Quarter marked by significant advancements with LHRH antagonist
platform QUEBEC CITY, QC, Nov. 13 /PRNewswire-FirstCall/ -- Aeterna
Zentaris Inc. (TSX: AEZ; NASDAQ: AEZS) today reported financial and
operating results for the third quarter ended September 30, 2006.
"The third quarter was marked by significant progress with the
clinical development of our luteinizing hormone-releasing hormone
(LHRH) antagonist compound, ozarelix, for which we disclosed
positive Phase 2 results in both prostate cancer and benign
prostatic hyperplasia," said Gilles Gagnon, Aeterna Zentaris'
President and Chief Executive Officer. "These very encouraging
results enable us to pursue ozarelix's clinical development in both
indications, moving forward with an ongoing Phase 2b trial in
prostate cancer as well as the potential to initiate a late-stage
program in benign prostatic hyperplasia in 2007. Furthermore, we
granted Nippon Kayaku an exclusive license to develop and market
ozarelix for all potential oncological indications in Japan.
Additionally, we launched the first LHRH antagonist to enter the
Japanese market, Cetrotide(R) (cetrorelix) for in vitro
fertilization with our Japanese partners. We are pleased with these
significant achievements as they clearly represent our commitment
to aggressively move our product candidates through the pipeline
and bring our lead compounds even closer to market." Key
Developments for the Quarter Ended September 30, 2006 - Positive
Phase 2 results for ozarelix in prostate cancer - The study
achieved its primary end-point of defining a tolerable dosage
regimen of ozarelix that would ensure continuous suppression of
testosterone at castration level (< 0.5 ng/ml) for a three-month
test period. The detailed results from the study will be presented
at the upcoming SIU (Societe internationale d'urologie) meeting in
Cape Town, South Africa, on November 13, 2006. - Positive Phase 2
results for ozarelix in benign prostatic hyperplasia (BPH) - With
highly statistically significant positive data, the study achieved
its primary efficacy end-point of improving clinical symptoms of
BPH, at week 12, as measured by significant changes in the
International Prostate Symptom Score (I-PSS), the standard method
of assessing BPH symptoms. - Partnership for ozarelix in Japan -
Aeterna Zentaris granted Nippon Kayaku an exclusive license to
develop and market ozarelix for all potential oncological
indications in Japan. - Cetrotide(R) (cetrorelix) launched in Japan
for in vitro fertilization - Cetrotide(R) (cetrorelix), the first
LHRH antagonist to enter the Japanese market, has been launched in
Japan for in vitro fertilization. Cetrotide(R) (cetrorelix) is
being manufactured and marketed in Japan by partners Nippon Kayaku
Co., Ltd. and Shionogi & Co., Ltd. Financial Results for the
Quarter Ended September 30, 2006 Consolidated revenues for the
quarter ended September 30, 2006 totalled $83.9 million compared to
$52.9 million for the same period in 2005. Consolidated R&D
expenses, net of tax credits and grants (R&D) remained steady
during the third quarter at $6.2 million compared to $6.1 million
for the same period in 2005. Consolidated selling, general and
administrative (SG&A) expenses increased to $15.1 million for
the quarter ended September 30, 2006 compared to $9.8 million for
the same period in 2005. Consolidated net loss for the quarter
ended September 30, 2006 was $6.5 million or $0.12 per basic and
diluted share, compared to $3.8 million or $0.08 per basic and
diluted share for the same period in 2005. The increase is mainly
attributable to increased non-recurring corporate expenses and
future income tax expense, partly offset by the increased
contribution of Atrium. Cash, cash equivalents and short-term
investments reached $45.8 million for the quarter ended September
30, 2006 compared to $52.7 million as of December 31, 2005. More
than $25 million was dedicated to the Company's Biopharmaceutical
segment as of September 30, 2006. Taking into account the sale of
24% of Aeterna Zentaris' ownership interest in Atrium that occurred
on October 18, 2006, Aeterna Zentaris' pro-forma cash and
short-term position dedicated to its Biopharmaceutical segment
reached $71 million, compared to $34.8 million as of December 31,
2005. Dennis Turpin, Vice President and Chief Financial Officer of
Aeterna Zentaris, commented, "With a strong balance sheet, a
controlled burn rate and a clear development strategy, we are well
positioned to execute our business plan." Developments Subsequent
to Quarter End - Closing of secondary offering of Aeterna Zentaris'
3,485,000 subordinate voting shares of Atrium Biotechnologies Inc.,
at a price of Cdn$15.80 per share - In early January 2007, Aeterna
Zentaris intends, subject to receiving regulatory and other
approvals, to distribute all of its remaining 11,052,996
subordinate voting shares of Atrium to its shareholders. Gilles
Gagnon, President and Chief Executive Officer at Aeterna Zentaris
concluded, "Over the past few months, we have successfully achieved
major milestones. We now look forward to continuing this great
momentum for the remainder of the year and emerge in early 2007 as
a late-stage pure play biopharmaceutical company, in an effort to
further unlock value to our shareholders." Management will be
hosting a conference call for the investment community beginning at
10:30 a.m. Eastern Time today, Monday, November 13, to discuss 2006
third quarter financial and operating results, followed by a
question and answer session. To participate in the live conference
call by telephone, please dial 416-644-3415, 514-807-8791 or
800-814-4857. Individuals interested in listening to the conference
call on the Internet may do so by visiting
http://www.aeternazentaris.com/. A replay will be available on the
Company's Web site for 30 days. About Aeterna Zentaris Inc. Aeterna
Zentaris Inc. is a growing global biopharmaceutical company focused
on endocrine therapy and oncology with proven expertise in drug
discovery, development and commercialization. News releases and
additional information are available at
http://www.aeternazentaris.com/. Forward-Looking Statements This
press release contains forward-looking statements made pursuant to
the safe harbor provisions of the U.S. Securities Litigation Reform
Act of 1995. Forward-looking statements involve known and unknown
risks and uncertainties, which 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 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 the 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. Attachment: Financial
summary (In thousands of US dollars, except share and per share
data) Quarters ended Nine months ended CONSOLIDATED RESULTS
September 30, September 30 Unaudited 2006 2005 2006 2005
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$ $ $ $ Revenues 83,893 52,879 251,760 174,888
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Operating expenses Cost of sales 55,664 34,073 165,479 109,800
Selling, general and administrative 15,125 9,836 44,209 29,785
R&D costs, net of tax credits and grants 6,194 6,147 20,475
18,692 Depreciation and amortization 2,517 1,837 7,376 5,666
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79,500 51,893 237,539 163,943
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Earnings from operations 4,393 986 14,221 10,945 Interest income
539 339 1,414 1,071 Interest expense (1,971) (2,241) (7,198)
(7,067) Foreign exchange gain (loss) 109 (404) 26 (351)
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Earnings (loss) before the following items 3,070 (1,320) 8,463
4,598 Current income taxes (2,010) (251) (6,401) (4,503) Future
income taxes (4,244) (753) (2,425) (1,915) Gain (loss) on dilution
of investments (5) 109 (140) 16,502 Non-controlling interest
(3,316) (1,544) (10,144) (5,047)
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Net earnings (loss) for the period (6,505) (3,759) (10,647) 9,635
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Net earnings (loss) per share Basic (0.12) (0.08) (0.21) 0.21
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Diluted (0.12) (0.08) (0.21) 0.20
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Weighted average number of shares Basic 52,692,065 46,139,814
51,900,754 46,139,814 Diluted 53,040,488 46,397,156 52,390,209
46,459,000 Issued and outstanding shares 53,160,970 46,139,814
Biopharmaceutical Segment - Selected Financial Information (In
thousands of US dollars) Quarters ended Nine months ended September
30, September 30 Unaudited 2006 2005 2006 2005
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$ $ $ $ Revenues Sales and royalties 8,419 5,462 20,222 17,741
License fees 2,211 3,562 8,539 15,190
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10,630 9,024 28,761 32,931
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Cost of sales 3,992 1,941 8,037 6,110 Selling and administrative
4,540 3,840 12,900 11,125 R&D expense, net of tax credits and
grants 6,181 6,067 20,247 18,498 Depreciation and amortization
1,673 1,536 4,889 4,794
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16,386 13,384 46,073 40,527
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Loss from operations (5,756) (4,360) (17,312) (7,596)
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Cash flows used by operating activities (1,711) (3,814) (8,753)
(3,567)
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CONSOLIDATED BALANCE SHEET As at As at September 30, December 31,
Unaudited 2006 2005 $ $ Cash and short-term investments 45,753
52,705 Other current assets 111,634 110,971
----------------------------- 157,387 163,676 Long-term assets
274,253 263,835 ----------------------------- Total assets 431,640
427,511 ----------------------------- -----------------------------
Current liabilities 63,450 64,174 Long-term debt 99,144 135,743
Other long-term liabilities 54,367 53,532 Non-controlling interest
77,938 64,531 ----------------------------- 294,899 317,980
Shareholders' equity 136,741 109,531 -----------------------------
Total liabilities and shareholders' equity 431,640 427,511
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DATASOURCE: AETERNA ZENTARIS INC. CONTACT: Media Relations: Paul
Burroughs, (418) 652-8525, ext. 406, ; Investor Relations: Jenene
Thomas, (418) 655-6420,(908) 996-3154,
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