All amounts are in U.S. dollars (unless otherwise
noted)
QUEBEC CITY,
Aug. 8, 2013 /CNW Telbec/ - Aeterna
Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company"), a
specialty biopharmaceutical company engaged in developing novel
treatments in oncology and endocrinology, today reported financial
and operating results as at and for the second quarter ended
June 30, 2013.
Key Highlights
Appointment of New President and CEO
- David Dodd was appointed
President and Chief Executive Officer of the Company, as well as to
its Board of Directors. Mr. Dodd's executive management
experience in the pharmaceutical and biotechnology industries spans
more than 35 years. Before joining the Company, he was President,
CEO and Chairman of BioReliance Corporation, a leading provider of
biological safety and related testing services. During his six-year
tenure as President, CEO and Director of Serologicals Corporation,
the market value of that company increased from $85 million to an all-cash sale to Millipore
Corporation for $1.5 billion.
That successful transformation followed his five-year term as
President and CEO of Solvay Pharmaceuticals, Inc. and as Chairman
of its subsidiary Unimed Pharmaceuticals, Inc. Mr. Dodd also held
various senior management positions at Wyeth-Ayerst Laboratories,
the Mead Johnson Laboratories Division at Bristol-Myers Squibb, and
Abbott Laboratories. Mr. Dodd holds a Master's degree from
Georgia State University, and completed
the Harvard Business School of Advanced
Management Program.
Zoptarelin Doxorubicin (AEZS-108)
- Co-development and revenue sharing agreement signed with
Ergomed Clinical Research Ltd. ("Ergomed") as the contract clinical
development organization for the ongoing Phase 3 "ZoptEC"
(Zoptarelin doxorubicin in Endometrial Cancer)
trial in women with endometrial cancer resistant to
platinum/taxane-based chemotherapy. Ergomed will assume 30% (up to
$10 million) of the clinical and
regulatory costs for this trial, which are estimated at
approximately $30 million over
the course of the study. Ergomed will be entitled to receive an
agreed upon single-digit percentage of any net income received by
the Company for zoptarelin doxorubicin (AEZS-108) in this
indication, up to a specified maximum amount. This is an
open-label, randomized, multicenter trial to be conducted in
North America, Europe, and other territories under a Special
Protocol Assessment ("SPA"). The trial will compare zoptarelin
doxorubicin (AEZS-108) with doxorubicin as second line therapy for
locally-advanced, recurrent or metastatic endometrial cancer. The
trial will involve approximately 500 patients and the primary
efficacy endpoint is improvement in median Overall Survival.
- Subsequent to quarter-end, the Company announced the initiation
of patient-dosing in the ZoptEC trial.
- Encouraging final data for the Phase 1 portion of the ongoing
Phase 1/2 trial in men with castration- and taxane‑resistant
prostate cancer with zoptarelin doxorubicin (AEZS-108) were
presented at the American Society of Clinical Oncology Annual
Meeting in Chicago. In general,
zoptarelin doxorubicin (AEZS-108) was well tolerated and
demonstrated promising evidence of its anti-tumor activity in this
heavily pretreated population. Among the 15 evaluable patients with
measurable disease, 10 achieved stable disease and a drop in PSA
was noted in 3 patients. The maximum tolerated dose ("MTD") of
zoptarelin doxorubicin (AEZS-108) in this indication was
established at 210 mg/m2, which is below the MTD
reported in women with refractory endometrial and ovarian cancer.
The Phase 2 portion of this trial in prostate cancer is
ongoing.
Macimorelin Acetate (AEZS-130)
- Ongoing preparation of a New Drug Application ("NDA")
submission to the United States Food and Drug Administration for
macimorelin acetate (AEZS-130) as an oral diagnostic test for Adult
Growth Hormone Deficiency ("AGHD"). Phase 3 data have demonstrated
that the compound has the potential to become the first
orally-approved diagnostic test for AGHD, with accuracy comparable
to available testing procedures.
Cetrotide® Manufacturing Rights
- Binding agreements signed with various partners and licensees
with respect to the manufacturing rights for Cetrotide®,
currently marketed for in vitro fertilization. The principal
effect of such agreements is to transfer the manufacturing rights
and to grant a manufacturing license for Cetrotide® to a
subsidiary of Merck KGaA of Darmstadt, Germany ("Merck Serono"), in all jurisdictions
(the "Cetrotide® Transactions"). The
Cetrotide® Transactions are expected to be completed on
or about October 1, 2013, at which
time Zentaris IVF GmbH, a direct wholly-owned subsidiary of AEZS
GmbH ("AEZS Germany"), would receive a one-time payment of €2.5
million, or approximately $3.3 million, as well as certain other
payments related to current assets and equipment to be transferred.
In addition, AEZS Germany and Zentaris IVF GmbH also entered into a
transitional services agreement with Merck Serono under which the
Company will, during a 36-month period, provide various transition
services to assist Merck Serono in assuming responsibility for the
manufacturing of Cetrotide® in consideration for the
payment of a monthly fee to Zentaris IVF GmbH throughout such
period. The Company had previously monetized the royalty stream
related to Cetrotide® in November
2008 in a transaction with HealthCare Royalty Partners L.P.
(formerly Cowen Healthcare Royalty Partners L.P.).
"At-the-Market" Issuance Program
- On May 21, 2013, the Company
entered into an "At-the-Market" ("ATM") Sales Agreement, under
which it may, at its discretion, from time to time during the term
of the sales agreement, sell up to a maximum of 2.5 million of its
common shares through ATM issuances on the NASDAQ for aggregate
gross proceeds not to exceed $4.6
million.
- Between May 22, 2013 and
June 30, 2013, the Company issued a
total of 708,959 common shares under the May
2013 ATM Program for aggregate gross proceeds of
$1.5 million.
Class Action Lawsuit
- The class action lawsuit filed against the Company and certain
of its officers (the "Defendants") in the United States District
Court for the Southern District of New
York was entirely dismissed with prejudice and without leave
to amend. No payment was made by any of the Defendants to the
plaintiff or his counsel in connection with the lawsuit. The
plaintiff did not appeal the judgment dismissing the lawsuit.
Registered Direct Offering
- On July 30, 2013, subsequent to
quarter-end, the Company completed a registered direct offering of
5.2 million units, at a purchase price of $1.50 per unit, (the "Offering"), generating net
proceeds of approximately $7 million.
Each unit consisted of one common share and 0.5 of a warrant to
purchase one common share. Each warrant is exercisable at any time
after January 30, 2014 for a period
of five years from the date of issuance at an exercise price of
$1.85 per share. The Company intends
to use the net proceeds of the Offering for the continued funding
of its ongoing drug development activities, primarily for the
advancement of its zoptarelin doxorubicin (AEZS-108) program,
secondly for its macimorelin acetate (AEZS-130) program, as well as
for general corporate purposes and working capital.
Cash and cash equivalents totalled $25.3 million as at June 30, 2013, compared to $39.5 million as at December 31, 2012.
David Dodd, Aeterna Zentaris
President and Chief Executive Officer, commented, "Over the past
few months, we have successfully met four out of the five critical
objectives that were previously outlined: (1) transfer of
Cetrotide® manufacturing rights to Merck Serono; (2)
initiation of patient recruitment and dosing of the first patient,
as well the signed agreement with Ergomed as CRO for our very
important Phase 3 ZoptEC trial in endometrial cancer; (3)
successful raising of important financing in support of our ongoing
operations and development programs; and (4) significant efforts
related to obtaining on-the-market products that will accelerate
our strategy aimed at transitioning to a revenue and cash
generating company. As for the fifth objective, we are finalizing
our preparation for submitting the NDA for macimorelin acetate
(AEZS‑130) as the only approved oral diagnostic test for adult
growth hormone deficiency. Having now completed my initial three
months with the Company, I am even more confident in our ability to
successfully develop Aeterna Zentaris to a position of commercial
and competitive presence within our target markets."
Dennis Turpin, CPA, CA, Senior
Vice President and Chief Financial Officer at Aeterna Zentaris
stated, "As of June 30, 2013,
including net proceeds from the recent Offering, we had a pro forma
cash and cash equivalents position of $32.3 million which enables us to continue
to move our key product candidates through the pipeline."
CONSOLIDATED RESULTS AS AT AND FOR THE SECOND QUARTER ENDED
JUNE 30, 2013
Revenues were $30.1 million for the three-month period
ended June 30, 2013, compared to
$7.5 million for the same period
in 2012. The increase is largely attributable to the acceleration
of the recognition of previously deferred revenues received in
connection with the 2008 sale of the Cetrotide® royalty
stream to HealthCare Royalty Partners L.P.
R&D costs, net of refundable tax credits and grants
were $5.3 million for the
three-month period ended June 30,
2013, compared to $5.2 million for the same period in
2012.
Selling, general and administrative ("SG&A") expenses
were $5.8 million for the
three-month period ended June 30,
2013, compared to $3.6 million for the same period in 2012.
The increase is mainly related to the termination benefits granted
to the Company's former CEO and to the related non-cash share-based
compensation costs.
Net income for the three-month period ended June 30, 2013 was $9.3 million or $0.37 per basic and diluted share, compared to
$4.5 million or $0.25 per basic and diluted share for the same
period in 2012. The significant increase is due largely to the
significant increase in royalties revenues (non-cash), partly
offset by lower net finance income (non-cash), as well as by higher
SG&A.
CONFERENCE CALL
Management will be hosting a conference call for the investment
community beginning at 8:30 a.m. (Eastern
Time) tomorrow, Friday, August 9, 2013, to discuss the 2013
second quarter results. Individuals interested in participating in
the live conference call by telephone may dial, in Canada, 514-807-9895 or 647-427-7450, outside
Canada, 888-231-8191. They may
also listen through the Internet at www.aezsinc.com in the
"newsroom" section. A replay will be available on the Company's
website for 30 days following the live event.
For reference, the Management's Discussion and Analysis
("MD&A") for the second quarter 2013 with the associated
Unaudited Interim Condensed Consolidated Financial Statements can
be found at www.aezsinc.com in the Investors section.
About Aeterna Zentaris
Aeterna Zentaris is a specialty biopharmaceutical company
engaged in developing novel treatments in oncology and
endocrinology. The Company's pipeline encompasses compounds from
drug discovery to regulatory approval. For more information, visit
www.aezsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements made
pursuant to the safe harbour provisions of the U.S. Securities
Litigation Reform Act of 1995. 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, 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 take advantage of business opportunities
in the pharmaceutical industry, uncertainties related to the
regulatory process and general changes in economic conditions.
Investors should consult the Company's quarterly and annual filings
with the Canadian and U.S. securities commissions for additional
information on risks and uncertainties relating to forward-looking
statements. Investors are cautioned not to rely 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.
Interim Consolidated Statements of Comprehensive Income
Information
|
|
Three months ended June
30, |
|
Six months ended June 30,
|
(in thousands, except share and per
share data) |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
$ |
|
$ |
|
$ |
|
$ |
Revenues |
|
|
|
|
|
|
|
|
Sales and royalties |
|
29,751 |
|
7,239 |
|
39,960 |
|
15,547 |
License fees and other |
|
336 |
|
232 |
|
6,726 |
|
1,434 |
|
|
30,087 |
|
7,471 |
|
46,686 |
|
16,981 |
Operating expenses |
|
|
|
|
|
|
|
|
Cost of sales |
|
9,438 |
|
6,262 |
|
18,122 |
|
13,775 |
Research and
development costs, net of refundable tax credits and grants |
|
5,316 |
|
5,167 |
|
9,717 |
|
10,739 |
Selling, general and administrative
expenses |
|
5,848 |
|
3,642 |
|
9,642 |
|
6,855 |
|
|
20,602 |
|
15,071 |
|
37,481 |
|
31,369 |
Income (loss) from
operations |
|
9,485 |
|
(7,600) |
|
9,205 |
|
(14,388) |
Finance income |
|
379 |
|
12,140 |
|
2,183 |
|
7,477 |
Finance costs |
|
(534) |
|
— |
|
(172) |
|
— |
Net finance (costs) income |
|
(155) |
|
12,140 |
|
2,011 |
|
7,477 |
Net income (loss) |
|
9,330 |
|
4,540 |
|
11,216 |
|
(6,911) |
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(141) |
|
52 |
|
99 |
|
(203) |
Comprehensive income
(loss) |
|
9,189 |
|
4,592 |
|
11,315 |
|
(7,114) |
Net income (loss) per
share |
|
|
|
|
|
|
|
|
Basic |
|
0.37 |
|
0.25 |
|
0.44 |
|
(0.38) |
Diluted |
|
0.37 |
|
0.25 |
|
0.44 |
|
(0.38) |
Weighted average number of shares
outstanding |
|
|
|
|
|
|
|
|
Basic |
|
25,542,263 |
|
18,509,690 |
|
25,436,364 |
|
18,089,582 |
Diluted |
|
25,542,263 |
|
18,509,969 |
|
25,436,385 |
|
18,089,582 |
Interim Consolidated Statement of Financial Position
Information
|
|
As at June 30, |
|
As at December 31, |
(in thousands) |
|
2013 |
|
2012 |
|
|
$ |
|
$ |
Cash and cash equivalents |
|
25,339 |
|
39,521 |
Trade and other receivables and other current
assets |
|
14,111 |
|
13,780 |
Restricted cash |
|
816 |
|
826 |
Property, plant and equipment |
|
1,611 |
|
2,147 |
Other non-current assets |
|
11,034 |
|
11,391 |
Total assets |
|
52,911 |
|
67,665 |
|
|
|
|
|
Payables and accrued liabilities |
|
11,532 |
|
10,440 |
Current portion of deferred revenues |
|
11,842 |
|
5,235 |
Current portion of long-term payable |
|
— |
|
30 |
Warrant liability |
|
4,078 |
|
6,176 |
Non-financial non-current liabilities* |
|
17,669 |
|
52,479 |
Total liabilities |
|
45,121 |
|
74,360 |
Shareholders' equity (deficiency) |
|
7,790 |
|
(6,695) |
Total liabilities and shareholders' equity
(deficiency) |
|
52,911 |
|
67,665 |
_________________________
* Comprised mainly of non-current portion of deferred
revenues, employee future benefits and provision.
SOURCE Aeterna Zentaris Inc.