Anavex Life Sciences (AVXL) stock rocketed early Wednesday after the company signed a testing agreement with big biotech and IBD 50 stock Biogen (BIIB) for a drug that could treat Alzheimer's, central nervous diseases and various cancers.
Tiny Anavex, which made its initial public offering last October, saw shares fly 31.5% to close at 4.13. Biogen stock, though, fell 1.3% to 310.55 on the stock market today. Shares are about 7% below a possible buy point at 333.75 out of a flat base.
IBD'S TAKE: IBD's 421-company Medical-Biomed/Biotech industry group has climbed to No. 5 out of 197 groups tracked from No. 189 just 26 weeks ago as M&A rumors surrounding Big Pharma and biotechs have heated.
Under the material transfer agreement, Biogen will test Anavex's lead drug candidate, Anavex 2-73, in an oligodendrocyte precursor cell (OPC) differentiation assay.
OPCs are responsible for forming myelin coating the axons of nerves. The myelin sheath is a fatty substance that insulates electrical impulses, which are key in cognition. In CNS diseases, like Alzheimer's, the myelin sheath breaks down (demyelination).
A satisfactory result in the OPC test might lead to a human study examining remyelination using a chemical demyelination model, Anavex said.
"Battling demyelinating diseases such as multiple sclerosis requires an understanding of the processes that cause remyelination to fail," said Anavex CEO Christopher Missling in a statement. "These studies will examine the therapeutic role Anavex 2-73 may play in permitting remyelination in the brain."
RELATED:
