BST Trade Alert: August 14, 2014
August 14, 2014
Recommendation:
Buy Aeterna Zentaris (NASDAQ: AEZS) up to $1.30
About the Company:
Aeterna Zentaris is a specialty biopharmaceutical company engaged in developing and commercializing novel treatments in oncology and endocrinology based in Quebec City, Canada.
The Company’s pipeline encompasses compounds at various stages of development:
- Macrilen (macimorelin) – an orally-administered drug for the evaluation of Adult Growth Hormone Deficiency (AGHD). The New Drug Application has been submitted to the FDA and the PDUFA date set for November 5, 2014.
- Zoptarelin Doxorubicin – the current ZoptEC phase 3 trial in endometrial cancer is ongoing with results expected in the first half of 2015.
- AEZS-134 – a highly potent and selective ATP competitive Erk inhibitor is a potential treatment for tumors that are resistant to currently established therapies.
For this trade, we’re focusing on the ongoing phase 3 trial results for ZoptEC. Those results are expected during the first half of 2015.
In addition to a robust pipeline, Aeterna Zentaris is also in solid financial condition.
The company has $39.6 million in cash. The company has the ability to raise $15 million through a sales agreement with MLV & Co. LLC. And they recently reduced overhead by cutting 1/3 of their staffing.
Let’s now take a closer look at one of the company’s leading drug candidates…
About the Drug:
The drug candidate with the biggest upside is zoptarelin doxorubicin.
ZoptEC is designed as a second-line treatment for women with advanced, recurrent, or metastatic endometrial cancer.
This engineered molecule composed of a synthetic peptide carrier linked to the widely used and well-known chemotherapeutic agent, doxorubicin. The treatment is intended to provide a more impactful delivery of the cytotoxic agent with fewer side effects.
Right now the clinical testing is in phase III.
They have completed initiation of 115 sites with over 230 patients recruited. That’s nearly half of the 500 patients needed for the study and enough to ensure the interim analysis due in the first half of 2015.
The primary endpoint is improvement in overall survival.
About the Market for This Drug:
Endometrial cancer is the most invasive gynecological cancer in women. There are approximately 53,000 new cases in the US every year.
Currently there are no systemic treatments approved for this disease in the US or Europe.
Needless to say, developing a treatment for this invasive cancer that currently has no approved treatment could be a windfall for Aeterna Zentaris.
About the Potential Catalyst:
Results from the phase 3 trial of ZoptEC in patients with endometrial cancer are expected in the first half of 2015.
About the Shares:
We have an opportunity to grab shares of AEZS for $1.24.
As you can see on the chart below, the stock is 30% below the $1.75 52-week high and 25% above the 52-week low of $0.99.
At $1.24, RIGL is changing hands at just 1.94x its $0.64 in cash per share. If we subtract out the cash from the company’s market cap of $68.1 million, investors are valuing Aeterna Zentaris at just $28.5 million.
Simply put, that’s too low for a biotech with a drug waiting for approval, another in late stage testing, and one more promising treatment in early stage testing.
Grab your shares of AEZS as soon as possible. This biotech stock’s a great buy up to $1.30 per share.
Key Facts:
| Company: | Aeterna Zentaris |
| Ticker: | AEZS |
| Recent Price: | $1.24 |
| Market Cap: | $68 million |
| Avg. Daily Volume: | 645,590 shares |
Chart:
Category: BST Trade Alert
