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AEterna Zentaris (NASDAQ:AEZS) has recently provided extremely positive clinical data, along with having gained more credibility for its robust pipeline.
The following, extremely positive abstract was published April 15 in Radiation Oncology:

Perifosine is a membrane-targeted alkylphospholipid developed to inhibit the PI3K/Akt pathway and has been suggested as a favorable candidate for combined use with radiotherapy. In this study, we investigated the effect of the combined treatment of perifosine and radiation (CTPR) on prostate cancer cells in vitro and on prostate cancer xenografts in vivo. Methods: Human prostate cancer cell line, CWR22RV1, was treated with perifosine, radiation, or CTPR. Clonogenic survival assays, sulforhodamine B cytotoxity assays and cell density assays were used to assess the effectiveness of each therapy in vitro. Measurements of apoptosis, cell cycle analysis by flow cytometry and Western blots were used to evaluate mechanisms of action in vitro. Tumor growth delay assays were used to evaluate radiation induced tumor responses in vivo. Results: In vitro, CTPR had greater inhibitory effects on prostate cancer cell viability and clonogenic survival than either perifosine or radiation treatment alone. A marked increase in prostate cancer cell apoptosis was noted in CTPR. Phosphorylation of AKT-T308 AKT and S473 were decreased when using perifosine treatment or CTPR. Cleaved caspase 3 was significantly increased in the CTPR group. In vivo, CTPR had greater inhibitory effects on the growth of xenografts when compared with perifosine or radiation treatment alone groups. Conclusions: Perifosine enhances prostate cancer radiosensitivity in vitro and in vivo. These data provide strong support for further development of this combination therapy in clinical studies.

AEZS recently had a bullish article written by The Motley Fool -- 10 Small Caps To Rule Them All -- which reiterates my views on AEZS. AEZS is a compelling buy. It's absurd that AEZS is trading at such low levels, given its pipeline along with the analysts' buy ratings and price targets of $5. As the Motley Fool and my prior articles suggest, AEZS' pipeline is extensive, having two drugs in each of phases 1, 2 and 3. On a per-drug basis, the market has extremely undervalued the drugs within AEZS' pipeline.
Based on the following analyst ratings, it is clear that the market is finally beginning to uncover AEZS. It is also very clear the current stock price doesn't reflect the value AEZS deserves.
JMP Securities on March 16 started coverage on AEZS with an outperform rating and placed a $5 price target on the stock. JMP also started coverage on AEZS's American Partner, Keryx Biopharmaceuticals (NASDAQ:KERX), with an outperform and $8 price target.

Based on our long-term revenue and expenses projections, and if development of drug candidates in Æterna Zentaris' pipeline proceeds without any significant delays, unfavorable trial results, or other negative surprises, we think Æterna Zentaris could become profitable in 2015 based on regulatory approvals and launch of perifosine in the U.S. and E.U. by 2013 and 2014, respectively. We use adiscounted P/E model applied to our projected 2015 EPS to arrive at our current value of $4.00 per share and one-year price target of $5.50 per share. In our view, a 40% discount rate is appropriate for current uncertainties regarding the timing and outcome of ongoing and future clinical trials. We believe a 25x P/E multiple is appropriate for our projection of the company's growth.

I believe the stock has been kept down by "at the market" selling. On February 22, the company entered into an ATM sales agreement, under which the company may, at its discretion and from time to time during the 24-month term of the agreement, sell up to a maximum of 12,500,000 of its common shares through ATM issuances on the Nasdaq for aggregate gross proceeds not to exceed $19,750,831, being the amount remaining available for distribution, as at February 22, under the company's current registration statement on Form F-3.
On March 10 , the company issued 1,663,064 common shares in connection with the aforementioned ATM agreement, for gross proceeds of approximately $3,240,000. And since that time, I believe the company has issued its remaining shares and therefore raised sufficient capital to carry it through 2012. (Click here for all SEC filings.)
In the prior trading session, AEZS had block buys at $2.07, $2.08 and $2.10 totaling a 2M purchase. AEZS' stock price closed at $2.07 on very impressive volume. Investors should watch for AEZS to test its 52week high of $2.19. The chart technical expert at the fund I manage expects AEZS' stock price to make new highs within one to three trading days.
Major pharmaceutical companies worldwide currently recognize that, in spite of the new technologies, there are not sufficient new drug candidates in their internal development pipelines. Consequently, these companies are scouting for new product opportunities. I believe, AEZS is not just an excellent takeover candidate, but it's a perfect one given its robust pipeline. Perhaps investors could see a $5 to $8 offer in the near future.
Disclosure: I am long AEZS, KERX.
Source: AEterna Zentaris Looks Ready to Make New Highs