BUSINESS NEWS: Æterna Zentaris Reports Fourth Quarter and Full-Year 2009 Financial and Operating Results

Aeterna Zentaris has reported fourth quarter and full year (ended December 31, 2009) financial results. Revenues were $40.2 million for the quarter ended December 31, 2009, compared to $7.2 million for the same quarter in 2008. The significant increase in revenues is due primarily to the Company's having recognized the remaining unamortized portion, or approximately $30.4 million, of the upfront payment received from sanofi-aventis as part of its development and marketing agreement for cetrorelix in BPH. Revenues were $63.2 million for the year ended December 31, 2009, compared to $38.5 million for the year ended December 31, 2008. The increase in revenues in 2009 is almost exclusively attributable to license fee revenues related to the upfront payment received from sanofi-aventis, partly offset by lower royalty revenues having been recognized in 2009 in connection with our agreement with Merck Serono for Cetrotide(R).

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Æterna Zentaris Reports Fourth Quarter and Full-Year 2009 Financial and Operating Results

All amounts are in U.S. dollars

QUEBEC CITY, March 24 /CNW Telbec/ - Æterna Zentaris Inc. (NASDAQ: AEZS, TSX: AEZ) (the "Company"), a late-stage drug development company specialized in oncology and endocrine therapy, today reported financial and operating results as at and for the fourth quarter and the full year ended December 31, 2009.

Juergen Engel, Ph.D., Æterna Zentaris President and Chief Executive Officer, commented, "2009 was obviously a year of mixed results for us, starting off well with the licensing agreement with sanofi-aventis for cetrorelix in BPH, and ending with the disappointing results for our Phase 3 efficacy studies with this compound. Nevertheless, we achieved great successes with other innovative compounds from our pipeline, namely the initiation of the registration Phase 3 study with perifosine in multiple myeloma by our partner Keryx following encouraging Phase 2 results, and the positive preliminary Phase 2 results for AEZS-108 in ovarian and endometrial cancer. Additionally, we re-acquired all rights to AEZS-130, currently in Phase 3 as a promising oral diagnostic test for adult GHD. Over the course of this year, we look forward to further progress in North America with Keryx's Phase 3 trial with perifosine in multiple myeloma, as well as their initiation of a Phase 3 trial with this same compound in colon cancer. We hope to benefit from this development in order to ultimately achieve registration in other territories. As for AEZS-108, we anticipate reporting final results for our Phase 2 trial in endometrial and ovarian cancer. We also expect to perform additional studies with this compound in either one of these indications, as well as in prostate and bladder cancer, based on available financial resources and sponsorships. As for AEZS-130, we aim to successfully complete the Phase 3 trial as a diagnostic test for adult GHD and file a New Drug Application to the FDA. Overall in 2010, our focus will be on continuing the development of our innovative late-stage compounds and on garnering interest from potential partners for the benefit of both patients and shareholders."

Dennis Turpin, the Company's Senior Vice President and Chief Financial Officer, added, "As at December 31, 2009, we had a cash position of $38.1 million with no debt. In 2010, with our partner Keryx assuming significant R&D costs related to the Phase 3 program with perifosine, and our earlier-stage projects associated with grants, R&D credits or collaboration agreements, we can expect a substantial reduction of our R&D expenses. With these measures, we feel we are in a relatively comfortable position to execute our business plan throughout the year."

CONSOLIDATED RESULTS AS AT AND FOR THE FOURTH QUARTER ENDED DECEMBER 31, 2009

Revenues were $40.2 million for the quarter ended December 31, 2009, compared to $7.2 million for the same quarter in 2008. The significant increase in revenues is due primarily to the Company's having recognized the remaining unamortized portion, or approximately $30.4 million, of the upfront payment received from sanofi-aventis as part of its development and marketing agreement for cetrorelix in BPH.

Net research and development ("R&D") expenses were $10.6 million for the quarter ended December 31, 2009, compared to $12.2 million for the same quarter in 2008. The decrease in R&D expenses primarily relates to lower costs having been incurred in connection with the Company's Phase 3 program for cetrorelix in BPH, given the progressive completion through the end of 2009 of efficacy and safety studies associated with that compound.

Selling, general and administrative ("SG&A") expenses were $6.2 million for the quarter ended December 31, 2009, compared to $3.0 million for the same quarter in 2008. The increase in SG&A expenses is predominantly related to the expensing of the remaining unamortized portion, or approximately $3.0 million, of the royalty paid to Tulane University in connection with the agreement entered into with, and subsequently terminated by, sanofi-aventis.

Net earnings were $12.0 million, or $0.19 per basic and diluted share, for the quarter ended December 31, 2009, compared to a net loss of $14.5 million, or $0.27 per basic and diluted share, for the same quarter in 2008. The significant increase in net earnings is largely attributable to the significant increase in license fee revenues, combined with lower comparative R&D expenses, as discussed above, partly offset by increased SG&A expenses and depreciation and amortization charges.

Cash and cash equivalents were $38.1 million as at December 31, 2009.


CONSOLIDATED RESULTS AS AT AND FOR THE FULL YEAR ENDED DECEMBER 31, 2009

Revenues were $63.2 million for the year ended December 31, 2009, compared to $38.5 million for the year ended December 31, 2008. The increase in revenues in 2009 is almost exclusively attributable to license fee revenues related to the upfront payment received from sanofi-aventis, partly offset by lower royalty revenues having been recognized in 2009 in connection with our agreement with Merck Serono for Cetrotide(R).

R&D costs were $44.2 million for the year ended December 31, 2009, compared to $57.4 million for the year ended December 31, 2008. The decrease in R&D costs is largely attributable to a lower volume of expenses having been incurred in 2009 related to the continued advancement during the first nine months of 2009, followed by the winding down of the Company's development activities linked to cetrorelix in BPH subsequent to its announcements that its related Phase 3 studies did not reach their primary endpoints.

SG&A expenses decreased to $16.0 million for the year ended December 31, 2009, compared to $17.3 million for the year ended December 31, 2008. The decrease is related to comparative euro-to-US dollar exchange rate fluctuations and to the absence in 2009 of certain non-recurring corporate expenses due to cost-saving measures that were implemented beginning in the second quarter of 2008, despite the additional selling expenses charged during 2009 as pertaining to the royalty paid to Tulane University.

Net loss was $24.7 million, or $0.43 per share for the year ended December 31, 2009, compared to $59.8 million, or $1.12 per basic and diluted share, for the year ended December 31, 2008. The significant decrease in net loss is due to the significant year-over-year increase in license fee revenues, associated mainly with agreements for cetrorelix and ozarelix, combined with lower comparative R&D, SG&A and income tax expenses, partly offset by lower comparative sales and royalties and increased depreciation and amortization expenses and foreign exchange losses.

SOURCE: CNW NewsWire Aeterna Zentaris Press Release