VFC's Stock House: AEterna Zentaris A Potential Rebound And Growth Play Based On Pipeline Progress And Pending Catalysts
(EMAILWIRE.COM, September 18, 2012 ) New York, NY -- A recent price and volume boost for shares of AEterna Zentaris (AEZS) has drawn investor attention to the fact that this company could be setting up as a nice rebound and growth story, as outlined by VFC's Stock House, an information and research outlet that brings ideas and opens discussions to a broad spectrum of investors, in a Tuesday report available at: http://vfcsstockhouse.com/blog/article/-aeterna-zentaris-a-potential-rebound-and-growth-play-based-on-pipeline-progress-and-pending-catalysts

AEterna Zentaris was cruising along earlier this year with a share price four times the current levels, a pipeline full of potential and results from a Phase III trial testing the company's lead product candidate, Perifisone, in the treatment of metastatic colorectal cancer soon to be released. Investor confidence was also building as shares of both AEterna and partner Keryx Biopharmaceuticals (KERX) were quickly heading higher leading into the trial catalyst. All that changed overnight, however, when it was announced that Perifisone failed the Phase III trial. AEterna shares plunged, as did those of Keryx, and neither company has yet to return to the pre-results highs. AEterna, actually, remained stagnant over the course of the summer, trading at well below the dollar mark as investors demonstrated a loss of confidence in Perifisone, which was (and still is) being investigated in a Phase III trial for multiple myeloma (MM).

In general, the short term minded investors reacted to the immediate news, bailed out and went looking for quicker gains elsewhere. While that strategy is typical in today's environment of seeking quick gains, others may have seen some benefit is slow accumulation of AEZS shares with a more patient eye towards the development of the rest of the pipeline - which still includes Perifisone, too. Those investors may start to see quick returns of their own as volume has been rolling into AEZS trading over the past couple of weeks, and the share price has also followed higher.

At the open of September the stock was trading at fifty cents and below, but a swift influx of trading volume last week boosted shares to nearly seventy cents before the profit-takers jumped ship and sent shares back to the low sixties. Such a quick barrage of price and volume, however, has brought additional eyes to the AEterna story and many may like what they see.

One outcome of the failed Perifisone trial earlier this year was that all North American rights to the drug were returned to AEterna from then-partner Keryx, leaving AEterna to most benefit from any future successes. The MM trial, as mentioned, is still trucking along in Phase III and interim results from the trial are expected to be released in the first quarter of next year, according to a current company presentation available on the company website.

Investors may not give due notice to the advancement of Perifisone after its noted failure in the colorectal indication, but there are numerous instances, as outlined in a report earlier this year, of cancer-fighting product candidates failing in the treatment of one indication, only to prove successful in treating others.

Perifisone still remains the company's flagship product candidate and successful interim results early next year could reinvigorate investor interest in the product.

Beyond Perifisone, however, the company boasts a deep pipeline of potential and offers the company multiple paths for success. Such a pipeline is always a positive for a developmental stage company, as it provides the company with room for error (although it should also be noted that multiple pipeline products also means more money needed for development). For instance, Perifisone failed one trial, but another was already under way; and for investors who discount the potential of Perifisone altogether because of the trial failure, there is a lot more in the pipeline to take a look at, both clinical and pre-clinical.

The most advanced of 'the rest of the story' is AEZS-130, a diagnostic test for Adult Growth Hormone Deficiency (AGHD) which has already proven successful in Phase III trials and for which the company plans to file an NDA with the FDA early next year. Should the product be approved, it would be the first orally-administered diagnostic test and has the potential to dominate the majority of its market, according to an Oppenheimer report this summer that tagged AEZS with a rating of 'perform.' AEZS-130 has already received an Orphan Drug Designation in the United States and the company has also filed for a Fast Track Designation and rolling-NDA for the product. Additionally, the company announced in August that the first patient had been treated in a Phase IIa trial for AEZS-130 in patients with cancer cachexia.

Between Perifisone and AEZS-130, investors have ample catalyst and milestone events to monitor with regards to this company.

A little earlier along in development is AEZS-108, another anti-cancer agent that has already proven successful in multiple Phase II trials and is being prepared for a near-term launch of a Phase III trial for endometrial cancer. Additional Phase I and II trials are also planned, positioning AEZS-108 as the AEterna product with potentially the most robust market potential.

According to the latest quarterly report, AEterna had nearly $40 million in the bank as of the end of June, 2012, with a monthly burn rate of just over $2 million. That cash cushion reduces investor risk of immediate massive dilution, but investors may also keep in mind that additional funds may be required at some point during development.

In the meantime, the price and volume action over the past couple of weeks could be an indication that investors may have gotten over the early-year Perifisone failure and are ready to again entertain the potential of the remaining pipeline candidates. While a move back towards the early-year highs is unlikely at this time, there is reason to believe that the stock could again push the dollar mark over the near to mid term, based on the advancement into late-stage trials of AEZS-108, the advancement to FDA approval of AEZS-130 and the pending interim look at the Perifisone MM trial. The potential for other sporadic interim and actual Phase II trial news could also hit the wires at any given time.

Lost and forgotten for the better part of 2012, AEZS may be in the midst of a fine period of recovery, and it looks like the pipeline potential is again grabbing attention.

Disclosure: No position.

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VFC's Stock House is an information and research outlet that brings new ideas to the table and opens discussions for a broad spectrum of investors, with a strong focus on - but not limited to - biotech stocks, biopharma stocks, and pharmaceutical and healthcare stocks. VFC's Stock House provides individual company profiles, write-ups and reports as well as giving general insights and opinions into broader-market news. At the conclusion of most weeks, VFC's Stock House issues a "Weekly Stock Watch" that examines news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well. The information contained within the pages of VFCs Stock House are not intended to be taken as advice, but as a starting point where investors can follow up with their own DD and make informed and well thought-out investment decisions. For full disclaimer visit: http://vfcsstockhouse.com





VFC's Stock House

VFC

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