Annovis Bio: Moving Forward Against Parkinson’s (NYSE:ANVS)

I don’t want to repeat my innocence. I want the pleasure of losing it again.” – F. Scott Fitzgerald

Today, we put small cap development firm Annovis Bio, Inc. (NYSE:ANVS) in the spotlight for the first time. The company has several compounds in its pipeline and its primary drug candidate is being advanced into late stage development. An analysis follows below.

Company Overview:

Annovis Bio, Inc. is a clinical stage drug platform company based just outside of Philadelphia, PA. The company is focused on developing drugs to treat neurodegeneration. Currently the stock trades just above $15.00 a share and sports an approximate market capitalization of $125 million.

The company’s lead drug candidate is ANVS401 which is also known as Buntanetap. This is an orally available small molecule that is a translational inhibitor of neurotoxic aggregating proteins (TINAPs). Management states that buntanetap is the only drug to attack multiple neurotoxic proteins simultaneously which differs it from monoclonal antibody therapies. Buntanetap is being targeted to treat neurodegenerative disorders and was granted three key patents in mid-September.

This compound is in Phase 2a clinical trials for the treatment of Alzheimer’s disease or AD, Parkinson’s disease, Alzheimer’s disease in Down Syndrome, and other chronic neurodegenerative disorders. The company is currently enrolling some 150 patients for a key Phase 3 study evaluating buntanetap to treat Parkinson’s disease or PD. The has two other compounds (ANVS405 and ANVS301) in development. ANVS405 is an injectable drug being developed for traumatic brain injury and stroke. However, these candidates are in earlier stages of development so the prospects for buntanetap will be the focus of this analysis.

Recent Developments:

Last week the company disclosed that enrollment into its Phase 3 PD trial for buntanetap was going well and based on the pace of this effort, an interim data analysis from this study should be out sometime in the second quarter of this year. This obviously could be a key near term milestone on the horizon.

In early October, the company garnered permission from the FDA to initiate a phase 2/3 trial of buntanetap to treat moderate Alzheimer’s Disease or AD. Previously Annovis had conducted a phase 2a safety data and chronic toxicology data around buntanetap. Data from that study showed statistically significant improvement in motor function in PD patients and cognition in AD patients. The study also showed that buntanetap was well-tolerated and safe with no adverse effects related to treatment observed. The 54 patients in the PD cohort were treated with either 0mg, 5mg, 10mg, 20mg, 40mg or 80mg of buntanetap once daily. The individuals showed statistically significant improvements in a couple of key metrics compared to placebo.

Analyst Commentary & Balance Sheet:

There has been little in the way of analyst coverage on this small cap name over the past year. Maxim Group did maintain their Buy rating and $26 price target on ANVS. Prior to that H.C. Wainwright reiterated their Buy rating on the stock with a $40 price target in October while Ladenburg Thalmann initiated the shares as a new Buy with a $37 price target in early May of last year.

Just over three percent of the outstanding float in this equity is currently held short. There has been no insider activity in the shares since October of 2021. The company ended the third quarter with just over $30 million in cash and marketable securities against no long term debt. The company posted a net loss of $7.6 million for the quarter. A new CFO came on board for the company in late August.

Verdict:

I put little value on the company’s efforts in AD. Scores of companies are exploring treatments in this area, tens of billions of R&D dollars have been flushed down the drain through these efforts with only Biogen (BIIB) enjoying very moderate success to date. The stock of Annovis was also crushed in the summer of 2021 when the company presented AD clinical efficacy and biomarker data at the Alzheimer’s Association International Conference that was received underwhelming to say the least.

That leaves the company one near term ‘shot on goal‘. In addition, given the firm’s balance sheet and current burn rate, Annovis is likely to have to raise additional capital sometime this year. My guess is that gets executed soon after interim results from the Phase 3 study to treat PD comes out. Therefore, I am staying on the sidelines on this name until additional trial data is disclosed and Annovis addresses its near/medium term funding needs.

There are memories that time does not erase… Forever does not make loss forgettable, only bearable.” – Cassandra Clare