Maxim analyst Jason Kolbert is out with a bullish research report today on AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) just one week after the biotech firm announced its Phase 3 clinical trial of Macrilen failed to achieve the primary objective.
Yet, after spending time with AEZS management last week, the analyst has added Macrilen back to his model and reiterates a Buy rating while lifting the price target from $7 to $10, which represents a just under 267% increase from where the shares last closed. Subsequently, shares have been escalating almost 7%.
Kolbert believes, “Given the very high risk(s) associated with the traditional insulin tolerance test (ITT) and the ‘arbitrary’ high limit that was set, it seems reasonable that regulators will be open to discussions with the company. The most likely scenario would be an additional phase III modestly powered trial of 140 patients (at a cost of $3 million) with a year to complete. As such, we return Macrilen back to our model but push the timeline out a year.”
Ultimately, “Had the lower bound been set lower on the positive agreement side, the test would likely have yielded a result consistent with the traditional ITT. Since this is an ‘arbitrary’ comparison, we believe adjusting the level makes sense. The Macrilen test, in our view, is a safer and more reliable option. As such, we believe regulators will be open to discuss a path forward,” Kolbert concludes.
As usual, we recommend taking analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, Jason Kolbert is ranked #4,288 out of 4,349 analysts. Kolbert has a 30% success rate and loses 15.1% in his yearly returns. When suggesting AEZS, Kolbert forfeits 55.0% in average profits on the stock.
TipRanks analytics indicate AEZS as a Strong Buy. Based on 3 analysts polled by TipRanks in the last 3 months, all 3 rate a Buy on AEZS stock. The 12-month average price target stands at $8.17, marking a 208% upside from where the stock is currently trading.
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