Aeterna Zentaris Reports First Quarter 2013 Financial and Operating Results
All amounts are in U.S. dollars (unless otherwise noted)
QUEBEC CITY, May 7, 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 first
quarter ended March 31, 2013.
Key Drug Developments
AEZS-108 (Doxorubicin Peptide Conjugate)
-- First patient treated for Phase 2 trial in triple-negative breast cancer. Alberto J. Montero, MD, Assistant Professor, Department of Medicine, Division of Hematology/Oncology, Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine, is the lead investigator of this trial which also includes sites at the Universities of Regensburg and Goettingen in Germany. -- Subsequent to quarter-end, a co-development and profit-sharing agreement was signed with Ergomed Clinical Research Ltd. ("Ergomed") as the contract clinical development organization for the upcoming Phase 3 trial for AEZS 108 in endometrial cancer. Under the terms of the agreement, Ergomed will assume 30% (up to $10 million) of the clinical and regulatory costs for this trial, which are estimated at approximately $30 million over the course of the study. Ergomed will be entitled to receive an agreed upon single-digit percentage of any net income received by the Company for AEZS-108 in this indication, up to a specified maximum amount. This is an open-label, randomized, multicenter trial to be conducted in North America, Europe, Israel and other countries under a Special Protocol Assessment ("SPA"). The trial will compare 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 ("OS").
AEZS-130 (Oral Ghrelin Agonist)
-- Ongoing preparation of a New Drug Application ("NDA") submission to the U.S. Food and Drug Administration ("FDA") for AEZS 130 as an oral diagnostic test for Adult Growth Hormone Deficiency ("AGHD"). Phase 3 data have demonstrated that the compound has the potential to become the first orally-approved diagnostic test for AGHD, with accuracy comparable to available testing procedures.
Perifosine (Oral AKT Inhibitor)
-- Phase 3 trial in multiple myeloma was discontinued after an interim analysis by an independent Data Safety Monitoring Board ("DSMB") reported that it was highly unlikely the study would achieve a significant difference in its primary endpoint, progression-free survival. The Company will not make any further investment in the development of perifosine. Should its partners decide to continue its development, the Company will provide them with perifosine in return for a service fee.
Key Corporate Developments
Appointment of New President and CEO
-- Subsequent to quarter-end, David A. Dodd was appointed President and Chief Executive Officer of the Company. Mr. Dodd was also appointed to its Board of Directors. Mr. Dodd's executive management experience in the pharmaceutical and biotechnology industries spans more than 35 years. Before joining the Company, he was President, CEO and Chairman of BioReliance Corporation, a leading provider of biological safety and related testing services. During his six-year tenure as President, CEO and Director of Serologicals Corporation, the market value of that company increased from $85 million to an all-cash sale to Millipore Corporation for $1.5 billion. That successful transformation followed his five-year term as President and CEO of Solvay Pharmaceuticals, Inc. and as Chairman of its subsidiary Unimed Pharmaceuticals, Inc. Mr. Dodd also held various senior management positions at Wyeth-Ayerst Laboratories, the Mead Johnson Laboratories Division at Bristol-Myers Squibb, and Abbott Laboratories. Mr. Dodd holds a Master's degree from Georgia State University, and completed the Harvard Business School of Advanced Management Program.
Cetrotide((R)) Manufacturing Rights
-- In April 2013, the Company announced binding agreements with various partners and licensees with respect to the manufacturing rights and obligations for Cetrotide(R), currently marketed for in vitro fertilization. The principal effect of such agreements is to transfer the manufacturing rights and to grant a manufacturing license for Cetrotide(R) to a subsidiary of Merck KGaA of Darmstadt, Germany ("Merck Serono"), in all jurisdictions. The transactions are expected to be completed on or about October 1, 2013, at which time Zentaris IVF GmbH, a direct wholly-owned subsidiary of Aeterna Zentaris GmbH ("AEZS Germany") would receive a one-time payment of EUR2.5 million, or approximately $3.2 million, as well as certain other payments related to current assets and equipment to be transfered. In addition, AEZS Germany and Zentaris IVF GmbH also entered into a transitional services agreement with Merck Serono under which the Company will, during a 36-month period, provide various transition services to assist Merck Serono in assuming responsibility for the manufacturing of Cetrotide(R) in consideration for the payment of a monthly fee to Zentaris IVF GmbH throughout such period. The Company had previously monetized the royalty stream related to Cetrotide(R) in November 2008 in a transaction with HealthCare Royalty Partners L.P. (formerly Cowen Healthcare Royalty Partners L.P.).
Cash and cash equivalents totalled $33.2 million as at March 31, 2013, compared to $39.5 million
as at December 31, 2012.
David A. Dodd, Aeterna Zentaris President and Chief Executive Officer,
commented, “I am very proud and delighted to join Aeterna Zentaris. I
believe that with our highly motivated staff, as well as our innovative
pipeline augmented by business development, we can achieve long-term
growth and profitability which will benefit both patients and
shareholders. My short-term goals include successfully starting patient
recruitment for the Phase 3 trial in endometrial cancer with AEZS-108,
submitting the NDA for AEZS-130 as an oral diagnostic test for AGHD
and, ensuring that we deliver on the commitments we make. We hold very
highly our responsibility to delivering on these activities and
demonstrating our commitment to all our stakeholders.”
Dennis Turpin, CPA, CA, Senior Vice President and Chief Financial
Officer at Aeterna Zentaris stated, “Based on our current expectations
and with $33.2 million in cash and cash equivalent as at March 31,
2013, we believe we have sufficient capital resources to fund our
planned operations for at least the next twelve months.”
CONSOLIDATED RESULTS AS AT AND FOR THE FIRST QUARTER ENDED MARCH 31,
Revenues were $16.6 million for the three-month period ended March 31, 2013,
compared to $9.5 million for the same period in 2012. The increase is
largely attributable to comparative higher deliveries of Cetrotide((R)) to certain customers and to the recognition of unamortized deferred
revenues related to upfront payments received from our licensee
partners in connection with perifosine, following the Company’s
decision to discontinue the Phase 3 trials of perifosine.
R&D costs, net of refundable tax credits and grants were $4.4 million for the three-month period ended March 31, 2013,
compared to $5.6 million for the same period in 2012. The decrease is
attributable to lower employee compensation and benefit costs due 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
Selling, general and administrative (“SG&A”) expenses were $3.8 million for the three-month period ended March 31, 2013,
compared to $3.2 million for the same period in 2012.
Net income (loss) for the three-month period ended March 31, 2013 was $1.9 million or
$0.07 per basic and diluted share, compared to $(11.5) million or
$(0.65) per basic and diluted share for the same period in 2012. The
significant increase in net income is due largely to the significant
increases in license fees revenues (non-cash) and in net finance income
(non cash), as well as to lower net R&D costs, partly compensated by
Management will be hosting a conference call for the investment
community beginning at 8:30 a.m. (Eastern Time) tomorrow, Wednesday,
May 8, 2013, to discuss the 2013 first 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 (“MD&A”) for the
first quarter 2013 with the associated Unaudited Interim Condensed
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.
Attachment: Financial summary
Interim Consolidated Statements of Comprehensive Income (Loss)
Three months ended March 31, (in thousands, except share and per 2013 2012 share data) $ $ Revenues Sales and royalties 10,209 8,308 License fees and other 6,390 1,202 16,599 9,510 Operating expenses Cost of sales 8,684 7,513 Research and development costs, net of refundable tax credits and grants 4,401 5,572 Selling, general and administrative 3,794 3,213 expenses 16,879 16,298 Loss from operations (280) (6,788) Finance income 2,166 76 Finance costs -- (4,739) Net finance income (costs) 2,166 (4,663) Income (loss) before income taxes 1,886 (11,451) Income tax expense -- -- Net income (loss) 1,886 (11,451) Other comprehensive income (loss): Items that may be reclassified subsequently to profit or loss Foreign currency translation adjustments 240 (255) Comprehensive income (loss) 2,126 (11,706) Net income (loss) per share Basic 0.07 (0.65) Diluted 0.07 (0.65) Weighted average number of shares outstanding Basic 25,329,288 17,669,474 Diluted 25,330,128 17,669,474
Interim Consolidated Statement of Financial Position Information
As at March 31, As at December 31, (in thousands) 2013 2012 $ $ Cash and cash equivalents 33,183 39,521 Trade and other receivables and 12,449 13,780 other current assets Restricted cash 806 826 Property, plant and equipment 1,964 2,147 Other non-current assets 10,992 11,391 Total assets 59,394 67,665 Payables and other current 13,701 15,675 liabilities Long-term payable (current and -- 30 non-current portions) Warrant liability 4,419 6,176 Non-financial non-current 45,235 52,479 liabilities* Total liabilities 63,355 74,360 Shareholders' deficiency (3,961) (6,695) Total liabilities and 59,394 67,665 shareholders' deficiency
* Comprised mainly of non-current portion of deferred revenues, employee
future benefits and provision.
SOURCE AETERNA ZENTARIS INC.