Update on Aeterna Zentaris' Cetrotide - Analyst Blog


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Aeterna Zentaris Inc. 's ( AEZS ) source of revenue includes sales, royalties and license fees. Sales are derived from Cetrotide and royalties are derived indirectly from Merck KGaA 's ( MKGAF ) net sales of Cetrotide.

License fees include periodic milestone payments, research and development contract fees and the amortization of upfront payments received from licensing partners. Merck KGaA's subsidiary Merck Serono markets Cetrotide globally (excluding Japan).

Cetrotide is a luteinizing hormone-releasing hormone (LHRH) antagonist treatment approved for in vitro fertilization. Sales and royalties for the quarter ended Jun 2013 were $29.8 million.

In Apr 2013, Aeterna Zentaris had entered into an agreement with Merck KGaA to grant the latter manufacturing license and transfer manufacturing rights of Cetrotide. This agreement was completed in Oct 2013. As per the deal, Merck KGaA will pay a one-time payment of €2.5 million/ $3.3 million to Aeterna Zentaris.

In Nov 2008, Aeterna Zentaris had monetized the royalty stream related to Cetrotide in a transaction with HealthCare Royalty Partners.

We note that Cetrotide is marketed in 3 mg and 0.25 mg dosages by Merck Serono in the U.S. and Europe. It was launched in Japan in Sep 2006. It is marketed in Japan by its partner Shionogi. 

Aeterna Zentaris has its focus on developing AEZS-108, AEZS-130 and AEZS-120.  AEZS-108 is in a phase III ZoptEC study for the treatment of endometrial cancer and in phase II studies for the treatment of breast, prostate and bladder cancer. The company intends to seek U.S. approval for AEZS-130 for growth hormone deficiency. Aeterna Zentaris will commence a phase I study on AEZS-120 for treating prostate cancer.

Aeterna Zentaris currently carries a Zacks Rank #3 (Hold). Currently, companies like Roche Holding ( RHHBY ) and Actelion Ltd. ( ALIOF ) look more attractive with a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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