Aeterna stock jumps on early cancer drug test

TORONTO (Reuters) - Aeterna Zentaris (AEZ.TO) said on Monday that Phase 1 results for its cancer tumor treatment caused little side effects in patients and proved that it could work with other cancer treatments, sending the drugmaker's shares up more than 15 percent.

The company said AEZS-112, an oral treatment for advanced tumors and lymphoma, was well-tolerated among the 42 patients tested and that, aside from a gastrointestinal reaction in a patient with pre-existing problems, there were no side effects.

The Quebec City-based company also said the treatment showed disease stability in the test patients.

Aeterna shares, which have fallen 57 percent since the start of June on disappointing results for its cetrorelix treatment for enlarged prostates, were up 15.3 percent at C$1.51 on the Toronto Stock Exchange.

"The drug has passed its first test in humans. It was tolerated by humans in doses higher than we thought. It produced long periods of stable disease and it's good enough to keep going with development," Paul Blake, the company's chief medical officer, told Reuters.

Blake said Aeterna would now turn its attention to an additional Phase 1 trial designed to examine different dosing levels. This study would likely get under way later this year or early in 2010, he said.

But he declined to comment on the development timetable for the treatment's further trials and its subsequent marketing application.

"It's too soon to give an estimate there. We have got some more Phase 1 work to do," he said.

Douglas Loe, an analyst at Versant Partners, said investor reaction to the early-stage results showed confidence in the company's pipeline of cancer drugs.

"It does give investors confidence that Aeterna's oncology pipeline is advancing at a brisk pace in an environment where their main BPH drug cetrorelix certainly had a major setback in a pivotal Phase 3 trial," Loe said.

Last week, the company's shares soared on news that its experimental cancer drug KRX-0401, for which it is in partnership with Keryx Biopharmaceuticals Inc (KERX.O), received orphan drug designation from U.S. health regulators.

($1=$1.08 Canadian)

(Reporting by Scott Anderson; editing by Rob Wilson)