AEterna Zentaris Inc. (NASDAQ: AEZS) is headed up early in the trading session this morning, and for good reason. There has been an ongoing dispute between the company and Cogas Consulting. Minutes ago, the company announced that the dispute has been settled. Today, we’ll talk about:
- The dispute resolution;
- what we’re seeing from AEZS stock as a result; and
- what we’ll be watching for ahead.
AEZS Settles Cogas Litigation
As mentioned above, AEterna Zentaris is having an incredibly strong start to the trading session this morning after the company announced that it has settled litigation. The case was between the company and Cogas Consulting. Essentially, Cogas claimed that it was entitled to 5% of the upfront payment made under the Strongbridge Licensing Agreement. Cogas also expected to be paid a 5% royalty on any money paid under the agreement through January 17, 2021.
Nonetheless, in a press release issued early this morning, it was announced that the litigation between Cogas and AEZS had been settled. Under the terms of the settlement, AEZS has agreed to pay Cogas a break-up fee in the amount of $625,000. From there, the two parties agree that their contractual relationship has been terminated and no further money will be owed by the company to Cogas.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of AEterna Zentaris, the news proved to be positive. Sure, the settlement takes $625,000 out of the company’s bank account, but it puts an end to expensive litigation and makes it so that the losses are stopped completely at this point. So, it comes as no surprise to see that excited investors are pushing the stock on a run for the top in the market this morning. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:01), AEZS is trading at $2.47 per share after a gain of $0.10 per share or 4.22% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AEZS. In particular, we’re interested in following the story surrounding the company’s agreement with Strongbridge and the funding generated through the agreement that will likely bulster the company’s balance sheet. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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