HCW ups Aeterna Zentaris PT to $5.50 from $3


H.C. Wainwright raised its price target for Aeterna Zentaris (NASDAQ, TSX:AEZS) to $5.50 from $3 after its Macrilen agent for adult growth hormone deficiency (AGHD) was approved for sale in the EU. The stock closed at $3.60 on Jan. 16.

According to management, the European label for Macrilen is largely in-line with the FDA-approved label and covers the etiologies of AGHD with no contraindications.

“In our view, since the company lacks an in-house sales and marketing operation in the EU, Macrilen would likely be out-licensed to a partner for commercialization,” writes analyst Swayampakula Ramakanth.

Looking at the potential EU market, Mr. Ramakanth figures there are about 9,500 AGHD patients diagnosed annually, compared with about 6,000 patients a year in the U.S. However, he also notes that the product would likely be priced significantly less than the $4,500-to-$9,000 per patient in the U.S.

In January 2018, Aeterna licensed the commercial rights for Macrilen in the U.S. and Canada to Strongbridge Biopharma, which resold the rights in October to Novo Nordisk.

“If the European license is structured [in a similar manner] to the Novo Nordisk agreement, we expect to see an upfront payment in the range of $40-million to $70-million and double-digit tiered royalties,” Mr. Ramakanth said.

“Since Novo Nordisk also has significant European operations, it remains the front runner in terms of potential commercial partners,” he added.

Stephen Kilmer