Company Update (NASDAQ:AEZS): AEterna Zentaris Inc. (USA) Reports Second Quarter 2016 Financial and Operating Results


AEterna Zentaris Inc. (USA) (NASDAQ:AEZS), a specialty biopharmaceutical company engaged in developing and commercializing novel treatments in oncology, endocrinology and women’s health, today reported financial and operating results for the second quarter ended June 30, 2016.

Commenting on recent key developments, David A. Dodd, President and Chief Executive Officer of the Company, stated, “After the end of Q2, we concluded two important out-license agreements for Zoptrex™, confirming the market’s interest in our lead oncology compound, Zoptrex™ (zoptarelin doxorubicin). Zoptrex™ is a novel synthetic peptide carrier linked to doxorubicin as a New Chemical Entity (NCE). Based on recent information regarding the survival of patients in the Phase 3 clinical trial of Zoptrex™, we expect to complete the trial by year-end. If the results of the trial warrant doing so, we intend to file a new drug application for Zoptrex™ in the first half of 2017.”

Mr. Dodd continued his commentary with an update on the development of Macrilen™ (macimorelin), “We are pleased to announce that we should complete enrollment in our confirmatory Phase 3 study of Macrilen™ for the evaluation of adult growth hormone deficiency by the end of August. As a result, we are very confident that the study of Macrilen™ will be concluded in 2016. If our expectations for completion of the confirmatory Phase 3 study are realized and if the top-line results indicate that the product attained the primary endpoint of the Phase 3 study, we expect to file an NDA for Macrilen™ during the first half of 2017. Since the regulatory review period for the Macrilen™ confirmatory study is six months, we could begin commercializing the product late in 2017.”

Second Quarter 2016 Financial Highlights

R&D costs were $3.7 million for the three-month period ended June 30, 2016 and $7.4 million for the six-month period then ended, compared to $4.5 million and $8.9 million, respectively, for the three-month and six-month periods ended June 30, 2015. The decrease for the three-month and six-month periods ended June 30, 2016, as compared to the same period in 2015, is mainly attributable to lower comparative third-party costs. Third-party costs attributable to Zoptrex™ decreased considerably during the three-month and six-month periods ended June 30, 2016, as compared to the same periods in 2015, mainly due to the fact that dosing of patients in the ZoptEC trial was completed in February 2016. This is consistent with our expectations as we are approaching the end of the clinical trials. In addition, during 2015, we started the confirmatory Phase 3 clinical trial of Macrilen™, which explains the increase in costs for this product candidate. The overall decrease in R&D costs is also explained by lower employee compensation and benefits costs, lower facilities rent and maintenance as well as lower other costs. A substantial portion of this decrease is due to the realization of cost savings in connection with our effort to streamline our R&D activities and to increase our commercial operations and flexibility by reducing our R&D staff, which was started in 2014, and for which a provision was recorded in the third quarter of 2014.

G&A expenses were $1.9 million for the three-month period ended June 30, 2016, and $3.8 million for the six-month period then ended, compared to $2.0 million and $5.4 million, respectively, for the three-month and six-month periods ended June 30, 2015. The comparative decrease for the six-month period is mainly attributable to the recording, in the prior year quarter, of certain transaction costs allocated to warrants in connection with the completion of the March 2015 Offering.

Selling expenses were $1.7 million for the three-month period ended June 30, 2016 and $3.4 million for the six-month period then ended, essentially unchanged as compared to the three-month and six-month periods ended June 30, 2015. The selling expenses for the three- and six-month periods ended June 30, 2016 and 2015 represent the costs of our contracted sales force related to the co-promotion activities as well as our internal sales management team. Those activities were launched during the fourth quarter of 2014.

Net loss for the three-month and six-month periods ended June 30, 2016 were $7.0 million and $10.7 million, respectively, or $0.71 and $1.08, respectively, both per basic and diluted share. During the same three-month and six-month periods in 2015, our net loss was $15.1 million and $24.8 million, respectively, or $13.65 and $27.22, respectively, per basic and diluted share for the same period in 2015. The decrease in net loss for the three-month and six- month periods ended June 30, 2016, as compared to the same periods in 2015, is due largely to lower operating expenses and higher comparative net finance income.

Cash and cash equivalents were approximately $26.2 million as at June 30, 2016, compared to approximately $33.0 million as at March 31, 2016. (Original Source)

Shares of Aeterna Zentaris are up nearly 4% to $3.75 in after-hours trading Tuesday. AEZS has a 1-year high of $20.14 and a 1-year low of $2.60. The stock’s 50-day moving average is $3.41 and its 200-day moving average is $3.47.

On the ratings front, AEZS has been the subject of a number of recent research reports. In a report issued on August 1, Maxim Group analyst Jason Kolbert reiterated a Buy rating on AEZS, with a price target of $11, which implies an upside of 205% from current levels. Separately, on July 8, H.C. Wainwright’s Swayampakula Ramakanth reiterated a Buy rating on the stock and has a price target of $12.

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 total average return of -15.3% and -7.3% respectively. Kolbert has a success rate of 29% and is ranked #4016 out of 4105 analysts, while Ramakanth has a success rate of 37% and is ranked #3863.

Æterna Zentaris, Inc. 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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