First Quarter 2009 Management s Discussion and Analysis of Financial Condition and Results of Operations Introduction The following Management s Discussion and Analysis ( MD&A ) provides a review of the results of operat

Management s Discussion and

of Financial Condition and

Results of Operations

The following Management s Discussion and Analysis ( MD&A ) provides a

review of the results of operations, financial condition and cash flows of

terna Zentaris Inc. for the three-month period ended March 31, 2009. In this MD&A, the Company , we , us ,

and our mean terna Zentaris Inc. and its subsidiaries. This

discussion should be read in conjunction with the information contained in the

Company s interim consolidated financial statements and related notes for the

three-month periods ended on March 31, 2009 and 2008. Our consolidated financial statements, reported in United States

dollars ( US dollars ) have been prepared in accordance with Canadian Generally

Accepted Accounting Principles ( Canadian GAAP ) for interim financial

information, which differ in certain respects from United States Generally

Accepted Accounting Principles ( US GAAP ).

All amounts presented in this MD&A are in US dollars, except where

About Forward-Looking Statements

This document contains forward-looking

statements, which reflect our current expectations regarding future events.

Forward-looking statements may include words such as anticipate, believe,

could, expect, goal, guidance, intend, may, objective, outlook, plan, seek,

should, strive, target and will.

Forward-looking statements involve risks and

uncertainties, many of which are discussed in this MD&A. Results or performance

may differ significantly from expectations. For example, the results of current

clinical trials cannot be foreseen, nor can changes in policy or actions taken

by such regulatory authorities as the US Food and Drug Administration, the

Therapeutic Products Directorate of Health Canada or any other organization

responsible for enforcing regulations in the pharmaceutical industry.

Given these uncertainties and risk factors,

readers are cautioned not to place undue reliance on any forward-looking statements.

We disclaim any obligation to update any such factors or to publicly announce

any revisions to any of the forward-looking statements contained herein to

reflect future results, events or developments, unless requested to do so by a

governmental authority or by applicable law.

About Material Information

This MD&A includes the information we

believe to be material to investors after considering all circumstances,

including potential market sensitivity. We consider information and disclosures

to be material if they result in, or would reasonably be expected to result in,

a significant change in the market price or value of our shares, or where it is

quite likely that a reasonable investor would consider the information and

disclosures to be important in making an investment decision.

Company is a reporting issuer under the securities legislation of all of the

provinces of Canada and is registered in the United States and is, therefore,

required to file continuous disclosure documents such as interim and annual

financial statements, an MD&A, a Proxy Circular, an Annual Report on Form 20-F,

material change reports and press releases with the appropriate securities

regulatory authorities. Copies of these documents may be obtained free of

charge on request from the office of the Secretary of the Company or on the

Internet at the following addresses: www.aezsinc.com, www.sedar.com and

www.sec.gov/edgar.shtml.

(TSX: AEZ, NASDAQ: AEZS) is a global biopharmaceutical company focused on

endocrine therapy and oncology.

Key Developments for the

Three Months Ended March 31, 2009

Status of our drug pipeline

as at March 31, 2009

During the three months ended March 31,

2009, we continued to advance the Phase 3 program of cetrorelix in BPH.

The North American trial (Z033) completed

patient recruitment in April 2008 (667 patients randomized). We expect the

results from the double-blind portion of the study to be available during the

third quarter of 2009.

The European trial (Z036) also has all of its

patients enrolled since September 2008 (420 patients randomized). We

expect the results from the double-blind portion of the study to be available

during the fourth quarter of 2009.

Similarly, the safety trial (Z041) is also

fully enrolled (528 patients randomized), and we expect the results to be

available during the fourth quarter of 2009.

During the first quarter of 2009, we initiated

the screening of patients within our QTc safety trial (Z043) with the objective

of disclosing the results by the fourth quarter of 2009. We also held a data

safety monitoring board for Z036, which recommended the continuity of our

ongoing trials without any changes. Our focus is now on the execution of our

studies (Z033, Z036, Z041 and Z043) and on preparing for the analysis of forthcoming

2 trials with AEZS-108 are ongoing, as scheduled. For both indications,

advanced endometrial and ovarian cancers, we continue to progress into the

second stage of development according to the Simon design protocol. Data indicate

one complete response and several partial tumor responses, in addition to

stabilization of disease in a number of other patients, which we find very

encouraging to pursue further development.

We are pursuing a Phase

1 trial with 41 patients enrolled in the study. An abstract has been presented

in April 2009 at the American Association for Cancer Research Annual

Meeting ( AACR ). While we are continuing the Phase 1 trial, we plan to

further develop this compound.

During the quarter, we finalized the European

non-small cell lung cancer study with perifosine studied as a radiosensitizer.

Data are expected in the second quarter of 2009. Our partner, Keryx

Biopharmaceuticals, Inc. ( Keryx ), presented posters and gave a

presentation on perifosine at the AACR annual meeting in Denver in April 2009.

Further development is expected from Keryx during 2009.

Corporate Developments

Cetrorelix Development, Commercialization and

On March 4, 2009, we entered into a development, commercialization