Aeterna Zentaris Reports Fourth Quarter and Full-Year 2012 Financial and Operating Results
All amounts are in U.S. dollars (unless otherwise noted)
QUEBEC CITY, March 21, 2013 /PRNewswire/ – Aeterna Zentaris Inc.
(NASDAQ: AEZS) (TSX: AEZ) (the “Company”), a late-stage drug
development company specializing in oncology and endocrinology, today
reported financial and operating results as at and for the fourth
quarter and the year ended December 31, 2012.
Key Developments in 2012
AEZS-108 (Doxorubicin Peptide Conjugate)
-- Special Protocol Assessment ("SPA") granted by the U.S. Food and Drug Administration ("FDA") for the initiation of a Phase 3 study in advanced recurrent endometrial cancer. This is an open-label, randomized, multicenter trial which will be conducted in North America and Europe, comparing AEZS-108 with doxorubicin as second-line therapy for locally-advanced, recurrent or metastatic endometrial cancer. The trial will involve approximately 500 patients and the primary efficacy endpoint is improvement in median overall survival. -- Initiation of the Phase 2 portion of the Phase 1/2 trial in castration- and taxane-resistant prostate cancer ("CRPC") supported by a three-year $1.6 million grant from the National Institutes of Health ("NIH") to an investigator to support this study. Results for the Phase 1 portion demonstrated that AEZS-108 was well tolerated and early evidence of antitumor activity was observed in men with CRPC.
AEZS-130 (Oral Ghrelin Agonist)
-- Phase 3 trial results for AEZS-130 as a diagnostic test for adult growth hormone deficiency ("AGHD") presented at the 6th International Congress of the Growth Hormone Research and Insulin-like Growth Factor Society in Munich, Germany. The data expanded on the previously disclosed data in June 2012 at the 94th ENDO Annual Meeting and Expo. Both sets of data confirm AEZS-130's potential of possibly becoming the first approved oral diagnostic test for AGHD. -- Subsequent to year-end, New Drug Application ("NDA") as a diagnostic test for AGHD remains in preparation.
Perifosine (Oral AKT Inhibitor)
-- Phase 3 trial results for perifosine + capecitabine ("Xeloda") showed no benefit in overall survival and in progression-free survival in the refractory colorectal cancer ("CRC") setting. -- Subsequent to year-end, the Company determined to discontinue the Phase 3 trial with perifosine in multiple myeloma further to the Data Safety Monitoring Board's ("DSMB") recommendation to do so, following its preplanned safety and efficacy first interim analysis. The DSMB reported that it was unlikely the study would achieve a significant difference in its primary endpoint, progression-free survival. No safety concerns were raised.
At-the-Market Issuance Program
-- During 2012, the Company issued a total of 1.2 million common shares (retroactively adjusted to reflect the Share Consolidation described below) under the January 2012 At The-Market ("ATM") Program for aggregate gross proceeds of $8.8 million.
Share Consolidation and NASDAQ Minimum Bid Price Compliance
-- The Company consolidated its issued and outstanding common shares on a 6-to-1 basis (the "Share Consolidation"), effective as of October 2, 2012, in order to regain compliance with The NASDAQ Stock Market ("NASDAQ")minimum bid price requirement. Aeterna Zentaris' common shares began trading on a consolidated basis on October 5, 2012 and the Company regained NASDAQ compliance on October 19, 2012.
-- On October 17, 2012, the Company completed a public offering (the "Offering") of 6.6 million units at a purchase price of $2.50 per unit, generating net proceeds of $15.1 million.
Cash and cash equivalents totalled $39.5 million as at December 31, 2012, compared to $46.9
million as at December 31, 2011.
Juergen Engel, Ph D, Aeterna Zentaris President and Chief Executive
Officer, commented, “2012 was a challenging year. We had to face
disappointing Phase 3 results for perifosine in colorectal cancer, and
more recently, in multiple myeloma. Despite these obstacles, we believe
we demonstrated our ability to take on these challenges as we analyzed
the situation, made the necessary strategic adjustments and implemented
cost cutting measures needed to move forward. We now look to 2013 with
great anticipation, as we focus on reaching the next milestones for our
major drug development programs: our Phase 3 trial in endometrial
cancer under an SPA, as well as Phase 2 trials in triple-negative
breast cancer, bladder and prostate cancer with AEZS-108 and the NDA
filing for AEZS-130 as an oral diagnostic test for AGHD.”
Dennis Turpin, CPA, CA, SVP and Chief Financial Officer at Aeterna
Zentaris stated, “Based on our current expectations, with $39.5 million
in cash and cash equivalent as at December 31, 2012, we believe we have
sufficient capital resources to fund our planned operations into at
least the first half of 2014.”
CONSOLIDATED RESULTS AS AT AND FOR THE FOURTH QUARTER ENDED DECEMBER 31,
Revenues were $9.5 million for the three-month period ended December 31, 2012,
compared to $12.6 million for the same period in 2011. The decrease is
mainly due to the recording of a $2.6 million milestone payment from
Yakult with respect to the initiation of a Phase 1 trial with
perifosine in CRC in Japan during the last quarter of 2011.
R&D costs, net of refundable tax credits and grants were $5.5 million for the three-month period ended December 31, 2012,
compared to $7.8 million for the same period in 2011. The decrease is
attributable to lower employee compensation and benefit costs, as no
annual cash bonuses were recorded during the fourth quarter of 2012, as
well as to continued cost-saving measures resulting in a lower number
of employees. The decrease is also related to comparative lower
third-party costs associated with the development of PI3K/Erk
inhibitors and other products during the fourth quarter of 2012 and the
weakening of the euro against the US dollar.
Selling, general and administrative (“SG&A”) expenses were $3.5 million for the three-month period ended December 31, 2012,
compared to $5.4 million for the same period in 2011. The comparative
decrease is mainly related to 2011 events. During the three-month
period ended December 31, 2011, the Company recognized an impairment
loss on property, plant and equipment ($0.3 million), an increase in
onerous lease provision ($0.2 million) and marketing expenses incurred
in Europe ($0.5 million). In addition, the quarter-to-quarter decrease
is attributable to the employee benefits expense decrease ($0.4
million) and the related foreign exchange loss decrease ($0.5 million),
partly offset by transaction costs related to share purchase warrants
Net loss for the three-month period ended December 31, 2012 was $6.9 million or
$0.29 per basic and diluted share, compared to $7.5 million or $0.44
per basic and diluted share for the same period in 2011. The decrease
in net loss is largely due to lower net R&D costs, SG&A expenses and
income tax expense, as well as to higher margin contribution from
Cetrotide((R)), partly offset by the significant decrease in license fee revenues, and
in net finance income.
CONSOLIDATED RESULTS FOR THE YEAR ENDED DECEMBER 31, 2012
Revenues were $33.7 million for the year ended December 31, 2012, compared to
$36.1 million for the same period in 2011. The decrease is mainly due
to the recording of a $2.6 million milestone payment from Yakult with
respect to the initiation of a Phase 1 trial with perifosine in CRC in
Japan during the last quarter of 2011.
R&D costs, net of refundable tax credits and grants, were $20.6 million for the year ended December 31, 2012, compared to
$24.5 million for the same period in 2011. The decrease is attributable
to lower employee compensation and benefit costs, as no annual cash
bonuses were recorded during the fourth quarter of 2012, as well as to
continued cost-saving measures resulting in a lower number of
employees. The decrease is also related to comparative lower
third-party costs associated with the development of most of the
Company’s products except for AEZS-108 and perifosine, and the
weakening of the euro against the US dollar.
Selling, general and administrative (“SG&A”) expenses were $13.2 million for the year ended December 31, 2012, compared to
$16.2 million for the same period in 2011. The comparative decrease is
mainly related to 2011 events. During the year ended December 31, 2011,
the Company recognized an impairment loss on its Cetrotide((R)) asset ($1.1 million), an impairment loss on property, plant and
equipment ($0.3 million), an increase in onerous lease provision ($0.2
million) and marketing expenses incurred in Europe ($0.9 million). In
addition, the year-over-year decrease in SG&A expenses is attributable
to the decreases in employee benefit expenses ($0.8 million) and
royalty expenses ($0.2 million), as well as the weakening of the euro
against the US dollar, partly offset by transaction costs related to
share purchase warrants ($0.4 million), share-based compensation costs
related to collaborators ($0.3 million) and an increase in legal fees
Net loss for the year ended December 31, 2012 was $20.4 million, or $1.03 per
basic and diluted share, compared to $27.1 million, or $1.72 per basic
and diluted share for the same period in 2011. The decrease is largely
due to lower net R&D costs, SG&A expenses and income tax expense, as
well as to higher margin contribution from sales and higher net finance
income, partly offset by the significant decrease in license fee
ADOPTION OF ADVANCE NOTICE BY-LAW
The Company also announces that its Board of Directors has approved an
amendment to its by-laws to add an advance notice requirement (the
“By-Law Amendment”), which requires advance notice to be given to the
Company in circumstances where nominations of persons for election as a
director of the Company are made by shareholders other than pursuant
to: (i) a requisition of a meeting made pursuant to the provisions of
the Canada Business Corporations Act (the “CBCA”); or (ii) a shareholder proposal made pursuant to the
provisions of the CBCA. Among other things, the By-law Amendment fixes
a deadline by which shareholders must submit a notice of director
nominations to the Company prior to any annual or special meeting of
shareholders where directors are to be elected and sets forth the
information that a shareholder must include in the notice for it to be
valid. In the case of an annual meeting of shareholders, notice to the
Company must be given not less than 30 and not more than 65 days prior
to the date of the annual meeting, however, in the event the meeting is
to be held on a date that is less than 50 days after the date on which
the first public announcement of the date of the annual meeting was
made, notice may be given not later than the close of business on
the tenth day following such public announcement. The By-Law Amendment
is effective immediately and will be submitted to shareholders for
confirmation and ratification at the Company’s upcoming annual meeting
of shareholders to be held on May 8, 2013.
Management will be hosting a conference call for the investment
community beginning at 8:30 a.m. (Eastern Time) tomorrow, Friday, March
22, 2013, to discuss the 2012 fourth quarter and full year 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 (“MD&A”) for the
fiscal year 2012 with the associated Audited Consolidated Financial
Statements can be found at www.aezsinc.com in the Investors section.
About Aeterna Zentaris Inc.
Aeterna Zentaris is an oncology and endocrinology drug development
company currently investigating treatments for various unmet medical
needs. The Company’s pipeline encompasses compounds at all stages of
development, from drug discovery through to marketed products. For more
information please visit www.aezsinc.com.
This press release contains forward-looking statements made pursuant to
the safe harbour provisions of the U.S. 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, 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 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 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. 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.
Consolidated Statements of Comprehensive Loss Information
(in thousands, except share Three-month periods and per share ended data) December 31, Years ended December 31, 2012 2011 2012 2011 2010 $ $ $ $ $ Revenues Sales and royalties 9,165 9,317 31,538 31,306 24,857 License fees and other 380 3,310 2,127 4,747 2,846 9,545 12,627 33,665 36,053 27,703 Operating expenses Cost of sales 7,489 8,114 26,820 27,560 18,700 Research and development costs, net of refundable tax credits and grants 5,523 7,793 20,604 24,517 21,257 Selling, general and administrative expenses 3,469 5,408 13,245 16,170 12,552 16,481 21,315 60,669 68,247 52,509 Loss from operations (6,936) (8,688) (27,004) (32,194) (24,806) Finance income 689 1,434 6,974 6,231 1,792 Finance costs (700) (2) (382) - (5,437) Net finance (costs) income (11) 1,432 6,592 6,231 (3,645) Loss before income taxes (6,947) (7,256) (20,412) (25,963) (28,451) Income tax expense - (263) - (1,104) - Net loss (6,947) (7,519) (20,412) (27,067) (28,451) Other comprehensive loss: Items that may be reclassified subsequently to profit or loss Foreign currency translation adjustments (204) 169 (504) (789) 1,001 Items that will not be reclassified to profit or loss Actuarial loss on defined benefit plans (3,705) (1,335) (3,705) (1,335) 191 Comprehensive loss (10,856) (8,685) (24,621) (29,191) (27,259) Net loss per share Basic (0.29) (0.44) (1.03) (1.72) (2.26) Diluted (0.29) (0.44) (1.03) (1.72) (2.26) Weighted average number of shares outstanding Basic 24,181,462 17,185,156 19,775,073 15,751,331 12,609,902 Diluted 24,181,462 17,185,156 19,775,073 15,751,331 12,609,902
Consolidated Statement of Financial Position Information
As at December 31, (in thousands) 2012 2011 $ $ Cash and cash equivalents 39,521 46,881 Trade and other receivables and other current assets 13,780 13,258 Restricted cash 826 806 Property, plant and equipment 2,147 2,512 Other non-current assets 11,391 11,912 Total assets 67,665 75,369 Payables and other current liabilities 15,675 17,784 Long-term payable (current and non-current portions) 30 88 Warrant liability (current and non-current portions) 6,176 9,204 Non-financial non-current liabilities* 52,479 52,839 Total liabilities 74,360 79,915 Shareholders' deficiency (6,695) (4,546) Total liabilities and shareholders' deficiency 67,665 75,369
* Comprised mainly of non-current portion of deferred revenues, employee
future benefits and provision.
SOURCE AETERNA ZENTARIS INC.