Aeterna Zentaris Reports First Quarter 2019 Financial and Operating Results

Date : 05/07/2019 @ 10:12PM
Source : GlobeNewswire Inc.
Stock : Aeterna Zentaris Inc (AEZS)
Quote : 1.0  0.0 (0.00%) @ 1:09PM

Aeterna Zentaris Reports First Quarter 2019 Financial and Operating Results

Aeterna Zentaris (NASDAQ:AEZS)
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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 

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