Year marked by success in emerging as a late-stage pure play
biopharmaceutical company QUEBEC CITY, March 5
/PRNewswire-FirstCall/ -- AEterna Zentaris Inc. (TSX: AEZ; NASDAQ:
AEZS) today reported financial and operating results for the fourth
quarter and full year ended December 31, 2006. "The year 2006 was
driven by the significant advancement of our lead compounds into
late-stage clinical development, while making a strategic decision
to spin-off our subsidiary Atrium Biotechnologies and leverage our
equity interest in the company. Ultimately, we were successful in
reaching our goal of emerging as a late-stage pure play
biopharmaceutical company," said Gilles Gagnon, AEterna Zentaris'
President and Chief Executive Officer. "Our clinical trials
delivered solid results across the board. Positive, highly
statistically significant Phase 2 results with our flagship,
product candidate cetrorelix in BPH led to the initiation of our
Phase 3 program. We disclosed additional positive Phase 2 results
for ozarelix in both BPH and prostate cancer and quickly initiated
further Phase 2b trials in those indications. Perifosine yielded
positive Phase 2 results for multiple forms of cancer and
furthermore, we initiated several additional Phase 2 trials and
foresee the potential to initiate a Phase 3 program before year
end. "Our earlier-stage programs also provided additional proof of
our world-class development capabilities as we disclosed positive
Phase 1 results for AN-152 in gynaecological and breast cancers and
initiated a Phase 1 trial with ZEN-012 for solid tumors. Moving
forward, we have a sound financial position and remain committed to
further invest in our lead compounds and bring them closer to
market. We continue to strive to expose the depth, breadth and
potential of our robust pipeline and will diligently execute our
business plan providing opportunities to create additional value
for our shareholders," concluded Mr. Gagnon. KEY DEVELOPMENTS FOR
THE YEAR ENDED DECEMBER 31, 2006 CORPORATE EVOLUTION Spin-off of
Atrium Biotechnologies - The decision by AEterna Zentaris to sell a
portion of its ownership interest in Atrium by way of secondary
offering, and to distribute its remaining interest to its
shareholders represented the culmination of a lengthy and detailed
review process in which the Company examined a number of strategic
alternatives for how best to pursue and implement its business plan
of becoming a "pure play" biopharmaceutical Company. The
transaction was integral to the evolution of AEterna Zentaris as it
affords the Company the necessary financial resources to execute a
very focused strategy and emerge as a fully integrated, global
specialist-driven biopharmaceutical company with a focus on
endocrine therapy and oncology. ADVANCING THE PIPELINE Cetrorelix -
Early in the year, the Company regained exclusive worldwide
(ex-Japan) rights for its flagship, product candidate, cetrorelix
in benign prostatic hyperplasia (BPH). After presenting positive
Phase 2 data to the FDA, the Company announced the submission and
acceptance of an Investigational New Drug (IND) and the initiation
of an extensive, 1,500-patient late-stage Phase 3 program.
Additionally, cetrorelix was the first LHRH antagonist to be
launched in Japan under the trade name Cetrotide(R) for in vitro
fertilization and is now marketed worldwide. Ozarelix - After
expeditiously recruiting patients for Phase 2 trials in prostate
cancer and BPH, the Company, along with its partner Spectrum
Pharmaceuticals, reported positive data in both indications. An
extended Phase 2b trial in prostate cancer was then initiated and
subsequent to year end, a Phase 2b trial in BPH was initiated in
the United States. Moreover, the Company granted its Japanese
partner Nippon Kayaku, an exclusive license for ozarelix for all
oncological indications in Japan. Perifosine - Throughout the year,
the Company, along with its partner Keryx Biopharmaceuticals,
announced positive data in multiple Phase 2 trials, as well as the
initiation of additional Phase 1/2 trials in multiple cancers. Very
encouraging interim data were reported from a multi-center, Phase 2
trial showing a 43% partial response rate in patients with advanced
renal cell carcinoma. Additional positive interim Phase 2 data were
reported in relapsed and refractory multiple myeloma showing an
induction of response and/or disease stabilization in 69% of
evaluable patients in combination with dexamethasone. AN-152 -
Positive top-line Phase 1 results for the Company's cytotoxic
conjugate, AN-152, in patients with gynaecological and breast
cancers were reported. The data showed the compound's good safety
profile and established the maximum tolerated dose (MTD) at 267
mg/m(2) which will be the recommended dose for a Phase 2 trial. In
addition to good safety data, the trial provided a hint of efficacy
as disease stabilization and regression of lesions were observed at
the 160 mg/m(2) and 267 mg/m(2) dose levels. SUBSEQUENT TO YEAR END
Neovastat - The Company has decided to terminate its development
program being conducted with the National Cancer Institute (NCI)
for Neovastat (AE-941). The decision was taken following interim
results of the pivotal Phase 3 trial in non small-cell lung cancer
which showed that Neovastat, combined with induction chemotherapy
and concomitant chemoradiotherapy, has proven to be safe but did
not reach the main endpoint of improving overall patient survival
by 25% compared to the placebo-control arm. Overall, there were
less patients experiencing severe side effects (more than grade 3)
in the Neovastat arm compared to the placebo arm (p=0.018).The NCI
has submitted an abstract and is awaiting acceptance by the
American Society of Clinical Oncology (ASCO) for the upcoming
annual meeting in June. ZEN-012 - AEterna Zentaris announced the
initiation of a Phase 1 trial with its small molecule oral
anti-cancer drug, ZEN-012, in patients with solid tumors and
lymphoma, after the Company's IND application was accepted by the
U.S. Food & Drug Administration (FDA) in late December 2006.
This 50-patient, open-label, dose-escalation, multi-center,
intermittent treatment trial is being conducted in the United
States under the supervision of lead investigator, Daniel D. Von
Hoff, MD, Senior Investigator at the Translational Genomics
Research Institute in Phoenix, Arizona. CONSOLIDATED RESULTS FOR
THE FOURTH QUARTER ENDED DECEMBER 31, 2006 (x)Please note that
following the sale of a partial interest in the Company's former
subsidiary, Atrium, closed on October 18, 2006, the former Active
Ingredients & Specialty Chemicals Segment as well as the Health
& Nutrition Segment have been reclassified as discontinued
operations from January 1 to October 18, 2006 and for the years
ended December 31, 2005 and 2004. Consolidated revenues for the
fourth quarter ended December 31, 2006 were $12.6 million, a
decrease of 11.9% compared to revenues of $14.3 million for the
same period in 2005. Consolidated R&D expenses were $8.3
million for the fourth quarter ended December 31, 2006 compared to
$8.2 million for the same period in 2005. Consolidated loss from
operations for the fourth quarter 2006 were $6.8 million compared
to $2 million for the same period in 2005. Consolidated net
earnings from discontinued operations for the fourth quarter ended
December 31, 2006 were $16.8 million compared to $4.5 million for
the same period in 2005. The Company's consolidated net earnings
were $39.1 million for the fourth quarter of 2006, or $0.74 per
basic and diluted share, compared to $0.9 million, or $0.02 per
basic and diluted share, for the same period in 2005. The
consolidated cash and short-term investments were $61 million as of
December 31, 2006. CONSOLIDATED RESULTS FOR THE FULL YEAR ENDED
DECEMBER 31, 2006 Consolidated revenues for the 12-month period
ended December 31, 2006 decreased by 12.3% to $41.4 million
compared to $47.2 million for the same period in 2005. The decrease
in 2006 is mainly attributable to a reduction in license revenues
from the Company's collaboration with Solvay Pharmaceuticals,
partly offset by milestone payments received from a Japanese
partner with respect to the approval of Cetrotide(R) in Japan for
in vitro fertilization, and from the Company's partner, Spectrum,
related to the further development of ozarelix into Phase 2 for BPH
and prostate cancer. Consolidated R&D expenses were $28.7
million in 2006 compared to $27.1 million for the same period in
2005. The increase in R&D is mainly due to additional expenses
for further advancement of cetrorelix in BPH as well as for
targeted, earlier-stage development programs. The Company reported
a consolidated loss from operations for the 12-month period ended
December 31, 2006 of $24.1 million compared to $9.6 million for the
same period in 2005. The 2006 increase in loss from operations is
attributable to a combination of lower license revenues, an
increase in non-recurring corporate expenses, additional R&D
expenses, as well as additional D&A expenses with respect to an
impairment loss on non-core pharmaceutical development projects.
This 2006 increase in loss from operations was partly offset by
increased sales and royalties, as well as R&D investment tax
credits. Consolidated net earnings for the 12-month period ended
December 31, 2006 were $33.4 million, or $0.64 per basic share and
$0.62 per diluted share, compared to $10.6 million, or $0.23 per
basic share and diluted share, for the same period in 2005. The
increase of the net earnings for the 12-month period ended December
31, 2006 is directly attributable to the recording of an income tax
recovery for an amount of $29.1 million, lower interest expense for
an amount of $5.7 million, due to the conversion of the term loans
during the first quarter of the year, as well as increased revenues
representing $1.6 million from the share in the results of an
affiliated company partly offset by increased loss from operations.
CONFERENCE CALL Management will be hosting a conference call for
the investment community beginning at 10:30 a.m. Eastern Time
today, Monday, March 5, to discuss fourth quarter and full-year
2006 results, as well outline its strategy and milestones for 2007.
To participate in the live conference call by telephone, please
dial 416-644-3417, 514-807-8791 or 800-732-6179. 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 late-stage, 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. AEterna Zentaris (In
thousands of US dollars, except share and per share data) Three
months ended Year ended CONSOLIDATED RESULTS December 31, December
31, Unaudited 2006 2005 2006 2005
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$ $ $ $ Revenues Sales and royalties 7,518 5,933 27,740 23,674
License fees 5,113 8,340 13,652 23,530
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12,631 14,273 41,392 47,204
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Operating expenses Cost of sales 3,709 2,486 11,747 8,596 Selling,
general and administrative 4,335 4,156 17,235 15,281 R&D costs
8,283 8,198 28,652 27,075 R&D tax credits and grants (1,442)
(157) (1,564) (536) Depreciation and amortization 4,540 1,578 9,429
6,371
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19,425 16,261 65,499 56,787
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Loss from operations (6,794) (1,988) (24,107) (9,583) Interest
income 703 362 1,446 1,238 Interest expense (153) (1,823) (1,450)
(7,017) Foreign exchange gain (loss) 397 - 298 (88) Gain on
disposal of a long-term investment 409 - 409 - Share in the results
of an affiliated company 1,575 - 1,575 -
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Loss before the following: (3,863) (3,449) (21,829) (15,450) Income
tax recovery (expense) 26,163 (70) 29,129 (493)
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Net earnings (loss) from continuing operations 22,300 (3,519) 7,300
(15,943) Net earnings from discontinued operations 16,801 4,455
26,090 26,514
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Net earnings for the year 39,101 936 33,390 10,571
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Net earnings (loss) per share from continuing operations Basic and
diluted 0.42 (0.08) 0.14 (0.35)
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Net earnings per share Basic 0.74 0.02 0.64 0.23
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Diluted 0.74 0.02 0.62 0.23
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Weighted average number of shares Basic 52,694,868 46,139,814
52,099,290 46,139,814 Diluted 53,035,786 46,139,814 52,549,260
46,139,814 Issued and outstanding shares 53,169,470 46,139,814
AEterna Zentaris (In thousands of US dollars, except share and per
share data) December December CONSOLIDATED BALANCE SHEET 31, 31,
Unaudited 2006 2005
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$ $ Cash and short-term investments 61,019 34,861 Other current
assets 40,704 128,815 --------------------- 101,723 163,676
Long-term assets 121,768 256,109 --------------------- Total assets
223,491 419,785 --------------------- --------------------- Current
liabilities 16,310 64,174 Long-term debt 704 1,426 Other long-term
liabilities 27,598 244,654 --------------------- 44,612 310,254
Shareholders' equity 178,879 109,531 --------------------- Total
liabilities and shareholders' equity 223,491 419,785
--------------------- --------------------- DATASOURCE: AETERNA
ZENTARIS INC. CONTACT: Jenene Thomas, Senior Director, Investor
Relations & Corporate Communications, (418) 655-6420, ; Paul
Burroughs, Media Relations, (418) 652-8525, ext. 406,
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