AEZS-New Recommendation

AEtera Zentaris, Inc. (NASDAQ–AEZS)
Valuation-Speculative
Closing price June 19, 2009-$1.82

This is a Canadian drug stock. Small revenues, losing $12 million a quarter and Its 52 week low stock price was $.26. Good deal huh?

Well, AEZS has a lot going on. They or their partner’s, have a number of Phase 3 drugs in the pipeline and recently inked a deal with Sandofi-Aventis that brought in $30 million cash and could add another $135 million for Cetrorelix. Many other drugs in their pipeline too.

Last week they announced that they completed a private placement of stock for $1.88 a share. Raising money for a money losing outfit just is not easy these days, so the investors must see something pretty good here.

They also announced that they were accelerating the announcement of the results of their Phase III trials of Cetrorelix from Q4 to Q3 2009 (which starts in about 10 days).

We expect that at a less than $100 million market cap, with over $60 million in cash (as of March 31, 2009) real revenues (albeit maybe $6 million a quarter), and a promising drug pipeline, that this could soar on positive Cetrorelix news in the next couple of months. After the last couple of press releases, the stock price moved over $2.50 and over $3 on different days. It has fallen back after those people lucky enough to have bought under $1 took their profits.

Bad news on the drug development front will hammer the share price—so this is very “speculative”

AEZS trades about 93,000 shares a day.

There are about 53 million fully diluted shares outstanding.

About AEterna Zentaris, Inc
AEterna Zentaris Inc. is a global biopharmaceutical company focused on endocrine therapy and oncology, with proven expertise in drug discovery, development and commercialization. News releases and additional information are available at http://www.aezsinc.com.

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