Full Press Release Details
Financial Statements
As of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021
| Report of Independent Registered Public Accounting Firm (PCAOB ID:1208) | 2 |
| Report of Predecessor Independent Registered Public Accounting Firm (PCAOB ID:1263) | 4 |
| Consolidated Statements of Financial Position | 5 |
| Consolidated Statements of Changes in Shareholders' Equity | 6 |
| Consolidated Statements of Loss and Comprehensive Loss | 7 |
| Consolidated Statements of Cash Flows | 8 |
| Notes to Consolidated Financial Statements | 9 |
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. and subsidiaries (the "Company")
as of December 31, 2023, the related consolidated statements of changes in shareholders' equity, loss and comprehensive
loss, and cash flows, for the year ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023, and its financial performance and its cash flows for the year ended December 31, 2023, in accordance with International Financial
Reporting Standards 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 audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the 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 matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
and development ("R&D") accruals - Refer to Notes 3, 8 and 12 of the financial statements
Audit Matter Description
Company carries out R&D activities including contracts with clinical research organizations and contract manufacturing organizations.
Management applies judgment when reviewing open contracts and purchase orders, communicating with the Company's personnel to identify
services that have been performed on the Company's behalf and estimating the level of service performed and the associated cost
incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The Company adjusts the
accrued or prepaid expense balance accordingly.
identified the estimation of R&D accruals as a critical audit matter due to the judgment made by management. This resulted in an
increased extent of audit effort.
the Critical Audit Matter Was Addressed in the Audit
audit procedures related to the evaluation of R&D accruals included the following, among others:
Professional Accountants
have served as the Company's auditor since 2023.
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, 2022, the related consolidated statements of changes in shareholders' equity, loss and comprehensive loss, and cash flows,
for each of the two years in the period ended December 31, 2022, 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, 2022, and its financial performance and its cash flows for each of the two years in the period
ended December 31, 2022, in conformity with International Financial Reporting Standards (IFRSs) as issued by the International Accounting
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 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 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 audits,
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.
audits 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 audits provide a reasonable basis for our opinion.
served as the Company's auditor from 2021 to 2023.
Statements of Financial Position
of December 31, 2023 and 2022
thousands of US dollars)
| 2023 | 2022 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 6) | 34,016 | 50,611 | ||||||
| Trade and other receivables (note 7) | 222 | 732 | ||||||
| Inventory | 66 | 229 | ||||||
| Income taxes receivable | 121 | 1,428 | ||||||
| Prepaid expenses and other current assets (note 8) | 1,942 | 2,488 | ||||||
| Total current assets | 36,367 | 55,488 | ||||||
| Non-current assets | ||||||||
| Restricted cash equivalents (note 6) | 332 | 322 | ||||||
| Property and equipment (note 9) | 317 | 216 | ||||||
| Total non-current assets | 649 | 538 | ||||||
| Total assets | 37,016 | 56,026 | ||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Payables and accrued liabilities (note 12) | 3,622 | 3,828 | ||||||
| Provisions (note 13) | 429 | 45 | ||||||
| Income taxes payable | 111 | 108 | ||||||
| Deferred revenues (note 5) | 218 | 2,949 | ||||||
| Lease liabilities (note 14) | 160 | 114 | ||||||
| Total current liabilities | 4,540 | 7,044 | ||||||
| Non-current liabilities | ||||||||
| Deferred revenues (note 5) | 1,544 | 1,684 | ||||||
| Deferred gain | - | 110 | ||||||
| Lease liabilities (note 14) | 119 | 65 | ||||||
| Employee future benefits (note 15) | 12,617 | 11,159 | ||||||
| Provisions | - | 188 | ||||||
| Total non-current liabilities | 14,280 | 13,206 | ||||||
| Total liabilities | 18,820 | 20,250 | ||||||
| Shareholders' equity | ||||||||
| Share capital (note 16) | 293,410 | 293,410 | ||||||
| Warrants (note 17) | 5,085 | 5,085 | ||||||
| Contributed surplus (note 18) | 90,710 | 90,332 | ||||||
| Deficit | (369,831 | ) | (352,084 | ) | ||||
| Accumulated other comprehensive loss | (1,178 | ) | (967 | ) | ||||
| Total Shareholders' equity | 18,196 | 35,776 | ||||||
| Total liabilities and shareholders' equity | 37,016 | 56,026 |
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
the years ended December 31, 2023, 2022 and 2021
thousands of US dollars)
| Share capital | Warrants | Contributed Surplus | Deficit | Accumulated other comprehensive income (loss) | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance - January 1, 2021 | 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 plans and remeasurement of the net defined benefit liability | - | - | - | (3,592 | ) | - | (3,592 | ) | ||||||||||||||||
| Comprehensive loss | - | - | - | (11,960 | ) | 367 | (11,593 | ) | ||||||||||||||||
| Issuance of common shares and warrants, net of transaction costs (note 16) | 29,082 | 1,897 | - | - | - | 30,979 | ||||||||||||||||||
| Exercise of warrants (note 17) | 29,833 | (9,746 | ) | - | - | - | 20,087 | |||||||||||||||||
| Transfer of warrant issuance costs on exercise of warrants (note 17) | (532 | ) | 532 | - | - | - | - | |||||||||||||||||
| Exercise of deferred share units | 19 | - | (28 | ) | - | - | (9 | ) | ||||||||||||||||
| Share-based compensation costs | - | - | 311 | - | - | 311 | ||||||||||||||||||
| Balance - December 31, 2021 | 293,410 | 5,085 | 89,788 | (334,619 | ) | (678 | ) | 52,986 | ||||||||||||||||
| Net loss | - | - | - | (22,727 | ) | - | (22,727 | ) | ||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | (289 | ) | (289 | ) | ||||||||||||||||
| Actuarial gain on defined benefit plans and remeasurement of the net defined benefit liability (note 15) | - | - | - | 5,262 | - | 5,262 | ||||||||||||||||||
| Comprehensive loss | - | - | - | (17,465 | ) | (289 | ) | (17,754 | ) | |||||||||||||||
| Share-based compensation costs | - | - | 544 | - | - | 544 | ||||||||||||||||||
| Balance - December 31, 2022 | 293,410 | 5,085 | 90,332 | (352,084 | ) | (967 | ) | 35,776 | ||||||||||||||||
| Net loss | - | - | - | (16,552 | ) | - | (16,552 | ) | ||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | (211 | ) | (211 | ) | ||||||||||||||||
| Actuarial loss on defined benefit plans and remeasurement of the net defined benefit liability (note 15) | - | - | - | (1,195 | ) | - | (1,195 | ) | ||||||||||||||||
| Comprehensive loss | - | - | - | (17,747 | ) | (211 | ) | (17,958 | ) | |||||||||||||||
| Share-based compensation costs | - | - | 378 | - | - | 378 | ||||||||||||||||||
| Balance - December 31, 2023 | 293,410 | 5,085 | 90,710 | (369,831 | ) | (1,178 | ) | 18,196 |
accompanying notes are an integral part of these consolidated financial statements.
Statements of Loss and Comprehensive Loss
the years ended December 31, 2023, 2022 and 2021
thousands of US dollars, except share and per share data)
| Years ended December 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| $ | $ | $ | ||||||||||
| Revenues (note 5) | 4,498 | 5,640 | 5,260 | |||||||||
| Expenses | ||||||||||||
| Cost of sales | 222 | 157 | 90 | |||||||||
| Research and development | 13,560 | 12,506 | 6,574 | |||||||||
| Selling, general and administrative | 8,724 | 8,230 | 7,267 | |||||||||
| Impairment of intangible assets (note 10) | - | 584 | - | |||||||||
| Impairment of goodwill (note 11) | - | 7,642 | - | |||||||||
| Impairment of other assets (note 7) | - | 124 | - | |||||||||
| Total expenses | 22,506 | 29,243 | 13,931 | |||||||||
| Loss from operations | (18,008 | ) | (23,603 | ) | (8,671 | ) | ||||||
| (Loss) gain due to changes in foreign currency exchange rates | (206 | ) | 879 | 215 | ||||||||
| Gain on sale of intangible asset (note 10) | 549 | - | - | |||||||||
| Interest income | 1,126 | - | - | |||||||||
| Net other costs | (13 | ) | (3 | ) | (21 | ) | ||||||
| Net other income (costs) | 1,456 | 876 | 194 | |||||||||
| Loss before income taxes | (16,552 | ) | (22,727 | ) | (8,477 | ) | ||||||
| Income tax recovery | - | - | 109 | |||||||||
| Net loss | (16,552 | ) | (22,727 | ) | (8,368 | ) | ||||||
| Other comprehensive loss: | ||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||
| Foreign currency translation adjustments | (211 | ) | (289 | ) | 367 | |||||||
| Items that will not be reclassified to profit or loss: | ||||||||||||
| Actuarial (loss) gain on defined benefit plans (note 15) | (1,195 | ) | 5,262 | (3,592 | ) | |||||||
| Comprehensive loss | (17,958 | ) | (17,754 | ) | (11,593 | ) | ||||||
| Basic and diluted loss per share (note 25) | (3.41 | ) | (4.68 | ) | (1.82 | ) |
accompanying notes are an integral part of these consolidated financial statement
Statements of Cash Flows
the years ended December 31, 2023, 2022 and 2021
thousands of US dollars)
| Years ended December 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| $ | $ | $ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | (16,552 | ) | (22,727 | ) | (8,368 | ) | ||||||
| Items not affecting cash and cash equivalents: | ||||||||||||
| Amortization of deferred revenues | (1,607 | ) | (1,704 | ) | (1,670 | ) | ||||||
| Share-based compensation costs | 378 | 544 | 311 | |||||||||
| Movement in provisions | 224 | (28 | ) | 23 | ||||||||
| Depreciation and amortization | 169 | 135 | 145 | |||||||||
| Employee future benefits | 520 | 295 | 161 | |||||||||
| Gain on disposal of property and equipment | - | - | (1 | ) | ||||||||
| Gain on sale of intangible asset (note 10) | (549 | ) | - | - | ||||||||
| Interest accretion on lease liabilities | 13 | 4 | 7 | |||||||||
| Net foreign exchange differences | (7 | ) | 16 | (179 | ) | |||||||
| Impairment of intangible assets (note 10) | - | 584 | - | |||||||||
| Impairment of goodwill (note 11) | - | 7,642 | - | |||||||||
| Impairment of other assets | - | 124 | - | |||||||||
| Other non-cash items | - | - | 95 | |||||||||
| Refund (payment) of income taxes | 1,329 | 831 | (1,605 | ) | ||||||||
| Changes in operating assets and liabilities (note 20) | (1,036 | ) | 604 | 2,500 | ||||||||
| Net cash (used in) provided by operating activities | (17,118 | ) | (13,680 | ) | (8,581 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from issuances of common shares and warrants (note 16) | - | - | 34,200 | |||||||||
| Transaction costs | - | - | (3,221 | ) | ||||||||
| Proceeds from exercise of warrants | - | - | 20,087 | |||||||||
| Proceeds on deferred gain | - | 16 | 98 | |||||||||
| Payments on lease liabilities | (151 | ) | (134 | ) | (127 | ) | ||||||
| Net cash (used in) provided by financing activities | (151 | ) | (118 | ) | 51,037 | |||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of intangible assets | - | - | (609 | ) | ||||||||
| Purchase of property and equipment | (19 | ) | (11 | ) | (30 | ) | ||||||
| Proceeds from disposals of property and equipment | - | - | 1 | |||||||||
| Proceeds from sale of intangible asset (note 10) | 549 | - | - | |||||||||
| Decrease in restricted cash equivalents | (2 | ) | (1 | ) | (20 | ) | ||||||
| Net cash provided by (used in) investing activities | 528 | (12 | ) | (658 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | 146 | (879 | ) | (769 | ) | |||||||
| Net change in cash and cash equivalents | (16,595 | ) | (14,689 | ) | 41,029 | |||||||
| Cash and cash equivalents - beginning of year | 50,611 | 65,300 | 24,271 | |||||||||
| Cash and cash equivalents - end of year | 34,016 | 50,611 | 65,300 |
accompanying notes are an integral part of these consolidated financial statements.
to Consolidated Financial Statements
As of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021
thousands of US dollars, except share and per share data and where otherwise noted)
Zentaris ("Aeterna" or the "Company") is a specialty biopharmaceutical company commercializing and developing
therapeutics and diagnostic tests. The Company's lead product, Macrilen (macimorelin), is the first and only U.S. Food and
Drug Administration ("FDA") and European Medicines Agency ("EMA") approved oral test indicated for the diagnosis
of patients with adult growth hormone deficiency ("AGHD"). Macimorelin is currently marketed under the tradename Ghryvelin
in the European Economic Area and the United Kingdom through an exclusive licensing agreement with Pharmanovia. The Company's several
other license and commercialization partners are also seeking approval for commercialization of macimorelin in Israel and the Palestinian
Authority, the Republic of Korea, Turkey and several non-European Union Balkan countries. The Company is actively pursuing business development