Aeterna Zentaris calls in outside help in strategic review
Troubled US biotech Aeterna Zentaris has called in outside help to assist with a strategic review after a disastrous few months that saw the company axe its CEO, David Dodd.
Things got even worse last week when the South Carolina-based biotech said it had uncovered a plot by Dodd (pictured above) to gain control of lead product, Macrilen.
This led to the biotech taking legal action against Dodd and former general counsel Philip Theodore in the Ontario Superior Court of Justice for breaches of financial duties and attempting to steal trade secrets.
The plot allegedly involved obtaining rights to Macrilen through a company called RiversEdge BioVentures, wholly owned by Dodd, or another newly-formed company. Dodd has since told the Reuters news agency that the claims are “without merit”.
Under the leadership of new CEO Michael Ward, Aeterna has appointed a special committee of independent directors to review operations, and has brought in a consulting firm and a financial advisor to assist.
The committee is considering several options to take the company forward, including whether to continue with its existing business plan, and possibly recommending changes to its management and governance.
It is also checking the commercial potential of Macrilen (macimorelin acetate), which Aeterna refiled with the FDA for adult growth hormone deficiency in June after a rejection in 2014, when the regulator cited unconvincing efficacy data.
In the meantime, Ward is looking at ways to reduce costs, including removing resources that were associated with its discontinued cancer drug Zoptrex (zoptarelin doxorubicin), which failed in a late-stage endometrial cancer trial earlier this year.
Ward is also cutting costs at the company’s offices in Frankfurt, where he has assumed the role of managing director, and axed an executive in South Carolina.
Formerly based in Quebec City, Aeterna moved to Charleston, South Carolina late in 2015. However the company is still listed on the Toronto stock exchange, where shares trade at around 2.3 Canadian dollars.
Macrilen, a ghrelin agonist, is an orally-active small molecule that stimulates the secretion of growth hormone.
The drug’s main US patent expires in 2022, and a ‘utility’ patent expires in 2027.
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