Strong fundamentals; pace of transformation
accelerates; dilution negatively impacts stock price
All amounts are in US Dollars
Second quarter key developments
- Data and Safety Monitoring Board recommends continuation
of ZoptEC Phase 3 study of zoptarelin doxorubicin; patient
enrollment completed; second interim results expected in early
October 2015
- Macrilen™ confirmatory Phase 3 study
initiated
- Saizen® co-promotion agreement concluded;
promotional activities launched on July
27, subsequent to quarter-end
- Global optimization program successfully completed;
significant reduction of expenses at Frankfurt office through lease
renegotiation
QUEBEC CITY, Aug. 13, 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 second quarter ended June 30,
2015.
Commenting on second quarter results, David A. Dodd, Chairman, President and Chief
Executive Officer of the Company, stated, "During the second
quarter, our progress toward the transformation of the Company
accelerated. We made significant progress in the advancement
of our pipeline and now have two products in Phase 3. Our
commercial efforts gained momentum with our conclusion of a
co-promotion agreement for Saizen®, a leading product in
the $1.6 billion US market for the
treatment of growth hormone deficiency in children and
adults. Our sales force began promoting the product after the
end of the quarter. Furthermore, we renegotiated our
Frankfurt lease so as to enable us
to save an estimated $0.5 million per
year beginning in 2016. Overall, in the second quarter, we
believe that we delivered on our commitment to make the Company a
more highly focused and efficient entity with a strong pipeline of
internally developed products and a meaningful commercial
presence."
Continuing with his commentary on the second quarter, Mr. Dodd
stated, "During the first quarter of this year, we made the
decision to raise a significant amount of capital to see us through
the next 18 months of the implementation of our strategy. As
a result, we are in a strong financial position with cash and cash
equivalents of approximately $45.5
million as of June 30.
However, the pressure being exerted on our stock price since our
public offering does not reflect this strong cash position, our
recent achievements and overall corporate value. We believe that
the dilution attributable to warrants issued in the offering during
the first quarter is the reason for the pressure on our stock price
and that such dilution could continue for the next several months.
Nonetheless, we remain focused on our upcoming drug development and
commercial milestones which we believe will enable us to ultimately
achieve our goal of becoming a commercially operating specialty
biopharmaceutical company."
Second Quarter Financial Highlights
Research and development ("R&D") costs were
$4.5 million for the three-month
period ended June 30, 2015, as
compared to $5.5 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 EUR against the US dollar. The
decrease was partly compensated by higher third‑party costs
associated with the Company's ZoptEC Phase 3 trial in endometrial
cancer.
Selling expenses were $1.7
million for the three-month period ended June 30, 2015, as compared to $0.5 million for the same period in 2014. This
increase is mainly attributable to the Company's implementation of
its sales force and the related promotional activities associated
with EstroGel® in the last quarter of 2014. More
specifically, approximately $1.0
million of the Company's selling expenses represented
increased costs associated with the Company's contracted sales
force and in-house sales and marketing staff.
Net finance costs were $7.2
million for the three-month period ended June 30, 2015, as compared to net financial
income of $3.2 million for the same
period in 2014. The increase in net finance costs of $10.4 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 June 30, 2015 was $15.1
million or $0.14 per basic and
diluted share, as compared to $5.0
million or $0.09 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 second quarter, the Company had 93.6
million issued and outstanding common shares. On June 30 and August 12,
2015, the Company had 139.9 million and 182.3 million issued
and outstanding common shares, respectively. The increase in the
Company's outstanding shares during the quarter and subsequent to
quarter-end through August 12, 2015,
results from the issuance of 31.6 million common shares upon
exercise of pre-funded Series C warrants and 56.8 million common
shares upon the alternate cashless exercise of Series B warrants
issued as part of our previously disclosed March 2015 $37
million public equity financing. As of August 12, 2015, all pre-funded Series C Warrants
had been exercised and of the 29.8 million Series B warrants
initially issued, there remain an additional 20.9 million Series B
warrants available for exercise into common shares, including
through the alternate cashless exercise feature.
Cash and cash equivalents were $45.5 million as at June
30, 2015, compared to $34.9
million as at December 31,
2014.
Conference Call
Management will be hosting a conference call for the investment
community beginning at 8:30 a.m.
(Eastern) tomorrow, Friday, August 14,
2015, to discuss the 2015 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 of
Financial Condition and Results of Operations for the second
quarter 2015, as well as the Company's consolidated financial
statements, 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 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
June 30,
|
|
Six months ended
June 30,
|
(in
thousands)
|
|
2015
|
2014
|
|
2015
|
2014
|
|
|
$
|
$
|
|
$
|
$
|
Revenues
|
|
|
|
|
|
License fees and
other
|
|
197
|
—
|
|
270
|
—
|
|
|
197
|
—
|
|
270
|
—
|
Operating
expenses
|
|
|
|
|
|
Research and
development costs
|
|
4,476
|
5,462
|
|
8,941
|
11,292
|
General ans
administrative expenses
|
|
2,001
|
2,471
|
|
5,445
|
4,444
|
Selling
expenses
|
|
1,709
|
477
|
|
3,409
|
869
|
|
|
8,186
|
8,410
|
|
17,795
|
16,605
|
Loss from
operations
|
|
(7,989)
|
(8,410)
|
|
(17,525)
|
(16,605)
|
Finance
income
|
|
444
|
3,161
|
|
239
|
7,150
|
Finance
costs
|
|
(7,603)
|
—
|
|
(7,498)
|
(98)
|
Net finance
(costs) income
|
|
(7,159)
|
3,161
|
|
(7,259)
|
7,052
|
Net loss from
continuing operations
|
|
(15,148)
|
(5,249)
|
|
(24,784)
|
(9,553)
|
Net income (loss)
from discontinued operations
|
|
49
|
225
|
|
(51)
|
173
|
Net
loss
|
|
(15,099)
|
(5,024)
|
|
(24,835)
|
(9,380)
|
Other
comprehensive income (loss):
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(494)
|
(117)
|
|
1,281
|
(94)
|
Items that will not
be reclassified to profit or loss:
|
|
|
|
|
|
|
Actuarial gain (loss)
on defined benefit plans
|
|
2,261
|
(1,111)
|
|
960
|
(2,070)
|
Comprehensive
loss
|
|
(13,332)
|
(6,252)
|
|
(22,594)
|
(11,544)
|
Net loss per share
(basic and diluted) from continuing operations
|
|
(0.14)
|
(0.09)
|
|
(0.27)
|
(0.17)
|
Net income (loss)
per share (basic and diluted) from discontinued
operations
|
|
0.00
|
0.00
|
|
0.00
|
0.00
|
Net loss (basic
and diluted) per share
|
|
(0.14)
|
(0.09)
|
|
(0.27)
|
(0.17)
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
Basic
|
|
110,639,931
|
56,513,969
|
|
91,254,475
|
55,722,113
|
Diluted
|
|
110,639,931
|
56,513,969
|
|
91,254,475
|
55,722,113
|
Condensed Interim Consolidated Statement of Financial
Position Information
|
|
As at June
30,
|
|
As at December
31,
|
(in
thousands)
|
|
2015
|
|
2014
|
|
|
$
|
|
$
|
Cash and cash
equivalents1
|
|
45,458
|
|
34,931
|
Trade and other
receivables and other current assets
|
|
1,942
|
|
1,286
|
Restricted cash
equivalents
|
|
703
|
|
760
|
Property, plant and
equipment
|
|
344
|
|
797
|
Other non-current
assets
|
|
8,799
|
|
9,661
|
Total
assets
|
|
57,246
|
|
47,435
|
Payables and other
current liabilities
|
|
5,329
|
|
7,304
|
Current portion of
deferred revenues
|
|
250
|
|
270
|
Warrant
liability
|
|
27,684
|
|
8,225
|
Non-financial
non-current liabilities2
|
|
14,576
|
|
17,152
|
Total
liabilities
|
|
47,839
|
|
32,951
|
Shareholders'
equity
|
|
9,407
|
|
14,484
|
Total liabilities
and shareholders' equity
|
|
57,246
|
|
47,435
|
|
|
1 Of
which approximately $5.8 million was denominated in EUR as at June
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.