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AEterna Zentaris Inc. (USA) (AEZS) Stock Fires Up to the Roof; Here’s Why


AEterna Zentaris Inc. (USA)(NASDAQ:AEZS) investors are busy throwing a party today following the news that tiny drug maker has sold its U.S. and Canadian rights to MACRILEN™ (macimorelin), a drug designed to evaluate adults for growth hormone deficiency, to Strongbridge Biopharma (NASDAQ:SBBP).

Under the terms of the license and assignment agreement, Strongbridge will make an upfront payment of $24 million to Aeterna Zentaris within five days of the effective date of the agreement.  Strongbridge has agreed to pay tiered royalties in the mid-to-high teens as a percentage of net sales as well as milestone payments upon FDA approval of a pediatric indication and the achievement of pre-determined sales levels. The license and assignment agreement also provides Strongbridge with an exclusive license to manufacture and commercialize MACRILEN in the U.S. and Canada. Aeterna Zentaris will remain responsible for a pediatric development program to support regulatory submission for approval with Strongbridge sharing oversight and paying for 70 percent of the cost of the program, or approximately $4 million over a three-year period. Strongbridge expects to commercially launch MACRILEN in mid-year 2018.

AEterna Zentaris shares reacted to the news, skyrocketing over 30% in early trading Wednesday.

“We are extremely proud to acquire the U.S. and Canadian rights to MACRILEN, the first and only oral drug approved in the U.S. to diagnose adult growth hormone deficiency, or AGHD. MACRILEN has Orphan Drug Designation in the U.S. and was developed to address important unmet needs in the diagnosis and appropriate treatment of adult growth hormone deficiency, a condition that we believe is too often under-recognized or misdiagnosed, in part because of the lack of accurate, convenient and safe diagnostic procedures,” said Matthew Pauls, president and chief executive officer of Strongbridge Biopharma. “The acquisition of MACRILEN builds upon our rare endocrine disease franchise and establishes our commercial presence in the space, marking an important step forward for Strongbridge’s overall growth and evolution. Importantly, this transaction occurs prior to the potential regulatory approval and market introduction of RECORLEV™ (levoketoconazole), currently in Phase 3 for endogenous Cushing’s syndrome, a condition often treated by the same endocrinologists who diagnose and treat AGHD,” Pauls added.

On the ratings front, Aeterna Zentaris stock has been the subject of a number of recent research reports. In a report issued on December 21, Maxim analyst Jason Kolbert assigned a Buy rating on AEZS, with a price target of $4.00, which represents a potential upside of 93% from where the stock is currently trading. On November 29, H.C. Wainwright’s Swayampakula Ramakanth reiterated a Buy rating on the stock and has a price target of $3.00.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Kolbert and Swayampakula Ramakanth have a yearly average loss of -4.1% and -0.8% respectively. Kolbert has a success rate of 40% and is ranked #4590 out of 4748 analysts, while Ramakanth has a success rate of 39% and is ranked #3938.

Æterna Zentaris operates as a specialty biopharmaceutical company that is engaged in developing and commercializing novel treatments in oncology, endocrinology and women’s health. The company’s pipeline encompasses compounds at all stages of development, from drug discovery through to marketed products. It focuses on the development of Perifosine, Cetrotide, Ozarelix, AEZS-108 and AEZS-130.

 

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