Æterna Zentaris Reports Third Quarter 2009 Financial and Operating Results

All amounts are in U.S. dollars

QUEBEC CITY, Nov. 11 /CNW Telbec/ - Æterna Zentaris Inc. (NASDAQ: AEZS, TSX: AEZ) (the "Company"), a global biopharmaceutical company focused on endocrinology and oncology, today reported financial and operating results as at and for the three-month and nine-month periods ended September 30, 2009.

    Third Quarter 2009 Highlights

    - July 7, 2009. Publication in Proceedings of the National Academy of
      Sciences, of new data supporting the use of AEZS-123 for the treatment
      of alcohol dependence that involves ghrelin.

    - August 3, 2009. The Company's licensee partner for perifosine in North
      America, Keryx Biopharmaceuticals ("Keryx"), disclosed that it had
      reached an agreement with the FDA regarding a Special Protocol
      Assessment on the design of a Phase 3 trial for multiple myeloma.

    - August 17, 2009. Disclosure of results for two Phase 3 studies with
      cetrorelix in benign prostatic hyperplasia ("BPH"). The efficacy study
      Z-033 did not achieve its primary endpoint. Results from the safety
      study Z-041 were positive and exhibited a similar level of efficacy as
      the previously disclosed Phase 2 study results.

    - September 16, 2009. Disclosure that Keryx received Orphan Drug
      designation from the FDA for perifosine for multiple myeloma.

    - September 21, 2009. Disclosure of Phase 1 study results with AEZS-112
      in advanced solid tumors or lymphoma showed prolonged courses of stable
      disease, excellent tolerability and potential for long-term use as a
      combination treatment for cancer.

    - September 30, 2009. Disclosure of results for the Thorough QT Z-043
      ("TQT") study, which is part of the cetrorelix pamoate clinical
      development in BPH. The study met its primary endpoint.

    Subsequent to Quarter-End

    - October 19, 2009. Disclosure of the initiation of activities to
      complete a Phase 3 trial with macimorelin (AEZS-130) as a first
      approved oral diagnostic test for Growth Hormone Deficiency.

    - October 23, 2009. Completion of a $5.5 million registered direct

    - November 2, 2009. Disclosure of positive preliminary results for the
      Phase 2 study with AEZS-108 in ovarian cancer.

Juergen Engel, Ph.D., Æterna Zentaris President and Chief Executive Officer, commented, "During this quarter, we disclosed results for the first of two efficacy trials of our Phase 3 program in BPH with cetrorelix. The first efficacy trial did not reach its primary endpoint, while results for the safety and TQT trials were positive. We remain committed to this program and are working towards receiving the results of the second efficacy study next month. Furthermore, we made significant progress with other innovative late-stage compounds such as perifosine and AEZS-108 in oncology, as well as AEZS-130 in endocrinology, which are further proof of the breadth of our pipeline."

Dennis Turpin, the Company's Senior Vice President and Chief Financial Officer, added, "Our financial position enables us to pursue our business and drug development activities, as planned."

    SEPTEMBER 30, 2009

Consolidated revenues were $8.6 million for the three-month period ended September 30, 2009, compared to $11.0 million for the same period in 2008. This decrease is mainly related to lower royalty revenues having been recognized in 2009 in connection with the monetization of the royalties derived from the Company's agreement with Merck Serono. Amortization of the monetization proceeds received for the three months ended September 30, 2009 was lower than the royalty revenues generated and payable directly by Merck Serono during the same period in 2008. Additionally, sales volumes of Cetrotide(R) were lower during the three-month period ended September 30, 2009, compared to the same period in 2008.

Consolidated research and development ("R&D") costs, net of tax credits and grants, were $9.7 million for the three-month period ended September 30, 2009, compared to $13.9 million for the same period in 2008. The comparative decrease in net R&D costs is largely attributable to a lower volume of expenses incurred in connection with the continued advancement of the Phase 3 program for cetrorelix in BPH, since the Company progressively completed, during the third quarter, the safety study Z-041 and the TQT trial.

Consolidated net loss for the three-month period ended September 30, 2009 was $11.3 million, or $0.19 per basic and diluted share, compared to $13.9 million, or $0.26 per basic and diluted share, for the same period in 2008. This decrease is mainly related to lower comparative R&D expenses, partially offset by lower comparative revenues, less cost of sales.

Consolidated cash, cash equivalents and short-term investments were $44.5 million as at September 30, 2009, of which $0.9 million is restricted on a long-term basis.


Management will be hosting a conference call for the investment community beginning at 10:00 a.m. Eastern Time today, Wednesday, November 11, 2009, to discuss third quarter 2009 results. Individuals interested in participating in the live conference call by telephone may dial 877-974-0453, 416-644-3431 or 514-227-8860, 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 Æterna Zentaris Inc.

Æterna 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. 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 required by a governmental authority or applicable law.

Attachment: Financial summary

    Interim Consolidated Statements of Loss (Unaudited)

    (in thousands, except share and per share data)

                                Three months ended         Nine months ended
                                   September 30,             September 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    Sales and royalties         5,539        8,630       15,937       24,822
    License fees and
     other                      3,026        2,399        7,118        6,412
                                8,565       11,029       23,055       31,234
    Operating expenses
    Cost of sales               4,488        4,986       12,727       14,348
    Research and
     development costs,
     net of tax credits
     and grants                 9,738       13,880       33,251       44,914
    Selling, general and
     expenses                   3,193        3,277        9,849       14,287
    Depreciation and
      Property, plant
       and equipment              341          433          983        1,199
      Intangible assets           594          839        1,714        2,555
                               18,354       23,415       58,524       77,303
    Loss from operations       (9,789)     (12,386)     (35,469)     (46,069)
    Other income
    Interest income                41          149          315          737
    Interest expense               (2)           -           (4)         (68)
    Foreign exchange
     (loss) gain               (1,538)      (1,324)      (1,598)         429
    Loss on disposal of
     long-lived assets
     held for sale                  -          (90)           -         (125)
                               (1,499)      (1,265)      (1,287)         973
    Loss before income
     taxes                    (11,288)     (13,651)     (36,756)     (45,096)
    Income tax expense              -         (228)           -         (228)
    Net loss for the
     period                   (11,288)     (13,879)     (36,756)     (45,324)
    Net loss per share
    Basic and diluted           (0.19)       (0.26)       (0.67)       (0.85)
    Weighted average
     number of shares
    Basic and diluted      58,506,619   53,187,470   55,135,876   53,187,470

    Interim Consolidated Balance Sheet Information (Unaudited)
                                                          As at        As at
                                                   September 30, December 31,
    (in thousands)                                         2009         2008
                                                              $            $

    Cash and cash equivalents                            43,051       49,226
    Short-term investments                                  562          493
    Accounts receivable and other current assets         11,127       12,005
    Restricted cash                                         901            -
    Property, plant and equipment                         6,738        6,682
    Other long-term assets                               41,237       39,936
    Total assets                                        103,616      108,342

    Accounts payable and other current liabilities       23,015       22,121
    Current portion of long-term payable                     56           49
    Long-term payable                                       140          172
    Non-financial long-term liabilities                  88,390       64,525
    Total liabilities                                   111,601       86,867
    Shareholders' equity (deficiency)                    (7,985)      21,475
    Total liabilities and shareholders'
     equity (deficiency)                                103,616      108,342

SOURCE Aeterna Zentaris Inc.

For further information: For further information: Investor Relations: Ginette Vallières, 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

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