is that ATC is safe, and at least as effective against the HIV virus as any other equivalent drug. It aslo works against forms of the virus that are resistant to other leading anti-retrovirals.

As always, this sort of company is hard to put a value on. Their market cap is $220m, but they have about $75m in cash and no debt. That's enough to complete the Phase 3 clinical trials. Now for a company developing a drug that looks like it could get a fair percentage of the anti-HIV market, it seems very cheap. Importantly, they'll be releasing the final 2B report soon, so that could give this a kick. Also could be a possible takeover target for a big Pharma that want to use ATC in combo with a current HIV protease inhibitor or the like.

Recommend reading latest reports and having a look.

Cheers
Damo

Disc: bought yesterday

[OneUp]

Interesting. How big is the anti-retro viral HIV market?

Worth keeping in mind generic drugs makers in India will just copy the drug and sell to Africa (not that they could afford to pay anyhow).

[Damo79]

Global anti HIV medication market was ~US$7 billion in 2006. Mostly from the US and Europe.

[Damo79]

This is from a Bell Potter research report on the 9th of August:

"Our earnings estimates continue to be based on future sales from ATC only. At this stage,
we estimate approximately 60% of HIV cases are treatable with ATC. With average HIV
drug treatment costs estimated at $3,500 per annum, first year sales estimates of ATC in
the US total $62.5m. This represents 5% market share. We continue to apply an 85%
probability-weighting to reflect ATC’s Phase 3 stage of development. Given the scope of
the HIV market, we believe AVX will require a partner for sales, marketing and distribution.
A deal of this nature implies AVX would likely retain 40% of sales.
Buy 2 rating reiterated, probability-weight $1.35 valuation"

An important point for me is the revenue estimate, and thus their valuation, is based on a 5% market share. My take on the results they've reported on the Phase 2b trials is that they could get substantially more than that since ATC is active against several NRTI resistant forms of the virus. So a 20% market share could give a sales revenue of $250m... and that's just the US...

I expect (read as 'hope') that the AVX share price will start moving steadily upwards to reflect a more accurate valuation of their lead drug, driven in particular by furhter announcements reporting the longer term 2B trial results.

Cheers
Damo

[Damo79]

Trading halt today. And there's been a 12% increase in the share price since my first message on AVX 5 days ago, so indications are that all is good :)

Did anyone else have a look at this company?

[Damo79]

Remarkable good results from the Phase 2b 24 week data as expected. A bit of a lackluster immediate response. Think I might top up and wait for this info to be digested for the market.

http://imagesignal.comsec.com.au/asxdata/20070904/pdf/00756070.pdf

[tommy]

Excellent results DAMO, I'm bought some today! This is really promising, cheap takeover target at the current price levels.
Wait until this hits the news in the media, that's when interest will increase.

Over 80% of patients on ATC achieve undetectable HIV after 24 weeks
4 September, 2007

Melbourne-based biotechnology company Avexa Limited (ASX:AVX) announced today positive 24 week
data from the phase 2b clinical trial of apricitabine (ATC). The data demonstrate that, in over 80% of
patients treated with ATC, the level of HIV in the blood was reduced to below detectable levels after 24
weeks. This was markedly better than those patients on the 3TC control.

“The level of response seen with ATC is remarkable for these patients, all of whom have already failed
other drug regimens. The results indicate that with ATC, even drug-resistant patients with multiple previous
treatment failures can achieve a response approaching that of previously untreated patients on first line
therapy”, said Dr Julian Chick, CEO of Avexa.

Avexa also reported that in analysing CD4 cells of patients, there were CD4 cell increases of 28 – 39% and
73 – 86% in the ATC 600mg and 800mg arms respectively, compared to the 3TC treated patients. CD4
cells are essential for a healthy immune system, and it is these cells that are primarily destroyed by HIV
infection. “This indicates that the potent suppression of HIV by ATC is benefiting the patients’ immune
system, and is an important sign of the long term clinical benefit of treatment with ATC” said Dr Chick.

Avexa reported that no virus resistant to ATC has been identified after 24 weeks of therapy, which is
consistent with the potent suppression of HIV replication and the ideal properties of a long-term anti-HIV
therapy.

The safety profile of ATC continues to be excellent. No serious adverse events related to ATC have
occurred to date and no patients have withdrawn from the trial because of any side effects related to ATC.

Furthermore, 23 patients out of an eligible 24 have entered the ATC extension study. Two patients were
ineligible for inclusion in the extension study. “The fact that such a high percentage of patients continue to
enter the extension study tells us that these patients and their clinicians believe that ATC is providing
meaningful therapeutic benefit in their treatment of the HIV disease” stated Dr Chick.

“These results clearly indicate that ATC regimens are potentially as effective, safe and durable as current
first line regimens, but for drug-resistant patients that have already failed other drug regimens. This is
excellent news for drug-resistant patients in need of potent, durable but safe new HIV therapies. These
data will be submitted for presentation at a forthcoming international HIV conference ” said Dr Chick.

For more information:
Dr Julian Chick Dr Jonathan Coates Dr Susan Cox
Chief Executive Officer Chief Scientific Officer Head of Development
+61 3 9208 4300 + 61 3 9208 4300 +61 3 9208 4300

Avexa Limited
ABN 53 108 150 750
576 Swan Street Richmond
Victoria Australia 3121
Telephone 61 3 9208 4300
Facsimile 61 3 9208 4004
Website www.avexa.com.au
www.avexa.com.au
Avexa Limited is a Melbourne-based biotechnology company with a focus on research and development of drugs for
the treatment of infectious diseases. Avexa has dedicated resources and funding for key projects including its HIV
integrase program and an antibiotic program for antibiotic-resistant bacterial infections. The Company’s lead program
is apricitabine (ATC), an anti-HIV drug which has successfully completed the 24 week dosing of its Phase 2b trial. Avexa
continues to progress ATC towards Phase 3 trials. Avexa has entered into a collaboration with TargetDrug in China to
identify new CCR5 inhibitors for the treatment of HIV infections and has an exclusive option to license TargetDrug’s
lead CCR5 inhibitor, nifeviroc.
Technical Details
AVX-201 is a 48 week trial with three segments. For the first 21 days, patients received 600mg or 800mg
ATC twice daily, or continued on 3TC, without changing their background drug regimen. At day 21, patients
continued on ATC or 3TC as before, but their background drugs were optimized depending on their
treatment history and drug resistance. At week 24, all patients were offered open label ATC 800mg twice
daily. Results from the initial 21 day period were reported by Avexa in March 2007. This announcement
describes the data from the second segment of the trial to week 24.
At week 24, the number of patients whose plasma levels of HIV were below the limit of detection (400
copies/mL or 50 copies/mL, depending on the assay) was calculated. More than 80% of patients on either
dose of ATC had plasma levels of HIV <400 copies/mL, and more than 70% of patients on either ATC dose
had plasma levels of HIV <50 copies/mL.
Only four patients on ATC had sufficient levels of virus for genotyping at week 24, but none of them showed
additional mutations in reverse transcriptase.
Remarkably, in ATC treated patients the level of CD4 cells in the patients’ blood rose by more than 150
cells per milliliter on average. This marked increase demonstrates that ATC is able to not only halt the
decline in CD4 cells seen in HIV infection but even reverse that decline, indicating that ATC is having a
clinically beneficial effect on the patients’ immune system.
Across the whole study, most adverse events were mild or moderate in nature, and mainly associated with
gastro-intestinal disturbances. Six patients on ATC reported no adverse events at all up to week 24. No
serious adverse events related to ATC have occurred to date, and no patients have withdrawn from the
study because of adverse events related to ATC. Two patients were withdrawn from the study due to
unplanned pregnancies.

[tommy]

Chart looking pretty good:

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aavx&draw.x=0&draw.y=0

[Damo79]

I agree Tommy. I imagine there'll be the odd news segment on these results over the next 24 hours. Might see it gap up tomorrow :)

[tommy]

Quite surprised by the lack of share price movement at close, despite heavy volumes going through today.

Here's a summary of AVX's activities of late (before today's announcement)

____
http://www.hoovers.com/globaluk/sample/co/news/detail.xhtml?ID=ffffcrkxrtyxsxfcfx&ArticleID=200709041700.43_ab0b0020decbc95e&source_type&#37;5B%5D=n

New activities and developments reported by Avexa Limited

08/30/2007 09:54:01 PM EDT
Science Letter

New activities and developments reported by Avexa Limited.

This trend article is an immediate alert from NewsRx to identify the most recent news developments at Avexa Limited.

Report 1: Australian biotechnology company Avexa (ASX:AVX) announced further information relating to its Phase IIb clinical trial on apricitabine (ATC) as presented by Dr Pedro Cahn to the International AIDS Society (IAS) meeting in Sydney yesterday afternoon. Dr Cahn is not only one of Avexa's lead investigators for ATC but is also the President of the International AIDS Society. Dr Cahn's talk was titled "Superior Activity of Apricitabine in treatment experienced HIV-1 infected patients with M184V and NRTI resistance."

Report 2: Avexa Limited (ASX:AVX) announced the appointment of Dr John Sime as a non-executive director of the company.

Dr Sime is currently a director of Prima BioMed Limited and an Adjunct Professor at Swinburne University in the School of Research and Graduate Studies.

Dr Sime has more than 25 years of experience with SmithKline Beecham Pharmaceuticals (now GlaxoSmithKline Plc) working in the United Kingdom, Tokyo, Jakarta and Australia, and including nine years as managing Director of Beecham Australia and New Zealand.

A former director of Symbion Health Limited (formerly Mayne Group Limited) and former Chief Executive Officer of the Bioindustry Association (UK), Dr Sime brings to the Avexa Board a rare depth of biotechnology experience.]

"We are delighted to have someone of John's experience and reputation join the Avexa Board and his ability to contribute to the Phase III development and marketing programs for ATC will be particularly valuable," said Avexa Chairman Dr Hugh Niall.

"Dr Sime's overseas and large pharmaceutical company experience will be of great assistance to the company as we continue to grow the company and look to build a balanced product portfolio capable of generating sustainable revenue inflows well into the future," added Chief Executive Officer Dr Julian Chick.

Born and educated in Melbourne, Dr Sime holds an Honours degree and Master of Science in Physical Chemistry from the University of Melbourne and obtained a Ph.D in Biochemistry from the Imperial College in London. Dr Sime joins fellow non-executive directors Dr Hugh Niall and Mr Stephen Cooper and executive director Dr Julian Chick on the Avexa Board.

Report 3: Avexa (ASX:AVX) announced that it has been awarded an Australian Government Commercial Ready Grant worth $4.3m AUD to develop a new generation of HIV antiviral drugs using 'fragment based drug design,' a non-traditional research methodology. Avexa will work with CSIRO's Molecular and Health Technologies division to discover inhibitors of the HIV integrase enzyme which conventional techniques are unable to identify. This program can also be applied to other antiviral targets.

Australian Industry Minister Ian Macfarlane today congratulated Avexa on being awarded the Australian Government Commercial Ready grant. Mr. Macfarlane said the funding would support Avexa in its work to treat this devastating disease. "There are many treatments for HIV-AIDS but to date, there is no cure. This new approach may bring us closer to finding a cure and saving millions of lives. It will also reinforce Australia's role in being at the forefront of medical innovation."

The Commercial Ready Program is a competitive merit-based grant which supports innovative research. The grants provide funding for up to 50% of eligible project expenditures for early-stage R & D activities. It will contribute to funding the discovery and preclinical development required to advance the expected novel outcomes of the early phase of the program to proof of concept studies.

"We are pleased that the Australian Government has given Avexa this strong and valuable support in recognition of our capabilities in the antiviral drug-discovery area. This funding allows Avexa to benefit from the expertise of CSIRO in this new area of technology and to extend and support our existing HIV integrase program. The potential to discover a completely new generation of HIV integrase inhibitors is exciting both scientifically and commercially," said Julian Chick, CEO of Avexa.

Avexa is developing novel anti-HIV drugs, which are targeted against the specific and unique functions of the virus. These drugs will have therapeutic potential for the treatment of many aspects of HIV infection, including new infections and infections which have become resistant to current drugs.

[soulman]

My first thought, the rise yesterday was of insider nature. Hence, today is profit taking. Secondly, it was anticipated to be a positive phase, hence the lack of excitement. These phase/trials are of little relevance until phase 3 but having seen biotech shares before, any trial that have problems or have to be cancelled due to safety issue will be pummelled like Metabolic. I suspect there will be positive share price movement for AVX but unfortunately for me, I don't buy coy that have no current earnings capability.

I used to own AVX before. They were distributed free for Amrad shareholders and floated at an IPO price of 20 or 25 cents. That's how I got them being an Amrad shareholder. Amrad then change their name and has been taken over by CSL, I think.

[tommy]

My first thought, the rise yesterday was of insider nature. Hence, today is profit taking. Secondly, it was anticipated to be a positive phase, hence the lack of excitement. These phase/trials are of little relevance until phase 3 but having seen biotech shares before, any trial that have problems or have to be cancelled due to safety issue will be pummelled like Metabolic. I suspect there will be positive share price movement for AVX but unfortunately for me, I don't buy coy that have no current earnings capability.

I used to own AVX before. They were distributed free for Amrad shareholders and floated at an IPO price of 20 or 25 cents. That's how I got them being an Amrad shareholder. Amrad then change their name and has been taken over by CSL, I think.

Hi soulman,

I agree partly with you as to why you don't like biotechs with no current earnings capability, I myself will only trade these stocks and not hold for the medium/long term (with the exception of GRO before takeover).

That said, to compare AVX with Metabolic is a bit of a stretch because of the different nature of the drug (HIV) and the extent to which ATC has already proved successful in the development pipeline.

True, safety issues might arise but I think the downside risk is getting smaller as more information is released on the trial findings.

Do you think Dr Cahn is enthusiastic with a drug with no real potential? I think not!

I think AVX is a good highly speculative buy, though of course not for the faint hearted :-)

I expect AVX to reach 70c sooner than later.

P.S. Had to have a laugh at the end of the announcement:"Two patients were withdrawn from the study due to unplanned pregnancies." If ATC caused immaculate conception or something, that might be a miracle drug in itself :-P

[OneUp]

A wise investor once said...

A good patient drug is one where the patient needs to take it only once and is cured for good.

A good investor drug is one the patient needs to take over and over again.

AVX appear to have a drug of the latter variety.

[soulman]

Yes Tommy, I suspect AVX might get to 70 cents sometimes this week. Hence, maybe I should have a dip but I will resist the temptation. Just remember, MBP was in phase 2II trial and their obesity drug turned sour so deep into the trial.

I am staying out of the market for a few weeks starting this week (unless there is a dramatic fall) and will just sit on my portfolio now without buying more. This rebound has been short and swift and I see not much value now and a little downside risk. Also, I am switching to all cash purchase now instead of using margin lending as the last 2 months interest is about $2.5K, which is a bit too steep for me. Even though profits from those 2 months easily covered it, I'd rather use surplus cash to purchase stocks and pay minimum interest.

[macduffy]

Today's "Criterion" column in The Australian maintains its Speculative Buy on Avexa, noting that no HIV drug that got to phase 2B testing had failed to be approved.

Disc. Interested but not holding.

[tommy]

Thanks mucduffy,

Here is bell potter analysis update:

http://viewer.zoho.com/docs/qAnFj


Share price chart: AVX
CompanyUpdate
Date of issue
04.09.07
AVX reports further positive Phase 2b clinical trial results



Drug developer Avexa (ASX code: AVX) has reported further positive Phase 2b clinical trial
data for apricitabine (ATC).

Key points from today's results are:
Over 80% of patients treated with ATC had below detectable levels of HIV in the blood
after 24 weeks of treatment.

ATC continues to maintain suppression of viral loads after 24 weeks of treatment, HIV
drug-resistant patients experienced a response to the drug that was close to previously
untreated patients on first line therapy.

No virus resistant to ATC has been identified after 24 weeks of therapy, good safety
profile and no serious adverse events.

88% (23 out of 26) of patients have entered the extension study. AVX reported that 23
patients out of an eligible 24 have entered the ATC extension study. Two patients were
ineligible for inclusion in the extension study as they suffered from other conditions
precluding them from staying on the trial.

Phase 3 trials to commence before year-end & potential accelerated path to market
via initial approval for use in children.

AVX expects to commence Phase 3 trials before year-end. In our view, AVX is likely to
conduct this trial in parallel with a smaller trial in HIV-infected children. Pending further
negotiations between AVX and the FDA, we believe this would significantly accelerate
ATC's regulatory path to market. More importantly, once ATC gains approval, we believe
the off-label use in adults would be considerable.

Earnings estimates unchanged
We continue to apply an 85% probability-weighting to reflect ATC's Phase 3 stage of
development. At this stage, we continue to assume market launch during late 2010,
however, we are likely to adjust these timelines when AVX can confirm the FDA's
requirements for potential approval for use of ATC in children.

Buy rating with $1.35 valuation + potential co-development deal with big pharma
We reiterate our Buy rating based on our probability-weighted $1.35 valuation. From a
sales and marketing perspective, we believe it is in AVX's best interest to combine ATC with
another HIV drug. Currently, HIV drugs are often taken as combination pills and given
ATC's clinical trial data to date, we believe a number of HIV industry players (GSK, Gilead,
and Merck) may be interested in combining their lead HIV drugs with ATC. Timing on such
deals are unknown however we believe the recent Phase 2b data would be more than
sufficient for big pharma to become interested.

[Damo79]

Well the last week has been excellent for AVX, despite no new announcement. Several days of large volume, and peaked at 84c earlier today before seeming to settle at 80-81c. A very nice 44% increase since I bought in (and started this thread) just under 6 weeks ago :)

I wonder whether there's some insider news floating around... I'd expect the next step for AVX would be some sort of deal with a big pharmaceutical company (or they could be a takeover target), so this sort of trading could indicate that negotiations are underway and the exec's mate's cousin's neighbours pool boy has a hot tip to buy shares :p

Still holding, Tommy, Z-man?

[tommy]

Hi dammo,

AVX chart looks beauuutifuulllll!

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aavx&draw.x=0&draw.y=0

Well, AVX under one dollar is a steal really, but if it's a takeover that would be a real bummer because it will then get delisted before its full potential is realized. I hate takeovers of promising biotechs because potential multibaggers get nipped in the bud! I hope its just a manufacturing partnership/distribution deal with a big pharma.

[Damo79]

Hmmmmm.... Well that's disturbing :( An unexplained 20&#37; drop today on medium volume after quite a good run recently??? Is this a buy opportunity, or an indication that someone taking ATC has just had a reaction to the drug and spontaneously combusted... :p

[Damo79]

Bumping to top due to new AVX thread...

I still hold. Bought at 56 c, rode it into the 80s and down again. Still bullish on the company and believe risk is lower than most people think (although still present). But obviously I'm pretty bummed about the SP at the moment.

Cheers

Damo

[jdg]

sorry, damo, had no idea there was already a thread. it was good to have a read. i'll happily post here from now on (although my thread had a much better title...). i'm in at an average price of 46c. bought my last parcel today at .38 and i'm now heavily overweight. still, i have a few dollars in reserve if it should fall further (yip, i'm catching a falling knife and all that). i'm incredibly bullish on this one, i'm just looking for the market to take note. march results could be the catalyst.

-j

[Damo79]

sorry, damo, had no idea there was already a thread. it was good to have a read. i'll happily post here from now on (although my thread had a much better title...). i'm in at an average price of 46c. bought my last parcel today at .38 and i'm now heavily overweight. still, i have a few dollars in reserve if it should fall further (yip, i'm catching a falling knife and all that). i'm incredibly bullish on this one, i'm just looking for the market to take note. march results could be the catalyst.

-j

I'm happy to see there are others that share my interest in this company. Just thought I'd point out this thread 'cause there's been a bit of research (well, commentary I guess, as most things on ST are) already.

The short term share price is of course driven by sentiment alone. The medium term share price will be announcement driven regarding the progress and costing of phase III trials, and of possible agreements with big pharma, and the long term share price is reliant on the success of ATC. I think the most telling sign that things are looking good is that 39 out of 40 patients from the IIb trials are still taking it. That gives us a good indication that the results are excellent up to the 48 week point, even though only the 24 week data is out. I'd give them a 90% chance of making it to market (just pulling that number out of my ear :p).

Cheers
Damo

[jdg]

yip. nicely summed up. the fact that only one person dropped out of the trial would appear to mean that the side effects/safety of the product is very positive - and really, that’s all the FDA is concerned about. Also, the efficacy of ATC vs the current treatment (3tc) seemed pretty clear from the trials so far (let's hope that come through in the 48 wk trial as well). it just has so much in its favour and an enormous market to enter in to. i'm happy to gamble on your ear...?! (and a little research)
cheers, mate. be good to hear your thoughts when you have them.

-j

[jdg]

well, this one keeps creeping down (and astounding me). a release today that shows a pretty good cash position and highlights the excellent results so far is not enough to move the sp up. it's now touching year lows and the buy/sell sides are not in our favour. i'm hoping those sellers don't know something i don't (the 48-week trial is finished and the results being processed). if that's not the case (and the small volumes in recent weeks perhaps suggests it isn't) either this stock is flying below the radar or, more likely, people are waiting for the 48-week trial results in march. certainly patience is a virtue, but mine is being tested.
-j

[jdg]

with thanks to grahame11 - who posted on another forum that he contacted AVX CEO julian chick and asked about the sp decline. from grahame11:

The abbreviated version of his response was:

1. personally checked the shareholding of the top 20 and no decline in holdings.

2. believes market sentiment to small caps is a contributing factor.

3. believes margin calls on AVX are a contributing factor.

4. also outlined their trialling progress which is essentially contained in the latest conference presentation.

[jdg]

hey Damo79, some good movement yesterday, up 10&#37;, and a very strong start today. this is the month for the 48 wk results. i've been picking a strong surge in march, and i hope this is the beginning of it. i’ve got a fair stack of these now, and expecting big things. cheers,

-j

[Damo79]

hey Damo79, some good movement yesterday, up 10%, and a very strong start today. this is the month for the 48 wk results. i've been picking a strong surge in march, and i hope this is the beginning of it. i’ve got a fair stack of these now, and expecting big things. cheers,

-j

Good to see you're hanging in there. It can be depressing watching a share price go down when you're convinced the company is a bargain (and no one else is). Trust me, I'm very experienced in that :p

In the case of AVX, for me it was a buy based on research into the fundamentals. I decided that they had a very good chance of getting ATC to market, and that if they did, then the company would be worth several multiples of what it is now (or was when I bought). The fact that it's been 40% higher and then 40% lower than my purchase price doesn't change that fact one little bit. Until there is bad news ("ATC causes leaukemia" etc.), then all is on track, and in a year or two it'll make us money.

Of course I'd love to see it start a long steady increase in the share price, but that's only for the warm fuzzy feeling i get from looking at paper profit :) What i really wanna see is announcements every few months updating on the success of trials, followed by FDA approval of ATC in a year or two. Then I'll take my 5-bagger profits (fingers crossed).

Cheers
Damo

[jdg]

i see it playing out slightly differently.

i think the coming results will confirm ATC's efficacy and safety. if this is so, i believe AVX will be taken out by a larger company. i base this on the fact that no comparable drugs (30 odd of them) have failed to make it to market after starting stage 3 trials. given this, i see a pretty rapid rise in the sp in the short term, then a takeover offer of something just over $1 from a large pharmaceutical.

many ifs and buts in that - though there's also a good measure of logic (if i do say so myself). what is perfectly clear, however, is that given i see all of this happening in the next month or two, i will pretty quickly be proven right or wrong.

in the meantime, i'll enjoy the swift rise of the last couple of days and enjoy that (and see it as the beginning of my prediction...).

cheers Damo, good luck, mate.

-j

[Damo79]

Ah yes, I completely agree. A take-over by a big pharma well before the drug gets to market is a big possibility. And I think you're spot on for the sort of price we'd get at the moment.

[Damo79]

Exciting day :-) Very positive results I expect. And I'm assuming most people are expecting great results too given all other available information, so the announcement might not have a huge effect.... but then again, following the 24-week data, there was a pretty impressive increase. So one can hope.


AVEXA LIMITED
Pursuant to Listing Rule 17.1, we request a trading halt of the securities of Avexa Limited
(AVX) pending an announcement by the Company of the 48 week Phase IIb results for
apricitabine (ATC). The announcement in relation to the results will be made as soon as the
company is in a position to conclude on the 48 week data which is expected to be prior to the
close of trading today, Wednesday 12 March 2008 and the trading halt will continue until that
announcement has been made.

[jdg]

a trading halt until results of the 48 week trial are released which they expect to do today (timed well for expected big day on the ASX).

make or break time.

indications are that the results will be good. if so, confidence that ATC will go to market increases significantly and i would expect a significant rerating. given this is the expectation, however, any disappointment today will be punished.

the dice are currently in the air...

-j

[jdg]

hey damo, we posted at the same time. so long as the results don't disappoint, i'd expect a pretty big sp increase today - based on the fact the product is further derisked.

guess we'll soon know...

-j

[Damo79]

hey damo, we posted at the same time. so long as the results don't disappoint, i'd expect a pretty big sp increase today - based on the fact the product is further derisked.

guess we'll soon know...

-j

I'm almost certain they won't dissappoint. You also have to wonder whether the increases in the past week are due to friends and relatives of people putting the report together ;) It could well be that there are buyers waiting for the 48 week data as a significant "derisking" milestone. In which case this could indeed be the beginning of a re-rating...

Announcement out before the end of trade today, so we won't have to hold our breaths too long :)

[jdg]

i've put a pretty big bet on this one, my breath is indeed being held... see you on the other side, damo.

-j

[jdg]

i've just had a look at the report. if anything, the results maybe even better than expected. this looks like great news, but i'll need to have a thorough read... but it looks all good! great news.

-j

[Damo79]

Yep, all good. Let's just hope the old "buy on rumour, sell on news" adage doens't hold here...

[jdg]

mate, i'd be surprised. i can't get a live feed (ASB is down). can you see what's happening?

[Damo79]

mate, i'd be surprised. i can't get a live feed (ASB is down). can you see what's happening?

Hehe, you're better off not knowing jdg:(

Very dissappointing so far. DOWN!! half a cent from about a million volume. Looks like this was well and truly anticipated by the traders.

However, this'll probably get them some press tomorrow, and could spark more interest. Also, if there are larger investors that were waiting for the positive 48 week data, they'll be more likely to look at accumulating over a period of time (or buying in through some sor of deal).

Oh well. Things are fundamentally great!

Cheers

[jdg]

couldn't be more surprised if you'd leaped out of a box to tell me that, damo.

that has me flummoxed. is it too early for a drink...?

-j

[Damo79]

Patience. It'll be noticed. Also, 5 mins on and it's now poking at 44.5 cents :)

And damnit... i was just about to do some work finally, and my other major holding (ADY) has an announcement out that I'm now waiting to come through :p

[jdg]

patience? do you have that straight or with a mixer? i don't want any mixers.

ASB is back up so i'll have a look.

[soulman]

Don't like the sell depth. Maybe the market need more digestion for this news. Patience is the key. Not a holder but watching with interest.

[Damo79]

From http://www.bloomberg.com/apps/news?pid=20601081&sid=aXbiuy.AplKY&refer=australia

"Avexa's drug, called apricitabine or ATC, also helped increase patients' CD4 cells, the infection-fighting cells that HIV destroys, the Melbourne-based company said in a statement today. No resistance to the drug has been identified and no serious side effects were observed, the company said.

``We can safely say we've got a drug here,'' said Scott Power, a health-care analyst at ABN Amro Morgans Ltd. in Brisbane. He rates the stock a ``buy'' and expects it to reach 92 cents within 12 months."

I hope Scott Power proves to be right :-)

[jdg]

me too. closed today up 7&#37;. not a bad day, i guess, but i was certainly expecting much more on the back of those results. it will be interesting to see what tomorrow brings, particularly after news reports like that one are widely read.

-j

[soulman]

me too. closed today up 7%. not a bad day, i guess, but i was certainly expecting much more on the back of those results. it will be interesting to see what tomorrow brings, particularly after news reports like that one are widely read.

-j

Not one you would expect, would ya. I thought AVX might hold today.

[jdg]

yip, soulman, i've given up trying to understand this one. but i remain convinced the market will wake up and take notice of AVX at some stage. easily my worst performing stock for 2008, yet the one i think has the greatest potential.

i noticed in today's newsletter that "the search for a suitable partner to share the costs and rewards of successful commercialisation is well under way". i think news of a partnership would give the sp a boost - the size of which would reflect who that partner was and what financial arrangements were made. with $66m in the bank, AVX are in no hurry for a partner, but news of a partnership could certainly instil confidence that ATC will make it to market. still, i thought that positive 48wk trial results would bolster the sp, and i was wrong there...

all-in-all, i thought the newsletter was really quite good. in a nervous market i think it's important for the company to keep shareholders informed and it's tone was encouraging. i find julian chick a bit dry (he asserts the facts while being totally devoid of enthusiasm - not atypical for a scientist, perhaps) but this newsletter reflected a bit of spirit and determination. i liked it. but I’ll like it more when the sp is $1.

-j

[Damo79]

Still patiently holding here. Unless ATC falls through, it'll see the $1 mark easily. 'When' is the question... Patience :-)

[jdg]

hey damo, as you know, my punt has been on a takeover (one or two months after 48wk results). while i still have six weeks to test my skills with the crystal ball, if AVX can take this to market within a partnership arrangement the returns would be much greater in the long run - $1 would look very cheap, i would suspect. if that occurs, i'll certainly need some patience. i will also have to throw out my crystal ball.
have a good weekend, mate.

-j

[jdg]

for me, AVX has been a reminder that i don't always get it right (to this point, at least). i am rarely so certain about a stock as i am (was? he says wavering slightly) about this one. admittedly my knowledge of HIV drugs was and is rather limited (how may rules does one break investing in a product of which one has little knowledge), i felt i had researched it enough to be quite sure it was a winner.

although i'm not ready to concede defeat - i still hold, at a lefty loss - my concerns grow. not through lack of patience (although there might well be a good hint of that, damo), but due to the fact that large pharmaceuticals -and those who work for them - are aware of the results, know the market and can interpret the results of ATC much better than me. yet the price continues to fall.

i tried to catch the falling knife with this one (yip, another rule i broke) feeling sure that good stage II data would immediately fire up the market. i was clearly wrong. great results (or so it seems) but no interest in AVX.

where all of this leaves me is rather interesting. i’m sitting on a whopping great loss, hoping like hell a takeover (or licensing deal) comes in, which my logic tells me should occur. all well and good, but at what point will i admit that i may just have got this one plain wrong?

the answer? god knows. i've got a handful of weeks for my takeover prediction to come true (a timeframe that is, by the way, completely and utterly arbitrary) and an sp that is in a steady and undeniable downtrend.

i shall continue to hold, albeit as my white knuckles belie the grip i have on my rationale for doing so. indeed, i’m contemplating religion. if anyone knows a church where i can speak to all of the gods at once, i'd like that as a time saving tip.

this is, perhaps, what happens when you break the rules...

-j

[Damo79]

I feel for ya jdg. I'm sitting on a 30% paper loss for AVX myself :(

It seems like you had an idea of what you expected to happen with the company and the share price in the near term, following good phase 2 results and a probably licencing deal or takeover. Unfortunately what you (and I) expected hasn't happened. And that might count as a reason to exit for you.

I won't give advice, but for myself, I bought into AVX based on where I expect the share price will move following the approval of ATC as a drug. I won't make exact predictions, but I imagine it would be at least multiples of the current price. I'll also add that I agree with you that the value will be recognised (partly) earlier through some sort of transcation such as a takeover.

So, yes it's depressing to look at my paper loss, but then I have to ask, has anything changed with my plan? Has anything gone wrong with the company, or the drug? And the answer is no. So given that I bought on fundamentals, and that they haven't changed (and have actually improved), then I won't be selling.

That said, trends don't lie. It'll probably drop further by the looks of it. But remember, if the takeover you expect happens, it won't result in a steady uptrend - it'll be a trading halt followed by a gap up. If you sell (which I'm not recommending for or against), then you would of course miss out on that.

Good luck to us :-)

[jdg]

i'm hearing you, damo. given what i know, i feel comfortable. but it's what i don't know that concerns me. (if i start using Bush's lingo about 'known unknowns' it's all over...). is the fact that it's two pills twice per day a problem in the market? is the efficacy vs 3tc discernable enough to be exciting? are there other drugs being developed that match or better ATC. i'm pretty confident on the latter, but as for the other two, i just don't have the technical expertise to ascertain the answer to these. don't get me wrong, mate. i'm planning to hold a while longer yet. as you say, one anouncment and up she goes, but as the days go by i grow increasingly concerned about my known unknowns. cheers, damo. trust you are well.

-j

[jdg]

nathan dorna, an A&M expert, has been appointed to the board. that's encouraging. it will be interesting to see how the market reacts to the news.

-j

[Solo]

I still like the company, the phase II trial results looks extremely promising, the drug is targeted at a lucrative market where existing drugs often fail and new drug like ATC is urgently needed (hence the FDA’s Fasttrack status), the fundamental has only improved for this company over the past few months with the phase III trial begins, the company is actively seeking partners / merge opportunities, and it’s in a reasonably healthy cash position to last them a while. The FDA request to increase the dosage and patient number (hence the additional fund required to complete Phase III) is not great, but neither is anything new. Nothing fundamentally has changed recently to explain the current share price level, at least not publicly.

My guess is that since this stock is speculative in nature, many investors are short term buyers hoping for takeover announcement. When that did not happen (yet) they lost interest and decide to sell. The collapse of Opes Prime may have an impact on AVX as well (being one of the stock hold by Opes Prime), and obviously the credit squeeze and investors dislike towards riskier investment did not help either.

I bought into this one not long before the release of 48 week results, at an average price of 38c. Looking at buying more at the current levels. With everything the same (if not better) compare to a few months ago the current share price looks like a screaming bargain.

[SMan]

Solo, I agree r.e Screaming buy. I doubled up last week so thats about my fill of AVX. They have worldwide rights to ATC as well as North America. I was perhaps wondering if they might sell the rights to part of the world in return for $$ to fund development. Does anyone know how much they had to pay to secure the rights to North America?

[jdg]

Huntley's agree with you both. with thanks to Yehudi from another site:

Huntley's latest update on Avexa (1/05/08) was titled Nothing amiss with the underlying story. Comments made include: We consider AVX outstanding value around current levels. How can this be? What are other investors missing? There are a number of issues. The prime driver of the weakness is the severe bear market in non-resource stocks and heightened risk aversion. AVX stock caught up in the Opes Capital debacle that lenders to Opes are selling with little regard to price. The volume of stock involved is unclear, as is whether the selling is complete. The expectation of potential dilution of current shareholders by another equity issue to complete funding of AVX's lead drug candidate apricitabine's Phase III trial and to fund the company's earlier stage development programs is another negative - and is magnified by the falling share price. This may not occur via an equity issue but in that case the licensing deal would reflect the assistance.
On the appointment of Nathan Drona: This could turn out to be a very valuable appointment and attests to the promise of AVX's lead HIV program. Drona has the potential to assist with a partnering deal, to advise should a takeover bid for AVX eventuate, and engender additional investor interest.

Valuation and recommendation price trigger levels reduced
by around 10&#37; to reflect increased cost of capital, but no hesitation recommending the stock as speculative buy

[SMan]

AVX on a little run today, hopefully they can close in the 30c + range. Sell side looks to be thinning.

[jdg]

yeah, first bit of cheer i've had from the stock for a while. sign of things to come, i can only hope.

-j

[jdg]

looks like we may have found a base and buyers are building. the timeframe for my predicted takeover is about up. i hope nathan dorna is working hard. does anybody know when we can expect any updates or preliminary results from stage III trials? i'm looking for some good news.

-j

[jdg]

well, we got a collaboration but, needless to say, it was not really the one we are waiting for. still, the market looked on this new development favorably.

also, it seems as though recruiting for stage III trials is progressing to plan, so that's encouraging. there's been a bit of media of late, too.

with thanks to cortinaboy from another site.

This article (from Tues) is similar in content to some others recently posted (ie same brokers quoted), but it is nice to see more support coming forward for Avexa.

Article:

Ferret doesn't always pick winners and has been disappointed with the performance of Avexa Ltd (ASX:AVX) over the last six months when the shares dipped from 55c in mid January to 29c yesterday.

He pleads guilty to not taking into account market uncertainty and those who lost confidence that some of the company's research was likely to fail.

But biotech analyst Tanya Solomon from ABN AMRO Morgans has never wavered in her conviction that Avexa will win out in the longer term.

She has recommended the stock as a buy with a target price of 92c.

Ms Solomon says the current share price implies only a 20 per cent probability of success that AVX will successfully deliver ATC (HIV AIDS drug) to the market.

Given the clinical data reported to date, a Phase III program underway, and a partnership deal on the horizon, ABN AMRO Morgans reiterates its Buy call.

Ms Solomon says the current share price wrongly attributes little chance of success, and that ABN AMRO Morgans has used a probability of success of 80 per cent.

Given that every HIV compound to enter Phase III clinical trials to date has been successfully commercialised, ABN AMRO Morgans considers the current share price an exciting entry point.

Each 1 per cent change in the probability of success alters its valuation by 2c per share.

With no changes to its forecasts, ABN AMRO Morgans's valuation is unchanged at $1.32 (risk free rate of 6.25 per cent, WACC of 15.7 per cent and a terminal growth rate of 1.5 per cent), Ms Solomon declares.

Given the current volatility in the market, ABN AMRO Morgans has applied a 30 per cent discount to its valuation and has set the price target at 92c.

The downside risk to its price target includes delays in the progress of the Phase III trial.

Recruitment for Phase III clinical trials are on track, and since starting in December, the first of two Phase III trials has progressed well, with about 40 centres having opened across North America, Israel, Europe and Australia.

Given the increased rate of expenditure by the company (operating cash outflow of $9.3m vs $3.9m for the previous corresponding period), ABN AMRO Morgans believe the rate of recruitment is strong, with Avexa on track to finish recruitment by the third quarter of calendar 2008 and release the initial data in the first quarter of 2009.

Securing a partner before the end of 2008 is a key catalyst to watch for.

As at March, Avexa had $53.4m in cash and has confirmed its intention to look for a partner to supply additional capital and marketing expertise.

While at this stage it is still too early to tell what form this may take, in its model ABN AMRO Morgans assumes that the potential partner will license ATC from Avexa in return for a royalty and funding assistance for the Phase III trial.

It is also expected that the appointment of a marketing partner may speed the time to file a New Drug Application (NDA) and ultimately assist with marketing of the drug.

ABN AMRO Morgans believes the successful negotiation of a partnership deal will be an important share-price catalyst.

Although it is difficult to predict the timing of this, the company has confirmed its December year-end target.

SHARE PRICE MOVEMENTS

*********************

Shares of Avexa yesterday eased 1c to 28c. Rolling high for the year is 84c and low 27.5c. The company has $115.7 million shares on issue with a market cap $113.6 million.

In the chairman's letter to shareholders in March, Dr Hugh Niall (since retired) said Avexa had also recently entered into a collaboration agreement with Monogram Biosciences, based in San Francisco and a world leader in testing resistance to drug therapies.

This will make a valuable contribution to Avexa's discovery and development programs, including the Phase III clinical trials now under way.

The Avexa management team remains actively involved in a variety of HIV/AIDS forums.

Key personnel regularly participate in major conferences around the world, and have presented at several.

In addition to ensuring that the latest insights into pharmaceutical development are brought to bear on the company's programs, this is also important in building awareness of the company's objectives - for ATC in particular - and to maintain the international network of contacts which is invaluable in successful pharmaceutical development, Dr Niall told shareholders.

"Finally, it is difficult for all of us, as shareholders, not to be distracted and concerned about the turmoil in global sharemarkets in recent months and to worry about the impact on Avexa (and, for that matter, on other companies in which we may have an interest)."

"But while markets usually eventually recover people who are infected with HIV/AIDS still have it and have it for life.

"They still inevitably develop resistance to their existing drug therapies and they still badly need drugs like ATC," the chairman said.

"It remains our mission to press forward, using all the technical and financial resources we can access, to bring ATC successfully to market for the benefit of both our shareholders and those suffering from the scourge of HIV/AIDS."

Dr Niall retired as chairman in late March, and non-executive director Stephen Cooper has assumed the role of chairman pending a search for a new Board member to assume the role.

Mr Cooper has been a director of Avexa since November 2005. He is a director of Grant Samuel, a leading independent Australian advisory firm and has wide ranging experience in mergers and acquisitions, corporate restructuring and capital raisings.


________

the sp is responding well to all this. better days ahead, we can only hope.

-j

[jdg]

Damo, Sman, Solo, you guys still in?

today's ann was interesting. not much said because of confidentiality but AVX looks to be positioning itself moving forward. that gives me confidence. i have been tempted to buy more at these prices but have a big enough stack already. it's been a tough hold but i still think we will rise one day soon to see a collaborative marketing agreement (or a straight takeover) that will set the sp alight. big, big gains to be made on this one. i reread a couple of broker recommendations the other day - ATC really does look to have the goods and the current market cap simply doesn't reflect the chances of this drug making it to market. as we all know, if it fails at stage III it will be the only HIV drug to ever do so. i like the odds.

-j

[Damo79]

Hi jdg

Sorry to say I'm not in this one anymore. Needed some emergency funds so had to cull some holdings. However, this is the only share that I don't currently hold that makes it onto my main watchlist, because i'm definately planning on re-entering when funds permit. Hehe, that puts me in the awkward position (for you) of rooting for the share price to remain low for a little while longer at least :p

I was of two minds about the current announcement. Obviously there's something more going on, since there's little detail in it. The question is, was there a "renegotiation" because they really needed something changed due to lack of funds to finish phase III (in which case shire would probably come of best), or did shire approach them because things are looking great and they wanted a bigger piece through shares... Without details of the deal, we'll never know whether the announcement is good, bad or indifferent.

Cheers
Damo

[jdg]

Damo! you were the orgiinal AVX fan. sorry to hear you're out. (i want somebody to gloat with when this thing goes crazy...). you're right about the ann, it's difficult to assess, but my instinct says it's a good thing. in fact, i feel more confident about AVX than i ever have. i've gone back and researched this again recently and can't see it as anything but a winner. trust you are well, Damo, and the emergency funds weren't for anything negative. stay in touch if you spy something interesting or buy back in.

-j

[jdg]

i'm not gloating yet, damo. far from it, in fact, and your decision to pull out appears to be a good one. for better or worse, i'm holding on.

-j

[jdg]

damo, hope you stayed out of this one. just been sold down the road in what looks like a dreadful deal with PGL. i'm a little red faced to say that i've been buying at 10c. i've got a bucket load these days but my gamble has not paid off. still a couple of possible options that could come to fruition (maybe another deal flushed out...?), but i think i'm grasping at straws. will hang in their regardless, but my hopes of a multibagger are looking more and more remote. i got out of ADY (with my shirt, unlike many) because management were constantly disappointing. i suspect this may be another example. all talk no follow through. oh well - win some lose some. hope all else on this forum avoided this dog.

-j

[Damo79]

Hi jdg

What a crappy deal it looks. Just had a quick read through the short version of the presentation, and it doesn't look like it's very good for current AVX shareholders. It looks like a bargain for Progen in fact! The implied value of Progen shares at 1.35 or whatever it was is a bit of joke given that they're about half that, but if the deal goes ahead as explained, it looks like the 1.10 buy back should push the PGL share price up to that (although nothing ever seems to work as it should).

My thoughts:

On the good side, the new company will have funds to get through the first major stage of phase 3 trials. Actually, if the deal wasn't so bad (driven through desperation due to the current financial climate no doubt), I'd say that was brilliant news.

On the bad side, obviously the share offer at current market prices seems to value AVX at EVEN LESS that the current share price :(

What can I say, I won't offer advice of course. I will say that AVX is one of the companies I follow most, and I think their investment in ATC is worth so much more than the nothing that it seems to be valued at currently. I said before I was watching with a view to re-entry when I had funds, and will add that after the merger news, i wouldn't do that just now. I think the deal has a negative impact on the immediate share price, but of course no effect on the future prospects of ATC. So as a non-holder, I'll watch and wait - I don't think anything will happen quickly so I'm not worried about missing the boat.

To summarise (did I already say that? bit drunk) - the damage has been done to the share price with this deal. But it's something they probably desperately needed to do as a company if they weren't getting interest from big pharma yet (damn credit crunch etc etc). There's still massive potential, and now that they can fund it further the potential could actually be bigger - but the share price baseline has dropped unfortunately.

I was lucky to sell at around 30, or whatever it was, basically because I'd just moved overseas and ran out of ready cash. If I hadn't needed money, I'd be sitting on my pile of AVX shares wondering why no one else saw it the way I did :-/

Hope things pick up. Just remember, if you've lost half your investments in the last year, you're about on par like me :D

[Kiev Dreams]

Hey guys

I almost invested in Avexa a year or so ago but now i see there is an opportunity to do so.

I see the takeover isnt so popular, devaluating AVX.

If in the coming weeks there is more volatility in the markets, if i get the chance to buy at 6cents, is it a good buy allowing for the takeover?

Anyone here buying around current prices?

Whats the other company propgen like?

Cheers
Rob

[Damo79]

Anyone in this these days? Big movements today and yesterday, and the Phase III trials finished a year early based on discussions with regulatory bodies yada yada yada...

I haven't been a holder for a long time, but always thought the potential scientifically was excellent. Obviously didn't work out financially, but tossing up the idea of re-entering sometime. Such a rapid increase in a couple of days scares me, so will hold off for now.

Cheers
Damo

[jdg]

i've been out of this one for a while. i regret to say that i took a bath on this one. prospects are good but managment have proven themselves not up to it.

there could be a lot of money to be made, but i'm not prepared to gamble on it again.

-j

[SMan]

Have held all the way down (Over a year) then topped up significantly in the 9-10c range a few months ago after not taking up my rights. Sold half into the recent rise but a bit premaurely (18c) it was well above my 'averaged down' price so I'm happy with the holding i have now and where the company is at/headed. Will look to topup again at 12-13c if it dips back. Could be a long wait for trial results (Jan-Feb next year) so may drift down if tribotec deal for other pipeline drugs isn't finalised. - or shoot up if it is.

[Joshuatree]

Anyone in this care to summarize? Re halfway thru a phase 3; plus investing for 30% of a coal mine expected to produce 2nd half of 2014 ; awaiting mining license and off take buyer?. Trial to cost $30million, strong patent positions with ATC; plan is to fund it with coal mine investment Mkt cap $10.17 mill s/p at a low 1.2c. Sounds like a very risky speccy with the usual hook; big upside heh heh