Jason Kolbert Believes AEterna Zentaris Inc. (USA) (AEZS) Is “Deeply Undervalued;” Shares Leap 64% Following FDA Win for AGHD Drug

Maxim's Jason Kolbert bets AEZS' oral test could set a new standard in addressing Adult Growth Hormone Deficiency (AGHD) with FDA approval now under its belt.


AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) shares are rocketing 64% after the firm’s lead asset Macrilen, what will stand as the FDA’s only approved drug to assess Adult Growth Hormone Deficiency (AGHD) just gained a green light. The Canadian drug maker intends to launch its oral test to diagnose AGHD come the first quarter of the new year, forecasting roughly 60,000 tests to diagnose the deficiency are administered every year throughout the U.S., Canada, and Europe.

Maxim analyst Jason Kolbert is among the thrilled bulls throwing a party on the Street today, expecting this AGHD asset could be a real cash machine for the biotech company.

Seeing a bright and prosperous future for Macrilen waiting ahead, the analyst reiterates a Buy rating on AEZS stock with a $4 price target, which implies a close to 22% upside from current levels. (To watch Kolbert’s track record, click here)

For Kolbert, this is “no longer” a question of “if approved,” adding that this FDA victory paves the way for what could be a game-changer in AGHD: “As a reminder, the only test used for AGHD, the insulin tolerance test (ITT), is difficult to perform and has significant risks for the patient. Macrilen is a safer test than ITT and can be repeated with accuracy multiple times. Macrilen could become the new standard for addressing AGHD and be rapidly adopted by physicians.”

As the company bolsters its sales force, the analyst notes that though in the past the AEZS team anticipated a February 2018 launch date, the priority has now evolved to focus on the creation of a commercial sales force specializing in endocrinology experience. “Management believes that focusing the sales effort on key pituitary and endocrinology centers can drive faster adoption,” writes Kolbert.

The analyst likewise looks ahead with excitement for data that points to “a more powerful stimulator of growth hormone (GH) release than the ITT:” “In Europe as we now know, AEterna has filed the MAA for Macrilen. Ex-U.S., management has previously expressed their intention to out-license Macrilen so they can focus on sales domestically. Pediatric Program: AEterna has received agreement from the EMA on a Pediatric Development Plan and intends to engage after the approval of adult Macrilen.”

In a nutshell, “We believe Macrilen could generate substantial revenue, but even at a modest $50M in peak revenues and 3-5x revenues as a multiple, we see AEZS as deeply undervalued,” Kolbert contends, all bets in on today’s bull of the day.

TipRanks shows that the initial word on the Street goes to the bulls when it comes to analyst consensus on AEterna Zentaris’ market opportunity. All 3 analysts polled in the last 12 months rate a Buy on this biotech player. Is the stock overvalued or undervalued when taking under account expert expectations? With a solid return potential of nearly 27%, the stock’s consensus target price lands at $4.17, making AEterna a biotech company to watch.