Aeterna Zentaris Reports Third Quarter 2020 Financial Results and Provides Business Update

CHARLESTON, S.C., Nov. 06, 2020 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2020.

The Company also provided an update on its clinical program to expand the use of macimorelin for the diagnosis of childhood-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 and other key markets.

“We remain focused on advancing our strategy in order to unlock the Company’s full potential. Looking to the remainder of the year, we are executing on the preparations for our pivotal Phase 3 safety and efficacy study, AEZS-130-P02 (“Study P02”), to evaluate macimorelin for the diagnosis of childhood-onset growth hormone deficiency, and expect to commence this study in the first quarter of 2021,” commented Dr. Klaus Paulini, Chief Executive Officer of Aeterna.

“Additionally we continue to evaluate macimorelin for new therapeutic usages, as well as assess the potential of the development candidates from our previous programs to be re-purposed for alternative indications based on prior key findings from data already available to us. We look forward to providing additional updates as we explore these opportunities,” added Dr. Paulini.

Recent Highlights

  • Raised a total of $19 million, including a registered direct offering priced at-the-market under Nasdaq rules for gross proceeds of $7.0 million and a public offering for gross proceeds of $12 million to the Company;
  • Regained compliance with minimum stockholders’ equity requirement for continued listing on Nasdaq;
  • Expanded intellectual property portfolio for macimorelin with the filing of two additional patent applications; and
  • Presented results of the Company’s first pediatric study of macimorelin at the 22nd European Congress of Endocrinology (e-ECE 2020) held September 5-9, 2020.  

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.

Preparations are underway to initiate Study P02, an open-label, single dose, multicenter and multinational study expected to enroll approximately 100 subjects worldwide, with at least 40 pre-pubertal and 40 pubertal subjects and a minimum of 25 subjects expected to be enrolled in the USA. The study design is expected to be suitable to support a claim for potential stand-alone testing, if successful.

Upcoming Anticipated Program Milestones

  • Commence CGHD safety and efficacy study, Study P02 (multi-national, including U.S.); and
  • Advance business development efforts towards securing a potential marketing partner for macimorelin for the diagnosis of AGHD in Europe and other key markets.

Aeterna has also begun exploring the potential therapeutic use of macimorelin in various other indications. The Company plans to evaluate the development of alternative formulations or administration routes with the goal of ensuring sufficient bioavailability and expects to provide updates on its progress as results become available over the course of the next several months.

Pipeline Expansion Opportunities

Aeterna Zentaris intends to balance risks and secure growth opportunities by re-establishing a diversified, yet focused, development pipeline to which the Company can best leverage its expertise and experience. The Company is focused on opportunistically utilizing its network with universities in Europe and the U.S. which provides, what the Company believes will be, vital access to innovative development candidates in different indications, with a focus on rare or orphan indications and potential for pediatric use.

Financings Completed During the Third Quarter 2020

On July 7, 2020, the Company closed a public offering of 26,666,666 units at a price to the public of $0.45 per unit, for gross proceeds of $12 million, before deducting placement agent fees and other offering expenses payable by the Company, in the amount of $1.4 million. Each unit contained one common share (or common share equivalent in lieu thereof) and one investor share purchase warrant to purchase one common share. In total, 26,666,666 common shares, 26,666,666 investor share purchase warrants with an exercise price of $0.45 per share expiring July 7, 2025 and 1,866,667 placement agent warrants with an exercise price of $0.5625 per share expiring July 1, 2025 were issued.

On August 5, 2020, the Company closed a securities purchase agreement with several institutional investors in the United States providing for the sale and issuance of 12,427,876 common shares at a purchase price of $0.56325 per common share in a registered direct offering priced at-the-market under NASDAQ rules. The offering resulted in gross proceeds of $7 million. Concurrently, the Company issued to the purchasers unregistered warrants to purchase up to an aggregate of 9,320,907 common shares. The warrants are exercisable for a period of five and one-half years, exercisable immediately following the issuance date and have an exercise price of $0.47 per common share. In addition, the Company issued unregistered warrants to the placement agent to purchase up to an aggregate of 869,952 common shares, with an exercise price of $0.7040625 per share and an expiration date of August 3, 2025. The net cash proceeds to the Company from the offering totaled $6.3 million. Effective September 14, 2020, the Company registered the common shares underlying the 9,320,907 investor warrants and 869,952 placement agent warrants issued on August 3, 2020 by way of a registration statement which removed the cashless exercise option for registered warrants.

As of September 30, 2020 the Company had approximately $21.7 million cash and cash equivalents. Based on current expectations, management believes it has sufficient capital to fund its current operations through 2023.

Summary of Third Quarter 2020 Financial Results

All amounts are in U.S. dollars

For the three-month period ended September 30, 2020, the Company reported a consolidated net loss of $1.1 million, or $0.02 loss per common share (basic), as compared with a consolidated net loss of $0.3 million, or $0.02 loss per common share for the three-month period ended September 30, 2019. The $0.8 million decline in net results is primarily from a change in fair value of warrant liability of $1.3 million partially offset by a reduction of $0.2 million in operating expenses.

Revenues

  • The Company reported that total revenue for the three-month period ended September 30, 2020 was $0.1 million as compared with $0.3 million for the same period in 2019, representing a decrease of $0.2 million. The 2020 revenue was comprised of $0.02 million in royalty revenue (2019 - $0.01 million), $0.09 million in supply chain revenue (2019 - $0.3 million) and $0.02 million in licensing revenue (2019 – $0.02 million).           

Operating Expenses

  • The Company reported that total operating expense for the three-month period ended September 30, 2020 was $1.9 million as compared with $2.1 million for the same period in 2019, representing a decrease of $0.2 million. This decrease arises primarily from a $0.2million decline in general and administrative, a $0.1 million decline in research and development costs, and a $0.1 million decline in selling expenses. 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. During 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 September 30, 2020 was $ 0.6 million as compared with a net finance income of $1.5 million for the same period in 2019, representing a decrease of $0.9 million. This is primarily due to a $1.3 million lower gain in the change in fair value of warrant liability offset by a $0.2 million from changes in currency exchange rates and $0.2 million from other finance costs. Effective September 14, 2020, the Company registered the common shares underlying the 9,320,907 investor warrants and 869,952 placement agent warrants issued on August 3, 2020 by way of a registration statement which removed the cashless exercise option for registered 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 third quarter of 2020, as well as the Company’s audited consolidated financial statements as of December 31, 2019, 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, 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). Macimorelin is currently marketed in the United States under the tradename Macrilen™ through a license agreement with Novo Nordisk where Aeterna Zentaris receives 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 childhood-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.

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 Company obtaining approval of macimorelin for CGHD and the resulting potential to significantly increase the available patient population for macimorelin, the Company’s ability to secure marketing partners for macimorelin for GHD in Europe and elsewhere, the commencement of the CGHD Study P02, the ability of the Company to identify and develop therapeutic uses for macimorelin in new indications, the ability of the Company to expand its pipeline of products and the ability of the Company to have sufficient funding for its operations through 2023, 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 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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