Breaking Down a Biotech Press Release
Aeterna Zentaris (NAS: AEZS) issued a press release today with the following headline:
Aeterna Zentaris: FDA Grants IND to Investigator at Baylor College of Medicine for Phase 2A Trial with AEZS-130 in Cancer Cachexia
That sure is a mouthful. Let's see if we can break it down.
First, the abbreviations:
- FDA = Food and Drug Administration
- IND = Investigational New Drug
Aeterna Zentaris is in the title only because it's making the announcement; it's really Jose Garcia, an assistant professor at Baylor, who's received the IND.
So we're left with the longer, but more accurate, summary:
Aeterna Zentaris announces that the Food and Drug Administration Granted an Investigational New Drug to Jose Garcia, an Assistant Professor at Baylor College of Medicine, for a Phase 2A Trial with AEZS-130 in Cancer Cachexia
A few definitions:
- A phase 2 trial is the second of three stages of trials typically required before a drug is approved. The "A" in phase 2A means it's earlier stage; the "A" and "B" are sometimes separate, but they're often tied together, so if the patients in the 2A seem to be responding, the trial will enroll more patients into the B part.
- AEZS-130 is a drug being developed by Aeterna Zentaris that has already passed a phase 3 trial examining it as a diagnostic for testing growth-hormone stimulation.
- Cachexia is a situation in when patients experience substantial weight loss because of their disease or as a side effect of treatment -- in this case, patients with cancer who are likely taking chemotherapy.
So is it a big deal that Jose Garcia got an IND from the FDA to run a trial on AEZS-130? Not really. The FDA isn't particularly rigorous about issuing INDs; the agency usually signs off on such trials unless there's an obvious reason to think patients will be harmed or it's a new treatment regimen. Geron (NAS: GERN) , for instance, had to work hard to get an IND for its stem-cell trial. For a vast majority of trials, the IND is just paperwork so the FDA knows the trial is being run.
The fact that Jose Garcia is running the trial isn't that big of a deal, either. Investigators run trials independent of companies all the time, often with the company donating drug for the trial and helping in some other fashion. Just today, Exelixis (NAS: EXEL) announced a partnership with the National Cancer Institute to find investigators to sponsor trials testing its cancer-drug candidate cabozantinib.
I imagine there's a larger market for AEZS-130 as a cancer treatment than there is using it as a diagnostic, so running the trial seems like a good idea. The independently run trial will probably cost Aeterna Zentaris less money than if the company had run the trial, but it's also likely to give up some control.
Ultimately it'll be the results of the trial, not the FDA's allowing the trial to be run, that will drive Aeterna Zentaris' value. And the results of its phase 3 trial testing its colorectal cancer drug, perifosine, which it's developing with Keryx Biopharmaceuticals (NAS: KERX) , will come sooner than the AEZS-130 results, so the near-term value rests on the perifosine results.
Keep track of Aeterna Zentaris as it tries to get perifosine and AEZS-130 approved by adding it to the Fool's freeMy Watchlist service.
At the time this article was published Fool contributorBrian Orelliholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns, and Motley Fool newsletter serviceshave recommended buying, shares of Exelixis. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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