Aeterna Zentaris Inc. (NASDAQ: AEZS), is a specialty biopharmaceutical company, engages in developing and commercializing pharmaceutical therapies for treating oncology, endocrinology, and women’s health.
Aeterna Zentaris is up on a 159X surge in volume in reaction to Strongbridge Biopharma’s out-licensing deal with Novo Nordisk for U.S. and Canadian rights to the AEZS drug MACRILEN (macimorelin). Under the terms of their agreement, AEZS will eligible for a portion of milestone payments for a pediatric indication and for achieving certain sales targets.
Danish diabetes giant Novo Nordisk has bought the US and Canadian rights to Macrilen (macimorelin), from Strongbridge Biopharma. Macrilen is the first and only US Food and Drug Administration-approved oral growth hormone receptor indicated for the diagnosis of adult growth hormone deficiency (AGHD), a rare endocrine disorder. The product was approved by the US FDA in December 2017 and was launched in the USA in July 2018. Novo Nordisk has agreed to pay $145 million to Strongbridge as well as tiered royalties related to sales of Macrilen, and take a 10% share in the company for about $37 million. Strongbridge’s current field organization will continue to promote Macrilen in the USA for up to three-years, under the terms of the agreement, while Novo Nordisk’s existing biopharma field force will support the commercialization of Macrilen.
The Company’s U.S. and Canadian out-licensing partner, Strongbridge Biopharma plc (SBBP) officially launched the AEZS lead product Macrilen™ (macimorelin) in the United States effective July 23, 2018. Macrilen™ is the first and only FDA-approved oral ghrelin receptor agonist to be administered in the diagnosis of patients with adult growth hormone deficiency (AGHD) in the United States.
The Company successfully submitted its required response to the European Medicines Agency (EMA) for the use of macimorelin for the evaluation of AGHD in July 2018.
The Company continues to respond to out-licensing and other commercial partners for other markets globally.
The Company’s financial condition remains strong with $19.9 million of cash and cash equivalents and no debt.
The AEZS lead drug candidate is Macimorelin an oral growth hormone secretagogue (GHS) receptor agonist used to test for Adult Growth Hormone Deficiency (AGHD), a rare endocrine disorder.
About 6,000 cases of AGHD are reported each year in the United States, with an estimated 50,000 diagnosed adults. The prevalence after traumatic brain injury is estimated at 12%.1.
How Macimorelin Works
- Macimorelin stimulates the secretion of GH from the pituitary gland into the circulatory system.
- Stimulated GH levels are measured in only four blood samples over ninety minutes after oral administration of macimorelin (no intravenous infusions or intramuscular injections)
- No healthcare personnel supervision is required.
Its commercial product is the Macrilen, a ghrelin receptor agonist that stimulates the secretion of growth hormone by binding to the GHSR-1a, a ghrelin receptor, which is used for endocrinology and oncology indications. The company has a license and assignment agreement with Strongbridge Ireland Limited for the development, manufacturing, registration, and commercialization of Macrilen in the United States and Canada. It also has a collaboration agreement with Sinopharm A-Think Pharmaceuticals Co., Ltd. for the development, manufacture, and commercialization of Zoptrex, which has completed Phase III clinical study for women with advanced, recurrent, or metastatic endometrial cancer in the People’s Republic of China. Aeterna Zentaris Inc. was founded in 1991 and is headquartered in Summerville, South Carolina.
2 Wall Street analysts have issued ratings and price targets for AEterna Zentaris in the last 12 months. Their average twelve-month price target is $3.50, suggesting that the stock has a possible upside of 80.41%. The high price target for AEZS is $4.00 and the low price target for AEZS is $3.00. There are currently 2 buy ratings for the stock, resulting in a consensus rating of “Buy.”
6/15/2018 Maxim Group Reiterated Rating Buy
5/9/2018 HC Wainwright Reiterated Rating Buy $3.00
Second Quarter Highlights
Cash $19.9 million
Revenues $0.2 million
Research and Development (“R&D”) Costs $1.0 million
General and Administrative (“G&A”) Expenses $2.0 million
Net loss $2.6 million
Stock influences and risk factors
Milestone payments from Macrilen™ may act as a stock catalyst for AEZS shares.
They have a history of operating losses and may never achieve or maintain operating profitability.
If they are unsuccessful in generating new revenue, increasing revenue and/or raising additional funding, they may not be able to continue as a going concern.
If they decide to pursue new clinical trial programs for new products in the future and are unable to successfully complete those clinical trial programs, or if such clinical trials take longer to complete than projected, their ability to execute any related business strategy will be adversely affected.
On Wednesday, October 31, 2018, AEZS shares were at $2.11 (+62.31%) on traded volume of 12.8 million shares. The current RSI (14) is 72.64
At $2.11, AEZS shares are trading above their 50 DMA and 200 DMA of $1.66 and $1.82 respectively.
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