Full Press Release Details
Financial Statements
of December 31, 2021 and December 31, 2020 and for the years ended
31, 2021, 2020 and 2019
| Report of Independent Registered Public Accounting Firm (PCAOB ID:1263) | 3 |
| Report of Predecessor Independent Registered Public Accounting Firm (PCAOB ID:271) | 5 |
| Consolidated Statements of Financial Position | 6 |
| Consolidated Statements of Changes in Shareholders' Equity (Deficiency) | 7 |
| Consolidated Statements of Comprehensive Loss | 8 |
| Consolidated Statements of Cash Flows | 9 |
| Notes to Consolidated Financial Statements | 10 |
of independent registered public accounting firm
the shareholders and the board of directors of
on the financial statements
have audited the accompanying consolidated statement of financial position of Aeterna Zentaris Inc. (the Company) as of December
31, 2021, the related consolidated statement of changes in shareholders' equity (deficiency), comprehensive loss, and cash flows,
for the year ended December 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2021, and its financial performance and its cash flows for the year ended December 31, 2021, in conformity with International
Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board.
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that
our audit provides a reasonable basis for our opinion.
critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated
or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matter does
not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.
| Revenue from License and Collaboration Arrangements | |
| Description of the matter | As described in Note 2, Note 3 and Note 5, the Company enters into license and collaboration arrangements that may include non-refundable upfront license fees, the provision of development services, milestone payments, royalties on future product sales and supply arrangements. The Company has recorded $5.3 million of total revenues during the year ended December 31, 2021 and $6.3 million as deferred revenues as of December 31, 2021. Management analyzes each agreement and applies significant judgment to determine whether contracts entered into at or near the same time should be accounted for as a single arrangement and whether all parts of the contract fall within the scope of IFRS 15. In addition, each agreement is analyzed to identify all performance obligations and to determine whether a performance obligation is distinct or should be combined with other promised goods and services, determine and allocate the transaction price on a relative stand-alone selling price basis, determine whether a performance obligation is satisfied at a point in time or over time, and, for performance obligations satisfied over time, in concluding upon the appropriate method of measuring progress to be applied for purposes of recognizing revenue. |
| Auditing the Company's accounting for revenues from the license and collaboration arrangements was complex given the significant judgment required in evaluating the terms and multiple elements of the related agreements. A high degree of auditor judgment and effort was required in performing procedures to evaluate the reasonableness of management's assessment to identify all performance obligations and to determine whether a performance obligation is distinct or should be combined with other promised goods and services. | |
| How we addressed the matter in our audit | To test the Company's accounting for revenue from license and collaboration arrangements, our audit procedures included, among others, obtaining and evaluating management's accounting analyses for all significant arrangements. We inspected the Company's agreements and we evaluated whether management's assessments considered all relevant terms included in the agreements. We assessed management's consideration of whether contracts should be accounted for as a single arrangement and whether all elements fall within the scope of IFRS 15. We assessed management's identification of performance obligations and whether they are distinct or combined with other promised goods and services. We evaluated the reasonableness of management's recognition of revenue based on when each performance obligation will be satisfied in conformity with the Company's accounting policies. |
have served as the Company's auditor since 2021.
of Independent Registered Public Accounting Firm
the Board of Directors and Shareholders of Aeterna Zentaris Inc.
on the Financial Statements
have audited the accompanying consolidated statement of financial position of Aeterna Zentaris Inc. and its subsidiaries (together, the
Company) as of December 31, 2020, and the related consolidated statements of changes in shareholders' equity (deficiency), comprehensive
loss and cash flows for each of the two years in the period ended December 31, 2020, including the related notes (collectively referred
to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2020, and its financial performance and its cash flows for each of the two years
in the period ended December 31, 2020 in conformity with International Financial Reporting Standards as issued by the International Accounting
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Professional Accountants, Licensed Public Accountants
served as the Company's auditor from 1993 to 2021.
PricewaterhouseCoopers
Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J
0B2 T: +1 416 863 1133, F: +1 416 365 8215
refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Statements of Financial Position
thousands of US dollars)
| December 31, 2021 | December 31, 2020 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 6) | 65,300 | 24,271 | ||||||
| Trade and other receivables (note 7) | 1,314 | 1,681 | ||||||
| Inventory (note 8) | 73 | 21 | ||||||
| Income taxes receivable (note 22) | 2,361 | 601 | ||||||
| Prepaid expenses and other current assets (note 9) | 1,772 | 1,040 | ||||||
| Total current assets | 70,820 | 27,614 | ||||||
| Restricted cash equivalents (note 10) | 335 | 338 | ||||||
| Property, plant and equipment (note 11) | 42 | 22 | ||||||
| Right of use assets (note 12) | 150 | 157 | ||||||
| Identifiable intangible assets (note 13) | 625 | 59 | ||||||
| Goodwill (note 14) | 8,130 | 8,815 | ||||||
| Total assets | 80,102 | 37,005 | ||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Payables and accrued liabilities (note 15) | 2,672 | 2,199 | ||||||
| Current portion of provisions (note 16) | 34 | 92 | ||||||
| Income taxes payable (note 22) | 115 | 123 | ||||||
| Current portion of deferred revenues (note 5) | 4,815 | 2,193 | ||||||
| Current portion of lease liabilities (note 17) | 130 | 135 | ||||||
| Total current liabilities | 7,766 | 4,742 | ||||||
| Deferred revenues (note 5) | 1,493 | 3,289 | ||||||
| Deferred gain (note 13) | 98 | - | ||||||
| Lease liabilities (note 17) | 31 | 49 | ||||||
| Employee future benefits (note 18) | 17,485 | 15,435 | ||||||
| Provisions (note 16) | 243 | 279 | ||||||
| Total liabilities | 27,116 | 23,794 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Share capital (note 19) | 293,410 | 235,008 | ||||||
| Warrants (note 19) | 5,085 | 12,402 | ||||||
| Other capital (note 19) | 89,788 | 89,505 | ||||||
| Deficit | (334,619 | ) | (322,659 | ) | ||||
| Accumulated other comprehensive loss | (678 | ) | (1,045 | ) | ||||
| Total shareholders' equity | 52,986 | 13,211 | ||||||
| Total liabilities and shareholders' equity | 80,102 | 37,005 |
and contingencies (note 27)
accompanying notes are an integral part of these consolidated financial statements.
by the Board of Directors
| /s/ Carolyn Egbert | /s/ Dennis Turpin | |
| Carolyn Egbert Chair of the Board | Dennis Turpin Director |
Statements of Changes in Shareholders' Equity (Deficiency)
thousands of US dollars, except share data)
| Common shares | Share capital | Warrants | Other capital | Deficit | Accumulated other comprehensive income (loss) | Total | ||||||||||||||||||||||
| (number of) 1 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Balance - January 1, 2019 | 16,440,760 | 222,335 | - | 89,342 | (309,781 | ) | 11 | 1,907 | ||||||||||||||||||||
| Net loss | - | - | - | - | (6,042 | ) | - | (6,042 | ) | |||||||||||||||||||
| Other comprehensive loss: | - | |||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | 83 | 83 | |||||||||||||||||||||
| Actuarial loss on defined benefit plans (note 18) | - | - | - | - | (1,068 | ) | - | (1,068 | ) | |||||||||||||||||||
| Comprehensive loss | - | - | - | - | (7,110 | ) | 83 | (7,027 | ) | |||||||||||||||||||
| Share issuance from the exercise of warrants, stock options and deferred share units | 228,750 | 906 | - | (329 | ) | - | - | 577 | ||||||||||||||||||||
| Issuance of common shares and warrants, net (note 19) | 3,325,000 | 1,287 | - | - | - | - | 1,287 | |||||||||||||||||||||
| Share-based compensation costs | - | - | - | 793 | - | - | 793 | |||||||||||||||||||||
| Balance - December 31, 2019 | 19,994,510 | 224,528 | - | 89,806 | (316,891 | ) | 94 | (2,463 | ) | |||||||||||||||||||
| Net loss | - | - | - | - | (5,118 | ) | - | (5,118 | ) | |||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | (1,139 | ) | (1,139 | ) | |||||||||||||||||||
| Actuarial loss on defined benefit plan (note 18) | - | - | - | - | (650 | ) | - | (650 | ) | |||||||||||||||||||
| Comprehensive loss | - | - | - | - | (5,768 | ) | (1,139 | ) | (6,907 | ) | ||||||||||||||||||
| Reclassification of warrants to equity (note 19) | - | - | 7,377 | - | - | - | 7,377 | |||||||||||||||||||||
| Issuance of common shares and warrants, net of transaction costs (note 19) | 42,684,103 | 10,480 | 5,025 | (362 | ) | - | - | 15,143 | ||||||||||||||||||||
| Share-based compensation costs (note 19) | - | - | - | 61 | - | - | 61 | |||||||||||||||||||||
| Balance - December 31, 2020 | 62,678,613 | 235,008 | 12,402 | 89,505 | (322,659 | ) | (1,045 | ) | 13,211 | |||||||||||||||||||
| Net loss | - | - | - | - | (8,368 | ) | - | (8,368 | ) | |||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | 367 | 367 | |||||||||||||||||||||
| Actuarial loss on defined benefit plan (note 18) | - | - | - | - | (3,592 | ) | - | (3,592 | ) | |||||||||||||||||||
| Comprehensive loss | - | - | - | - | (11,960 | ) | 367 | (11,593 | ) | |||||||||||||||||||
| Issuance of common shares and warrants, net of transaction costs (note 19) | 23,586,207 | 29,082 | 1,897 | - | - | - | 30,979 | |||||||||||||||||||||
| Exercise of warrants (note 19) | 35,111,187 | 29,833 | (9,746 | ) | - | - | - | 20,087 | ||||||||||||||||||||
| Transfer of warrant issuance costs upon exercise of warrants (note 19) | - | (532 | ) | 532 | - | - | - | - | ||||||||||||||||||||
| Exercise of deferred share units (note 19) | 21,000 | 19 | - | (28 | ) | - | - | (9 | ) | |||||||||||||||||||
| Share-based compensation costs (note 19) | - | - | - | 311 | - | - | 311 | |||||||||||||||||||||
| Balance - December 31, 2021 | 121,397,007 | 293,410 | 5,085 | 89,788 | (334,619 | ) | (678 | ) | 52,986 |
accompanying notes are an integral part of these consolidated financial statements.
Statements of Comprehensive Loss
thousands of US dollars, except share and per share data)
| Years ended December 31, | ||||||||||||
| 2021 | 2020 | 2019 | ||||||||||
| $ | $ | $ | ||||||||||
| Revenues (notes 5 and 25) | ||||||||||||
| License fees | 1,670 | 911 | 74 | |||||||||
| Development services | 3,337 | - | - | |||||||||
| Product sales | - | 2,370 | 129 | |||||||||
| Royalties | 68 | 67 | 45 | |||||||||
| Supply chain revenue | 185 | 304 | 284 | |||||||||
| Total revenues | 5,260 | 3,652 | 532 | |||||||||
| Operating expenses (note 20) | ||||||||||||
| Cost of sales | 90 | 2,317 | 410 | |||||||||
| Research and development expenses | 6,574 | 1,506 | 1,837 | |||||||||
| General and administrative expenses | 5,916 | 4,759 | 6,615 | |||||||||
| Selling expenses | 1,351 | 1,134 | 1,214 | |||||||||
| Restructuring costs | - | - | 507 | |||||||||
| Impairment of right of use asset | - | - | 22 | |||||||||
| Gain on modification of building lease (notes 12 and 17) | - | (219 | ) | - | ||||||||
| (Reversal) impairment of other asset | - | (139 | ) | 169 | ||||||||
| Total operating expenses | 13,931 | 9,358 | 10,774 | |||||||||
| Loss from operations | (8,671 | ) | (5,706 | ) | (10,242 | ) | ||||||
| Gains due to changes in foreign currency exchange rates | 215 | 572 | 87 | |||||||||
| Change in fair value of warrant liability | - | 1,147 | 4,518 | |||||||||
| Other finance costs | (21 | ) | (736 | ) | (593 | ) | ||||||
| Net finance income | 194 | 983 | 4,012 | |||||||||
| Loss before income taxes | (8,477 | ) | (4,723 | ) | (6,230 | ) | ||||||
| Income tax recovery (expense) (note 22) | 109 | (395 | ) | 188 | ||||||||
| Net loss | (8,368 | ) | (5,118 | ) | (6,042 | ) | ||||||
| Other comprehensive loss: | ||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||
| Foreign currency translation adjustments | 367 | (1,139 | ) | 83 | ||||||||
| Items that will not be reclassified to profit or loss: | ||||||||||||
| Actuarial loss on defined benefit plans | (3,592 | ) | (650 | ) | (1,068 | ) | ||||||
| Comprehensive loss | (11,593 | ) | (6,907 | ) | (7,027 | ) | ||||||
| Net loss per share (basic) (note 26) | (0.07 | ) | (0.12 | ) | (0.35 | ) | ||||||
| Net loss per share (diluted) (note 26) | (0.07 | ) | (0.12 | ) | (0.35 | ) | ||||||
| Weighted average number of shares outstanding (note 26) | ||||||||||||
| Basic | 114,924,497 | 41,083,163 | 17,494,472 | |||||||||
| Diluted | 114,924,497 | 41,083,163 | 17,494,472 |
accompanying notes are an integral part of these consolidated financial statements.
Statements of Cash Flows
thousands of US dollars, except share data)
| Years ended December 31, | ||||||||||||
| 2021 | 2020 | 2019 | ||||||||||
| $ | $ | $ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | (8,368 | ) | (5,118 | ) | (6,042 | ) | ||||||
| Items not affecting cash and cash equivalents: | ||||||||||||
| Change in fair value of warrant liability | - | (1,147 | ) | (4,518 | ) | |||||||
| Transaction costs of warrants issued, expensed as finance cost | - | 732 | 550 | |||||||||
| Provision for restructuring and other costs (note 16) | 23 | (383 | ) | 511 | ||||||||
| Impairment of right of use asset | - | - | 22 | |||||||||
| (Reversal) impairment of other asset | - | (139 | ) | 169 | ||||||||
| Gain on modification of building lease (notes 12 and 17) | - | (219 | ) | - | ||||||||
| Depreciation and amortization (notes 11, 12 and 13) | 145 | 232 | 315 | |||||||||
| Share-based compensation costs (note 19) | 311 | 61 | 793 | |||||||||
| Employee future benefits (note 18) | 161 | 217 | 262 | |||||||||
| Amortization of deferred revenues | (1,670 | ) | 1,257 | (74 | ) | |||||||
| Foreign exchange gain on items denominated in foreign currencies | (179 | ) | (688 | ) | (87 | ) | ||||||
| (Gain) loss on disposal of property, plant and equipment (note 12) | (1 | ) | (2 | ) | 10 | |||||||
| Other non-cash items | 95 | 133 | (126 | ) | ||||||||
| Interest accretion on lease liabilities (note 17) | 7 | (19 | ) | (66 | ) | |||||||
| Payment of income taxes (note 22) | (1,605 | ) | (1,448 | ) | - | |||||||
| Changes in operating assets and liabilities (note 21) | 2,500 | 2,402 | (2,444 | ) | ||||||||
| Net cash used in operating activities | (8,581 | ) | (4,129 | ) | (10,725 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from issuance of common shares (note 19) | 34,200 | - | - | |||||||||
| Proceeds from issuances of common shares and warrants (note 19) | - | 23,500 | 4,988 | |||||||||
| Transaction costs | (3,221 | ) | (2,767 | ) | (795 | ) | ||||||
| Proceeds from exercise of warrants, stock options and deferred share units | 20,087 | - | 314 | |||||||||
| Proceeds on deferred gain (note 13) | 98 | - | - | |||||||||
| Payments on lease liabilities (note 17) | (127 | ) | (265 | ) | (614 | ) | ||||||
| Net cash provided by financing activities | 51,037 | 20,468 | 3,893 | |||||||||
| Cash flows from investing activities | ||||||||||||
| Proceeds for disposals of property, plant and equipment (note 11) | 1 | 6 | - | |||||||||
| Purchase of intangible assets (note 13) | (609 | ) | - | - | ||||||||
| Purchase of property, plant and equipment (note 11) | (30 | ) | - | - | ||||||||
| (Decrease) increase in restricted cash equivalents | (20 | ) | 50 | 50 | ||||||||
| Net cash (used in) provided by investing activities | (658 | ) | 56 | 50 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (769 | ) | 38 | 108 | ||||||||
| Net change in cash and cash equivalents | 41,029 | 16,433 | (6,674 | ) | ||||||||
| Cash and cash equivalents - beginning of year | 24,271 | 7,838 | 14,512 | |||||||||
| Cash and cash equivalents - end of year (note 6) | 65,300 | 24,271 | 7,838 |
accompanying notes are an integral part of these
consolidated financial statements.
to Consolidated Financial Statements
of December 31, 2021 and December 31, 2020 and for the years ended
31, 2021, 2020 and 2019
thousands of US dollars, except share and per share data and where otherwise noted)
Zentaris (the "Company" or "Aeterna") is a specialty biopharmaceutical company commercializing and
developing therapeutics and diagnostic tests. The Company's lead product, Macrilen (macimorelin), is the first and only
United States ("US") Food and Drug Administration ("FDA") and European Medicines Agency-approved oral test
indicated for the diagnosis of patients with adult growth hormone deficiency ("AGHD"). Macrilen is currently
marketed in the US through a license agreement, as amended, between the Company and Novo Nordisk Health Care AG
("Novo"). The Company is also dedicated to the development of therapeutic assets and has recently taken steps to
establish a pre-clinical pipeline to potentially address unmet medical needs across a number of indications with a focus on rare or
orphan indications and with the potential for pediatric use.
or COVID-19, a contagious disease that was characterized by the World Health Organization as a pandemic in early 2020, continues to affect
the global community.
spread of COVID-19 may continue to impact our operations, including the potential interruption of our clinical trial activities and of
our supply chain. For example, the rise in the Omicron variant in the COVID-19 pandemic has caused delays in site initiation and patient
enrollment in our Phase 3 DETECT clinical trial for diagnostic use in childhood-onset growth hormone deficiency. Additionally, sales
activities for Macrilen in the US may be impacted due to delays of diagnostic activities on AGHD in the US. Further, the COVID-19
pandemic may also cause some patients to be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if