AEterna Zentaris shares plunge on late-stage trial failure

Shares of AEterna Zentaris went into meltdown mode after the developer announced that a closely watched Phase III trial of the benign prostatic hyperplasia drug cetrorelix had failed to hit its primary endpoint. Shares plunged more than 64 percent after the Quebec-based developer said that the data revealed no clear difference between the drug and a placebo.

AEterna immediately said that it was shifting its focus to another late-stage study of the drug in Europe, with data due by the end of the year. But analyst Douglas Loe noted that the European trial is designed the same way the U.S. trial had been, and cut his forecast on the stock from $6.50 a share to $1.00. Loe hasn't given up on the company, though, noting that AEterna Zentaris has the late-stage cancer drug perifosine and a mid-stage ovarian cancer drug, AEZS-108, in development.

"Although the data received for the open-label safety study Z-041 with a nearly 6 point reduction in IPSS are in line with what we had observed in our Phase II program, we are disappointed by the failure to achieve the primary endpoint in the efficacy study Z-033," says CEO Juergen Engel. "We remain committed to the ongoing Phase III program with cetrorelix in BPH and are working towards receiving the results of the second pivotal efficacy study Z-036 in November."

- check out the AEterna release
- read the Dow Jones report