Saturday, May 23, 2015

Calling all Aeterna Zentaris AEZS stockholders!!! Retail Activist Campaign Begins!

Aeterna Zentaris has done a fantastic job of destroying shareholder value over the past year with a decline of -77%.  Even while having a cash position DOUBLE it's current market capitalization and TWO Phase 3 assets.  I'm tired of us retail investors taking it on the chin by companies that lack the leadership, execution, and the fiduciary responsibility to do what's best for it's shareholders.

I'm going to launch what may be the first Retail Activity Campaign to pressure the company to do what they should already be doing - listening to it's shareholders!  

I've attached a letter than I plan to send to the CEO and Board of Directors demanding that the company explore a sale.  But I need your help!  If you hold shares in AEZS and your want to join this campaign, please email me your name and number of shares owned.  I won't reference your name but I will reference your number of shares in the letter.  



David Dodd
Chairman and Chief Executive Officer
Aeterna Zentaris, Inc. 
315 Sigma Drive, Suite 302D
Summerville, SC 29483

Cc: Board of Directors

Mr. Dodd,

On November 6, 2014, Aeterna Zentaris received a complete responses letter from the FDA for Macrilen, though the trial was done under an SPA, and the market has since lost confidence in the direction of the company which is reflected in its stock performance. 

We beneficially own a significant number of the outstanding shares of AESZ and are long-term shareholder of the company.  Recent events and underperformance necessitate intervention.  As of Friday’s close, Aeterna Zentaris stock has declined -72% over the past year, -84% over the past two years, and -99% over the past ten years.  The Nasdaq Biotechnology Index has appreciated approximately +56%, +187%, and 444% over the comparable periods.

The shares are trading at a market capitalization of $27 million, half of the cash reported at March 31st, 2015.  Combine this with two late stage Phase 3 assets, Zoptarelin Doxorubican and Macrilen, and it’s easy for anybody to see that the company is severely undervalued. 

Building a sales infrastructure for the assumed launch of Macrilen is within the normal course of business but maintaining a sales team to sell Estrogel alone isn’t prudent and reflective in the mediocre sales results of $73,000 in the first quarter.  This strategy should be abandoned immediately without having a relevant product to sell. 

We request immediate disclosure of formal and informal expressions of interest and/or non-binding offers to acquire the Company.

We request that the Board of Directors immediately engage a top-tier investment bank and initiate a formal process to sell the company and/or it’s two leading assets and distribute proceeds and existing cash to shareholders. 

In parallel, we request that you step down as CEO or adjust your compensation to better align with the interests of shareholders.  We also request that the company undergo additional restructuring to preserve cash during the sales process including closing offices outside of the headquarters in South Carolina, eliminate your Chief Commercial Officer and the sales infrastructure built for the anticipated Macrilen launch, and evaluate other positions throughout the organization including the need for both a CFO and VP of Finance.

We welcome further discussion with you and the Board. 


Shane Skinner
Representing Significant Retail Ownership of AEZS

Wednesday, May 13, 2015

ASCO 2015 Abstracts Released - A few abstracts of trading interest

The highly anticipated ASCO abstract release happened at 2:00 PST today and here are some abstracts of trading interest.

Exelixis (EXEL) - Abstract 9006 reports updated Progression Free Survival for Roche partnered compound Cobimetinib in advanced BRAF-mutated melanoma.  Updated PFS came in at 12.3 months vs. 7.2 months for the control arm for a hazard ratio of .58.  In summary, this is great news and should add further ammunition for the upcoming FDA PDUFA date on August 11th.  I'd expect the stock to continue moving up when the results are formally released.

Oncothyreon (ONTY) - Abstracts 612 and 602 report Phase 1 results for lead compound ONT-380 in breast cancer.  I listened in on their first quarter call on Monday and the CEO made it a point to state that more mature data than than the initial abstract release will be presented at ASCO.  He's a pretty dry guy but his tone was that of excitement so my take is that the additional data will be positive.  Note that the stock was up 15% in after-hour trading tonight off the current data so who knows what will happen if better data is released at ASCO.

Array (ARRY) - There's a ton of abstracts and data released on their three late-stage wholly-owned and partnered compounds.  Some good and some bad but overall I think the data is positive and the stock will move up as investors sift through the data and press released hit the day of the presentations.

Threshold (THLD) - Abstracts presenting clinical data on both of the companies compounds, TH-302 and TH-4000, show clinical activity.  Further data will be presented at the conference so this one could move.

Ziopharm (ZIOP) - Abstract 7504 shows that compound Palifosfamide failed to improve overall survival in patients with lung cancer.  Though this was expected as prior trials in this compound failed, I'm short this stock and expect it could move lower on the news.

Immunomedics (IMMU) - Abstracts covering compounds IMMU-130, IMMU-132, and sacituzumab govitecan show various degrees of clinical activity in Phase 1 and 2 trials. I'd expect more detailed and mature data to be presented at the meeting which could move the stock up.

That's about it for now but will provide further updates as I sift through the thousands of abstracts. Good luck investing!

Saturday, April 25, 2015

Reader's question: What do you think about Actinium Pharmaceuticals ATNM?

I got the following question from Anonymous.  Thank you for the question and spent a few hours researching Actinium Pharmaceuticals ATNM and below are a summary of my thoughts on the company and their planned phase 3 trial in AML.

I think there are much better Biotech investments with similar or even lower market values.  Note that ATNM's current market cap is $104 million.  Here are my concerns:

-  They have no big pharma partnerships.  Always a red flag as we have no quality, third party due diligence done on the technology and/or leadership team.  Also, a small cap biotech would jump on the chance for a partnership so if their lead compound truly has blockbuster potential, as leadership boasts, why haven't they secured a partnership going into phase 3 trials?

-  They recently raised capital but have less than $30 million in cash and plan to launch a Phase 3 study of their lead compound.  Quality phase 3 studies cost in excess of $100 million so they will need to raise more capital (i.e. shareholder dilution).  

-  The phase 2 trial was not randomized (compared to the control arm being used for the phase 3 trial) and only had 27 patients.  THIS IS A HUGE RED FLAG!  They are assuming the results from a 27 patient study and comparing them to prior trials done in the planned control arm for the phase 3 trial. I see these types of assumptions used going into phase 3 trials all of the time and they almost always fail.  Beware!

-  There's a crossover component in the phase 3 trial.  Remember Aveo's failed phase 3 study?  They had a crossover for ethical reasons as well and that didn't work out for them.  Crossovers can muddle results and I don't like them.  

-  I'm also surprised they don't have a relationship with the Leukemia and Lymphoma Society which provides various degrees of funding for research and trials in their lead indication.  both CPXX and ONTX are in Phase 3 trials and have funding grants from this leading non-profit organization.  Why don't they?

If I were to invest in a company focused on AML/MDS, I'd look at CPXX and ONTX.  Cheaper companies, more cash on hand, better partnerships, and further along.  

Thank you again for the question and best of luck!