The stock market has been an absolute nightmare for bulls the past two weeks. Stocks, both good and bad, are being knocked down indiscriminately as traders attempt to cope with a U.S. debt downgrade and the potential for a slower economy recovery than at first anticipated.

With such chaos at the forefront, it's no surprise that otherwise actively followed names are reporting news and it's slipping through the cracks. But Aeterna Zentaris (Nasdaq: AEZS) is the sixth most-watched biotech on Motley Fool CAPS, and there was no way I was going to let its earnings report and pipeline update slip by without notice.

Yesterday, on lower-than-average volume and to the tune of a 4%-plus drop in the indexes, Aeterna Zentaris reported second-quarter results that featured a loss of $0.12 per share on revenue of $6.5 million, credited to better sales of its in vitro fertilization drug Cetrotide and strength in the euro relative to the dollar.

The company also shored up its balance sheet by exercising the remaining balance of its at-the-market sales agreement whereby it sold $14.7 million shares of stock during the quarter. Aeterna Zentaris also enacted a new two-year at-the-market sales agreement, which gives the company the ability to sell up to 9.5 million shares to raise cash, but not to exceed $24 million in aggregate proceeds. I can't say I'm a fan of stock offerings, but running six concurrent clinical trials isn't cheap, and ending the quarter with $49.6 million in cash should help investors sleep better at night.

Now, on to the real meat and potatoes -- the clinical-trials update.

During the quarter, Aeterna Zentaris marked some very key milestones in its bid to get its lead cancer drug candidate, perifosine, to market. First, the company completed enrollment of 430 patients into its late-stage refractory colorectal cancer phase 3 clinical trial. Keep in mind that this drug also has received fast-track status. While Aeterna has sold the rights of perifosine to Keryx Biopharmaceuticals (Nasdaq: KERX) in North America, Yakult Honsha in Japan, and Handok in South Korea, it maintains the licensing rights everywhere else.

That other victory I alluded to for perifosine concerns the European Patent Office's granting the company a patent for the use of perifosine in conjunction with antitumor antimetabolites to treat benign and malignant tumors. The patent will expire in 2023.

The second quarter also marked the completion of a phase 3 trial for AEZS-130 -- the company's oral diagnostic test for adult growth hormone deficiency. The company noted the trial as a success, and Aeterna anticipates shortly filing for a new drug application.

AEZS-120 provided exciting news as well, with the company stating that it should be moving beyond preclinical studies to phase 1 clinical trials by 2012. Data for the oral prostate-cancer vaccine have shown promise thus far, and though very early in the process, keep in mind that Aeterna owns the worldwide rights to this compound.

Although it's tough to say for sure whether Aeterna Zentaris is going to be successful in getting perifosine past the FDA, the data looks to be stacked in its favor. Unlike Insmed (Nasdaq: INSM) and Adventrx Pharmaceuticals (AMEX: ANX) which have fallen off a cliff over the past month because of unfavorable FDA findings, Aeterna has a much deeper pipeline, and the risks associated with a potential FDA denial are significantly outweighed by the potential of the company's 11 compounds currently in development.

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