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Aeterna Zentaris Inc. Message Board

  • drfil1987 drfil1987 Sep 19, 2011 6:43 PM Flag

    Why your money should be in AEZS for perifosine

    I think that one of the great long term biotech plays at the moment is perifosine. I believe this for the following reasons:
    The perifosine phase 2 trials were very promising. I’m not gonna go into detail as it has been done too many times. You all know the argument. What I will do is go into the main risks I see in the trial.
    The phase 2 was only 35 patients. Though double blind, this is a pretty small trial. The results are a bit suspect as a result of size. The current phase 3 has 430 patients. That’s a lot more pts, and statistically, perifosine benefit should suffer as a result.
    However, I think the risk of the trial failing its endpoints is reduced as the company designed the trial quite well. They managed to get the FDA to agree in a far lower OS primary endpoint value that the phase 2 showed (17.7 months seen to 7-8 months P3 target). Also, the capecitabine dose was increased to the SoC level of 1000mg/m3 compared to the phase 2 dose of 825mg/m3. Between the modified endpoint and the higher dose of cap, the loss of OS due to larger trial size should be somewhat mitigated. Also, the DMSB said continue, so it can’t be going too terribly.

    Why holding AEZS is less risky than KERX:
    KERX is essentially at the moment a one drug company, perifosine. Zerenex is entering a crowded market with generic alternatives and cannot be assumed to be viably commercial on launch. IMO, it will only be a success if the long term trial shows a very good reduction/elimination in Epo and iron supplements. This is far from a sure thing. Though both companies are good investments, my money is in AEZS through perifosine. (If holding through approval, KERX becomes a good, if not better investment than AEZS but that’s way down the road and another post).

    Of course, this is far from a sure bet, but I think there are enough ‘hedges’ to reduce the risk of holding AEZS through perifosine phase 3 results (See any of Bioinvestors’ posts). These primarily are:

    The fact that 108 is entering phase 3 trials any time now. In about 2-2.5 years (A guess until the actual trial structure is out) data will be available. If perifosine fails completely, 108 can possibly act as a backup for the company, in which case you have a decent chance of breaking even if you hold ultra long.

    The Solorel NDA should be filed by/in 1Q12. This seems to be a minor product, but even if sales are only 25 million (low compared to company estimates), and assuming a profit of 50% (12.5 mil) and a p/e of 15, that adds on about ~190 million to AEZS market cap. That’s actually over today’s closing mcap of ~170mil!

    That’s the way I see things. In summary, CRC phase 3 has a decent chance at succeeding. If it doesn’t, AEZS has a pipeline that can rescue your lost investment in 1-2 years (If you don’t feel like cutting and running).


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