Aeterna Zentaris bottoms out after a stinging FDA rejection

Aeterna Zentaris CEO David Dodd

The FDA has rejected Aeterna Zentaris' ($AEZS) orphan treatment, taking serious issues with its pivotal data and further battering the foundering biotech's share price.

Aeterna's candidate is macimorelin, an oral treatment designed to stimulate the secretion of growth hormone, and the company hoped to win the FDA's blessing to sell its drug as a diagnostic for the rare adult growth hormone deficiency (AGHD).

In its rejection letter, the agency pointed out that macimorelin failed to meet its primary efficacy endpoint in Aeterna's submitted trial results, and, beyond that, the company didn't adequately demonstrate that patients in the study were accurately diagnosed with AGHD. To address those problems, the FDA wants Aeterna to conduct another clinical trial on the drug, a costly proposition that may be impossible for the cash-strapped company.

As it stands, Aeterna is "currently reviewing the outstanding issues stated in the (FDA's letter) in order to evaluate our options and future plans," CEO David Dodd said in a statement.

The rejection sent the biotech's shares down more than 50% in premarket trading on Thursday, dragging Aeterna into penny stock territory as it struggles to cut costs and keep its clinical candidates moving.

The company is in the midst of a streamlining effort that calls for cutting 31 jobs and R&D work to focus on its two top prospects: the now-rejected macimorelin and zoptarelin doxorubicin, an endometrial cancer treatment currently in Phase III with an interim analysis on track for 2015.

- read the statement

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