Condensed Interim Consolidated Financial Statements ( Unaudited ) Aeterna Zentaris Inc. As at

Interim Consolidated Financial Statements

at June 30, 2019 and for the three-month and six-month periods ended June 30, 2019 and 2018

in thousands of US dollars)

and contingencies (note 18)

accompanying notes are an integral part of these condensed interim consolidated financial statements.

by the Board of Directors

accompanying notes are an integral part of these condensed interim consolidated financial statements.

accompanying notes are an integral part of these condensed interim consolidated financial statements.

accompanying notes are an integral part of these condensed interim consolidated financial statements.

accompanying notes are an integral part of these condensed interim consolidated financial statements.

Company has incurred significant expenses in its efforts to develop and co-promote products. Consequently, the Company has incurred

operating losses and negative cash flow from operations historically and in each of the last several years except for the year

ended December 31, 2018 when the Company earned revenue from the sale of a license for the adult indication of Macrilen

(macimorelin) in the United States and Canada (note 5). As at June 30, 2019, the Company had an accumulated deficit of $316 million.

The Company also had a net loss of $4,705 for the six months ended June 30, 2019, and negative cash flow from operations of

Company's principal focus is on the licensing and development of Macrilen (macimorelin) and it currently does not

have any other approved products. Under the terms of License and Assignment Agreement, Novo is funding 70% of the pediatric clinical

trial submitted to the EMA and FDA, the Company's sole development activity.

March 12, 2019, the Company announced that its board of directors formed a special committee of independent directors (the "Special

Committee") to review strategic options available to the Company. The Special Committee has approved the engagement by the

Company of a financial advisor that is working with management to assist the Special Committee and the board of directors in considering

a wide range of transactions (including opportunities for the license of Macrilen (macimorelin) outside of the United States

and Canada, or other monetization transactions relating to Macrilen (macimorelin).

has evaluated whether material uncertainties exist relating to events or conditions and has considered the following in making

that critical judgment.

ability of the Company to realize its assets and meet its obligations as they come due is dependent on earning sufficient

revenues under the License and Assignment Agreement, developing opportunities for Macrilen (macimorelin) in the rest

of the world, realizing other monetizing transactions, and raising additional sources of funding, the outcome of which cannot

be predicted at this time. The revenue provided under the License and Assignment Agreement was $21 for the six months ended

June 30, 2019 and as at June 30, 2019, the Company had cash of $9,683.

Furthermore, nearly all of the Company's cash is held in AEZS Germany, our wholly owned German subsidiary.

AEZS Germany is also the counter-party for any and all cash received from revenue earned under the License and Assignment Agreement.

At the present time, the Company's North American operations are financed through the repayment of intercompany liabilities

by AEZS Germany to the Canadian parent company and its U.S. subsidiary. However, if and when current and medium term liabilities

of AEZS Germany exceed the values ascribed to AEZS Germany's assets, it may no longer be possible under applicable German

solvency laws for such cash transfers to take place. Although the Company currently expects AEZS Germany to continue to transfer

cash to the Company's North American operations to finance operations in the Canadian parent company and its U.S. subsidiary,

in an amount sufficient for the Company (absent other funding sources) to finance most of its North American obligations, through

at least the remainder of 2019, there is significant risk that AEZS Germany's ability to make these transfers will become

restricted. The Company expects to have secured additional financing prior to the end of 2019 from third party sources; however,

there is no certainty that the Company will be successful in raising additional sources of cash.

Company has some discretion to manage research and development costs, administrative expenses and capital expenditures in order

to maintain its cash liquidity, however the Company will need to obtain equity or debt financing in 2019 in order to fund its

ongoing operations. The outcome of these efforts is uncertain.

Management has assessed the Company's ability to continue as a going concern and concluded that additional

capital will be required. There can be no assurance that the Company will be able to obtain equity or debt financing, or on terms

acceptable to it. Factors within and outside the Company's control could have a significant bearing on its ability to obtain

additional financing. As a result, management has determined that there are material uncertainties that may cast significant doubt

upon the Company's ability to continue as a going concern.

financial statements have been prepared on a going concern basis, which asserts the Company has the ability in the near term to

continue to realize its assets and discharge its liabilities and commitments in a planned manner giving consideration to the above

and expected possible outcomes. Conversely, if the going concern assumption is not appropriate, adjustments to the carrying amounts

of the Company's assets, liabilities, revenues, expenses and balance sheet classifications may be necessary, and these adjustments

Zentaris Inc. ("Aeterna Zentaris" or the "Company") is a specialty biopharmaceutical company which is

commercializing novel pharmaceutical therapies. On December 20, 2017, the United States Food and Drug Administration ("FDA")

granted marketing approval for Macrilen (macimorelin) to be used in the diagnosis of patients with adult growth hormone

deficiency ("AGHD"). On January 16, 2018, the Company, through Aeterna Zentaris GmbH ("AEZS Germany"),

entered into a license and assignment agreement with Strongbridge Ireland Limited ("Strongbridge") to carry out development,

manufacturing, registration, regulatory and supply chain services for the commercialization of Macrilen (macimorelin) in

the United States and Canada (the "License and Assignment Agreement"). Effective December 19, 2018, Strongbridge

sold the United States and Canadian rights to Macrilen (macimorelin) under the License and Assignment Agreement to

Novo Nordisk A/S ("Novo").

unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting

Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") 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, 2018.

accounting policies in these condensed interim consolidated financial statements are consistent with those presented in the Company's

annual consolidated financial statements, except for the adoption, of IFRS 16, Leases, effective January 1, 2019. See note

4 for the impact of the adoption of IFRS 16.

unaudited condensed interim consolidated financial statements were approved by the Company's Board of Directors on August

These unaudited condensed interim

consolidated financial statements were prepared on a going concern basis.

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. 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