All amounts are in US Dollars
QUEBEC CITY, Nov. 11, 2015 /CNW Telbec/ - Aeterna Zentaris
Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company") today urged its
shareholders to vote FOR a special resolution authorizing the
consolidation of the Company's issued and outstanding common shares
at a consolidation ratio of between 8-for-1 and 100-for-1 (the
"Share Consolidation") at a special meeting (the "Meeting") of
shareholders to be held on Monday, November
16, 2015 and highlighted the support for the Share
Consolidation that it has received from Institutional Shareholder
Services Inc. ("ISS") and Glass Lewis & Co. The Company
issued the following statement:
Aeterna Zentaris is pleased that ISS and Glass Lewis, two
leading independent proxy research and advisory firms, have
published reports recommending that the Company's shareholders vote
FOR the Share Consolidation. In the supportive recommendation
from ISS, they note: "Stock consolidations, while not
immediately adding to shareholder value, should enhance the
long-term growth prospects of the company by broadening its
financing alternatives. Continued low trading prices of the
company's shares can put them below investment grade for many
institutions, limiting the potential capital base for the company
and its prospects for raising new capital as needed." The
Company urges shareholders to consider management's continued
efforts to transform the Company into a profitable, growth-oriented
company, delivering long-term value to shareholders, employees,
patients and their healthcare providers and to vote in favor of the
Share Consolidation.
Commenting on the upcoming vote, Mr. David A. Dodd, Chairman, President and Chief
Executive Officer of the Company, highlighted the steps taken by
management to transform the Company, stating, "Shareholders should
consider our recommendation that they vote in favor of the Share
Consolidation in light of the significant accomplishments achieved
over the last two years to transform the Company towards becoming a
growth-oriented, profitable pharmaceutical company." Mr. Dodd
summarized the accomplishments as follows: "Over the past two
years, costs have been significantly reduced, a commercial platform
capable of handling a full product portfolio has been established,
two potentially high-value products are being progressed rapidly
through the regulatory process and development/commercial
partnerships and relationships have been established with major
pharmaceutical companies to maximize the value of our portfolio
pipeline."
The Company today also provided more details regarding each of
the following aspects of the progress toward its
transformation:
Optimizing Resource Utilization through Corporate
Restructuring and Cost Reduction
- Since January 2014, the Company
reduced headcount by a net of approximately 44 positions, resulting
in an operating expenditure reduction of approximately $3 million-to-$4 million annually, excluding
various one-time severance and other directly related costs; these
savings offset to a significant degree the expenses associated with
the Company's commercial operations.
- The Company obtained a direct cash contribution of $1 million through the sale of discontinued
equipment in Frankfurt and reduced
the monthly lease costs for the Frankfurt facility by approximately 50% by
subleasing unnecessary lab and office space at that facility.
Building Commercial Value through Co-Promotions and
In-Licensing of Commercial-Stage Products
- The Company's dedicated, contracted sales force of 23,
currently co-promoting EstroGel® and Saizen®,
provides increasing commission revenues and is expected to become
profitable as success with the co-promoted products
builds.
- An established commercial and field organization that is able
to immediately promote additions to a product portfolio is a strong
incentive to potential partners toward the successful pursuit of
commercial-stage products to in-license or acquire.
Maximizing Pipeline Development and Speed-to-FDA
Registration
- Approximately 90% of our third-party R&D costs relate to
our two pivotal Phase 3 programs for Zoptrex™ and Macrilen™; the
current pace and focus have resulted in these programs proceeding
toward completion and, hopefully, registration dossier submission
earlier than previously anticipated.
Partnering to Optimize Commercial Success and Value of
Zoptrex™ and Macrilen™
- Discussions related to partnering and, where feasible,
out-licensing, are an ongoing focus and pursuit for both Zoptrex™
and Macrilen™. In addition to the successful out-license of
Zoptrex™ to Sinopharm A-Think, for development in China, Hong
Kong and Macau, discussions
with other potential partners relative to other geographic
territories continue. Similarly, such partnering opportunities
for Macrilen™ are being pursued. The goals are to maximize the
commercial success and shareholder value of these two
close-to-market products.
Discussing the rationale for the Share Consolidation, Mr. Dodd
stated, "We concluded that a share consolidation presented the best
alternative for achieving a stock price that will meet and maintain
the NASDAQ listing requirements. We believe that remaining a
NASDAQ listed company is crucial to our liquidity and our future
financing opportunities. Also, following the Share Consolidation,
the Company will have a capital structure that is more supportive
of financing both the acquisition of commercial-stage products and
the completion of the development of Zoptrex™ and Macrilen™."
The Company also explained that in the past several weeks it had
considered, among other things, a share repurchase and the recently
concluded arrangement with certain of the holders of its Series B
Warrants as a means of improving its capital
structure. Commenting on the analysis, Mr. Dodd stated, "While
a share repurchase may have increased or supported our stock price,
we rejected that course of action because we believed that our cash
was insufficient to purchase enough shares to return us to above
$1.00, which is required to regain
compliance with NASDAQ listing requirements. Our current share
base, following the extreme dilution resulting from the Series B
Warrants, is simply too large. Furthermore, we concluded that
eliminating the overhang from the Series B Warrants and preserving
our cash to continue our development programs was the better course
of action."
The Management Information Circular (the "Circular") sent to
shareholders contains, among other things, details concerning the
Share Consolidation, reasons that the Company's Board of Directors
recommends the Share Consolidation, requirements for the Share
Consolidation to be implemented and the procedure for receiving new
shares if the Share Consolidation is implemented, as well as the
procedures for voting at the Meeting and other related
matters. Shareholders are urged to carefully review the
Circular and accompanying materials as they contain important
information regarding the Share Consolidation and its consequences
to shareholders. A copy of the Circular is available on SEDAR at
www.sedar.com and on the EDGAR section of the U.S. Securities and
Exchange Commission's website at www.sec.gov.
The Board of Directors UNANIMOUSLY recommends
that Shareholders vote FOR the Share Consolidation.
YOUR VOTE IS IMPORTANT. VOTE
TODAY!
A proxy form or voting instruction form accompanied the Meeting
materials you received by mail. Instructions on how to vote,
which vary depending on whether you are a registered or beneficial
shareholder of the Company, are provided in the Circular and the
proxy form or voting instruction form.
If you have any questions or require more information with
regard to the procedures for voting, please contact Laurel Hill
Advisory Group, the Company's proxy solicitation agent, toll free
at 1-877-452-7184, collect at 416-304-0211 or by email at
assistance@laurelhill.com.
About Aeterna Zentaris
Aeterna Zentaris is a specialty biopharmaceutical company
engaged in developing and commercializing novel treatments in
oncology, endocrinology and women's health. For more information,
visit www.aezsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the US Securities
Litigation Reform Act of 1995. All statements that express
expectations or projections about the future, including statements
about the Company's growth strategy, the success of its commercial
efforts and its efforts to obtain regulatory approval for its
compounds, are forward-looking statements. Forward-looking
statements involve known and unknown risks and uncertainties that
could cause the Company's actual results to differ materially from
those in the forward-looking statements. Such risks and
uncertainties include, among others, the availability of funds and
resources to pursue R&D projects and clinical trials, the
successful and timely completion of clinical studies, the risk that
safety and efficacy data from any of our Phase 3 trials may not
coincide with the data analyses from previously reported Phase 1
and/or Phase 2 clinical trials, the ability of the Company to
effectively commercialize one or more of its products or product
candidates, the ability of the Company to take advantage of
business opportunities in the pharmaceutical industry,
uncertainties related to the regulatory process, the ability to
protect our intellectual property, the potential of liability
arising from shareholder lawsuits and general changes in economic
conditions. Investors should consult the Company's quarterly and
annual filings with the Canadian and US securities commissions for
additional information on risks and uncertainties relating to
forward-looking statements. Investors are cautioned not to place
undue reliance on these forward-looking statements. The Company
does not undertake to update these forward-looking statements. We
disclaim any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future results, events or
developments, unless required to do so by a governmental authority
or by applicable law.
SOURCE Aeterna Zentaris Inc.