AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) has had a rough year in the market. However, it seems as though the stock has reached support. With positive data surrounding an experimental treatment, great analyst opinions and more, the stock climbed dramatically in the market last week and seems poised to do the same this week. Today, we’ll talk about the experimental drug that’s showing strong signs, how analysts feel about the stock and what we can expect to see from AEZS moving forward.
AEZS is currently working on a Phase 3 study known as ZoptEC that surrounds the experimental drug Zoptrex. Zoptrex is being designed to treat men who have a wide range of medical ailments including prostate cancer and pre-treated castration. Recently, AEZS received the green light from DSMB, recommending that they continue the Phase 3 study of Zoptrex based on what we’ve seen in the study so far. The green light led to the build of investor excitement that we saw last week, leading to the more than 150% growth we saw in the stock.
Currently, there are three analysts covering AEZS. Of all three in the coverage, every one of them rates that stock a buy. While three analysts isn’t a big sample size to go off of, it’s rare that every analyst rating a stock will rate it a buy, so this is a great signal for AEZS and its investors.
Throughout the year, AEZS has been struggling with high short interest. However, that issue seems to be going away as well. As of November 13th, short interest on AEZS totaled 1,338,682 shares. That’s a massive decline from the 5,869,537 short shares we saw on the stock on October 30th. This is important because when investors feel as though a stock is likely to decline, they generally short the stock. However, in this particular case, short interest has fallen dramatically, more than 77% to be exact. This means that we’re seeing an overwhelmingly positive change in investor sentiment surrounding AEZS.
Moving forward, I have an incredibly bullish opinion of what we can expect to see from AEZS moving forward. While it’s unfortunate that we’ve see such a decline in the stock since the beginning of the year, I believe that AEterna Zentaris has reached heavy support in the market and that we’re not likely to see a continuation of long-term declines. The first reason for this is the ZoptEC study. The positive recommendation surrounding the study suggests that the Phase 3 study is likely to yield positive results, as did the Phase 2 study. As a result, of this analysts are overwhelmingly bullish and investor sentiment surrounding AEZS is turning incredibly positive. With all of these factors taken into consideration, I don’t see any reason the stock would realize long-term downtrends. However, I do see plenty of reasons for growth.
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