Shares of Aeterna Zentaris Inc. (TSX:AEZS) were up 23.1% in late morning trading on January 17. The company announced a licensing and assignment agreement with a subsidiary of Strongbridge Biopharma PLC (NASDAQ:SBBP). The agreement will allow both to carry out the development of Macrilen, an orally available ghrelin agonist.
Aeterna Zentaris is a specialty biopharmaceutical company. The company announced that it had received United States Food and Drug Administration (FDA) approval of Macrilen on December 20. The drug has been developed to treat adult growth hormone deficiency (AGHD), which has shown increased prevalence over recent decades. Macrilen has been shown to stimulate growth hormone levels in a number of blood samples.
The company will receive a cash payment of $24 million from Strongbridge and will be entitled to 15% royalty on net sales up to $75 million and an 18% royalty on sales above $75 million.
Aeterna Zentaris released its third quarter results on November 8, 2017. Revenues were up to $745,000 for the nine month period ending September 30 compared to $607,000 in the previous year. Research and development costs actually dipped year over year from $11.9 million in Q3 2016 to $10.2 million in the most recent quarter. Net income year to date was $3.2 million compared to $5.4 million in the prior year.
The development of Macrilen and subsequent partnership provides Aeterna Zentaris with the opportunity to rake in sales revenue over the coming years.
