Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) (“Aeterna” or the
“Company”), a specialty biopharmaceutical company commercializing
and developing therapeutics and diagnostic tests, today reported
its financial and operating results for the three months ended
March 31, 2020.
The Company also provided an update on its
clinical program to develop macimorelin for the diagnosis of
child-onset growth hormone deficiency (“CGHD”), an area of
significant unmet need, and its plans to expand macimorelin for the
diagnosis of adult growth hormone deficiency (“AGHD”) in
Europe.
Dr. Klaus Paulini, Chief Executive Officer of
Aeterna commented, “Over the course of the first quarter, we made
significant progress on clinical and corporate fronts. We
successfully executed Study P01 in our clinical program to develop
macimorelin for the diagnosis of CGHD, an area of significant unmet
need. We are encouraged by the final results from the study, which
demonstrated positive safety and tolerability data for use of
macimorelin in CGHD. With these positive Study P01 results, we have
the necessary data to lay the foundation for our test validation,
Study P02, which we expect to commence later this year.
Additionally, we were pleased to have received the decision from
the EMA to accept a modification to our agreed pediatric
investigation plan for macimorelin, ultimately supporting the
development of one globally harmonized study protocol for Study
P02, which will be accepted both in Europe and the United States of
America.”
Dr Paulini concluded, “In tandem, we have
continued to work alongside our U.S. and Canadian commercialization
partner, Novo Nordisk, to raise awareness and position Macrilen™
(macimorelin) for the diagnosis of AGHD. We remain focused on
advancing our business development efforts to secure a marketing
partner for macimorelin for the diagnosis of AGHD in Europe and
other key markets. We are pleased with the progress we have made
over the first quarter and believe that 2020 holds significant
potential for the advancement of macimorelin.”
Recent Highlights
- Announced the decision of the European Medicines Agency (“EMA”)
to accept a modification request by Aeterna of the Company’s PIP
for macimorelin as originally approved in March 2017 which covered
the conduct of two pediatric studies and defined relevant key
elements in the outline of these studies;
- Announced the positive results for the dose-finding pediatric
study, Study P01, of macimorelin as a growth hormone stimulation
test for the evaluation of CGHD; and
- Closed a $4.5 million registered direct offering priced
at-the-market (the “February 2020 Financing”).
Macimorelin Clinical Program
Update
The Company’s lead product, macimorelin, is the
only United States Food and Drug Administration (“FDA”) approved
oral drug indicated for the diagnosis of AGHD and is currently
marketed in the United States (“U.S.”) under the tradename
Macrilen™, by Novo Nordisk. Aeterna is currently developing
macimorelin for the diagnosis of CGHD, an area of significant unmet
need, in collaboration with Novo Nordisk.
The Company recently announced positive results
for the first pediatric study of macimorelin as a growth hormone
stimulation test for the evaluation of CGHD. The dose-finding
results from Study P01 provides the clinical framework to advance
the Company’s pediatric investigation plan for macimorelin as a
growth hormone deficiency diagnostic. The completed study included
24 subjects aged 4 to 15 years. In the subjects who completed the
study in accordance with the protocol, macimorelin demonstrated an
excellent safety and tolerability profile. There were 88 adverse
events (“AE”) reported in 23 subjects, none of which were assessed
by the investigator as related to macimorelin. The majority of AEs
(approximately 70%) were expected side effects related to the
hypoglycemia introduced by the Insulin Tolerance Test. No
significant changes in electrocardiogram parameters and safety
laboratory values were noted in any of the three dosing
cohorts.
The pharmacokinetic and pharmacodynamic profile
of macimorelin proved to be in the expected range and in general
comparable to data in adults.
For more information about Study P01, please
visit EU Clinical Trials Register and reference EudraCT
#2018-001988-23.
Upcoming Anticipated Program
Milestones
- Commence CGHD safety and efficacy study, Study P02
(multi-national, including U.S.); and
- Advance business development efforts to secure a marketing
partner for macimorelin for the diagnosis of AGHD in Europe and
other key markets.
The Company is closely monitoring the evolving
situation with coronavirus, or COVID-19, and is following guidance
from health authorities. COVID-19 is affecting the global community
and is adversely affecting our business operations, in a manner
which at this time cannot be fully determined or quantified. The
situation with COVID-19 is rapidly evolving and the impact of
COVID-19, including travel and business restrictions, and other
impediments to undertaking clinical studies, may significantly
affect the Company’s business, operations, results, projected
timelines and market price for Aeterna’s common shares. Aeterna has
developed protocols and procedures should they be required to deal
with any potential epidemics and pandemics and has implemented
these protocols and procedures to address the current COVID-19
pandemic. Despite appropriate steps being taken to mitigate such
risks, there can be no assurance that existing policies and
procedures will ensure that the Company’s operations will not be
further adversely affected. For more information, please see the
Risk Factor entitled, “The economic effects of a pandemic, epidemic
or outbreak of an infectious disease could adversely affect our
operations or the market price of our Common Shares,” in the
Company’s Annual Report on Form 20-F for the year ended December
31, 2019.
Summary of First Quarter 2020 Financial
Results
All amounts are in U.S. dollars
For the three-month period ended March 31, 2020,
the Company reported a consolidated net income of $0.8 million, or
$0.04 income per common share (basic), as compared with a
consolidated net loss of $4.9 million, or $0.30 loss per common
share (basic) for the three-month period ended March 31, 2019. The
$5.7 million improvement in net results is primarily from a gain in
fair value of warrant liability of $4.5 million and increase in
revenues of $1.1 million.
Revenues
- The Company reported total revenue
for the three-month period ended March 31, 2020 of $1.1 million as
compared with $0.04 million for the same period in 2019,
representing an increase of $1.06 million. The 2020 revenue was
comprised of $0.01 million in royalty revenue (2019 - $0.01
million), $1.0 million in product sales of Macrilen™ (macimorelin)
to Novo Nordisk (2019 - $nil), $0.04 million in supply chain
revenue (2019 - $0.01 million) and $0.02 million in licensing
revenue (2019 – $0.02 million). The product sales in 2020
represented sales of Macrilen™ (macimorelin) to Novo Nordisk.
Operating Expenses
- The Company reported total
operating expenses for the three-month period ended March 31, 2020
of $2.4 million as compared with $3.0 million for the same period
in 2019, representing a decrease of $0.6 million. This decrease
arises primarily from a $0.5 million decline in general and
administrative, a $0.2 million decline in research and development
costs, a $0.2 million gain on modification of building lease, $0.3
million impact from impairment in right of use assets, $0.2 million
impact in impairment of prepaid asset, and a $0.1 million decline
in selling expenses, offset by a $0.9 million increase in cost of
sales. The impact of the Company’s June 2019 restructuring in its
German subsidiary, namely for payroll and share-based compensation
costs, is a key influence in the declines in general and
administrative expenses, selling and research and development
expenses.
- The further impact on the decline
in research and development costs is attributed to the different
phases of activity of Study P01. In the first quarter of 2019,
study activities included study start with document development,
medication manufacturing, study feasibility testing at different
sites and clinical trial applications in Hungary, Poland, Belarus,
Russia, Ukraine and Serbia, while in 2020, all sites had completed
their enrollment and clinical activities.
Net Finance Income
- The Company reported net finance
income for the three-month period ended March 31, 2020 of $2.1
million as compared with net finance costs of $2.0 million for the
same period in 2019, representing an increase of $4.1 million. This
is primarily due to a $4.5 million change in fair value of warrant
liability offset by increased finance costs of $0.3 million from
the February 2020 Financing and $0.1 million from changes in
currency exchange rates. Such a non-cash change in fair value of
warrant liability results from the periodic “mark-to-market”
revaluation, which occurs through the application of the Company‘s
pricing model, of Aeterna’s outstanding share purchase
warrants.
Consolidated Financial Statements and
Management’s Discussion and Analysis
For reference, the Management’s Discussion and
Analysis of Financial Condition and Results of Operations for the
first quarter of 2020, as well as the Company’s audited
consolidated financial statements as of March 31, 2020, will be
available at www.zentaris.com in the Investors section or at the
Company’s profile at www.sedar.com and www.sec.gov.
About Aeterna Zentaris Inc.
Aeterna Zentaris Inc. is a specialty
biopharmaceutical company commercializing and developing
therapeutics and diagnostic tests. The Company’s lead product,
Macrilen™ (macimorelin), is the first and only U.S. FDA and
European Commission approved oral test indicated for the diagnosis
of adult growth hormone deficiency (AGHD). Macrilen™ is currently
marketed in the United States through a license agreement with Novo
Nordisk and Aeterna Zentaris receives double-digit royalties on
sales. Aeterna Zentaris owns all rights to macimorelin outside of
the U.S. and Canada.
Aeterna Zentaris is also leveraging the clinical
success and compelling safety profile of macimorelin to develop it
for the diagnosis of child-onset growth hormone deficiency (CGHD),
an area of significant unmet need.
The Company is actively pursuing business
development opportunities for the commercialization of macimorelin
in Europe and the rest of the world, in addition to other
non-strategic assets to monetize their value. For more information,
please visit www.zentaris.com and connect with the Company on
Twitter, LinkedIn and Facebook.
Condensed Consolidated Statements of Comprehensive
Income (Loss)
|
(in thousands of US dollars, except share and per share data) |
|
|
|
|
|
Three months endedMarch 31, |
(Unaudited) |
|
2020 |
|
|
|
2019 |
|
|
|
$ |
|
|
$ |
Revenues |
|
|
|
|
|
|
|
Royalty income |
|
|
14 |
|
|
|
|
13 |
|
Product sales |
|
|
1,016 |
|
|
|
|
— |
|
Supply chain |
|
|
41 |
|
|
|
|
6 |
|
Licensing revenue |
|
|
19 |
|
|
|
|
18 |
|
Total
revenues |
|
|
1,090 |
|
|
|
|
37 |
|
Operating expenses |
|
|
|
|
|
|
|
Cost of sales |
|
|
862 |
|
|
|
|
— |
|
Research and development costs |
|
|
319 |
|
|
|
|
528 |
|
General and administrative expenses |
|
|
1,124 |
|
|
|
|
1,637 |
|
Selling expenses |
|
|
248 |
|
|
|
|
304 |
|
Impairment of right of use asset |
|
|
— |
|
|
|
|
337 |
|
Modification of building lease |
|
|
(185 |
) |
|
|
|
— |
|
Impairment of prepaid asset |
|
|
— |
|
|
|
|
169 |
|
Total operating expenses |
|
|
2,368 |
|
|
|
|
2,975 |
|
Loss from
operations |
|
|
(1,278 |
) |
|
|
|
(2,938 |
) |
(Loss) gain due to changes in foreign currency exchange
rates |
|
|
(104 |
) |
|
|
|
64 |
|
Change in fair value of warrant liability |
|
|
2,470 |
|
|
|
|
(2,061 |
) |
Other finance (costs)
income |
|
|
(309 |
) |
|
|
|
24 |
|
Net finance income
(costs) |
|
|
2,057 |
|
|
|
|
(1,973 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
779 |
|
|
|
|
(4,911 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
|
|
210 |
|
|
|
|
84 |
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
Actuarial gain (loss) on defined benefit
plans |
|
|
1,388 |
|
|
|
|
(735 |
) |
Comprehensive income
(loss) |
|
|
2,377 |
|
|
|
|
(5,562 |
) |
Net income (loss) per
share [basic] |
|
|
0.04 |
|
|
|
|
(0.30 |
) |
Net income (loss) per
share [diluted] |
|
|
0.04 |
|
|
|
|
(0.30 |
) |
Weighted average number of shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
21,523,416 |
|
|
|
16,440,760 |
|
Diluted |
|
|
21,860,416 |
|
|
|
16,440,760 |
|
Condensed Consolidated Interim Statements of Financial
Position
|
|
|
(in thousands) |
|
As at March
31,2020(Unaudited) |
|
As at December 31,2019 |
|
|
$ |
|
$ |
Cash and cash equivalents |
|
9,182 |
|
|
7,838 |
|
Trade and other receivables
and other current assets |
|
1,498 |
|
|
1,869 |
|
Inventory |
|
367 |
|
|
1,203 |
|
Restricted cash
equivalents |
|
358 |
|
|
364 |
|
Property, plant and
equipment |
|
31 |
|
|
35 |
|
Right of use assets |
|
288 |
|
|
582 |
|
Other non-current assets |
|
7,917 |
|
|
8,090 |
|
Total
assets |
|
19,641 |
|
|
19,981 |
|
Payables and accrued
liabilities and income taxes payable |
|
2,293 |
|
|
3,596 |
|
Current portion of provision
for restructuring and other costs |
|
96 |
|
|
418 |
|
Current portion of deferred
revenues |
|
585 |
|
|
991 |
|
Lease liabilities |
|
360 |
|
|
903 |
|
Warrant liability |
|
2,110 |
|
|
2,255 |
|
Non-financial non-current
liabilities (1) |
|
12,510 |
|
|
14,281 |
|
Total
liabilities |
|
17,954 |
|
|
22,444 |
|
Shareholders' equity
(deficiency) |
|
1,687 |
|
|
(2,463 |
) |
Total liabilities and
shareholders' equity (deficiency) |
|
19,641 |
|
|
19,981 |
|
_________________________
(1) Comprised mainly of employee future
benefits, provisions for restructuring and other costs and
non-current portion of deferred revenues.
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
include those relating to the intended use of proceeds and 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 ability to raise
capital and obtain financing to continue our currently planned
operations, our ability to continue to list our Common Shares on
the NASDAQ, our ability to continue as a going concern is
dependent, in part, on our ability to transfer cash from Aeterna
Zentaris GmbH to Aeterna Zentaris and the U.S. subsidiary and
secure additional financing, 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 commercialize the product, including our heavy
reliance on the success of the License Agreement with Novo, the
global instability due to the global pandemic of COVID-19, and its
unknown potential effect on our planned operations, including
studies, our ability to enter into out-licensing, development,
manufacturing, marketing and distribution agreements with other
pharmaceutical companies and keep such agreements in effect, our
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, uncertainties related to the regulatory process,
unforeseen global instability, including the instability due to the
global pandemic of the novel coronavirus, our ability to
efficiently commercialize or out-license Macrilen™ (macimorelin),
our reliance on the success of the pediatric clinical trial in the
European Union (“E.U.”) and U.S. for 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
product, our ability to successfully negotiate pricing and
reimbursement in key markets in the E.U. for Macrilen™
(macimorelin), any evaluation of potential strategic alternatives
to maximize potential future growth and shareholder value may not
result in any such alternative being pursued, and even if pursued,
may not result in the anticipated benefits, our ability to take
advantage of business opportunities in the pharmaceutical industry,
our ability to protect our intellectual property, and 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.
Investor Contact:
Jenene Thomas JTC Team T (US): +1 (833) 475-8247 E:
aezs@jtcir.com
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