November 6, 2014
By Riley McDermid, BioSpace.com Breaking News Staff
Canadian biopharma AEterna Zentaris is seeing another day of market turbulence, during a week which saw it jump 18 percent on Wednesday after announcing it will slash jobs and operating cash, only to plummet into penny stock territory Thursday when the U.S. Food and Drug Administration rejected its orphan drug treatment.
The FDA sent a rejection letter to the company outlining its rejection of growth hormone stimulant macimorelin, which was AEterna Zentaris’s major hope for achieving orphan drug status to treat adult growth hormone deficiency. Approval would have given the firm a new lease on life after disappointing third quarter results that saw losses of 20 cents per share and a net loss of $11.3 million.
But the FDA put the kibosh on those hopes Thursday when it said that macimorelin had failed to meet its primary efficacy endpoint in submitted trial results, and may not have even been tested on patients that had been demonstrably suffering from AGHD. The FDA asked the firm to resubmit another clinical trial, a request that may be a non-starter given how broke AEterna Zentaris will likely be by the end of this week.
The biopharma said earlier this week that it would cut the jobs of 31 staff over a 12-month period, restructuring that would allow it to streamline R&D, bulk up commercial operations and conserve its operating cash. The market had liked that news Wednesday and sent the stock up higher, but those gains were largely lost in morning trading today.
AEterna Zentaris still has a few tricks up its sleeve, however: Its hormone replacement therapy EstroGel will begin being marketed in specific U.S. territories in the next quarter and the company signed a co-promotion agreement with Ascend Therapeutics to help it sell the drug.
“This agreement will jump start our commercial activities as we expect to start the field selling of EstroGel in a few weeks through our sales force of about 20 representatives,” said chairman and chief executive officer, David Dodd, in statement released after market Tuesday.
The firm also has an ongoing Phase III trial for endometrial cancer drug ZoptEC, which has over 300 of the expected 500 patients already enrolled at 120 sites. It said it will have data from the study during the first half of 2015.
