AEterna Zentaris (NASDAQ:AEZS) Shares Up on Solorel Study Approval from FDA

Shares of AEterna Zentaris (NASDAQ:AEZS) pushed on on news the U.S. Food and Drug Administration (FDA) gave them the okay to go ahead with their study of Solorel.

While shares soared over 10 percent on the immediate news, they pulled back at close Monday to between 6 percent and 7 percent gain.

Solaris is used for diagnosing the presence of growth hormone deficiency.

If the drug eventually was approved for use, it is estimated from Dejardins Securities to generate from $30 million to $40 million in revenue annually.

Canaccord said, "We attended AEZS’ analyst and investor day, where the company highlighted its deep oncology and endocrinology pipeline. Our positive view of the company’s lead drug development programs was reinforced following expert presentations; however, we have made no changes to our valuation other than to add niche Phase III product Solorel, which results in a small increase to our target price. Despite the modest change to our model, we believe that there exists a significant valuation gap between AEZS and a comparator company, thereby increasing our confidence in our rating."

Canaccord Genuity maintains a "Speculative Buy" AEterna Zentaris, which closed Monday at $1.96, up $0.12, or 6.52 percent. Canaccord increased their price target on the company from $2.60 to $2.75.