Aeterna Zentaris and Ceapro Complete Merger Transaction
Aeterna Zentaris (NASDAQ: AEZS, TSX: AEZS) and Ceapro (TSX-V: CZO, OTCQX: CRPOF) have completed their all-stock merger announced in December 2023. The new entity, yet to be named, aims to leverage diversified product pipelines, combining financial and operational resources for enhanced R&D capabilities. The merger will drive development in areas like oat beta glucan and avenanthramides, while macimorelin revenues will support high-potential products. Post-merger, Aeterna's board includes eight directors. Ceapro shares will be delisted from the TSX Venture Exchange, and Ceapro shareholders will receive 0.02360 Aeterna shares per Ceapro share. Ceapro aims to cease being a reporting issuer under Canadian laws.
- Completed all-stock merger between Aeterna Zentaris and Ceapro, creating a diversified biopharmaceutical company.
- Enhanced financial resources, boosting R&D capabilities and efficiency.
- Expanded development pipeline with quick-to-market and long-horizon products.
- Potential for stable cash flow from oat beta glucan and avenanthramides.
- Greater presence in North American and European markets.
- Combined expertise in human clinical trials and regulatory approvals.
- Ceapro shares to be delisted from TSX Venture Exchange within five business days.
- Ceapro to cease being a reporting issuer under Canadian laws.
- Uncertainty about the new company name and future shareholder approval processes.
Insights
The merger between Aeterna Zentaris and Ceapro presents a strategic realignment for both companies aiming to harness synergies and drive growth. From a financial standpoint, the all-stock nature of the merger suggests confidence in the combined future value over a cash transaction, which would typically signal immediate financial need or uncertainty.
Diversification is a key highlight as it spreads revenue sources, thereby reducing the risk associated with dependency on a single product line. This is especially valuable in the biopharmaceutical sector, which is characterized by high R&D costs and long development cycles.
Additionally, the merger is anticipated to generate efficiencies in operational costs and enhance cash flows from combined revenue streams. These cash flows will be important for funding ongoing and new R&D projects. The ability to leverage existing products like macimorelin alongside new pipeline developments is a positive indicator of an integrated future revenue model.
However, retail investors should note the potential dilution effect, as Ceapro shareholders will receive Aeterna Zentaris shares. Monitoring the post-merger performance and integration process will be critical, as the anticipated benefits need to translate into actual performance improvements and shareholder value.
This merger enhances the market position of the combined entity by expanding its product portfolio and geographical reach. Aeterna Zentaris and Ceapro's merged operations in North America and Europe significantly boost their market presence and access to new business development opportunities and talent pools.
The emphasis on maintaining a North American market focus is a strategic move considering the region's robust biotechnology sector, renowned for high investment, innovation and regulatory frameworks supportive of biotech ventures. The combined entity's ability to navigate clinical trials and regulatory approvals will be a determinant in accelerating the time-to-market for new products.
On the downside, the merger's execution and integration risks should not be overlooked. Harmonizing different corporate cultures, aligning operational processes and achieving the projected efficiencies require meticulous management. Investors should watch for any signs of integration issues or delays in realizing the expected benefits.
From a pharmaceutical perspective, this merger is poised to enhance R&D capabilities and accelerate the development pipeline. The combined expertise in biotechnology and pharmaceuticals is likely to yield more innovative products and leveraging proprietary technologies from both entities could lead to significant breakthroughs.
The diversification of the product pipeline includes both short-term and long-term projects, which is vital for maintaining a steady flow of new products entering the market. This is particularly important in the pharmaceutical industry, where product development timelines can be lengthy and uncertain.
Investors should be aware of the complexities involved in the development of high-return pharmaceutical products, which often require substantial investment and face rigorous regulatory scrutiny. The balance between funding ongoing operations and investing in R&D will be important for the company's sustained growth and competitiveness.
TORONTO and EDMONTON, June 03, 2024 (GLOBE NEWSWIRE) -- Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) (“Aeterna” or the “Company”) and Ceapro Inc. (TSX-V: CZO) (OTCQX: CRPOF) (“Ceapro”), two innovative biopharmaceutical development companies, are pleased to announce the successful completion and closing of their all-stock merger of equals transaction (the “Transaction”), which was previously announced by Aeterna and Ceapro in their joint press release of December 14, 2023.
“This is an important day for shareholders of both companies as Aeterna and Ceapro have now officially come together to create a diversified business that is expected to create value for many years to come,” said Ronald W. Miller, Chair of the Company. “With the successful completion of this merger, we are now optimized to bring value-driving, transformational products to the market.”
Gilles Gagnon, Chief Executive Officer of the Company, said: “with the shared benefits, additional competencies and resources resulting from this merger, we are now poised to push forward exciting development programs in selected areas while continuing to grow our revenue generating base business and constantly looking for strategic growth opportunities.”
“We would like to thank Aeterna shareholders for their support for this transaction,” said Carolyn Egbert, former Chair of the Company. “We also look forward to working with the Ceapro team to build a long-term, sustainable business.”
- Greater potential for stable cash flow to support R&D of potentially higher return pharmaceutical products. The Company currently generates revenues from two main active ingredients, oat beta glucan and avenanthramides, extracted and purified using its proprietary technology. Cash from these products is planned to be used along with the Company’s revenue from the commercialization or licensing of its macimorelin product to support the development of exciting, high potential-return products, ideally creating growing and sustainable revenue for the Company and investors.
- Greater diversification of commercial and development product pipeline lowers risk. The Company is expected to benefit from an extensive and diversified pipeline of innovative products in development, including quicker-to-market biotechnology products and exciting potentially higher return, but longer-horizon, products. With this pipeline rejuvenation, the Company is anticipated to boast:
- more products in the pipeline that are closer to potential commercialization;
- an enhanced ability to strategically focus financial and company resources in a manner that provides the most value to the company and shareholders; and
- a more compelling value proposition and lower risk profile.
- Expanded pharmaceutical research and development capabilities. The Company’s talented team brings deep expertise and knowledge that are expected to play a key role in advancing the Company and its development pipeline. The Company has the infrastructure to support development activities and potentially offer improved efficiencies, in addition to cost savings. It now also has an expanded development pipeline of products which its leadership is committed to prioritizing as they evaluate what will provide the best overall potential for the Company, shareholders, and consumers.
- Compelling North American + European combination. The Company now has an operational presence in North America and Europe. While the Company expects to continue to maintain some presence in Europe, its leadership believes that it needs to re-focus operations within the North American biotechnology market, to provide optimal exposure to potential new investors, business development opportunities and talent.
- Expertise and efficiencies. The Company can now leverage the combined experience and expertise of its predecessor companies, including navigating the conduct of human clinical trials and the crucial regulatory approval process required to bring pharmaceutical products to market. The Company plans to leverage this expertise with the higher value pharmaceutical opportunities being advanced for its active ingredients and technologies.
Following the closing of the Transaction, Aeterna’s board of directors now consists of eight directors: Ronald W. Miller (Chair), Carolyn Egbert, Gilles Gagnon, Ulrich Kosciessa, Geneviève Foster, William Li, Dennis Turpin and Peter Edwards. The executive leadership team now consists of Gilles Gagnon, President and Chief Executive Officer, and Giuliano La Fratta, Senior Vice President and Chief Financial Officer.
A new name for the combined company is expected to be announced in the coming weeks and will be put forward for shareholder approval at the upcoming annual meeting of shareholders, details of which are expected to be announced shortly.
Full details of the Transaction and certain other matters are set out in the respective information circulars filed by Aeterna and Ceapro which are available under each company’s profile on SEDAR+ at www.sedarplus.ca or, as regards Aeterna, its reports on Form 6-K and other filings on EDGAR at www.sec.gov.
Aeterna is an “Eligible Interlisted Issuer” as such term is defined in the TSX Company Manual. As an Eligible Interlisted Issuer, the Company has relied on an exemption pursuant to Section 602.1 of the TSX Company Manual, the effect of which is that the Company was not required to comply with certain requirements relating to the issuance of securities in connection with the Transaction.
Information for Ceapro Shareholders
The shares of Ceapro are expected to be delisted from the TSX Venture Exchange within five business days. Ceapro is also in the process of applying to cease to be a reporting issuer under applicable Canadian securities laws.
Pursuant to the Transaction, former Ceapro shareholders are entitled to receive 0.02360 of an Aeterna Zentaris share for each Ceapro share held. In order to receive Aeterna Zentaris shares in exchange for Ceapro shares, Ceapro registered shareholders must complete, sign, date and return (together with the certificate or DRS statement representing their shares) the letter of transmittal that was mailed to them prior to closing of the Transaction. The letter of transmittal is also available under Ceapro’s profile on SEDAR+ at www.sedarplus.ca and by contacting Computershare Investor Services Inc., the depositary, by telephone at 1-514-982-7555 or toll-free in North America at 1-800-564-6253 or by email at corporateactions@computershare.com.
For those shareholders of Ceapro whose shares are registered in the name of a broker, investment dealer, bank, trust company or other intermediary or nominee, they should contact such intermediary or nominee for assistance in depositing their Ceapro shares and should follow the instructions of such intermediary or nominee.
About Aeterna Zentaris Inc.
Aeterna is a specialty biopharmaceutical company engaged in the development and commercialization of a diverse portfolio of pharmaceutical and diagnostic products, including those focused on areas of significant unmet medical need. One of Aeterna’s lead products is macimorelin (Macrilen; Ghryvelin), the first and only U.S. FDA and European Commission approved oral test indicated for the diagnosis of adult growth hormone deficiency (AGHD). Aeterna is also engaged in the development of therapeutic assets and proprietary extraction technology, which is applied to the production of active ingredients from renewable plant resources currently used in cosmeceutical products (i.e., oat beta glucan and avenanthramides which are found in leading skincare product brands like Aveeno and Burt’s Bees formulations) and being developed as potential nutraceuticals and/or pharmaceuticals.
The company is listed on the NASDAQ Capital Market and the Toronto Stock Exchange, and trades on both exchanges under the ticker symbol “AEZS”. For more information, please visit Aeterna’s website at www.zentaris.com.
Forward-Looking Statements
The information in this news release has been prepared as of June 3, 2024. Certain statements in this news release, referred to herein as "forward-looking statements", constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended, and "forward-looking information" under the provisions of Canadian securities laws. All statements, other than statements of historical fact, that address circumstances, events, activities, or developments that could or may or will occur are forward-looking statements. When used in this news release, words such as "anticipate", "assume", "believe", "could", "expect", "forecast", "future", "goal", "guidance", "intend", "likely", "may", "would" or the negative or comparable terminology as well as terms usually used in the future and the conditional are generally intended to identify forward-looking statements, although not all forward-looking statements include such words. Forward-looking statements in this news release include, but are not limited to, statements relating to: the future business and operations of the combined Company, including cash flow, research and development, and costs.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic, operational and other risks, uncertainties, contingencies and other factors, including those described below, which could cause actual results, performance or achievements of the combined Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements and, as such, undue reliance must not be placed on them.
Forward-looking statements involve known and unknown risks and uncertainties which include, among others: the combined Company’s present and future business strategies; operations and performance within expected ranges; anticipated future cash flows; local and global economic conditions and the environment in which the combined Company operates; anticipated capital and operating costs; uncertainty in product development and related clinical trials and validation studies, including our reliance on the success of the pediatric clinical trial in the European Union and U.S. for Macrilen™ (macimorelin); the commencement of the DETECT-trial may be delayed or we may not obtain regulatory approval to initiate that study; we may be unable to enroll the expected number of subjects in the DETECT-trial and the result of the DETECT-trial may not support receipt of regulatory approval in child-onset growth hormone deficiency; results from ongoing or planned pre-clinical studies of macimorelin by the University of Queensland or for our other products under development may not be successful or may not support advancing the product to human clinical trials; our ability to raise capital and obtain financing to continue our currently planned operations; 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; the ability to secure strategic partners for late stage development, marketing, and distribution of our products, including our ability to enter into a new license agreement or similar arrangement following the termination of the license agreement with Novo Nordisk AG; our ability to enter into out-licensing, development, manufacturing, marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our ability to protect and enforce our patent portfolio and intellectual property; and our ability to continue to list our common shares on the NASDAQ Capital Market.
Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties, including those discussed in our Annual Report on Form 20-F and MD&A filed under the Company’s profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. We disclaim any obligation to update any such risks or uncertainties 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.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The Toronto Stock Exchange accepts no responsibility for the adequacy or accuracy of this news release.
For Further Information
Aeterna Investor Contact:
Aeterna, Investor Relations
AZinfo@aezsinc.com
+1 843-900-3223
Aeterna Media Contact:
Joel Shaffer
FGS Longview
joel.shaffer@fgslongview.com
416-670-6468
FAQ
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