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 first quarter ended March 31, 2016.
Commenting on first quarter results, David A. Dodd, Chairman, President and Chief Executive Officer of the Company, stated, “During the first quarter, we made steady progress in the areas of product development, commercial performance and financial operations. I am pleased to report that we remain on track to attain our 2016 corporate objectives. We still expect to complete the pivotal Phase 3 Zoptrex™ trial in Q3 of 2016 and to report top-line results by year-end.”
Mr. Dodd continued his commentary with a discussion of the development of Macrilen™, which, if approved, will be the only FDA-approved means of evaluating adult growth hormone deficiency (AGHD), “Since announcing patient recruitment in the fourth quarter of last year, our CRO has opened approximately 20 of our anticipated 30 sites, enrolling approximately 30 patients. The pace of recruitment is accelerating, confirming our expectation that the confirmatory Phase 3 clinical study of Macrilen™ will be concluded in Q3 of 2016, also with top-line results being reported as soon as possible following trial conclusion. We feel very confident that the confirmatory study, which will consist of approximately 30 sites and a minimum of 110 patients, is on schedule.”
Concluding, Mr. Dodd addressed the Company’s commercial operations, stating, “We are pleased with the building of success from our promotion of Saizen® during the first quarter. Exceeding our baseline by 66% during the quarter was a great accomplishment by our sales team. Now that they have a number of targets that more closely matches our promotional capacity, we believe they should be in a position to produce meaningful commission revenue this year. I am hopeful that we will be able to add even more targets as EMD Serono recognizes the success of our efforts. Our full sales force sold APIFINY® for only half of the first quarter but managed to generate commission revenue nevertheless. We are hopeful about the commercial potential of APIFINY® because it is the only cancer-specific, non-PSA blood test for the evaluation of the risk of prostate cancer. Physicians have long needed such an adjunct to the PSA test. With APIFINY®, we believe we can satisfy that need. As a result of our promotional efforts, we are realizing an increasing penetration and acceptance of APIFINY®. More recently, we announced the expansion of our APIFINY® agreement to reflect our exclusive rights to promote this product throughout the U.S. We believe that such an expanded agreement opens significant revenue opportunities in support of this exciting product.”
First Quarter 2016 Financial Highlights
R&D costs were $3.7 million for the three-month period ended March 31, 2016, compared to $4.5 million for the same period in 2015. The decrease for the three-month period ended March 31, 2016, as compared to the same period in 2015, is mainly attributable to lower comparative third-party costs. The decrease in third-party costs is mainly attributable to the fact that the number of patients in active treatment in the clinical trial for Zoptrex™ was lower in the first quarter of 2016, as compared to the same period in 2015. The overall decrease in R&D costs is also explained by lower employee compensation and benefits costs, lower facilities rent and maintenance as well as lower other costs. A substantial portion of this decrease is due to the realization of cost savings in connection with our effort to streamline our R&D activities and to increase our commercial operations and flexibility by reducing our R&D staff, which was started in 2014 (the "Resource Optimization Program"), for which a provision was recorded in the third quarter of 2014.
G&A expenses were $1.9 million for the three-month period ended March 31, 2016, as compared to $3.4 million for the same period in 2015. The decrease is mainly attributable to the recording during three-month period ended March 31, 2015 of certain transaction costs associated with the completion of a public, registered offering of shares and warrants in March 2015.
Selling expenses were $1.7 million for the three-month period ended March 31, 2016, essentially unchanged as compared to the same period in 2015. The selling expenses for the three-month periods ended March 31, 2016 and 2015 represent the costs of our contracted sales force related to the co-promotion activities as well as our internal sales management team. Those activities were launched during the fourth quarter of 2014.
Net loss for the three-month period ended March 31, 2016 was $3.7 million, or $0.37 per basic and diluted share, compared to a net loss of $9.7 million, or $13.59 per basic and diluted share for the same period in 2015. The decrease in net loss for the three-month period ended March 31, 2016, as compared to the same period in 2015, is due largely to lower operating expenses and higher comparative net finance income.
Cash and cash equivalents were approximately $33.0 million as at March 31, 2016, compared to $41.5 million as at December 31, 2015.
Conference Call & Webcast
The Company will host a conference call and live webcast to discuss these results on Tuesday, May 10, 2016, at 8:30 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 #13635224. A replay of the webcast will also be available on the Company’s website for a period of 30 days.
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.
Condensed Interim Consolidated Statements of Comprehensive Loss Information (Unaudited) | ||||||
| Three months ended March 31, | ||||||
| (in thousands, except share and per share data) | 2016 | 2015 | ||||
| $ | $ | |||||
| Revenues | ||||||
| Sales Commission and Other | 181 | — | ||||
| License fees | 61 | 73 | ||||
| 242 | 73 | |||||
| Operating expenses | ||||||
| Research and development costs | 3,657 | 4,466 | ||||
| General and administrative expenses | 1,894 | 3,443 | ||||
| Selling expenses | 1,682 | 1,700 | ||||
| 7,233 | 9,609 | |||||
| Loss from operations | (6,991 | ) | (9,536 | ) | ||
| Gain (loss) due to changes in foreign currency exchange rates | 468 | (1,474 | ) | |||
| Change in fair value of warrant liability | 2,805 | 1,189 | ||||
| Other finance income | 42 | 185 | ||||
| Net finance income (costs) | 3,315 | (100 | ) | |||
| Net loss from continuing operations | (3,676 | ) | (9,636 | ) | ||
| Net loss from discontinued operations | — | (100 | ) | |||
| Net loss | (3,676 | ) | (9,736 | ) | ||
| Other comprehensive loss: | ||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||
| Foreign currency translation adjustments | (469 | ) | 1,775 | |||
| Items that will not be reclassified to profit or loss: | ||||||
| Actuarial loss on defined benefit plans | (1,426 | ) | (1,301 | ) | ||
| Comprehensive loss | (5,571 | ) | (9,262 | ) | ||
| Net loss per share (basic and diluted) from continuing operations | (0.37 | ) | (13.45 | ) | ||
| Net loss per share (basic and diluted) from discontinued operations | — | (0.14 | ) | |||
| Net loss per share (basic and diluted) | (0.37 | ) | (13.59 | ) | ||
| Weighted average number of shares outstanding: | ||||||
| Basic | 9,928,697 | 716,536 | ||||
| Diluted | 9,928,697 | 716,536 | ||||
Consolidated Interim Consolidated Statement of Financial Position Information (Unaudited) | ||||
| As at March 31, | As at December 31, | |||
| (in thousands) | 2016 | 2015 | ||
| $ | $ | |||
| Cash and cash equivalents1 | 32,981 | 41,450 | ||
| Trade and other receivables and other current assets | 1,358 | 944 | ||
| Restricted cash equivalents | 266 | 255 | ||
| Property, plant and equipment | 231 | 256 | ||
| Other non-current assets | 9,210 | 8,593 | ||
| Total assets | 44,046 | 51,498 | ||
| Payables and other current liabilities2 | 3,643 | 4,770 | ||
| Current portion of deferred revenues | 254 | 244 | ||
| Warrant liability (current and non-current portion) | 8,086 | 10,891 | ||
| Non-financial non-current liabilities3 | 15,766 | 13,978 | ||
| Total liabilities | 27,749 | 29,883 | ||
| Shareholders' equity | 16,297 | 21,615 | ||
| Total liabilities and shareholders' equity | 44,046 | 51,498 | ||
1 Approximately $1.1 and $1.5 million are denominated in EUR as at March 31, 2016 and December 31, 2015, respectively. 2 Approximately $0.2 and $0.6 million related to our provision for restructuring as at March 31, 2016 and December 31, 2015, respectively. 3 Comprised mainly of employee future benefits, provisions for onerous contracts and non-current portion of deferred revenues. | ||||
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Contacts:
Philip A. Theodore, Senior Vice President
843-900-3211,
IR@aezsinc.com
