Macrilen™ NDA filed at end of Q2; FDA granted a PDUFA date of
December 30, 2017
All amounts are in US Dollars
Recent key developments
- Macrilen™ development progressing
toward completion
- The Company announced on June 30, 2017
that a new drug application (“NDA”) seeking approval of Macrilen™
(macimorelin), an orphan drug, for the evaluation of
growth hormone deficiency in adults (“AGHD”) was resubmitted to the
U.S. Food and Drug Administration (the “FDA”) on such day.
- On July 18, 2017, the Company announced
that we had been notified by the FDA that our NDA seeking approval
of Macrilen™ for the evaluation of AGHD had been accepted as a
complete response to the FDA’s November 5, 2014 Complete Response
Letter and granted a PDUFA date of December 30, 2017.
- Cost reduction measures
- Restructuring Program of the Frankfurt,
Germany operations was approved by the Company and the German Work
Council.
- The total cost of the Restructuring
Program is expected to be approximately $2.0 million. Most of the
restructuring costs are expected to be paid in the financial year
ending December 31, 2018.
- Three sales representatives and one
sales-manager position were eliminated at quarter-end as part of
sales force optimization prior to anticipated sales force expansion
related to Macrilen™ commercialization.
- Cash on hand sufficient to get to
expected approval
- $13.9 million of unrestricted cash and
cash equivalents at quarter-end; no third-party debt.
- Approximately $2.6 million of net
proceeds raised from sales of Common Shares pursuant to our current
ATM program subsequent to the end of the second quarter.
- Approximately 16.1 million Common
Shares outstanding as of August 10, 2017.
Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) (the
“Company”), a specialty biopharmaceutical company engaged in
developing and commercializing novel pharmaceutical therapies,
today reported financial and operating results for the second
quarter ended June 30, 2017.
Commenting on recent key developments, Michael V. Ward, Chief
Executive Officer of the Company, stated, “On June 30, 2017, we
reported that we re-submitted an NDA for Macrilen™, which was ahead
of our previously announced goal. On July 18, 2017 we were notified
by the FDA of a PDUFA date of December 30, 2017. If the product is
approved, it will be the only FDA-approved drug for assessing AGHD
and we believe it is likely to rapidly become the new method for
confirming AGHD.”
Addressing the Company’s future plans, Mr. Ward stated, “We are
continuing our commercial organization and infrastructure
preparation for the earliest possible launch of Macrilen™ in the
United States. Our goal is to be prepared to launch the product in
the first quarter of 2018. We are also reviewing our resources and
making adjustments consistent with our focus on commercializing
Macrilen™. In this regard, we continue to concentrate our selling
efforts on the territories that will be key to the successful
commercialization of Macrilen™. As a result, we eliminated one
sales manager position and three sales territories at the end of
the quarter. Furthermore, we decided to effect a substantial
reduction in our Frankfurt organization because of the
discontinuance of our work on Zoptrex™ and related development
programs. With the implementation of the restructuring plan, we
expect to have approximately 10 employees in Frankfurt by the end
of 2018, as compared to our current roster of 35 employees there.
The total cost of the Restructuring Program is expected to be
approximately $2.0 million and should lead to annual savings of
approximately $2.5 million following complete implementation
expected to be at the end of 2018. The majority of the
restructuring costs are expected to be paid in the financial year
ending December 31, 2018. Overall, we are focused on progressing
Macrilen™ through regulatory approval and commercialization, while
continuing to ensure that we optimize the use of our resources and
capital. Finally, following the cost savings measure and the latest
ATM share issuances, we improved our financial condition in order
to have a stronger balance sheet at the end of 2017.”
Mr. Ward continued his commentary, “The Company has reached an
important point in its evolution and is conducting a strategic
review of its plans, resources and opportunities in order to best
position itself to maximize shareholder value and formed a special
committee of independent directors (the “Strategic Review
Committee”) to consider and evaluate various strategic and
financing alternatives available to the Company to maximize
shareholder value, including continuing to execute on its existing
business plan and/or considering and recommending changes to the
Company’s management and governance.”
Second Quarter 2017 Financial Highlights
Revenues
Revenues were $243,000 and $504,000 for the three and six months
ended June 30, 2017, as compared to $96,000 and $338,000 for the
same periods in 2016. The increase is mainly explained by the
expanded contract with APIFINY® which was effective June 1, 2016
and the amortization of the up-front payment received in connection
with one of the out-licensing agreements that we entered into in
the third quarter of 2016 for ZoptrexTM.
Research and Development (“R&D”) costs
R&D costs were $3.6 million and $6.1 million for the three
and six months ended June 30, 2017, compared to $3.7 million and
$7.4 million for the same periods in 2016. R&D costs remained
stable for the three-month period ended June 30, 2017. The decrease
in our R&D costs for the six months ended June 30, 2017, as
compared to the same period in 2016, is mainly attributable to
lower third-party costs attributable to Zoptrex™, which is mainly
due to the fact that we completed the clinical portion of the
ZoptEC trial during the first quarter of 2017. Third-party costs
attributable to Macrilen™ also decreased during the six months
ended June 30, 2017, as compared to the same period in 2016. This
is mainly due to the fact that we completed the Phase 3 clinical
trial at the end of 2016. The costs incurred in 2017 are related to
the detailed analysis of the top-line results as well as
preparation of the NDA filing, which was submitted on June 30,
2017.
General and Administrative (“G&A”) Expenses
G&A expenses were $1.9 million and $3.8 million for both the
three and six-month periods ended June 30, 2017 and 2016 and are in
line with expectations.
Selling Expenses
Selling expenses were $1.4 million and 3.0 million for the three
and six months ended June 30, 2017, as compared to $1.7 million and
$3.4 million for the same periods in 2016. Selling expenses for the
three and six months ended June 30, 2017 and 2016 represent mainly
the costs of our sales force related to the co-promotion activities
as well as our sales management team. The decrease in selling
expenses is explained by the reduction in the number of sales
representatives from 20 to 13 since February 2017. In July 2017, we
further reduced the number of sales representative to 10 and we
reduced our headcount by one sales manager. We believe that we will
be able to expand our sales force quickly following the expected
approval of MacrilenTM.
Net Finance Income
Net finance income was $4.1 million and $5.6 million for the
three and six months ended June 30, 2017, as compared to $0.2
million and $3.5 million, for the same periods in 2016. The
increase in finance income is mainly attributable to the change in
fair value recorded in connection with our warrant liability. Such
change in fair value results from the periodic "mark-to-market"
revaluation, via the application of option pricing models, of
outstanding share purchase warrants. The closing price of our
common shares, which, on the NASDAQ, fluctuated from $0.84 to $3.65
during the six-month period ended June 30, 2017, compared to $2.67
to $4.40 during the same period in 2016, also had a direct impact
on the change in fair value of warrant liability.
Net Loss
Net loss for the three and six months ended June 30, 2017 was
$2.6 million and $6.7 million (or $0.18 and $0.49 per share), as
compared to a net loss of $7.0 million and $10.7 million (or $0.71
and $1.08 per share) for the same periods in 2016. The decrease in
net loss and net loss per share for the three and six months ended
June 30, 2017, as compared to the same periods in 2016, is largely
attributable to lower operating expenses as well as higher net
finance income, as presented above.
Liquidity
Cash and cash equivalents were $13.9 million as at June 30,
2017, as compared to $22.0 million as at December 31, 2016. The
decrease in cash and cash equivalents as at June 30, 2017, as
compared to December 31, 2016, is due to the net cash used in
operating activities including variations in components of our
working capital. The decrease was partially offset by the net
proceeds generated by the issuance of common shares under our
various ATM programs.
Conference Call
The Company will host a conference call to discuss these results
on Friday, August 11, 2017, at 8:30 a.m., Eastern Time.
Participants may access the conference call using the following
dial-in number: 201-689-8029 and Confirmation number #13665527 . A
replay of the conference call 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 second
quarter ended June 30, 2017, as well as the Company’s interim
condensed consolidated financial statements as at June 30, 2017,
can be found at www.aezsinc.com in the
“Investors” section.
About Aeterna Zentaris Inc.
Aeterna Zentaris is a specialty biopharmaceutical company
engaged in developing and commercializing novel pharmaceutical
therapies. We are engaged in drug development activities and in the
promotion of products for others. We recently resubmitted an NDA to
the FDA seeking approval of MacrilenTM, an internally developed
compound. The focus of our business development efforts is the
acquisition of licenses to 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
non-U.S. 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 provision of the U.S. Securities
Litigation Reform Act of 1995, which reflect our current
expectations regarding future events. 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 risks and uncertainties, many of which are discussed
under the caption “Key Information - Risk Factors” in our most
recent Annual Report on Form 20-F filed with the relevant Canadian
securities regulatory authorities in lieu of an annual information
form and with the U.S. Securities and Exchange Commission (“SEC”).
Such statements include, but are not limited to, statements about
the timing of, and prospects for, regulatory approval and
commercialization of our product candidates, statements about the
status of our efforts to establish a commercial operation and to
obtain the right to promote or sell products that we did not
develop and estimates regarding our capital requirements and our
needs for, and our ability to obtain, additional financing. 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 now heavy
dependence on the success of Macrilen™ and the continued
availability of funds and resources to successfully launch the
product in the event the FDA approves Macrilen™, the rejection or
non-acceptance of the NDA by one or more regulatory authorities
and, more generally, uncertainties related to the regulatory
process, the ability of the Company to efficiently commercialize
Macrilen™, the degree of market acceptance of Macrilen™ in the
event it is approved for commercialization by the FDA, our ability
to take advantage of business opportunities in the pharmaceutical
industry, our 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
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.
Attachment: Financial summary
Condensed Interim Consolidated Statements of
Comprehensive Loss Information
(in thousands, except share and per share
data)
Three months ended June 30, Six months ended June
30,
(unaudited)
2017 2016 2017 2016
$ $ $ $ Revenues Sales
commission and other
131 33
284 214 License fees
112 63
220 124
243
96
504 338
Operating
expenses Research and development costs
3,599 3,707
6,054 7,364 General and administrative expenses
1,874
1,865
3,755 3,759 Selling expenses
1,449
1,708
2,991 3,390
6,922
7,280
12,800 14,513
Loss from operations (6,679 ) (7,184 )
(12,296 ) (14,175 ) Gain (loss) due to changes in
foreign currency exchange rates
196 (78 )
261 390
Change in fair value of warrant liability
3,914 190
5,317 2,995 Other finance income
19 64
37 106
Net finance income 4,129
176
5,615 3,491
Net loss
(2,550 ) (7,008 )
(6,681 ) (10,684 )
Other comprehensive (loss) income: Items that may be
reclassified subsequently to profit or loss: Foreign currency
translation adjustments
(659 ) 230
(792
) (239 ) Items that will not be reclassified to profit or
loss: Actuarial gain (loss) on defined benefit plans
194
(797 )
635 (2,222 )
Comprehensive loss
(3,015 ) (7,575 )
(6,838 ) (13,145 )
Net loss per share (basic and diluted) (0.18 )
(0.71 )
(0.49 ) (1.08 )
Weighted average number of
shares outstanding: Basic and Diluted
14,086,508
9,936,541
13,776,045 9,932,641
Condensed Interim Consolidated Statement of
Financial Position Information (in thousands)
As at June 30, As at December 31, (unaudited)
2017 2016 $ $ Cash and cash equivalents 1
13,931 21,999 Trade and other receivables and other current
assets
1,007 744 Restricted cash equivalents
467 496
Property, plant and equipment
139 204 Other non-current
assets
8,962 8,216
Total assets 24,506
31,659 Payables and other current liabilities
3,568 3,778 Current portion of deferred revenues
462
426 Warrant liability
1,537 6,854 Non-financial non-current
liabilities 2
14,448 14,389
Total liabilities
20,015 25,447 Shareholders' equity
4,491 6,212
Total liabilities and shareholders'
equity 24,506 31,659
_________________________ 1. Approximately $0.7 million and
$1.5 million were denominated in EUR as at June 30, 2017 and
December 31, 2016, respectively, and approximately $1.9 million and
$3.7 million were denominated in Canadian dollars as at June 30,
2017 and December 31, 2016, respectively. 2. Comprised
mainly of employee future benefits, provisions for onerous
contracts and non-current portion of deferred revenues.
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Aeterna Zentaris Inc.Michael V. Ward, 843-900-3223Chief
Executive OfficerIR@aezsinc.com
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