H.C. Wainwright Weighs in on AEterna Zentaris Inc. (USA) (AEZS) Post Q3 Update

On November 9th, AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) posted third-quarter financial earnings and held a conference call. In reaction, H.C. Wainwright analyst Swayampakula Ramakanth reiterates a Buy rating on shares of AEZS with a $12 price target, which represents just under a 240% increase from where the stock is currently trading.

The analyst believes in regards to the firm’s pipeline drug Macrilen, a ghrelin agonist in development for use in evaluating adult growth hormone deficiency (AGHD), “If Macrilen is able to demonstrate comparable accuracy as ITT, we believe it could garner significant market share. Furthermore, with the introduction of an easier-to-use test like Macrilen, we believe the AGHD diagnostic market could also be expanded to cover patients suffering from traumatic brain injury as well. Since we expect Macrilen to have a six-month accelerated approval process at the FDA, We believe it could receive regulatory approval before the end of 2017 and achieve risk-adjusted revenues of $50M by 2025.”

When assessing the firm’s pipeline drug Zoptrex, a cytotoxic peptide conjugate focused under development for multiple cancer indications, Ramakanth concludes, “Based on the results from earlier studies, we believe that the ZoptEC study is likely to be successful and that positive result from this study would be a significant catalyst for the stock.” Ramakanth finds the “Zoptrex study on track to report in 1Q17.”

For the quarter, the biotech firm posted $269,000 in revenues and a net loss of $0.61 per share, coming in above Ramakanth’s projected forecasts for $223,000 in revenues and a net loss of $0.74 per share. The analyst attributes this to a $1.6 million non-cash addition from warrant liabilities, which was “partially offset” by R&D expenses that hit higher than initially anticipated. Subsequently, Ramakanth has tweaked revenues for 2016 to $1.1 million and expects a net loss of $2.60 per share.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Swayampakula Ramakanth is ranked #4,109 out of 4,223 analysts. Ramakanth has a 29% success rate and faces a loss of 18.5% in his annual returns. When recommending AEZS, Ramakanth forfeits 47.7% in average profits on the stock.

TipRanks analytics indicate AEZS as a Buy. Out of 2 analysts polled by TipRanks, both are bullish on AEterna stock. With a return potential of 150%, the stock’s consensus target price stands at $8.75.  screen-shot-11-16-16-at-07-55-pm

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