AEterna Zentaris Inc. Message Board

I agree that you cannot infer too much from a single patient. He may just be an anomoly or could have done well with just doxy... What is weird to me is that he started about two years ago in this open label study... Within months of him starting there was a news story out about his miraculous recovery... In the mean time the study has continued with other patients, although slowly. Surely, by now, the company knows if chambers was an anomaly or if other patients are having similar responses... If they are, you would think they would be shouting about it before raising more money...

I honestly have no idea. They need probably an additional 60m to run the company until the 108 results. I understand limiting the number of shares to sell, but seeing as how they need so much money, the cap seems odd.
Hopefully the ozarelix results in about 4 months are good and then they might be able to raise money at a better rate.

Kind of odd to me as well. $4.6m is nothing. It pays two months of their burn... why do an ATM just to do another in a couple of months? If you get lucky and the PPS goes up, why not sell more to fund the company longer? (Yes, naive people will say they are only doing a little bit because huge news is coming soon... but people have said that at every ATM. If huge news were coming, why do an ATM at all (they have a year of cash), if it isn't, why not raise more money, rather than needing to repeat this process 2 or 3 months after it finishes?)

Good for Chambers! I was shocked last year when they pushed backed the expected completion date of this study by two years due to slow patient recruitment. You would hope that Chambers' case is not unique, and with those kinds of results, other volunteers would be easy to find. While the results for Chambers are amazing (I was surprised to read he is still alive!), it would be really good to hear about how other patients have reacted. Hopefully we get an update soon as the trial progresses (the trial is a phase I/II trial, and although it is not expected to complete until next November (2014), the phase I portion should be done soon, and hopefully we get an encouraging update!

Not only would that be fantastic news for the bladder cancer treatment, but it would also add more credence for the drug working in other areas (such as the about to start endometrial trial).

The SA article came out after the spike. Over 150k shares were bought at ~2.13 in 2 minutes an hour before that article came out... I'm not saying that the article couldn't have been written by the same people who bought the shares looking for a quick flip, but that is a larger transaction than just a small stakeholder... $300k+in a couple of minutes is not nothing...
Hopefully, it is an indication that someone is interested in establishing a larger position. While it was a nice trade that lead to a quick spike, it still isn't a significant amount. 1GlobeCapital bought 7% of the company late last year, and that hasn't lead to any news or upswing in price...

I always wonder with SA articles if they are written by the people buying to try to cause a quick boost, or if they write the articles, and then wait to release them after a quick jump so it looks like they know what they are talking about... In either case, I don't put any stock in SA, but I would like to know who did the buying today.

(Maybe our new CEO made a personal investment ;) But I really doubt that...)

He did say they are still targeting Q2... so before May has turn into before July... same thing for P3 (Blake said they hope to have their first patient next month).

Hmm... they want to commercialize 130 on their own? Really? Is that because they don't want to sell it for cheap or because no one is interested in buying?

That pretty much means that 130 won't generate any cash via a partnership anytime soon. It sounded like they were at least considering expanding the relationship with Ergomed, which likely means no huge partner coming on board with that... and 120 should start soon.

With 12 months of cash left, and no major inflow of cash expected, I assume they will need to get financing within 6 months. Time to see if Dodd can close a good deal.

I don't really feel like I learned much during the call (except that I did not expect them to commercialize 130 themselves)... but, again, it is still too early to say anything. Dodd just started. He has a few months to work on securing financing on favorable terms. Lets see what he does.

Well, all we got (pre Q&A) is "soon" for both 130 and starting 108 P3 (and the likely the first patient will be in Israel).

At least we got that 120 will likely start P1 in ~90 days (application submitted on Monday with 90 day turn around).

I guess Engel left us with two final lies.

7+ weeks ago, he said the 130 NDA would be filed within 6 weeks. Today's PR still makes it sound like it is not imminent.
Around the same time he said they would recruit their first patient for the phase 3 in endometrial for 108 in April. Today's PR also referred to that as a future event.

Hopefully DaD gives us some realistic timelines, meets his stated timelines, and gives us an explanation over the debacle that has become the 130 NDA filing. I'm inclined to believe those stating that there is something horribly wrong with the drug, their data, or something else. The NDA was originally supposed to be filed by the end of 2011. 1.5 years past the first deadline it still isn't filed. What, they don't want to start selling a drug and making money?!

I'm not putting Dodd down, nor do I expect him to save the company in two weeks. Time will tell, and I certainly hope he delivers. I was just saying that I really don't think he said much during the call. Sure, he wants to make money, increase shareholder value, help employees, and help patients. I'm sure Engel would have said the same thing. The question is, can Dodd deliver, and time will tell.

I was a bit disappointed he didn't address the elephant in the room. AEZS has less than one year of cash at the current burn rate, and nothing that will be generating revenue from the pipeline before that time runs out. Will he raise money in an offering, try to form a partnership, try to sell an asset, try a merger, cut costs, or some combination of those choices?

Time will tell. Hopefully in two weeks at the annual meeting he will have more substance to deliver.

I don't know.

I'm glad it sounded like he is looking to get rid of 130 (not get into diagnostics).
I'm very glad he said it is important to deliver on time and meet promises (something sadly lacking in the past). He also said that it was necessary to restore confidence in the company (something with which I completely agree).

He did say two things that weren't particularly helpful.
1. He wants to turn the company into an operating company that supports itself from revenue rather than investors. Great. I assume every company wants to do that! But he did not really detail HOW he would do that.
2. Along those lines, he said he wants to acquire revenue generating products. Rather than just raising capital, raise products. Again, great! But how? It isn't like they can take their $30m in cash and buy a product that supports their $30m+ burn rate.

Although it wasn't said, my assumption is merger. Merge with a company that has cash, cash flow, and revenue generating products, but does not have much of a pipeline. That is pretty much how Aeterna Zentaris was formed (Zentaris was bought by Aeterna for the pipeline). I don't really see any other option besides massive dilution to raise the capital to buy another company... merger seems far more likely.

I'd be happy with a merger on good terms. I'm anxiously awaiting to see what Dodd does. If he can pull it off, I will be impressed.

(I guess we traded a thick German accent for a thick Southern drawl.)

First, I will say I am glad they are doing the call. In the past, AEZS mailed out proxy votes, then dropped news the day of the meeting... meaning you either didn't vote or made an uninformed vote. At least with this webcast, investors can have more information before voting (assuming we all don't want to fly to the company annual meeting).
Dilution is definitely a possibility. They have maybe 11 months worth of cash counting the recent sale. They will either need to dilute, partner, or sell an asset in the next few months. I would hope they give Dodd at least a couple of months to work out a better deal than prior management was able to get.
It will be interesting to see what he says about 130. I want him to give a time, and then meet that deadline. I don't care if he tells me 8 weeks instead of 6, if I can actually trust what he is saying. I had no faith in any of Engel's comments, and that trend needs to be reversed.
I would love to see 130 sold for upfront cash, with milestone payments on NDA approval (and either retain rights for cachexia, or have huge milestone payments for that if it works out). They either need to do that or partner 108 very soon... otherwise investors will be diluted away (or find a huge investor willing to invest 30+m at above market prices... I could live with dilution if that kind of confidence was displayed along with it...)

Looking at his resume, Dodd does not seem like a fool. Obviously, luck played a huge role in his prior successes, and his past in no way guarantees a bright future for AEZS. Still, he has been successful enough in the past that he is not here for just a few dollars. He must at least see some future promise or he wouldn't be wasting his time. It is time for him to convince shareholders of this future promise. I'm looking forward to hearing him speak at the Q1 meeting in a couple of weeks.

As far as a plan goes:
I believe the company must bet the farm on their three most advanced compounds, 108, 130 and possibly 120. Scrap the rest of the pipeline. The company is currently burning ~$32m/year of cash. At that rate, they would need to raise $60-70m more before we get close to P3 results. At current market rates, that dilutes the shareholders to nothing.
A deep pipeline is nice when you can afford it, but developing it is only bleeding money and shareholders can no longer afford it. I am hoping the new CEO has been chosen to stop the bleeding. Getting the small chunk of cash for cetrotide manufacturing is nice, I guess, but the burn rate must drastically drop.
Even if they cut the burn rate significantly, there is no avoiding the fact that they will need at least another $30-40m in cash before P3 results.
Perhaps they could get some of that by selling 130. I would love to see a sale of 130 for AGHD indication, with possible milestone payments on reaching certain targets (if, for example, TBI makes it a larger market). 130 for AGHD will never make shareholders here rich, but a decent cash payment could reduce the need for dilution.
I would also love to see a real partner for 108. If this drug is really so great, then why can't the find a large drug company willing to foot the bill in exchange for part of the profits?
Even though 120 is interesting and might have promise in the long run, I don't think it matters too much. Either the company will already be successful from 108 by then, or shareholders will be so diluted that it won't mean anything. I would love to see that completely partnered off. Let someone else develop it and absorb the costs, and take a share of the profit if it happens to work out.
AEZS has lots of opportunities. I do not see many other companies with as many drugs being valued as cheaply. But in the end, that won't matter if they keep diluting at the current rate. It is time for Dodd to step up.

I hope so... I doubt the new CEO made this deal in hos first two days, so it seems like their might be a push by the board to monetize existing assets and stop the bleeding from financing. Lets hope the new CEO can do what he was hired to do and deliver a good partnership.

No... They were manufacturing at cost plus and making money. Basically instead of collecting money over the next decade or so, they took a smaller amount now because money now is worth more to them than future money, since conditions aren't favorable for them to currently get more money... At least it shows they are trying to put off financing and probably believe their stock is underpriced, but they still need to prove that to the market.

Yeah, it is probably on the order of the next couple of years of profit on the manufacturing. It should buy about a month of time on the cash burn... Maybe let them shut down a facility? Good to see them doing something, but what they really need is to partner 108 or 130 or find a significant investor.

I am very much looking forward to a new CEO. I am tired of all the half-truths coming out of current management. They constantly gave timelines that never came to fruition, which either means they intentionally lied or were incompetent... Whether lying or incompetent, they shouldn't be running the company.
Time will tell if Dodd can turn things around. If Engel was personally the weak point, then that is good... if the weakness came from other VPs, Dodd needs to get rid of them as well.
The big question going forward is if he can either create some kind of reasonable partnership or get financing on better terms (is Turpin a horrible CFO or was he limited by Engel?).

AEZS has had some great partnerships in the past (eg Cetrorelix with Sanofi-Aventis). However, recently, despite talk, they haven't been able to partner 108 or 130. Maybe Dodd can turn that around. Or, if not that, at least find an investor willing to take a significant stake in the company.

I certainly think this has the potential to be a good development.

I think the chances of that are slim. The market for AGHD isn't that big... There is the potential it gets bigger with TBI but that is still a gamble. Any sale now before approval would be at a serious discount. And I don't expect approval for a year... Yes they said they would file the NDA by the end of the month... We will see. The FDA will then respond within 6 months... But I am guessing the first response will be asking for more information (there is a reason they wanted to get fast track designation...). So at least one more rou d with the FDA... They will need money before that.
They either could not get a partner or they want to retain as much of the rights as possible and hope the payoff is worth it even with dilution, but dilution is almost certainly coming.