AEterna Zentaris Inc. (AEZS:NASDAQ) will regain full U.S. and Canadian rights to Macrilen Dx, its macimorelin-based oral diagnostic test for adult growth hormone deficiency, from Novo Nordisk Healthcare after the 270 days of notice end, reported H.C. Wainwright & Co. analyst Dr. Ram Selvaraju in a September 6, 2022 research note. Macimorelin is AEterna's oral, ghrelin-agonist that stimulates growth hormone secretion.
Also, in his report, Selvaraju pointed out the U.S.-based company is trading at "a considerable discount to its most recently reported cash position," indicating the market's valuation excludes macimorelin and its pipeline. AEterna's current share price is about $4.52, and H.C. Wainwright's price target on the biopharma is $28 per share, the difference between the figures indicating significant potential return for investors.
"We remain optimistic on Ghryvelin adoption in Europe," Selvaraju wrote. "We believe Ghryvelin's oral convenience and ability to stimulate growth hormone within one hour are desirable attributes that should resonate with the European Union physician community."
Selvaraju relayed what happens next regarding Macrilen Dx, approved by the U.S. Food and Drug Administration and the European Commission.
Now that Novo Nordisk has terminated the associated development and commercialization license agreement with AEterna, as of late August, after 270 subsequent days, Novo must return the related regulatory approvals and intellectual property to AEterna and help as needed in transitioning back the rights, the analyst noted.
In the interim, Novo must continue selling and promoting Macrilen Dx in the U.S. and keep its financial support for the DETECT trial in place, relayed Selvaraju. DETECT is a pivotal Phase 3 safety and efficacy study evaluating macimorelin for the diagnosis of childhood-onset growth hormone deficiency.
Selvaraju opined that AEterna should easily and quickly find a new partner to replace Novo and may even negotiate a better share of Macrilen Dx sales revenue. The analyst expects the product to gain traction in Europe, too, given, he wrote, it is safe, is as accurate as standard insulin tolerance testing (ITT), and unlike ITT, it can prevent adult growth hormone deficiency overdiagnosis.
In other macimorelin news, indicated Selvaraju, AEterna partnered with Consilient Health to commercialize the drug, under the name Ghryvelin, in Europe, where it was approved in 2019. Per the agreement between the two companies, AEterna is to receive 10–20% royalties on net sales.
"We remain optimistic on Ghryvelin adoption in Europe," Selvaraju wrote. "We believe Ghryvelin's oral convenience and ability to stimulate growth hormone within one hour are desirable attributes that should resonate with the European Union physician community."
H.C. Wainwright rates AEterna Buy.
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Disclosures For H.C.Wainwright & Co., Aeterna Zentaris Inc., September 6, 2022
H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
I, Raghuram Selvaraju, Ph.D. and Boobalan Pachaiyappan, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Aeterna Zentaris Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of August 31, 2022 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Aeterna Zentaris Inc..
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Aeterna Zentaris Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Aeterna Zentaris Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Aeterna Zentaris Inc. as of the date of this research report.
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