Fourth quarter progress lays foundation for promising 2016
All amounts are in US Dollars
Fourth quarter key developments
-
Capital structure repaired
-
Share consolidation successfully concluded
-
Compliance with NASDAQ listing standards achieved
-
$15.4 million of net capital obtained on favorable terms
-
Product development advanced towards registration
-
Zoptrex™ (zoptarelin doxorubicin) pivotal Phase 3 clinical program
received DSMB recommendation to continue to completion following
review of the final interim efficacy and safety data; completion
of trial scheduled for Q3 2016
-
Zoptrex™ licensee in China and related territories, Sinopharm
A-Think Pharmaceuticals Co., Ltd., on track to commence clinical
program in H2 2016 and to begin manufacturing the compound
-
Macrilen™ (macimorelin) confirmatory Phase 3 Trial for the
evaluation of AGHD initiates patient enrollment; completion of
trial scheduled for Q3 2016
-
Co-Marketing Agreement for APIFINY® Prostate
Cancer Blood Test concluded with Armune BioScience
-
Restructuring of financial team and closing of the Quebec City
office
Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the “Company”), a
specialty biopharmaceutical company engaged in developing and
commercializing novel treatments in oncology, endocrinology and women's
health, today reported financial and operating results for the fourth
quarter and year ended December 31, 2015.
Commenting on fourth quarter accomplishments, David A. Dodd, Chairman,
President and Chief Executive Officer of the Company, stated, “Our
progress during the fourth quarter was truly astounding. As we began the
quarter, we faced the prospect of massive dilution from the exercise of
warrants that had very unfavorable terms and a capital structure that
challenged our ongoing operations and our ability to raise further
funding. We ended the quarter with a cleaned-up capital structure and a
successful, significant capital raise on favorable terms. A tremendous
amount of difficult work during the quarter made this successful
turn-around possible. We now have the resources to complete the Phase 3
studies of both Zoptrex™ and Macrilen™ and to move the Company to an
entirely new level, if our confidence in our product candidates is
demonstrated with positive outcomes of the clinical programs. I would
like to thank our team for their very hard and dedicated work during the
quarter that achieved these critical accomplishments. I also want to
thank our Board for their commitment and supportive efforts that enabled
these successful achievements. We recognize that substantial progress
remains to be achieved and we are committed to successfully building a
profitable growth-oriented company, providing attractive financial
returns to our shareholders, commercializing meaningful products that
improve the lives of patients and enabling our employees to develop
purposeful careers.”
Commenting on the Company’s product-development progress, Mr. Dodd
stated, “During the fourth quarter, we received very encouraging news
regarding Zoptrex™ when, following a comprehensive review of the final
interim efficacy and safety data, the DSMB recommended that we continue
the ZoptEC Phase 3 clinical study to its conclusion. We expect to
complete the ZoptEC trial in Q3 of 2016 and, if the results of the trial
warrant doing so, to file the NDA for Zoptrex™ in the first half of
2017. More recently, we reported on the successful progress of the
Zoptrex™ development program in China. We also initiated patient
enrollment in our confirmatory Phase 3 clinical study of Macrilen™,
which we expect to be the first FDA-approved test for the evaluation of
adult growth hormone deficiency. We expect the confirmatory Phase 3
clinical study of Macrilen™ to be concluded in Q3 of 2016, which would
permit us to submit a NDA by mid-year 2017. If the study is successful
in meeting its primary endpoint, we anticipate FDA approval of Macrilen™
by as early as year-end 2017.”
Continuing with his commentary, Mr. Dodd stated, “Restructuring our
financial team and closing our office in Quebec City was another very
important and difficult accomplishment during the fourth quarter, which
permitted us to further simplify our operations. We continue our search
for a permanent finance staff and we are committed to taking the time
necessary to find the appropriate expertise and experience that will
contribute to our continued progress. I would like to note that we ended
the year with a global headcount of approximately 48 active employees,
compared to the almost 100 active employees we had when I joined the
company in April of 2013. This restructuring, as well as the Resource
Optimization Program implemented in 2014, has positioned us to achieve
net research and development (“R&D”) and general and administrative
(“G&A”) savings of approximately $2.5 million annually.”
Concluding, Mr. Dodd addressed the Company’s commercial operations,
stating, “Our co-promotions of EstroGel® and Saizen®
continued to ramp up during the fourth quarter, although not at the pace
we are seeking. During 2015, our selling efforts resulted in a
consistent increase of EstroGel® prescriptions within our
territories. Specifically, we increased EstroGel® market
share of total prescriptions for non-patch transdermal estrogen products
in our territories from 23.8% in Q1 to 26.9% in Q4. This resulted in a
17.4% increase in EstroGel® total prescriptions within our
territories over this same period, compared to a 0.5% decline by our
competitors. However, this increase did not result in our receipt of
meaningful commission revenue from our promotion of EstroGel®.
During the fourth quarter, we expanded our Saizen® target
list from the 450 endocrinologists we had during most of last year to
900 validated targets that we are now addressing. As a result, recent
performance is producing attractive results, which we expect will result
in meaningful commission revenue this year. During 2016, we expect to
achieve more significant commission revenue for both of these products
as we continue our focused selling efforts. One way to increase the
productivity and income contribution resulting from our selling efforts
is to expand our selling portfolio. During the fourth quarter, we added
what we think will be a significant product, when we concluded a
co-marketing agreement with Armune BioScience for APIFINY®,
the only cancer-specific, non-PSA blood test for the evaluation of the
risk of prostate cancer. This product was launched by our sales force in
mid-February. Early reports from our representatives are positive
regarding the interest in targeted physicians adopting this product."
Fourth Quarter and Full Year 2015 Financial Highlights
R&D costs were $4.2 million and $17.2 million for the three-month period
and the year ended December 31, 2015, respectively, compared to $6.3
million and $23.7 million for the same periods in 2014. The decrease for
the three-month period and for the year ended December 31, 2015, as
compared to the same period in 2014, is mainly attributable to the
realization of cost savings in connection with our 2014 Resource
Optimization Program, as well as to the weakening, in 2015, of the euro
against the US dollar. The decrease for the year ended December 31, 2015
was partly offset by higher third-party costs, which increased slightly
during the year ended December 31, 2015, as compared to the same period
in 2014, mainly due to a higher comparative number of patients enrolled
in the ZoptEC clinical trial, which is now fully enrolled. However, the
quarter-over-quarter decrease in third-party costs is explained by the
fact that the number of patients in treatment was lower in 2015 as
compared to the same period in 2014.
G&A expenses were $4.0 million and $11.3 million for the three-month
period and the year ended December 31, 2015, respectively, as compared
to $2.6 million and $9.8 million for the same periods in 2014. The
increase is mainly attributable to the recording of a provision related
to the closure of our Quebec City office and the restructuring of our
finance and accounting team in the fourth quarter of 2015, as well as to
the recording of certain transaction costs associated with the
completion of our March 2015 and December 2015 offerings of Common
Shares and warrants.
Selling expenses were $1.8 million and $6.9 million for the three-month
period and the year ended December 31, 2015, respectively, as compared
to $2.0 million and $3.9 million for the same periods in 2014. The
decrease in selling expenses for the three-month period ended December
31, 2015 is explained by the start-up costs related to the deployment of
our contracted sales force in connection with the co-promotion
activities, which were launched in late 2014. The increase in selling
expenses for the year ended December 31, 2015 as compared to the same
period in 2014, is attributable to the fact that 2014 was not a full
year of sales activity. During the third quarter of 2015, we also
expanded the size of our contracted sales force from 19 to 21 sales
representatives in order to support our promotional efforts associated
with Saizen®. This sales force expense will also cover the
recently initiated selling in support of APIFINY®.
Net (loss) income for the three-month period and the year ended December
31, 2015 was ($10.0) million and ($50.1) million, or ($1.46) and
($18.14) per basic and diluted share, respectively, compared to $4.2
million and ($16.6) million, or $6.35 and ($28.06) per basic and diluted
share for the same periods in 2014. The increase in our net loss from
operations for the three-month period and for the year ended December
31, 2015, as compared to the same period in 2014, is due to the higher
comparative G&A and selling expenses and net finance costs, partly
offset by lower comparative R&D costs.
Cash and cash equivalents were $41.5 million as at December 31, 2015,
compared to $34.9 million as at December 31, 2014.
Conference Call & Webcast
The Company will host a conference call and live webcast to discuss
these results on Wednesday, March 30, 2016, at 8:00 a.m., Eastern Time.
Participants may access the live webcast via the Company's website at www.aezsinc.com,
or by telephone using the following number: 201-689-8029, Confirmation
#13632538. A replay of the webcast will also be available on the
Company’s website for a period of 30 days.
For reference, the Management’s Discussion and Analysis of Financial
Condition and Results of Operations for the fourth quarter and full-year
2015, as well as the Company’s audited consolidated financial statements
as at December 31, 2015 and 2014 and for the years ended December 31,
2015, 2014 and 2013, can be found at www.aezsinc.com
in the “Investors/Regulatory Filings” section.
About Aeterna Zentaris Inc.
Aeterna Zentaris is a specialty biopharmaceutical company engaged in
developing and commercializing novel treatments in oncology,
endocrinology and women’s health. We are engaged in drug development
activities and in the promotion of products for others. We are now
conducting Phase 3 studies of two internally developed compounds. The
focus of our business development efforts is the acquisition or license
of products that are relevant to our therapeutic areas of focus. We also
intend to license out certain commercial rights of internally developed
products to licensees in territories where such out-licensing would
enable us to ensure development, registration and launch of our product
candidates. Our goal is to become a growth-oriented specialty
biopharmaceutical company by pursuing successful development and
commercialization of our product portfolio, achieving successful
commercial presence and growth, while consistently delivering value to
our shareholders, employees and the medical providers and patients who
will benefit from our products. For more information, visit www.aezsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to
the safe harbor provisions of the US Securities Litigation Reform Act of
1995. Forward-looking statements may include, but are not limited to
statements preceded by, followed by, or that include the words
“expects,” “believes,” “intends,” “anticipates,” and similar terms that
relate to future events, performance, or our results. 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 and clinical trials, 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 rejection or
non-acceptance of any new drug application by one or more regulatory
authorities and, more generally, uncertainties related to the regulatory
process, the ability of the Company to efficiently commercialize one or
more of its products or product candidates, the degree of market
acceptance once our products are approved for commercialization, the
ability of the Company to take advantage of business opportunities in
the pharmaceutical industry, the ability to protect our intellectual
property, the potential of liability arising from shareholder lawsuits
and general changes in economic conditions. Investors should consult the
Company's quarterly and annual filings with the Canadian and US
securities commissions for additional information on risks and
uncertainties relating to forward-looking statements. Investors are
cautioned not to place undue reliance 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 required to do so.
Attachment: Financial summary
Consolidated Statements of Comprehensive (Loss) Income Information
(unaudited)
|
|
Three-month periods ended
December 31,
|
|
Years ended December 31,
|
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2013
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Sales commission and other
|
|
41
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
96
|
|
License fees
|
|
61
|
|
|
11
|
|
|
248
|
|
|
11
|
|
|
6,079
|
|
|
|
102
|
|
|
11
|
|
|
545
|
|
|
11
|
|
|
6,175
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
Research and development costs
|
|
4,243
|
|
|
6,282
|
|
|
17,234
|
|
|
23,716
|
|
|
21,284
|
|
General and administrative expenses
|
|
3,953
|
|
|
2,633
|
|
|
11,308
|
|
|
9,840
|
|
|
11,091
|
|
Selling expenses
|
|
1,764
|
|
|
2,043
|
|
|
6,887
|
|
|
3,850
|
|
|
1,225
|
|
|
|
9,960
|
|
|
10,958
|
|
|
35,429
|
|
|
37,406
|
|
|
33,651
|
|
Loss from operations
|
|
(9,858
|
)
|
|
(10,947
|
)
|
|
(34,884
|
)
|
|
(37,395
|
)
|
|
(27,476
|
)
|
Finance income
|
|
26
|
|
|
15,053
|
|
|
305
|
|
|
20,319
|
|
|
1,748
|
|
Finance costs
|
|
(211
|
)
|
|
—
|
|
|
(15,649
|
)
|
|
—
|
|
|
(1,512
|
)
|
Net finance (costs) income
|
|
(185
|
)
|
|
15,053
|
|
|
(15,344
|
)
|
|
20,319
|
|
|
236
|
|
(Loss) income before income taxes
|
|
(10,043
|
)
|
|
4,106
|
|
|
(50,228
|
)
|
|
(17,076
|
)
|
|
(27,240
|
)
|
Income tax expense
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
Net (loss) income from continuing operations
|
|
(10,043
|
)
|
|
3,995
|
|
|
(50,228
|
)
|
|
(17,187
|
)
|
|
(27,240
|
)
|
Net income from discontinued operations
|
|
25
|
|
|
158
|
|
|
85
|
|
|
623
|
|
|
34,055
|
|
Net (loss) income
|
|
(10,018
|
)
|
|
4,153
|
|
|
(50,143
|
)
|
|
(16,564
|
)
|
|
6,815
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
249
|
|
|
(677
|
)
|
|
1,509
|
|
|
(1,158
|
)
|
|
1,073
|
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
Actuarial (loss) gain on defined benefit plans
|
|
(116
|
)
|
|
1,336
|
|
|
844
|
|
|
(1,833
|
)
|
|
2,346
|
|
Comprehensive (loss) income
|
|
(9,885
|
)
|
|
4,812
|
|
|
(47,790
|
)
|
|
(19,555
|
)
|
|
10,234
|
|
Net (loss) income per share (basic and diluted) from continuing
operations1
|
|
(1.46
|
)
|
|
6.11
|
|
|
(18.17
|
)
|
|
(29.12
|
)
|
|
(92.41
|
)
|
Net income purchase per share (basic and diluted) from
discontinued operations1
|
|
0.00
|
|
0.24
|
|
|
0.03
|
|
|
1.06
|
|
|
115.53
|
|
Net (loss) income per share (basic and diluted)1
|
|
(1.46
|
)
|
|
6.35
|
|
|
(18.14
|
)
|
|
(28.06
|
)
|
|
23.12
|
|
Weighted average number of shares outstanding1
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
6,874,460
|
|
|
653,833
|
|
|
2,763,603
|
|
|
590,247
|
|
|
294,765
|
|
Diluted
|
|
7,302,816
|
|
|
653,833
|
|
|
3,424,336
|
|
|
590,247
|
|
|
294,765
|
|
1 Adjusted to reflect the November 17, 2015 100 - 1 share
consolidation
Consolidated Statement of Financial Position Information
(unaudited)
|
|
As at December 31,
|
(in thousands)
|
|
2015
|
|
2014
|
|
|
$
|
|
$
|
Cash and cash equivalents1
|
|
41,450
|
|
|
34,931
|
Trade and other receivables and other current assets
|
|
944
|
|
|
1,286
|
Restricted cash equivalents
|
|
255
|
|
|
760
|
Property, plant and equipment
|
|
256
|
|
|
797
|
Other non-current assets
|
|
8,593
|
|
|
9,661
|
Total assets
|
|
51,498
|
|
|
47,435
|
Payables and other current liabilities2
|
|
4,770
|
|
|
7,304
|
Current portion of deferred revenues
|
|
244
|
|
|
270
|
Warrant liability (current and non-current portion)
|
|
10,891
|
|
|
8,225
|
Non-financial non-current liabilities3
|
|
13,978
|
|
|
17,152
|
Total liabilities
|
|
29,883
|
|
|
32,951
|
Shareholders' equity
|
|
21,615
|
|
|
14,484
|
Total liabilities and shareholders' equity
|
|
51,498
|
|
|
47,435
|
_________________________
1 Of which approximately $1.5 million was denominated in EUR as of
December 31, 2015 ($3.6 million as of December 31, 2014).
2 Of which approximately $0.6 million is related to a provision for
restructuring costs as of December 31, 2015 ($1.5 million as of December
31, 2014).
3 Comprised mainly of employee future benefits, provisions for
onerous contracts and non-current portion of deferred revenues.
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