In a research report released Monday, Canaccord analyst Neil Maruoka maintained a Hold rating on AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) and reduced the price target to $0.15 (from $0.70), citing substantial dilution risk.
Maruoka noted, “During the quarter, the company announced plans to initiate a new Phase III study of Macrilen, which could be complete by the end of next year. Further, patient recruitment in the Phase III study of Zoptarelin was complete in Q2, with a second DSMB interim analysis scheduled for October 2015. Despite the advancement of these key value-driving programs, we have difficulty recommending investors buy the stock in light of dilution risk from the most recent financing.”
“We believe that the Series B warrants present investors with substantial dilution risk. Until we have greater visibility of the dilution here, we urge caution ahead of potential catalysts for Zoptarelin and Macrelin,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Neil Maruoka has a total average return of 7.5% and a 62.2% success rate. Maruoka has a 0.0% average return when recommending AEZS, and is ranked #1046 out of 3737 analysts.
Out of the 4 analysts polled by TipRanks, 3 rate Aeterna Zentaris stock a Buy, while 1 rates the stock a Hold. With a return potential of 792.9%, the stock’s consensus target price stands at $1.19.