AEZS Aeterna Zentaris Inc

Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) today reported its financial and operating results for the first quarter ended March 31, 2019.

All Amounts are in U.S. Dollars

Highlights

• In March 2019, the Board formed a Special Committee to review strategic options available to the Company and engaged Torreya Partners to assist in that process

• In January 2019, European Medicines Agency granted marketing authorization for macimorelin for diagnosis of adult growth hormone deficiency

• Net loss for the first quarter of 2019 $4.9 million, compared to net income of $14.4 million for the same period in 2018

• As of March 31, 2019, we had $11.4 million of unrestricted cash and cash equivalents

Summary of First Quarter Results

For the three-month period ended March 31, 2019, we reported a consolidated net loss of $4.9 million, or $0.30 loss per common share, as compared with a consolidated net income of $14.4 million, or $0.88 income per common share, for the three-month period ended March 31, 2018. The $19.3 million decline in net loss results primarily from a reduction of $24.6 million in total revenues and $3.9 million increase in net finance loss, offset by a reduction of tax expense of $6.9 million and of operating expenses of $2.3 million. In January 2018, the Company received a $24.0 million cash payment under a license and assignment agreement for Macrilen™ (macimorelin).

Condensed Interim Consolidated Financial Statements and Management’s Discussion and Analysis

For reference, the condensed interim consolidated financial statements as at March 31, 2019 and for the three-month periods ending March 31, 2019 and 2018 and management’s discussion and analysis of financial condition and results of operations for the first quarter ended March 31, 2019, will be found at www.zentaris.com in the "Investors" section and at the Company’s profile at www.sedar.com and www.sec.gov.

The following tables set out summary consolidated financial information for the periods indicated. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year or any future period. The information presented herein does not contain disclosures required by IFRS for consolidated financial statements and should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2018.

About Aeterna Zentaris Inc.

Aeterna Zentaris Inc. is a specialty biopharmaceutical company engaged in commercializing novel pharmaceutical therapies, principally through out-licensing arrangements. Aeterna Zentaris is the licensor and party to a license and assignment agreement with a subsidiary of Novo Nordisk A/S to carry out development, manufacturing, registration, regulatory, and supply chain for the commercialization of Macrilen™ (macimorelin), which is to be used in the diagnosis of patients with adult growth hormone deficiency in the United States and Canada. In addition, we are actively pursuing business development opportunities for macimorelin in the rest of the world and to monetize the value of our non-strategic assets.

Forward-Looking Statements

This press release contains forward-looking statements (as defined by applicable securities legislation) made pursuant to the safe-harbor provision of the U.S. Securities Litigation Reform Act of 1995, which reflect our current expectations regarding future events. Forward-looking statements may include, but are not limited to statements preceded by, followed by, or that include the words "will," "expects," "believes," "intends," "would," "could," "may," "anticipates," and similar terms that relate to future events, performance, or our results. Forward-looking statements involve known and unknown risks and uncertainties, including those discussed in this press release and in our Annual Report on Form 20-F, under the caption "Key Information -Risk Factors" filed with the relevant Canadian securities regulatory authorities in lieu of an annual information form and with the U.S. Securities and Exchange Commission. Known and unknown risks and uncertainties could cause our actual results to differ materially from those in forward-looking statements. Such risks and uncertainties include, among others, our now heavy dependence on the success of Macrilen™ (macimorelin) and related out-licensing arrangements and the continued availability of funds and resources to successfully launch the product, our strategic review process, the ability of the Special Committee to carry out its mandate, the ability of Aeterna Zentaris to enter into out-licensing, development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect, reliance on third parties for the manufacturing and commercialization of  Macrilen™ (macimorelin), potential disputes with third parties, leading to delays in or termination of the manufacturing, development, out-licensing or commercialization of our product candidates, or resulting in significant litigation or arbitration, and, more generally, uncertainties related to the regulatory process, our ability to efficiently commercialize or out-license Macrilen™ (macimorelin), the degree of market acceptance of Macrilen™ (macimorelin), our ability to obtain necessary approvals from the relevant regulatory authorities to enable us to use the desired brand names for our products, the impact of securities class action litigation or other litigation on our cash flow, results of operations and financial position, our ability to take advantage of business opportunities in the pharmaceutical industry, our ability to protect our intellectual property, the potential of liability arising from shareholder lawsuits and general changes in economic conditions. Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties. Given these uncertainties and risk factors, readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce 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 applicable law.

Contact:

Leslie Auld

Chief Financial Officer

Aeterna Zentaris Inc.

IR@aezsinc.com

(843) 900-3211

Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Comprehensive (Loss) Income
For the three months ended March 31, 2019 and 2018
(in thousands of US dollars, except share and per share data)
			Three months ended March 31,
	(Unaudited)		2019			2018
			$			$
	Revenues
	Royalty income		13			—
	Licensing revenue		18			24,568
	Sales commission and other		6			90
	Total revenues		37			24,658
	Operating expenses
	Research and development costs		528			833
	General and administrative expenses		1,637			2,786
	Selling expenses		304			1,641
	Impairment of right of use asset		337			—
	Write-off of other current assets		169			—
	Total operating expenses		2,975			5,260
	(Loss) income from operations		(2,938	)		19,398
	(Loss) gain due to changes in foreign currency exchange rates		64			48
	Change in fair value of warrant liability		(2,061	)		1,828
	Other finance income		24			18
	Net finance (loss) income		(1,973	)		1,894
	(Loss) income before income taxes		(4,911	)		21,292
	Income tax expense		—			(6,868	)
	Net (loss) income		(4,911	)		14,424
	Other comprehensive (loss) income:
	Items that may be reclassified subsequently to profit or loss:
	Foreign currency translation adjustments		84			(222	)
	Items that will not be reclassified to profit or loss:
	Actuarial loss on defined benefit plans		(735	)		—
	Comprehensive (loss) income		(5,562	)		14,202
	Net (loss) income per share [basic]		(0.30	)		0.88
	Net (loss) income per share [diluted]		(0.30	)		0.87
	Weighted average number of shares outstanding:
	Basic		16,440,760			16,440,760
	Diluted		16,440,760			16,493,363

Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Financial Position
	(in thousands of US dollars)
(Unaudited)		March 31, 2019			December 31, 2018
		$			$
ASSETS
Current assets
Cash and cash equivalents		11,357			14,512
Trade and other receivables		612			294
Inventory		540			240
Prepaid expenses and other current assets		894			1,210
Total current assets		13,403			16,256
Restricted cash equivalents		363			418
Right of use assets		451			—
Property, plant and equipment		59			65
Identifiable intangible assets		55			62
Goodwill		8,053			8,210
Total assets		22,384			25,011
LIABILITIES
Current liabilities
Payables and accrued liabilities		2,668			2,966
Provision for restructuring and other costs		200			887
Income taxes payable		1,637			1,669
Current portion of deferred revenues		74			74
Current portion of lease liabilities		624			—
Current portion of warrant liability		420			—
Total current liabilities		5,623			5,596
Deferred revenues		240			258
Lease liabilities		718			—
Warrant liability		5,275			3,634
Employee future benefits		13,647			13,205
Non-current portion of provision for restructuring and other costs		441			411
Total liabilities		25,944			23,104
SHAREHOLDERS' (DEFICIENCY) EQUITY
Share capital		222,335			222,335
Other capital		89,437			89,342
Deficit		(315,427	)		(309,781	)
Accumulated other comprehensive income		95			11
Total shareholders' (deficiency) equity		(3,560	)		1,907
Total liabilities and shareholders' (deficiency) equity		22,384			25,011