Stock Alert for AEterna Zentaris Inc. (AEZS)
AEterna Zentaris Inc. (AEZS) is a global biopharmaceutical company focused on endocrine therapy and oncology. The Company’s product pipeline encompasses compounds at all stages of development, from drug discovery through marketed products. The products of the Company include Cetrorelix, AEZS-108, Perifosine, Ozarelix, AEZS-112 and AEZS-130. On March 31, 2008, the Company completed the selling of the Company’s product Impavido to Paladin Labs Inc. (Paladin). On March 5, 2009, the Company entered into a development, commercialization and license agreement with sanofi-aventis for the development, registration and marketing of cetrorelix in benign prostatic hyperplasia (BPH) for the U.S. market.
AEterna Zentaris Inc. was founded in 1991 and is headquartered in Quebec City, Canada.
| Share Statistics (Jul-28-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | AEZS | Revenue, $Mn | 42.07M | 38.48M | 8.5% | 7.24M | 40.18M | 455.0% |
| Current price | $1.08 | Gross marg. | 69.3% | 49.9% | 28.0% | 75.1% | 90.6% | 17.1% |
| 52wk Range: | $3.01-0.75 | Oper. margin | -82.6% | -162.1% | 38.5% | -225.4% | 28.6% | 112.7% |
| Avg Vol (3m): | 3,945,140 | Net margin | -89.0% | -145.7% | 63.7% | -162.4% | 46.1% | 128.4% |
| Market Cap. | 80.14M | |||||||
| Shares Outst. | 83.1M | EPS, $ | -0.61 | -1.12 | 83.6% | -0.27 | 0.30 | 211.1% |
Source: Reuters.com, SEC Filings.
Financial Summary
Revenues were $6.4 million for the three-month period ended March 31, 2010, compared to $6.1 million for the same period in 2009. The increase is mainly due to a comparative increase in sales of Cetrotide® to certain customers in the first quarter of 2010. This increase was partly offset by lower amortization of upfront license fee payments in 2010 related to AEZS’s agreement with Sanofi-aventis U.S. LLC (“sanofi-aventis”), which was entered into in March 2009, in connection with the Company’s now discontinued development program involving cetrorelix for the treatment of Benign Prostatic Hyperplasia (“BPH”), and subsequently terminated.
Research and development (“R&D”) costs, net of tax credits and grants, were $5.7 million for the three-month period ended March 31, 2010, compared to $11.4 million for the same period in 2009. The comparative decrease in net R&D costs is almost entirely attributable to the winding down and termination of development activities related to cetrorelix in BPH, despite the presence in the first quarter of 2010 of residual expenditures associated with certain remaining contractual obligations.
Selling, general and administrative (“SG&A”) expenses were $2.8 million for the three-month period ended March 31, 2010, compared to $3.6 million for the same period in 2009. This decrease is primarily related to lower comparative salary and benefit costs, lower legal expenses and other cost-saving measures.
Net loss was $5.9 million, or $0.09 per basic and diluted share, for the three-month period ended March 31, 2010, compared to $12.4 million, or $0.23 per basic and diluted share, for the same period in 2009. This decrease is mainly related to lower comparative net R&D costs, lower SG&A expenses and higher foreign exchange gains, partly offset by lower comparative license fee revenues and lower sales and royalty margins.
Cash and cash equivalents were $26.9 million at March 31, 2010. This amount excludes an estimated $13.7 million of net proceeds received in connection with the registered direct offering completed on April 20, 2010.
| Financial Strength (Jul-28-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 2.28 | 5.16 | 2.65 | 0.73 |
| Current Ratio (MRQ) | 2.52 | 5.54 | 3.17 | 0.88 |
| Long-Term Debt to Equity(MRQ) | 3.72 | 18.53 | 22.97 | 112.53 |
| Total Debt to Equity (MRQ) | 5.58 | 24.24 | 29.32 | 176.36 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
This is the consensus forecast among seven polled investment analysts. Against the AEterna Zentaris Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 2 | 1 | 3 | 1 | 0 | 0 |
| 4 weeks ago | 2 | 1 | 3 | 1 | 0 | 0 |
| 2 months ago | 2 | 1 | 2 | 1 | 0 | 0 |
| 3 months ago | 2 | 1 | 2 | 1 | 0 | 1 |
| Last year | 3 | 3 | 1 | 0 | 0 | 0 |
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Sep-10 | 2 | 6.13 | 6.22 | 6.04 | 6.60 |
| Quarter Ending Dec-10 | 2 | 5.82 | 5.94 | 5.70 | 6.60 |
| Year Ending Dec-10 | 6 | 24.11 | 31.70 | 15.00 | 27.53 |
| Year Ending Dec-11 | 5 | 19.97 | 26.60 | 12.30 | 36.73 |
| EARNINGS (per share) | |||||
| Quarter Ending Sep-10 | 2 | -0.10 | -0.10 | -0.10 | -0.14 |
| Quarter Ending Dec-10 | 2 | -0.09 | -0.09 | -0.10 | -0.14 |
| Year Ending Dec-10 | 6 | -0.44 | -0.35 | -0.60 | -0.58 |
| Year Ending Dec-11 | 5 | -0.44 | -0.34 | -0.59 | -0.19 |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=AEZS.A
Investment Highlights
First-Quarter 2010 Highlights
- January 25, 2010: Updated results of a phase 2 study related to the use of perifosine in the treatment of advanced metastatic colon cancer showing a statistically significant benefit in survival, including 5 FU-refractory patients.
- January 29, 2010: Publication in the February 2010 issue of the Journal of Clinical Cancer Research of positive phase 2 results for perifosine as a single agent for the treatment of advanced Waldenstrom’s macroglobulinemia.
- February 3, 2010: Special Protocol Assessment (SPA) granted by the United States Food and Drug Administration (FDA) for the phase 3 trial of perifosine in combination with capecitabine (Xeloda®) in refractory advanced colorectal cancer. The trial is to be conducted by Keryx Biopharmaceuticals Inc. (NASDAQ: KERX), AEZS’ partner and licensee for perifosine in North America.
- March 1, 2010: Disclosure that the Committee for Orphan Medicinal Products of the European Medicines Agency (EMA) had issued a positive opinion for orphan medicinal product designation for perifosine for the treatment of multiple myeloma.
Subsequent to Quarter-End
- April 5, 2010: Perifosine receives FDA Fast Track Designation for the phase 3 X-PECT (Xeloda® + Perifosine Evaluation in Colorectal cancer Treatment) registration trial.
- April 8, 2010: Initiation of a phase 3 registration trial with perifosine in refractory advanced colorectal cancer by Keryx.
- April 15, 2010: Positive Scientific Advice from the EMA for the phase 3 program with perifosine in multiple myeloma. Data from ongoing phase 3 study, sponsored by Keryx, can be used to register perifosine in multiple myeloma in Europe.
- April 20, 2010: Presentations of preclinical data on Erk inhibitor, AEZS 131, and Erk/PI3K dual inhibitor, AEZS 132, as well as preclinical data from a study sponsored by the National Institutes of Health with perifosine in oncology at the American Association for Cancer Research Annual Meeting in Washington, D.C.
- April 20, 2010: Completion of a $15.0 million registered direct offering with certain institutional investors.
- April, 23, 2010: Company regained compliance with Nasdaq’s minimum bid price listing requirement.
- May 6, 2010: Company receives orphan-drug designation from the FDA for AEZS 108 in ovarian cancer.
- May 12, 2010: FDA approves the Company’s Investigational New Drug (IND) application for AEZS 108 in LHRH-receptor positive urothelial (bladder) cancer.
Recent News
AEZS recently announced that its partner, Keryx Biopharmaceuticals Inc. (Nasdaq: KERX), has been granted orphan-drug designation by the U.S. Food and Drug Administration for perifosine, the Company’s novel, potentially first-in-class, oral Akt inhibitor, for the treatment of neuroblastoma. Neuroblastoma is a cancer of the nervous system affecting mostly children and infants for which there are no FDA approved therapies. Keryx is AEZS’ partner and licensee for perifosine in the United States, Canada and Mexico. AEZS has also out-licensed perifosine to Handok in South Korea, while retaining rights for the rest of the world.
Phase 1 data of perifosine in recurrent pediatric solid tumors, including neuroblastoma, were presented last month in the pediatric solid tumor poster discussion session held at the 46th Annual Meeting of the American Society of Clinical Oncology. Investigators from the Memorial Sloan-Kettering Cancer Center concluded that perifosine was demonstrated to be safe and well tolerated in children with advanced solid tumors and that perifosine may have antitumor clinical activity as a single agent in neuroblastoma. Additionally, in a preclinical study recently published in the Journal of the National Cancer Institute, perifosine showed a statistically significant reduction in neuroblastoma cell survival, slowed or regressed tumor growth, and increased survival in mice bearing neuroblastoma tumors.
A decreased level of activated Akt was also observed in perifosine-treated neuroblastoma cells and xenograft tumors.
About Perifosine
Perifosine, a novel, potentially first-in-class, oral Akt inhibitor, is currently in phase 3 trials in the United States for advanced colorectal cancer and multiple myeloma, under Special Protocol Assessment and Fast Track designation granted by the FDA for both indications. FDA has also granted perifosine orphan-drug designation for multiple myeloma and neuroblastoma. In Europe, the European Medicines Agency (“EMA”) has issued positive Scientific Advice for perifosine in multiple myeloma and colorectal cancer, as well as positive opinion for Orphan Medicinal Product designation for perifosine in multiple myeloma.
Perifosine is also in a phase 1 trial in pediatric patients, as well as in other phase 1 and phase 2 trials for several other tumor types.
Source: http://www.aezsinc.com/
Technical Analysis
Source: http://stockcharts.com
AEZS is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.
AEZS has been relatively stable recently. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, AEZS is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
AEZS’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below zero, which suggests that the underlying moving averages are bearish.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| Jul-28-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| SuperGen Inc. | SUPG | 1.87 | 112.72M | 21.08 | n/a | 2.83 | n/a |
| Protox Therapeutics Inc. | TSE:PRX | 0.38 | 37.08M | n/a | n/a | n/a | n/a |
| Spectrum Pharmaceuticals Inc. | SPPI | 4.31 | 213.34M | n/a | n/a | 5.68 | n/a |
| Drug Manufacturers Median | 121.04M | n/a | n/a | 4.25 | n/a | ||
| AEterna Zentaris Inc. | AEZS | 1.08 | 80.14M | n/a | n/a | 1.27 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
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| Shares | Transaction | |
| Purchases | n/a | n/a |
| Sales | n/a | n/a |
| Net Shares Purchased (Sold) | n/a | n/a |
| Total Insider Shares Held | n/a | n/a |
| % Net Shares Purchased (Sold) | n/a | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | n/a |
| % Change in Institutional Shares Held | n/a |
Source: Yahoo Finance
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