Aeterna Zentaris Reports First Quarter 2021 Financial Results and Provides Pipeline Program Updates

Rhea-AI Summary

Aeterna Zentaris Inc. (NASDAQ: AEZS) reported a consolidated net loss of $1.4 million for Q1 2021, compared to a net income of $0.8 million in Q1 2020. Total revenue decreased to $0.6 million, driven by a lack of product sales. However, the company raised $34.2 million through a bought deal offering and received $20 million from warrant exercises. A pivotal Phase 3 study for macimorelin diagnostic is set to begin in Q2 2021. The company maintains a strong balance sheet with $73.4 million in cash, expected to fund operations beyond 2023.

Positive

• Raised $34.2 million through a bought deal offering.
• Secured $20 million from warrant exercises.
• Strong balance sheet with $73.4 million in cash.
• Initiation of pivotal Phase 3 DETECT study for macimorelin planned for Q2 2021.

Negative

• Consolidated net loss of $1.4 million for Q1 2021 compared to a net income of $0.8 million in Q1 2020.
• Total revenue decreased by $0.5 million from $1.1 million in Q1 2020.

– Q1 2021 marked by solid operational execution with expansion and diversification of pipeline, intellectual property and portfolio of assets

– Pivotal Phase 3 DETECT (Study P02) safety and efficacy study evaluating macimorelin diagnostic for CGHD on track to commence in Q2 2021

– Strong balance sheet with cash expected to fund operations beyond 2023

CHARLESTON, S.C., May 05, 2021 (GLOBE NEWSWIRE) -- Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) (“Aeterna” or the “Company”), a specialty biopharmaceutical company developing and commercializing a diversified portfolio of pharmaceutical and diagnostic products, today reported its financial and operating results for the first quarter ended March 31, 2021. The Company also provided an update on its preclinical and clinical development programs.

“Over the course of the first quarter, we continued to execute on our key strategic priorities by significantly strengthening our balance sheet and expanding our development pipeline. This solid execution provides us with optionality to advance and accelerate our pipeline programs,” commented Dr. Klaus Paulini, Chief Executive Officer of Aeterna.

Recent Highlights:

• Regained compliance with minimum bid price requirement for continued listing on Nasdaq;
• Closed bought deal offering of common shares for gross proceeds of $34.2 million;
• Received $20.0 million in proceeds from exercise of warrants in 2021;
• Entered into a material transfer agreement (the “MTA”) with The University of Queensland (“Queensland University”), for the advancement of macimorelin as a potential therapeutic for the treatment of an undisclosed neurodegenerative disease; and
• Executed on building preclinical projects pipeline to expand assets in development for potential high-value indications through multiple licensing agreements with universities in Europe.

“I firmly believe we have positioned Aeterna Zentaris for a transformational year. We have secured intellectual property and assets in high-value indications that we believe hold significant promise, the necessary capital to advance our pipeline as rapidly as possible, and the team and expertise to execute and deliver results, all of which we believe will build shareholder value in the near- and long-term,” added Dr. Paulini.

Preclinical and Clinical Programs Update:

Diagnostics Development Pipeline

Macimorelin Diagnostic: Ghrelin agonist in development for diagnostic use in childhood-onset growth hormone deficiency (“CGHD”)

With the investigational new drug application, “Multicenter, open-label trial to investigate the efficacy and safety of a single oral dose of 1.0 mg/kg macimorelin acetate as growth hormone stimulation test (“GHST”) in pediatric patients with suspected growth hormone deficiency (“GHD”),” now active, preparations remain ongoing to initiate the pivotal Phase 3 study (the “DETECT-trial”). Children and adolescents from two to less than 18 years of age with suspected growth hormone deficiency are expected to be included. The study is expected to include approximately 100 subjects worldwide, with at least 40 subjects in pre-pubertal and 40 subjects in pubertal status. A macimorelin GHST will be performed twice to ensure the repeatability of the data. Two standard GHSTs will be used as controls: arginine (i.v.) and clonidine (p.o.).

Next Steps

• Initiate DETECT-trial study sites and patient enrollment, which is expected in the second quarter of 2021.

Therapeutics and Vaccine Development Pipeline

AIM Biologicals: Targeted, highly specific immunosuppressive therapeutics for the potential treatment of neuromyelitis optica spectrum disorder (“NMOSD”)

In January 2021, the Company entered into an exclusive patent license agreement and research agreement with Julius-Maximilians-University of Wuerzburg, Germany for worldwide rights to develop, manufacture and commercialize targeted, highly specific immunosuppressive therapeutic proteins (“AIM Biologicals”) for the potential treatment of NMOSD.

AIM Biologicals utilize a novel mechanism which is believed to demonstrate that peptide antigens presented on immunosuppressive major histocompatibility complex class I molecules can selectively and efficiently induce antigen-specific tolerance. Based on this mechanism, the targeted immunosuppressive therapeutics are being designed as optimized soluble molecules with the goal that they may be adapted to selectively induce tolerance to various autoantigens.

Next Steps

• Conduct further preclinical research to identify and characterize an AIMBiologicals-based development candidate for the treatment of NMOSD and develop manufacturing process for selected candidate.

Delayed Clearance Parathyroid Hormone (“DC-PTH”) Fusion Polypeptides: Potential treatment for primary hypoparathyroidism

In March 2021, Aeterna entered into an exclusive patent and know-how license agreement and research agreement with The University of Sheffield, United Kingdom, for the intellectual property relating to DC-PTH fusion polypeptides with delayed clearance covering the field of all human use.

DC-PTH is a modified growth hormone binding protein (GHBP) linked to PTH1-34 with the goal of providing parathyroid hormone activity with a delayed clearance of one or two weeks. PTH is a key regulating hormone and may help patients with primary hypoparathyroidism maintain normal serum calcium and phosphate levels during chronic use.

Next Steps

• Work with The University of Sheffield to conduct in depth characterization of development candidate (in vitro and in vivo).

Macimorelin Therapeutic: Ghrelin agonist in development for the treatment of an undisclosed neurodegenerative disease

In January 2021, the Company entered into the MTA with Queensland University, Australia, to provide macimorelin for the conduct of preclinical and subsequent clinical studies evaluating macimorelin as a potential therapeutic for the treatment of an undisclosed neurodegenerative disease. Queensland University researchers have filed for supportive grants and aim to conduct preclinical studies in multiple models to demonstrate the therapeutic reach of macimorelin on disease progression and disease-specific pathology as well as to conduct a subsequent investigator initiated clinical trial.

Macimorelin, a ghrelin agonist, is an orally active small molecule that stimulates the secretion of growth hormone from the pituitary gland. Acting via this mechanism, it is believed that macimorelin may slow the progression of certain neurodegenerative diseases.

Next Steps

• Work with Queensland University to conduct proof-of-concept studies with macimorelin in disease-specific animal models, assess alternative formulations and formalize a preclinical development plan.

COVID-19 Vaccine: Potential orally active COVID-19 (SARS-CoV-2) live-attenuated bacterial vaccine

In February 2021, Aeterna entered into an exclusive option agreement with Julius-Maximilians-University to evaluate a preclinical, potential COVID-19 vaccine developed at Julius-Maximilians-University. In March 2021, the Company exercised its option and entered into a license agreement where the Company was granted an exclusive, world-wide, license to certain patent applications and know-how owned by Julius-Maximilians-University to research and develop, manufacture, and sell a potential COVID-19 vaccine.

Julius-Maximilians-University also granted Aeterna an option for the exclusive use of certain patent applications and know-how in an additional undisclosed field. The Company has six months from the date of the license agreement to exercise that option. Additionally, Aeterna entered into a Research Agreement under which the Company has engaged Julius-Maximilians-University on a fee-for-service basis to conduct supplementary research activities and preclinical development studies on the potential vaccine, the results of which will be included within the scope of the license agreement.

Next Steps

• Conduct in vivo immunology experiments with antigen variant candidates, initiate challenge experiments in immunized transgenic animals as proof of concept, select a development candidate for initiation of the formal preclinical toxicology and safety studies and start manufacturing process assessment and development.

Financing and Warrant Exercises

Between January 1, 2021 and March 24, 2021, the Company has raised net proceeds of approximately $31.0 million from a registered public offering and $20.0 million from warrant exercises. On February 19, 2021, the Company closed a public offering of 20,509,746 common shares at a price to the public of $1.45 per common share, for gross proceeds of $29.7 million, before deducting underwriting discounts, commissions and offering expenses payable by the Company, in the amount of $2.8 million. Aeterna also granted the underwriter, which was also the Placement agent, a 30-day overallotment option (the “Underwriter Option”) to purchase up to 3,076,461 additional common shares at the public offering price, less underwriting discounts and commissions, and 1,435,682 Placement agent warrants with an exercise price of $1.8125 and expiring on February 17, 2026. The net cash proceeds to the Company from the offering totaled $26.9 million. On February 22, 2021, the underwriter exercised the Underwriter Option in full and received 3,076,461 common shares for gross proceeds to the Company of $4.5 million. In connection with the public offering and the exercise of the Underwriter Option, the Company paid commissions and other expenses of $0.4 million and issued 215,352 Placement agent warrants priced at $1.8125 and expiring on February 17, 2026. Collectively, this financing is referred to as the “February 2021 Financing.”

Summary of First Quarter 2021 Financial Results

All amounts in this press release are in U.S. dollars unless otherwise noted.

Results of operations for the three-month period ended March 31, 2021

For the three-month period ended March 31, 2021, we reported a consolidated net loss of ($1.4 million), or ($0.02) net loss per common share (basic), as compared with a consolidated net income of $0.8 million, or $0.04 net income per common share (basic) for the three-month period ended March 31, 2020. The $2.2 million increase in net loss is primarily from a decrease in net finance income of $2.3 million and a decrease of $0.5 million in total revenues, partially offset by a decrease of $0.5 million in total operating expenses and $0.1 million increase in tax recovery.

Revenues

• Our total revenue for the three-month period ended March 31, 2021 was $0.6 million as compared with $1.1 million for the same period in 2020, representing a decrease of $0.5 million. The 2021 revenue was comprised of $0.5 million in licensing revenue (2020 - $0.02 million), $0.04 million in supply chain revenue (2020 - $0.04 million) and $0.01 million in royalty income (2020 - $0.01 million). In the first quarter of 2020, the Company sold $1.0 million in Macrilen^™ (macimorelin) to Novo Nordisk Biopharm Limited (“Novo Nordisk”) while no such sale of product occurred in the first quarter of 2021.

Operating expenses

• Our total operating expense for the three-month period ended March 31, 2021 was $1.9 million as compared with $2.4 million for the same period in 2020, representing a decrease of $0.5 million. This decrease arose primarily from a $0.8 million decrease in cost of sales, offset by an increase of $0.1 million in general and administrative expenses and a $0.2 million one-time gain on modification of a lease that was incurred in 2020 only. There was a significant decrease in cost of sales as the Company did not sell any product in the first quarter of 2021.

Net finance (costs) income

• Our net finance (costs) for the three-month period ended March 31, 2021 was ($0.3 million) as compared with net finance income $2.1 million for the same period in 2020, representing a decrease in net finance income of $2.4 million.

The Company had $73.4 million cash and cash equivalents at March 31, 2021 (December 31, 2020 – 24.3 million).

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 first quarter of 2021, as well as the Company's unaudited consolidated interim financial statements as of March 31, 2021, 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 is a specialty biopharmaceutical company developing and commercializing a diversified portfolio of pharmaceutical and diagnostic products focused on areas of significant unmet medical need. 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). The Company is leveraging the clinical success and compelling safety profile of macimorelin to develop it for the diagnosis of childhood-onset growth hormone deficiency (CGHD) in collaboration with Novo Nordisk.

Aeterna Zentaris is dedicated to the development of therapeutic assets and has recently taken steps to establish a growing pipeline to address unmet medical needs across a number of indications, including neuromyelitis optica spectrum disorder (NMOSD), primary hypoparathyroidism and an undisclosed neurodegenerative disease. Additionally, the Company is developing an oral prophylactic bacterial vaccine against SARS-CoV-2, the virus that causes COVID-19.

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 statements that may constitute forward-looking statements within the meaning of U.S. and Canadian securities legislation and regulations and such statements are made pursuant to the safe-harbor provision of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “potential,” “possible,” and similar expressions. Such statements, based as they are on current expectations of management, inherently involve numerous risks, uncertainties and assumptions, known and unknown, many of which are beyond our control. Forward-looking statements in this press release include, but are not limited to, those relating to: Aeterna’s expectation with respect to the DETECT-trial (including the ability to commence in the second quarter of 2021, to enroll subjects in the DETECT-trial, and expectations that the results of the DETECT-trial will be suitable to support a claim (regulatory approval) for potential stand-alone testing with macimorelin); Aeterna’s expectation that, upon receipt of pricing and reimbursement approvals, macimorelin will be marketed in Europe and the United Kingdom; the aims and details of the pre-clinical and potential clinical studies involving the potential use of macimorelin to treat an undisclosed neurodegenerative disease being conducted by Queensland University; the potential of the coronavirus vaccine platform technology licensed from Julius-Maximilians-University (and any vaccine candidates using that technology) to be effective as a vaccine against COVID-19 (SARS-CoV-2) or any other coronavirus disease or to offer an alternative to other approved vaccines against COVID-19; the ability to obtain approval to commence any clinical trial or the timeline to develop any potential vaccine and the characteristics of any potential vaccine; plans for research and trials regarding the DC-PTH fusion polypeptides licensed from The University of Sheffield; plans regarding AIM Biologicals in-licensed from Julius-Maximilians-University and the potential to treat NMOSD; and Aeterna’s intentions with respect to growth opportunities and its business focus, including with respect to its cash position and development pipeline (including the ability to accelerate its development pipeline).

Forward-looking statements involve known and unknown risks and uncertainties, and other factors which may cause the actual results, performance or achievements stated herein to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such risks and uncertainties include, among others, 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 CGHD, we may be delayed or unsuccessful in obtaining pricing and reimbursement approvals in Europe and the UK to market macimorelin; the coronavirus vaccine platform technology (and any vaccine candidates using that technology) licensed from Julius-Maximilians-University has never been tested in humans and so further pre-clinical or clinical studies of that technology and any vaccine developed using that technology may not be effective as a vaccine against COVID-19 (SARS-CoV-2) or any other coronavirus disease; the timeline to develop a vaccine may be longer than expected; such technology or vaccines may not be capable of being used orally, may not have the same characteristics as vaccines previously approved using the Salmonella Typhi Ty21a carrier strain; results from ongoing or planned pre-clinical studies of macimorelin by Queensland University 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, including our heavy reliance on the success of the License Agreement with Novo Nordisk; the global instability due to the global pandemic of COVID-19, and its unknown potential effect on our planned operations; our ability to enter into out-licensing, development, manufacturing, marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect. 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 risks discussed in our Annual Report on Form 40-F and annual information form, under the caption "Risk Factors". Given the 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.

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 release.

Investor Contact:

Jenene Thomas
JTC Team
T (US): +1 (833) 475-8247
E: aezs@jtcir.com

FAQ

What were Aeterna Zentaris's financial results for Q1 2021?

Aeterna reported a consolidated net loss of $1.4 million for Q1 2021, with total revenues of $0.6 million.

When is the DETECT trial for macimorelin expected to start?

The DETECT trial for macimorelin is set to commence in Q2 2021.

How much cash does Aeterna Zentaris have as of March 31, 2021?

As of March 31, 2021, Aeterna had $73.4 million in cash and cash equivalents.

What caused the net loss for Aeterna Zentaris in Q1 2021?

The net loss was primarily due to a decrease in net finance income and a reduction in total revenues.

What is the significance of the $34.2 million raised by Aeterna Zentaris?

The $34.2 million raised will provide capital for advancing their pipeline and operations into the future.