Strong fundamentals; dilution from Series B Warrants
substantially ended
All amounts are in US Dollars
Third quarter key developments
- Saizen® promotional activities show early
promise
- EstroGel® year-over-year new-prescription
growth continues ahead of the market in the Company's
territories
- Zoptrex™ (zoptarelin doxorubicin) receives DSMB
recommendation to continue ZoptEC Phase 3 clinical program to
completion following review of the final interim efficacy and
safety data (after quarter end)
- Zoptrex™ meets Phase 2 Primary Endpoint in Men with
Heavily Pretreated Castration- and Taxane-Resistant Prostate
Cancer
- Optimized Erk-Inhibitor Compound Selected for Further
Development
- Company announces restructuring of Financial Team and
closing of Quebec City office (after quarter end)
- Series B Share Purchase Warrants substantially eliminated
(after quarter end)
Quebec City, Nov. 5, 2015 /CNW
Telbec/ - Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the
"Company"), a specialty biopharmaceutical company engaged in
developing and commercializing novel treatments in oncology,
endocrinology and women's health, today reported financial and
operating results as at and for the third quarter ended
September 30, 2015.
Commenting on third quarter results and the Company's prospects,
David A. Dodd, Chairman, President
and Chief Executive Officer of the Company, stated, "Despite our
continued progress in transforming the Company, the price of our
common shares remained under intense pressure during the third
quarter as a result of the exercise of Series B Common Share
Purchase Warrants ("Series B Warrants"). At the beginning of the
quarter, 26,812,308 Series B Warrants were outstanding. We finished
the quarter with 6,880,170. As a result of the agreements we
reached with the major holders of the Series B Warrants on
November 1, only approximately
0.8 million Series B Warrants will remain outstanding,
representing approximately 2.7% of the number originally issued.
While the dilution caused by the Series B Warrants is substantially
ended, we find it necessary to ask our fellow shareholders to
approve another share consolidation. We believe that a share
consolidation will permit our common shares to remain listed on The
Nasdaq Capital Market, which will permit us to raise capital again
on reasonable terms, further supporting our focus on developing a
profitable, growth-oriented pharmaceutical business."
Commenting on the Company's lead oncology compound, Mr. Dodd
stated, "Our confidence in the commercial potential of Zoptrex™,
which is the brand name we selected for zoptarelin doxorubicin, was
enhanced by the announcement during the third quarter of the
results of an investigator sponsored Phase 2 clinical study of
Zoptrex™ in men with in castration- and taxane-resistant prostate
cancer. Zoptrex™ achieved its primary endpoint and
demonstrated good tolerability during this early-stage study. The
primary endpoint was Clinical Benefit, defined as remaining
progression-free by RECIST and Prostate Specific Antigen after
treatment for 12+ weeks. Shortly after quarter end, we received
very encouraging news regarding Zoptrex™ when, following a
comprehensive review of the final interim efficacy and safety data,
the DSMB recommended that we continue the ZoptEC Phase 3 clinical
study to its conclusion. We look forward to the successful
completion of the clinical development of ZoptrexTM for
our initial indication over the next year."
Continuing with his commentary, Mr. Dodd stated, "During the
third quarter, we made progress promoting Saizen®, a
leading product in the $1.6 billion
US market for the treatment of growth hormone deficiency in
children and adults. Our recently commenced promotional efforts for
Saizen® show promise and support our belief that
detailing this product will contribute to our commercial success.
In addition, year-over-year new prescription growth for
EstroGel® in our territories increased
significantly, compared to its market which is currently flat or
declining. Our commercial operation, while not yet a meaningful
contributor to our financial results, is an important investment we
are making in the transformation of the Company. This demonstrated,
effective commercial operation will position us to build our
portfolio by in-licensing products. We intend to continue with this
investment in parallel with our efforts to successfully in-license
products."
Concluding, Mr. Dodd addressed the Company's earlier stage
development efforts as follows: "We also made significant progress
with respect to our pipeline of internally developed products,
selecting an optimized Erk-inhibitor compound for further
development. We are looking for other parties to assist us with the
further development of the compound because we believe it could
represent an important new category of cancer therapy."
Third Quarter Financial Highlights
Research and development ("R&D") costs were $4.1 million for the three-month period ended
September 30, 2015, as compared to
$6.1 million for the same period in
2014. A substantial portion of this decrease is mainly due to the
realization of cost savings in connection with the Company's global
resource optimization program, as well as to the weakening, in
2015, of the euro against the US dollar. The decrease was partly
offset by higher costs associated with the Company's ZoptEC and
Macrilen™ Phase 3 trials.
Selling expenses were $1.7 million
for the three-month period ended September
30, 2015, as compared to $0.9
million for the same period in 2014. This increase is mainly
attributable to the implementation of our promotional activities
associated with EstroGel®, which commenced in late 2014.
We also expanded the size of our contracted sales force from 19 to
23 sales representatives during the quarter in order to support our
promotional efforts associated with Saizen®.
General and administrative expenses were $1.9 million for the three-month period ended
September 30, 2015, as compared to
$2.8 million for the same period in
2014. General and administrative expenses were lower in the
current-year quarter mainly due to the realization of costs savings
in connection with the Company's global resource optimization
program.
Net finance costs were $7.9
million for the three-month period ended September 30, 2015, as compared to net finance
costs of $1.8 million for the same
period in 2014. The increase in net finance costs of $6.1 million is mainly related to the change in
the estimated fair value of the Company's warrant liability.
Net loss for the three-month period ended September 30, 2015 was $15.3 million or $0.07 per basic and diluted share, as compared to
$11.3 million or $0.20 per basic and diluted share for the same
period in 2014. This increase is predominantly due to higher
comparative net finance costs and to higher comparative selling
expenses, partially offset by lower comparative R&D costs.
At the opening of the third quarter, the Company had 139.9
million issued and outstanding common shares. On September 30 and November
4, 2015, the Company had 492.5 million and 632.7 million
issued and outstanding common shares, respectively. The increase in
the Company's outstanding shares during the quarter and subsequent
to quarter-end through November 4,
2015, results from the issuance of 492.8 million common
shares upon the alternate cashless exercise of Series B
Warrants.
Cash and cash equivalents were $38.3
million as at September 30,
2015, compared to $34.9
million as at December 31,
2014.
Conference Call
The Company will host a conference call and live webcast to
discuss these results on Friday, November 6,
2015, at 8:30 a.m., Eastern
Time. Participants may access the live webcast via the
Company's website at Aeterna Zentaris Q3 2015, or by telephone
using the following numbers: in Canada, 514-807-9895 or 647-427-7450, outside
Canada, 888-231-8191. A replay of
the webcast will also be available on the Company's website for a
period of 30 days.
For reference, the Management's Discussion and Analysis of
Financial Condition and Results of Operations for the third quarter
of 2015, as well as the Company's interim consolidated financial
statements as at September 30, 2015
and for the three-month and nine-month periods ended September 30, 2015 and 2014, can be found at
www.aezsinc.com in the "Investors" section.
About Aeterna Zentaris Inc.
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. Forward-looking statements may
include, but are not limited to statements preceded by, followed
by, or that include the words "expects," "believes," "intends,"
"anticipates," and similar terms that relate to future events,
performance, or our results. The following statements in the press
release are forward-looking statements:
- The statement that effecting a share consolidation will permit
us to consummate a financing in the future on favorable terms;
and
- The statement that our promotion of Saizen® will
contribute to our commercial success
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 efficiently 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.
Attachment: Financial summary
Condensed Interim
Consolidated Statements of Comprehensive Loss
Information
|
|
|
|
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
(in
thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenues
|
|
|
|
|
|
|
|
Sales commissions,
license fees and other
|
173
|
|
—
|
|
443
|
|
—
|
|
173
|
|
—
|
|
443
|
|
—
|
Operating
expenses
|
|
|
|
|
Research and
development costs
|
4,050
|
|
6,142
|
|
12,991
|
|
17,434
|
General and
administrative expenses
|
1,910
|
|
2,763
|
|
7,355
|
|
7,207
|
Selling
expenses
|
1,714
|
|
938
|
|
5,123
|
|
1,807
|
|
7,674
|
|
9,843
|
|
25,469
|
|
26,448
|
Loss from
operations
|
(7,501)
|
|
(9,843)
|
|
(25,026)
|
|
(26,448)
|
Finance
income
|
40
|
|
1,091
|
|
279
|
|
5,266
|
Finance
costs
|
(7,940)
|
|
(2,877)
|
|
(15,438)
|
|
—
|
Net finance
(costs) income
|
(7,900)
|
|
(1,786)
|
|
(15,159)
|
|
5,266
|
Net loss from
continuing operations
|
(15,401)
|
|
(11,629)
|
|
(40,185)
|
|
(21,182)
|
Net income from
discontinued operations
|
111
|
|
292
|
|
60
|
|
465
|
Net
loss
|
(15,290)
|
|
(11,337)
|
|
(40,125)
|
|
(20,717)
|
Other
comprehensive (loss) income :
|
|
|
|
|
Items that may be
reclassified subsequently to profit or loss:
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(21)
|
|
(387)
|
|
1,260
|
|
(481)
|
Items that will not
be reclassified to profit or loss:
|
|
|
|
|
|
Actuarial gain (loss)
on defined benefit plans
|
—
|
|
(1,099)
|
|
960
|
|
(3,169)
|
Comprehensive
loss
|
(15,311)
|
|
(12,823)
|
|
(37,905)
|
|
(24,367)
|
Net loss per share
(basic and diluted) from continuing operations
|
(0.07)
|
|
(0.20)
|
|
(0.29)
|
|
(0.37)
|
Net income per
share (basic and diluted) from discontinued
operations
|
0.00
|
|
0.00
|
|
0.00
|
|
0.01
|
Net loss per share
(basic and diluted)
|
(0.07)
|
|
(0.20)
|
|
(0.29)
|
|
(0.36)
|
Weighted average
number of shares outstanding:
|
|
|
|
|
Basic and
diluted
|
229,450,370
|
|
59,163,710
|
|
137,825,986
|
|
56,881,919
|
Condensed Interim
Consolidated Statement of Financial Position
Information
|
|
|
|
|
|
As at September
30,
|
|
As at December
31,
|
(in
thousands)
|
2015
|
|
2014
|
|
$
|
|
$
|
Cash and cash
equivalents1
|
38,345
|
|
34,931
|
Trade and other
receivables and other current assets
|
1,206
|
|
1,286
|
Restricted cash
equivalents
|
262
|
|
760
|
Other non-current
assets
|
9,088
|
|
10,458
|
Total
assets
|
48,901
|
|
47,435
|
|
|
|
|
Payables and other
current liabilities
|
4,861
|
|
7,574
|
Warrant liability
(current and non-current portions)
|
16,752
|
|
8,225
|
Non-financial
non-current liabilities2
|
14,464
|
|
17,152
|
Total
liabilities
|
36,077
|
|
32,951
|
Shareholders'
equity
|
12,824
|
|
14,484
|
Total liabilities
and shareholders' equity
|
48,901
|
|
47,435
|
|
|
|
|
1
|
Of which
approximately $3.1 million was denominated in EUR as at September
30, 2015 ($3.6 million as at December 31, 2014)
|
2
|
Comprised mainly of
employee future benefits and provisions for onerous
contracts.
|
SOURCE Aeterna Zentaris Inc.