Here's What's Next For AEterna Zentaris Inc (USA)(NASDAQ:AEZS)

AEterna Zentaris Inc (USA)(NASDAQ:AEZS) has collapsed in early morning trading on the news that its phase III study Zoptrex has failed. The drug was under investigation as a potential therapy for women with locally advanced, recurrent or metastatic endometrial cancer, and as per the latest release, it's now essentially dead in the water as a potential asset for any oncology indication.That markets are selling off in response to the news is no surprise. That the company is down more than 60% at time of writing is a little surprising. It's a big selloff, and brings AEterna to a market capitalization of less than $20 million. If the company had no other assets in its pipeline, we'd be on board with the degree to which it has declined on the back of the Zoptrex news.That's not the case, however.AEterna is also trying to get a drug called Macrilen approved, and management has stated that complete focus will now shift to getting this asset on shelves. It's a drug that's had a rocky development pathway to date, and has suffered setbacks (we're looking at you, late 2014 Complete Response Letter), and it's also not got a particularly high peak sales potential. Analysts put peak sales at around $70 million.Again, however, even at $70 million in annual sales, that's a close to four times multiple on AEterna's entire market capitalization at current price. Given these metrics, we think there's some potential to pick up an exposure to Macrilen, and its potential near term regulatory green light, at a cut price.Before we look at Macrilen, let's just quickly recap what happened with Zoptrex. As mentioned, it was an endometrial cancer target, which is a type of cancer that affects the endometrium – the lining of the womb. It's deadly, and relatively highly prevalent, and current SOC is standard chemotherapy. SOC isn’t that effective and it brings with it the host of side effects associated with chemo. With Zoptrex, AEtrena was trying to bring an alternative to market that could build on the efficacy of SOC. As it turns out, however, and unfortunately for the company, its shareholders, and the patient population, it doesn't. The trial missed its primary and its secondary, proving to add basically nothing to the efficacy of doxorubicin.So management has said that it's not going to allocate any more resources to the development of the drug, and with that comment, the program has essentially wrapped up.Which brings us to Macrilen. This one is targeting the treatment of adult growth hormone deficiency (AGHD), and it does so through the agonizing of what's called the ghrelin receptor. Stimulation of this receptor results in the stimulation of the production of growth hormone, and this should – theoretically, at least – work towards reversing the symptoms associated with the disease.As mentioned, the FDA already issued a CRL for the drug back in 2014, and this CRL necessitated a phase III study that wrapped up in January this year. Subsequent to the data, the company sat down with the FDA as part of a Type A meeting, and reported at the end of March that it plans to submit a fresh NDA (on the back of the discussions with the FDA) for Macrilen this year. Specifically, the submission has a third quarter target.Importantly, the company reported that the FDA indicated the data collected addressed the concerns raised on the back of the first CRL. Of course, just addressing these concerns isn’t enough for us to say that the agency is going to green light the drug – far from it – but it's a step forward for a program that many felt had stalled.So that's how things stand. Macrilen is everything now for AEterna, and an approval in this indication isn’t going to close the gap entirely that we've seen on the back of the oncology dropout. It would induce considerable upside on the current price, however, and that makes the stock one to watch near term.We will be updating our subscribers as soon as we know more. For the latest updates on AEZS, sign up below!Disclosure: We have no position in AEZS and have not been compensated for this article.