Aeterna CEO Dodd out as company reviews options

Dodd leaves after four years at the Canadian company.

It's been a big week for Aeterna Zentaris. Fresh from the news that its lead pipeline candidate is back under FDA review with a verdict due before year-end, it's just announced the departure of CEO David Dodd and a strategic rethink.

New CEO Michael Ward—a 30-year pharma veteran—joins the company fresh from orchestrating the $736 million sale of Sagent to Japan's Nichi-Iko Pharmaceutical, leaving investors wondering if a similar option might be on the table for Aeterna.

If that is the case, prospects for the company look much better than just a few days ago. The FDA has just agreed that Aeterna's new marketing application for lead drug Macrilen (macimorelin) for the evaluation of adult growth hormone deficiency (AGHD)—which was rejected in 2014—is strong enough to allow a second review with a verdict due on or before December 30.

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Macimorelin is a small-molecule ghrelin agonist that if approved would be an alternative to insulin tolerance testing (ITT) for the diagnosis of AGHD. Aeterna reported results from a confirmatory phase 3 trial of the drug at the end of 2016, which initially looked disappointing after the drug missed one of its primary objectives.

A subsequent analysis gave some cause for optimism, however, with the company saying the data was "supportive of achieving registration" and that Macrilen "has the potential to rapidly become the new standard for assessing adult growth hormone deficiency, displacing the insulin tolerance test and capturing the majority of the market quickly following commercial launch."

Dodd's departure ends a four-year stint at the Canadian company that started shortly after the company's multiple myeloma candidate perifosine flopped in phase 3, and comes to an end shortly after the company was forced to stop development of a second pipeline drug—Zoptrex (zoptarelin doxorubicin) for endometrial cancer—after it failed to improve survival in a phase 3 trial.

In a statement, Aeterna said it is setting up a strategic review panel chaired by Carolyn Egbert, who joined the board as a non-executive chair last year, to "evaluate various strategic and financing alternatives available to the company." That could include sticking with the current business plan or "changes to the company's management and governance."

Aeterna ended the first quarter with around $18 million in cash, which it said should be enough to fund operations while it tries to bring Macrilen through to market.