All amounts are in U.S. dollars
QUEBEC CITY, March 11 /PRNewswire-FirstCall/ - AEterna Zentaris Inc. (“the Company”), a global biopharmaceutical company focused on endocrinology and oncology, today reported financial and operating results for the fourth quarter and the full year ended December 31, 2008.
Juergen Engel, Ph. D., AEterna Zentaris’ President and Chief Executive Officer commented, “I am proud of our achievements of the past 12 months. At the financial level, we generated nearly $100 million in 2008 and in the first few months of 2009, through multiple non-dilutive transactions and a major pharmaceutical partnership with sanofi-aventis for our lead compound, cetrorelix. At the drug development level, we completed the recruitment of over 1,600 patients for our Phase 3 program in BPH with cetrorelix, according to schedule. We now look forward to disclosing results of this program throughout the second half of 2009. We also made significant progress with our lead oncology compound, AEZS-108, in endometrial and ovarian cancer with results expected by the end of this year.
Moving forward, we will continue to concentrate our efforts on bringing cetrorelix closer to market in collaboration with our partner, sanofi-aventis. We believe that this compound could prove to be a novel treatment for the benefit of millions of men with BPH and also build value for our shareholders.”
Dennis Turpin, Senior Vice President and Chief Financial Officer of AEterna Zentaris added, “The non-dilutive transactions and the recent partnership with sanofi-aventis have provided the Company with an overall stronger financial position and with the necessary funds to pursue our growth strategy.”
CONSOLIDATED RESULTS FOR THE FOURTH QUARTER ENDED DECEMBER 31, 2008
Consolidated revenues were $7.2 million for the quarter ended December 31, 2008, compared to $10.2 million for the same quarter in 2007. The decrease in revenues is primarily due to lower quarter-over-quarter royalties related to our license agreement with Merck Serono. Subsequent to the sale of the Company’s rights to royalties on future sales of Cetrotide(R), covered by the Company’s license agreement with Merck Serono, to Cowen, which was effective, for royalty determination purposes, on October 1, 2008, our periodic amortization of the gross proceeds received from Cowen, while still recognized as royalty revenues, has been lower than the royalty revenues recognized in the past, as receivable directly from Merck Serono. Additionally, quarter-over-quarter sales and royalties decreased due to the absence of sales of Impavido(R) in the fourth quarter of 2008, while license revenues witnessed a decrease due to the non-recurrence in 2008 of milestone payments received from one of our partners, related to the perifosine Phase 2 trials.
Consolidated selling, general and administrative (“SG&A”) expenses were $3.0 million for the quarter ended December 31, 2008, compared to $5.1 million for the same quarter in 2007. The decrease in SG&A expenses is mainly related to the continued results of cost-saving measures that were implemented beginning in the second quarter of 2008.
Consolidated research and development (“R&D”) expenses were $12.3 million for the quarter ended December 31, 2008, compared to $13.6 million for the same quarter in 2007. The decrease in R&D expenses primarily relates to the comparative reduction in expenses incurred in connection with our Phase 3 program with cetrorelix in BPH, which by the fourth quarter of 2008 was fully enrolled and less subject to larger front-end expenditures that were necessary in the earlier, fourth quarter 2007 stage of the program.
Consolidated net loss was $14.5 million, or $0.27 per basic and diluted share for the quarter ended December 31, 2008, compared to $13.6 million, or $0.26 per basic and diluted share, for the same quarter in 2007. The increase in consolidated net loss is largely attributable to a combination of lower sales and royalties, lower license fee revenues, lower manufacturing margins on Cetrotide(R) due in part to a $0.7 million write-down to net realizable value of certain components of inventory, as well as to higher amortization expense, partly offset by lower quarter-over-quarter SG&A expenses, higher net foreign exchange gains and lower income tax expense.
Consolidated cash, cash equivalents and short-term investments were $49.7 million as at December 31, 2008.
CONSOLIDATED RESULTS FOR THE FULL YEAR ENDED DECEMBER 31, 2008
Consolidated revenues were $38.5 million for the year ended December 31, 2008, compared to $42.1 million for the year ended December 31, 2007. The decrease in consolidated revenues in 2008 compared to 2007 is primarily related to lower sales of Impavido(R), a decrease in consolidated license fee revenues mainly attributable to non-recurring milestone payments and the termination of a partner licensing agreement in 2007, partly offset by an increase in sales of Cetrotide(R).
Consolidated SG&A expenses decreased to $17.3 million for the year ended December 31, 2008, compared to $20.4 million for the year ended December 31, 2007. The decrease in SG&A expenses is primarily related to the organizational changes and cost-saving measures that were implemented beginning in the second quarter of 2008.
Consolidated R&D costs were $57.4 million for the year ended December 31, 2008, compared to $39.2 million for the year ended December 31, 2007. The increase in consolidated R&D costs for the year 2008 compared to 2007 is mainly attributable to the advancement of our Phase 3 program with our lead compound, cetrorelix, in BPH.
Consolidated net loss was $59.8 million, or $1.12 per basic and diluted share, for the year ended December 31, 2008, compared to $32.3 million, or $0.61 per basic and diluted share, for the year ended December 31, 2007. The increase in consolidated net loss is attributable to a combination of lower license fee revenues, lower manufacturing margins, higher R&D costs, higher depreciation and amortization and higher income tax expense, partly offset by lower SG&A expenses and higher net foreign exchange gains.
CONFERENCE CALL
Management will be hosting a conference call for the investment community beginning at 10:00 a.m. Eastern Time today, Wednesday, March 11, 2009, to discuss fourth quarter and full-year 2008 results. Individuals interested in participating in the live conference call by telephone may dial 416-646-3095, 514-807-8791 or 800-814-4859, or may listen through the Internet at www.aezsinc.com. A replay will be available on the Company’s website for 30 days following the live event.
About AEterna Zentaris Inc.
AEterna Zentaris Inc. is a 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 www.aezsinc.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, and 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 except if we are requested to do so by a governmental authority or applicable law.
Attachment: Financial summary
CONTACT: Investor Relations: Ginette Vallieres, Investor Relations
Coordinator, (418) 652-8525 ext. 265, gvallieres@aezsinc.com; Media
Relations: Paul Burroughs, Director of Communications, (418) 652-8525 ext.
406, pburroughs@aezsinc.com
