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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