This article refutes the science-related claims of Mr Adam Feuerstein using expert opinions from interviews.

The donepezil-2-73 differential effect is the most important statement to come out of any Alzheimer's trial in recent memory.

This article denies that that effect is a placebo effect.

First, a brief history. I began covering Anavex Life Sciences (NASDAQ:AVXL), now on NASDAQ but on OTC until last month, from July 23 with a write up on my biotech digest. Next day, on July 24, I published an email interview with Dr Missling, and a critical but bullish research note on the company. After that, I covered the stock with brief notes on my digest, as I do for most stocks I cover, about once a month, with news updates, until late October, when a series of short articles came out on Anavex as the stock was moving towards its first important results declaration.

In late October, and now in November, I have covered AVXL more extensively as the short position grew mainstream with a tweet from Martin Shrekli, an article by Adam Feuerstein, and two others by Daniel Ward and Jean Fonteneau. These articles coincided with the first major results declaration of AVXL in its history, at a time when there was a HUGE short interest in the stock, with 7% of AVXL being shorted and days to cover being 1.7.

My article has been critical but cautiously bullish about Anavex all along, and as part of my caution, I have urged investors to recover their initial investments as soon as possible. That is not an advice I would give regarding a stock like Gilead, on which I am bullish, but hardly wary.

Even my interview with Dr Missling from July 24 was a little rough. I asked him pointed questions about patent issues, its origins as a failed photo printing business, and problems with its trials with donepezil etc. Readers will remember he said "There is no patent dispute" 8 times in the interview.

So I find it hard to believe today that people will accuse me of promoting this company, and now that the stock is down, of telling me they lost money based on my advice. They lost money because, one, they didn't follow my advice in its entirety and did not take profit when I said I did, and two, because there is more at play here from the big people at Wall Street than we ordinary retail investors can understand.

Now I am going to take a hard stance, myself. I will keep emailing every scientist I know in the Alzheimer's field and discuss sigma 1 receptor pharmacology with them. I will prove the zero hypothesis to my satisfaction - that, within the bounds of clinical trial entropy, this company has scientific promise.

Here's the first in that series.

Professor Tangui Maurice

Professor Dr Tangui Maurice is a co-inventor of ANAVEX 2-73, and one of the named inventors of its original patents along with Dr Alexander Vamvakides. His current complete designation is:

CNRS Research Director

Team II Endogenous Neuroprotection in Neurodegenerative Diseases

INSERM U. 1198, EPHE, University of Montpellier

He is also a scientific advisor of Anavex.

Before I interviewed (LINK) him by email over the weekend, November 14-15, 2015, I wrote to Professor Angela Cenci Nilsson of Lund University in Sweden, who is also closely involved with the Michael J Fox Foundation and is also associated with the research involving the Foundation's grant to Anavex for Parkinson's disease- see this link. She wrote to me:

"We have just started the experiments funded by MJFF and I am still rather ignorant about the efficacy of this drug.

I suggest that you contact Dr Maurice Tangui in France - he is the guru of Sigma1 receptor pharmacology."

So I wrote to Professor Maurice, and received two extensive responses from him. I will use some of his responses to discuss the bear position on AVXL. Please note that where I provide my opinion, and unless Professor Maurice clearly says the same thing, my opinion and my language is my own, and not his.

The 3 bearish articles

Daniel Ward

Of the 3 bearish articles published recently, Daniel Ward's had a brief sectionon AVXL's science, and the rest of the lengthy article discussed the company's clearly shady origins, alleged involvement with promotions, and the huge failure rate of Alzheimer's trials.

Some of his scientific comments confused me.

The primary endpoint for this P2a study is maximum tolerable dose, which I honestly don't particularly care about.

Unfortunately, the company only had data on 12 patients from what is a 32-patient study.

Clinical trial purists would certainly argue that this (open label phase 2a trial) clouds the results and may not be the appropriate way to run the trial.

As we will see from the expert interview from Professor Maurice and Dr Macfarlane, points 2 and 3 above are easily explained, and as for point 1, I have no idea what Mr Ward means when he says he doesn't care about MTD in a phase 2a trial meant to discover MTD.

However, I will not be fair if I don't say that of all the bearish articles, Mr Ward's was the more balanced and sensible. I will completely agree with him that the huge gain in AVXL's stock was unwarranted. While it reached the $15 levels, I was only expecting a sensible $8 and would have been happy with that.

Jean Fonteneau

As for Mr Jean Fonteneau's article, this is a very well-researched diatribe against Canadian gold mining scams, how Anavex is part of a client group of a PR company involved with such gold mining companies, the alleged promotions and alleged scams in its past, and its unusual dealings with Lincoln Park.

This article mentions Anavex's main drug candidate ANAVEX 2-73 only once.

If this article wasn't part (probably an unfortunate coincidence) of a bearish 3-article set on AVXL, I would have taken this article much more seriously than I did. In fact, now that the storm is subsided, I take these allegations very seriously.

I would also have taken the article more seriously if it had discussed the scientific claims of Anavex. By not doing so, it failed to complete its mission of proving Anavex is a scam. It merely leads me to the following conclusion - Anavex, when it was an OTC company, may or may not have some shady past 3-4 years ago, and as an OTC company it may have had to resort to unusual dealmaking to raise money, but as long as it has undisputed scientific promise, I can live with everything else.

Personally, I was quite aware of some of the red flags surrounding Anavex, notably the alleged promotions. I asked Dr Missling the following in an unpublished email interview last month, October 23 (not published because the interview came to me a little late, and my article was already published by then and I could not spare more time to AVXL at that time):

Did you pay a penny stock website $200,000 for a 1-day promotion campaign?

Anavex did not pay for this. The promotion's disclaimer says it was paid for by a third party.

I believed him and can try to explain away the other red flags because Anavex had good science. If it didn't, I wouldn't believe the company.

Therefore, it is much more important for me to address Mr Adam Feuerstein's article, which actually tries to challenge Anavex's science. With that in mind, I asked Professor Maurice some questions. Many of his responses address Mr Feuerstein's statements directly. To be clear, I did not use any particular columnist's name in my questions to him.

Adam Feuerstein's article: some background

Recently, on twitter, Mr Feuerstein mentioned one of my AVXL articles, although he did not name its author. I asked him for a debate, but he did not respond to it or agree to it. I am just a smalltime retail investor with little journalistic experience, but I have interviewed many experts in Alzheimer's, and using their responses, I will bring the debate to Mr Feuerstein.

Adam Feuerstein's "Meaningless" article

This article was published on November 9th, two days after AVXL declared the phase 2a results. Daniel's article, by the way, was published on October 20, and Jean Fontenaue's article was published on November 9, the same day as Adam Feuerstein's, and two days later, again on SeekingAlpha. AVXL went from almost $15 to below $5 at that time.

In his article, Mr Feuerstein said the following, against which I will provide a response from one of the experts involved, who I interviewed, with explanatory notes from myself:

The Anavex data presentation didn't even come close to proving Anavex 2-73 cures Alzheimer's, as some outside stock promoters had been claiming.

I am not sure who is indicated to claim ANAVEX 2-73 "cures" Alzheimer's. I have used that word as a possibility to be proven, given the science is what it is. The science does not say "treat" but implies "cure," in contrast with current treatment options which have some symptomatic effects. However, nobody in their sanity would think of a proof of that distant possibility at this early juncture.

About a phase 2a dosing trial "proving" something like that, Dr Steven Macfarlane, the lead investigator of ANAVEX 2-73, said in an email interviewwith this author published last week:

Whilst there is clearly a lot of interest in the cognitive data the study has generated thus far, I think people are losing sight of the fact that this was designed as a study to test safety, tolerability and bioavailability.

Professor Tangui Maurice says in emails to this author:

This is a first trial in human for this kind of drug in this indication. The purpose is mainly to demonstrate an effect in human together with a safe profile, in order to be able to design larger scale double blind trial in the future. This is the reason why the company selected an open- label trial. The idea is to be able to adapt the protocol and get the maximum information they can.

The data disclosed at present are the very preliminary ones. The main idea I retain is that no "red flag" has been raised. The drug is safe (adverse effects ('AE) reported are very minimal) and the first cognitive or physiological data obtained are positive.

Clearly, the data was not intended to prove Anavex 2-73 cured Alzheimer's. It had far simpler goals - whether the drug was safe, and if there was any hint of efficacy to take it to the next level. Those longs who think there was "proof," and those shorts who do not think the company is legitimate because there was no "proof" - both commit the same mistake of assuming this trial meant to prove anything in efficacy.

Then, Mr Feuerstein says that the only positive efficacy data from this trial was from placebo effect. He says:

In the clinical trial, Anavex took a handful of Alzheimer's patients and treated all of them with a drug they were told might help improve their memory and cognition. After taking Anavex 2-73 for just five weeks, the patients were given a battery of tests to measure memory and cognition. Not surprisingly, the memory and cognition of the patients improved just a little bit.

To Anavex and its stock promoters, this was success. To everyone else, it's just another classic example of a placebo effect. The handful of Alzheimer's patients in the Anavex study improved over a short period of time because they were easily convinced the drug they were taking would help them.

Professor Maurice very clearly discussed this so-called placebo effect. When I first read the first sentence below, I was confused until I realized when he used the word "includes" he meant "compensates for" or something similar. Before I could ask him for clarification, however, he sent a second detailed email to clarify his first one. See the complete interview for the context:

In answer of question 5, I wrote "The actual analysis strategy is before/after treatment to use each patient as its own control, and it obviously includes placebo effect."

I want to be very clear: I did not mean that the effects observed are due to a placebo effect. (I meant) The opposite, the facts that differential effects were observed on the several parameters examined, and that one of the most difficult tests (Cogstate One Back) showed the best degree of improvement with statistical significance of p<0.001 as well as the biomarker test ERP Reaction Time with p<0.0007 clearly confirmed the drug effect.

On another note, while placebo effects are common with sedative drugs, they are less common with drugs designed to improve cognition. This is because individuals can not anticipate what it is like to have better thinking. Most individuals know what it is like to have a sense of worse cognition. Taken together these aspects of the data make the placebo effect a less likely explanation for the data.

Dr Macfarlane also said in his interview:

The 'one-back' test within cogitate showed an effect size of 1.1 (meaning the standard distribution curve of the results was improved by 1.1 standard deviations, a huge effect size. A published meta-analysis of donepezil's benefit on the same test showed an effect size of 0.28. The significance of this particular change is underlined by the fact that 75% of our sample had already been taking a stable dose of donepezil for at least three months, so the improvements on the Cogitate battery (and on all the other cognitive outcome measures, were achieved over and above the gains our participants might already have achieved through being on donepezil. The same is true for the improvements noted on MMSE and ADCS-ADL, and the EEG markers (of which one ERP was statistically significant). I gather much is being made in certain circles that the remainder of the EEG markers, as well as the MMSE and ADCS-ADL scores failed to achieve statistical significance, but in a 5-week study of 32 patients it would almost have been beyond belief if this were to have been shown to be the case. The study was not powered to demonstrate significance, but the response on certain outcome measures was so marked that significance was achieved anyway (at a level of p=0.001 in the case of the Cogitate one-back task.

Thus it is clear that patients who were on donepezil and had an effect size of .28, increased that to 1.1 after taking ANAVEX 2-73. The difference wasprobably due to ANAVEX 2-73. There was probably no placebo effect involved. To make that probability into a certainty, we need a phase 2b and a phase 3 trial to prove or disprove the placebo effect.

In that respect, what Mr Feuerstein says next is highly intriguing. He quotes an alleged expert to confirm his placebo effect hypothesis:

"The chance you would have gotten similar data giving the patients 10 cups of coffee a day instead? Almost 100%," said Dr. Adam Kline, an Alzheimer's disease researcher who reviewed the Anavex 2-73 data presented Saturday.

The internet has been rife with speculation about who Dr Adam Kline is. After much research, all I could find was a single paper that said that he may have been employed at Eisai for 5 years. I found no Linkedin account, no university affiliations - unlike Dr Macfarlane, Professor Maurice and Professor Nilsson - people I myself talked with.

Adam Kline was in the past 5 years an employee of Eisai Limited and received a fixed salary. Adam Kline was not an Eisai employee at the time of publication

Now, Dr Kline basically says that there's an almost 100% chance the positive data was a result of placebo effect.

Let's understand this clearly. I will not mince my words. The following two statements are mine.

ANAVEX 2-73 had a 1.1 effect size in the most foolproof cognitive test compared to donepezil which had .28.


And, to negate that breakthrough datapoint, all we have is a one-liner from Dr Kline. If this were Biogen or some other Big Pharma that would not have been possible. However, AVXL is being punished because it is small, and may have allegedly had a poor corporate record.

The contrast between Dr Kline's and Professor Maurice's statements is striking. Professor Maurice clearly says:

On another note, while placebo effects are common with sedative drugs, they are less common with drugs designed to improve cognition. This is because individuals can not anticipate what it is like to have better thinking. Most individuals know what it is like to have a sense of worse cognition. Taken together these aspects of the data make the placebo effect a less likely explanation for the data.

Anavex 2-73 is not a sedative drug, but a cognition-improving drug candidate. A placebo effect for it cannot be as simplistically posited as for a sedative drug, as Professor Maurice indicates. A placebo effect takes place when a subject can anticipate a result and adopt it without it actually being present. This is a profound statement from Professor Maurice, "individuals can not anticipate what it is like to have better thinking." They cannot play-act better memory.

My only question to Mr Feuerstein is: this is the critical aspect of the data. If this is false, AVXL is a scam. You, as the leading biotech author, have access to all kinds of experts, KOLs, doctors and professors.

Why didn't you negate this data using someone with undisputable credibility?

My own belief: no credible expert was going to reject something this important so callously.

They would wait for further trials.

Mr Adam Feuerstein concludes with another "meaningless" statement:

The small, short, single-arm, open-label study run by Anavex met none of these scientific criteria, making the results presented Saturday clinically meaningless.

A phase 2a study is clinically meaningful if it shows data on adverse effects. This was done.

So, why is this data clinically meaningless?

What Mr Feuerstein probably meant to say was that the data was clinically meaningless as to efficacy.

Not true.

Like many phase 2a trials run by small and even big companies, this trial's secondary endpoints were simply for indications of efficacy, thus trying to disprove negative hypothesis.

The negative hypothesis is: the drug is completely without efficacy. If that's the case, no small company would waste hundreds of millions of dollars on further trials.

To disprove that hypothesis, you don't have to prove the drug candidate is effective. All you need to prove is that there "seems to be" signs of efficacy which requires further trials.

The real fight takes place in phase 2b and 3, where efficacy (or lack thereof) is proven in large population, multi-arm, placebo or SoC controlled trials.

My central beef with this entire Feuerstein scenario is: you do not want to give this company even the opportunity to prove itself in phase 3.


Personally, I have always been cautious about any OTC company, including Anavex - my funds are too limited for the luxury of incautious investment. However, not letting them even enter the debate by invoking their alleged past and denying without adequate proof their present achievements? Mr Feuerstein, I don't know about you, but I think that is downright not cricket.