Full Press Release Details
Interim Consolidated Financial Statements
at MARCH 31, 2021 and for the three-month periodS ended MARCH 31, 2021 and 2020
thousands of US dollars)
Interim Consolidated Financial Statements
at MARCH 31, 2021 and for the three-month periodS ended MARCH 31, 2021 and 2020
| Condensed Interim Consolidated Statements of Financial Position | 3 |
| Condensed Interim Consolidated Statements of Changes in Shareholders' Equity | 5 |
| Condensed Interim Consolidated Statements of Comprehensive (Loss) Income | 6 |
| Condensed Interim Consolidated Statements of Cash Flows | 7 |
| Notes to Condensed Interim Consolidated Financial Statements | 8 |
Interim Consolidated Statements of Financial Position
thousands of US dollars)
| March 31, 2021 | December 31, 2020 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 73,371 | 24,271 | ||||||
| Trade and other receivables (note 5) | 1,075 | 1,681 | ||||||
| Inventory | 60 | 21 | ||||||
| Prepaid expenses and other current assets (note 6) | 3,050 | 1,913 | ||||||
| Total current assets | 77,556 | 27,886 | ||||||
| Restricted cash equivalents | 325 | 338 | ||||||
| Right of use assets | 122 | 157 | ||||||
| Property, plant and equipment | 37 | 22 | ||||||
| Identifiable intangible assets | 541 | 59 | ||||||
| Goodwill | 8,433 | 8,815 | ||||||
| Total Assets | 87,014 | 37,277 | ||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Payables and accrued liabilities (note 7) | 2,252 | 2,199 | ||||||
| Current portion of provisions (note 8) | 86 | 92 | ||||||
| Income taxes | 378 | 395 | ||||||
| Current portion of deferred revenues | 2,101 | 2,193 | ||||||
| Current portion of lease liabilities | 129 | 135 | ||||||
| Total current liabilities | 4,946 | 5,014 | ||||||
| Deferred revenues | 3,800 | 3,289 | ||||||
| Lease liabilities | 15 | 49 | ||||||
| Employee future benefits (note 9) | 13,807 | 15,435 | ||||||
| Provisions (note 8) | 272 | 279 | ||||||
| Total liabilities | 22,840 | 24,066 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Share capital (note 10) | 293,781 | 235,008 | ||||||
| Warrants (note 10) | 4,595 | 12,402 | ||||||
| Other capital (note 10) | 89,518 | 89,505 | ||||||
| Deficit | (323,222 | ) | (322,659 | ) | ||||
| Accumulated other comprehensive loss ("AOCI") | (498 | ) | (1,045 | ) | ||||
| Total shareholders' equity | 64,174 | 13,211 | ||||||
| Total liabilities and shareholders' equity | 87,014 | 37,277 |
and contingencies (note 15)
accompanying notes are an integral part of these condensed interim consolidated financial statements.
by the Board of Directors
| /s/ Carolyn Egbert | /s/ Pierre-Yves Desbiens | |
| Carolyn Egbert Chair of the Board | Pierre-Yves Desbiens Director |
Interim Consolidated Statements of Changes in Shareholders' Equity (DEFICIENCY)
the three MONTHS ended MARCH 31, 2021 and 2020
thousands of US dollars, unaudited)
| Common shares (number of) 1 | Share capital | Warrants | Other capital | Deficit | AOCI | Total | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Balance - January 1, 2021 | 62,678,613 | 235,008 | 12,402 | 89,505 | (322,659 | ) | (1,045 | ) | 13,211 | |||||||||||||||||||
| Net loss | - | - | - | - | (1,445 | ) | - | (1,445 | ) | |||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | 547 | 547 | |||||||||||||||||||||
| Actuarial gain on defined benefit plan (note 9) | - | - | - | - | 882 | - | 882 | |||||||||||||||||||||
| Comprehensive loss | - | - | - | - | (563 | ) | 547 | (16 | ) | |||||||||||||||||||
| Issuance of common shares, net of transaction costs (note 10) | 23,586,207 | 29,082 | 1,897 | - | - | - | 30,979 | |||||||||||||||||||||
| Exercise of warrants (note 10) | 34,888,965 | 29,691 | (9,704 | ) | - | - | 19,987 | |||||||||||||||||||||
| Share-based compensation costs | - | - | - | 13 | - | - | 13 | |||||||||||||||||||||
| Balance - March 31, 2021 | 121,153,785 | 293,781 | 4,595 | 89,518 | (323,222 | ) | (498 | ) | 64,174 |
| Common shares (number of) | Share capital | Other capital | Deficit | AOCI | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||
| Balance - January 1, 2020 | 19,994,510 | 224,528 | 89,806 | (316,891 | ) | 94 | (2,463 | ) | ||||||||||||||||
| Net income | - | - | - | 779 | - | 779 | ||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | 210 | 210 | ||||||||||||||||||
| Actuarial gain on defined benefit plan | - | - | - | 1,388 | - | 1,388 | ||||||||||||||||||
| Comprehensive income | - | - | - | 2,167 | 210 | 2,377 | ||||||||||||||||||
| Issuance of common shares and warrants, net | 3,478,261 | 1,885 | - | - | - | 1,885 | ||||||||||||||||||
| Share-based compensation costs | - | - | (112 | ) | - | - | (112 | ) | ||||||||||||||||
| Balance - March 31, 2020 | 23,472,771 | 226,413 | 89,694 | (314,724 | ) | 304 | 1,687 |
accompanying notes are an integral part of these condensed interim consolidated financial statements.
Interim Consolidated Statements of Comprehensive (Loss) INCOME
the three months ended March 31, 2021 and 2020
thousands of US dollars, except share and per share data)
| Three months ended | ||||||||
| March 31 | ||||||||
| 2021 | 2020 | |||||||
| $ | $ | |||||||
| Revenues | ||||||||
| Royalty income | 8 | 14 | ||||||
| Product sales | - | 1,016 | ||||||
| Supply chain | 41 | 41 | ||||||
| Licensing revenue | 537 | 19 | ||||||
| Total revenues | 586 | 1,090 | ||||||
| Operating expenses | ||||||||
| Cost of sales | 29 | 862 | ||||||
| Research and development costs | 363 | 319 | ||||||
| General and administrative expenses | 1,264 | 1,124 | ||||||
| Selling expenses | 246 | 248 | ||||||
| Gain on modification of building lease | - | (185 | ) | |||||
| Total operating expenses (note 11) | 1,902 | 2,368 | ||||||
| Loss from operations | (1,316 | ) | (1,278 | ) | ||||
| Loss due to changes in foreign currency exchange rates | (248 | ) | (104 | ) | ||||
| Change in fair value of warrant liability | - | 2,470 | ||||||
| Other finance costs | (10 | ) | (309 | ) | ||||
| Net finance (costs) income | (258 | ) | 2,057 | |||||
| (Loss) income before income taxes | (1,574 | ) | 779 | |||||
| Income tax recovery | 129 | - | ||||||
| Net (loss) income | (1,445 | ) | 779 | |||||
| Other comprehensive (loss) income: | ||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||
| Foreign currency translation adjustments | 547 | 210 | ||||||
| Items that will not be reclassified to profit or loss: | ||||||||
| Actuarial gain on defined benefit plans (note 9) | 882 | 1,388 | ||||||
| Comprehensive (loss) income | (16 | ) | 2,377 | |||||
| Net (loss) income per share [basic and diluted] | (0.02 | ) | 0.04 | |||||
| Weighted average number of shares outstanding (note 14): | ||||||||
| Basic | 95,444,990 | 21,523,416 | ||||||
| Diluted | 95,444,990 | 21,860,416 |
accompanying notes are an integral part of these condensed interim consolidated financial statements.
Interim Consolidated Statements of Cash Flows
the three months ended MARCH 31, 2021 and 2020
thousands of US dollars, except share and per share data)
| Three months ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
| $ | $ | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income for the period | (1,445 | ) | 779 | |||||
| Items not affecting cash and cash equivalents: | ||||||||
| Change in fair value of warrant liability | - | (2,470 | ) | |||||
| Transaction costs of warrants issued and expensed as finance cost | - | 310 | ||||||
| Utilization of provisions (note 8) | 19 | (327 | ) | |||||
| Depreciation and amortization | 36 | 107 | ||||||
| Gain on modification of building lease | - | (185 | ) | |||||
| Share-based compensation costs | 13 | (112 | ) | |||||
| Employee future benefits (note 9) | 49 | 49 | ||||||
| Amortization of deferred revenues | (537 | ) | (14 | ) | ||||
| Foreign exchange gain on items denominated in foreign currencies | 266 | 52 | ||||||
| Other non-cash items | 29 | (15 | ) | |||||
| Interest accretion on lease liabilities | 2 | (11 | ) | |||||
| Payment of income taxes | (1,124 | ) | (811 | ) | ||||
| Changes in operating assets and liabilities (note 12) | 1,647 | 204 | ||||||
| Net cash used in operating activities | (1,045 | ) | (2,444 | ) | ||||
| Cash flows from financing activities | ||||||||
| Issuance of common shares (note 10) | 34,200 | - | ||||||
| Issuance of common shares and warrants (note 10) | - | 4,500 | ||||||
| Transaction costs (note 10) | (3,221 | ) | (600 | ) | ||||
| Proceeds from exercise of warrants (note 10) | 19,987 | - | ||||||
| Payments on lease liabilities | (33 | ) | (158 | ) | ||||
| Net cash provided by financing activities | 50,933 | 3,742 | ||||||
| Cash flows from investing activities | ||||||||
| Purchase of intangible assets | (490 | ) | - | |||||
| Purchase of property and equipment | (17 | ) | - | |||||
| Net cash used by investing activities | (507 | ) | - | |||||
| Effect of exchange rate changes on cash and cash equivalents | (281 | ) | 46 | |||||
| Net change in cash and cash equivalents | 49,100 | 1,344 | ||||||
| Cash and cash equivalents - Beginning of period | 24,271 | 7,838 | ||||||
| Cash and cash equivalents - End of period | 73,371 | 9,182 |
accompanying notes are an integral part of these condensed interim consolidated financial statements.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2021 AND FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
1. Business overview
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 U.S.
Food and Drug Administration ("FDA") and European Commission approved oral test indicated for the diagnosis of patients
with adult growth hormone deficiency ("AGHD"). Macimorelin is currently marketed in the U.S. under the tradename Macrilen
through a license agreement with Novo Nordisk Biopharm Limited ("Novo Nordisk") where Aeterna Zentaris receives royalties
on net sales. Macimorelin will be marketed in Europe and the United Kingdom through a license agreement with Consilient Health
Ltd. ("Consilient Health") and Aeterna Zentaris will receive royalties on net sales and other potential payments.
The Company is conducting the Phase 3 study ("DETECT" trial) for macimorelin in the U.S. and Europe for the diagnosis
of childhood-onset growth hormone deficiency ("CGHD") in partnership with Novo Nordisk. Novo Nordisk is paying 100%
of costs up to 9,000 (approximately $10,980) and includes reimbursement of Aeterna's budgeted internal labor costs
and any additional external jointly approved DETECT trial costs incurred over 9,000 (approximately $10,980) will be shared
equally between Novo Nordisk and Aeterna. The Company is actively pursuing business development opportunities for the commercialization
of macimorelin in Asia and the rest of the world, in addition to other non-strategic assets to monetize their value.
addition, the Company is pursuing innovative development candidates in different indications with a focus on rare or orphan indications
and potential for pediatric use.
2020, the COVID-19 pandemic began causing significant financial market declines and social dislocation and, to date, the Company
has not experienced significant business disruption from COVID-19. The situation is dynamic with various cities and countries
around the world are responding in different ways to address the outbreak. The spread of COVID-19 may impact the Company's
operations, including the potential interruption of our clinical trial activities and the Company's supply chain, or that
of the Company's licensee. For example, the COVID-19 outbreak may delay enrollment in the Company's clinical trials
due to prioritization of hospital resources toward the outbreak, and some patients may be unwilling to be enrolled in the Company's
trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services,
which would delay the Company's ability to conduct clinical trials or release clinical trial results and could delay the
Company's ability to obtain regulatory approval and commercialize the Company's product candidates. The pandemic may
also impact the ability of the Company's suppliers to deliver components or raw materials on a timely basis or at all. In
addition, hospitals may reduce staffing and reduce or postpone certain treatments in response to the spread of an infectious disease.
The Company's licensee may be impacted due to significant delays of diagnostic activities in the U.S. Management will continue
to monitor and assess the impact of the pandemic on its judgments, estimates, accounting policies and amounts recognized in these
consolidated financial statements. As at March 31, 2021, the Company assessed the possible impacts of COVID-19 on its financial
results. The Company has evaluated its financial assets, property, plant and equipment, intangible assets, and goodwill for impairment
and no changes from the carrying amount were required in the reporting period.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2021 AND FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted) (Unaudited)
unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board ("IFRS") applicable to the preparation of interim
financial statements, including IAS 34, Interim Financial Reporting. These unaudited condensed interim consolidated financial
statements should be read in conjunction with the Company's annual consolidated financial statements as at and for the year
ended December 31, 2020. The accounting policies in these condensed interim consolidated financial statements are consistent with
those presented in the Company's annual consolidated financial statements.
unaudited condensed interim consolidated financial statements were approved by the Board of Directors (the "Board")
2. Critical accounting estimates and judgements
preparation of condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments,
estimates and assumptions that affect the reported amounts of the Company's assets, liabilities, revenues, expenses and
related disclosures. Judgments, estimates and assumptions are based on historical experience, expectations, current trends and
other factors that management believes to be relevant at the time at which the Company's condensed interim consolidated
financial statements are prepared.
reviews, on a regular basis, the Company's accounting policies, assumptions, estimates and judgments in order to ensure
that the condensed interim consolidated financial statements are presented fairly and in accordance with IFRS applicable to interim
financial statements. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in
any future periods affected.
accounting estimates and assumptions, as well as critical judgments used in applying accounting policies in the preparation of
the Company's condensed interim consolidated financial statements, were the same as those applied to the Company's
annual consolidated financial statements as of December 31, 2020 and 2019 and for the years then ended except for the following:
acquired intangible assets are recognized at the price paid in cash, less amortization and impairments. All intangible assets
are tested for impairment when there are indications that the carrying value may not be recoverable, or, at a minimum, annually.
The recoverable amount is determined as the higher of value in use or fair value less costs to sell using a discounted cash flow
calculation, where the products' expected cash flows are risk-adjusted over their estimated remaining useful economic life.
Any impairment losses are recognized immediately in the consolidated statements of comprehensive (loss) income. Intangible assets
relating to products which fail during development (or for which development ceases for other reasons) are also tested for impairment
and are written down to their recoverable amount (which is usually nil). If, subsequent to an impairment loss being recognized,
development restarts or other facts and circumstances change indicating that the impairment is less or no longer exists, the value
of the asset is re-estimated and its carrying value is increased to the recoverable amount, but not exceeding the original value,
by recognizing an impairment reversal in the consolidated statements of comprehensive (loss) income. Amortization of such intangible
assets begins once such assets are ready for their intended use.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2021 AND FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020