Full Press Release Details
Management s Discussion and Analysis
of Financial Condition and
Results of Operations
Third Quarter MD&A 2011
Corporate Developments
This Management s Discussion and Analysis ( MD&A ) provides a review of the results of operations, financial condition and cash flows
of Aeterna Zentaris Inc. for the three-month and nine-month periods ended September 30, 2011. In this MD&A, Aeterna Zentaris , the Company , we , us , our and the Group
mean Aeterna Zentaris Inc. and its subsidiaries. This discussion should be read in conjunction with the information contained in the Company s interim consolidated financial statements as at September 30, 2011 and for the three-month and
nine-month periods ended September 30, 2011 and 2010.
All amounts in this MD&A are presented in US dollars, except for share, option
and warrant data, per share and per warrant data and as otherwise noted.
Adoption of International Financial Reporting Standards
In 2008, the Canadian Accounting Standards Board confirmed that all publicly accountable enterprises must adopt IFRS in
place of Canadian generally accepted accounting principles ( Canadian GAAP ) beginning on January 1, 2011 (for entities with a calendar year-end). As such, our unaudited interim consolidated financial statements as at
September 30, 2011 and for the three-month and nine-month periods then ended have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board ( IASB ), applicable to the preparation of interim
financial statements. Additionally, our unaudited consolidated statement of financial position as at January 1, 2010 and our comparative unaudited consolidated financial statements for 2010 have been adjusted to reflect our adoption of IFRS on
a retrospective basis, effective on January 1, 2010 (the Transition Date ). Consequently, all comparative financial information presented in this MD&A reflects the consistent, retrospective application of IFRS.
Third Quarter MD&A 2011
A complete description of our transition to IFRS, including reconciliations of previously reported
Canadian GAAP information, is provided in note 21 to our unaudited interim consolidated financial statements as at March 31, 2011 and for the three-month periods ended March 31, 2011 and 2010, and in note 18 to our unaudited interim
consolidated financial statements as at September 30, 2011 and for the three-month and nine-month periods ended September 30, 2011 and 2010, which notes are incorporated by reference herein.
About Forward-Looking Statements
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 ,
foresee , goal , guidance , intend , may , objective , outlook , plan , seek , should , strive , target and
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 regulatory authorities such as the FDA, the European Medicines Agency
( EMA ), 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 required to do so by a governmental authority or by applicable law.
About Material Information
MD&A includes information that 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 reasonably would be
expected to result in, a significant change in the market price or value of our securities, or where it is likely that a reasonable investor would consider the information and disclosures to be important in making an investment decision.
The Company is a reporting issuer under the securities legislation of all of the provinces of Canada, and its securities are registered with the United
States Securities and Exchange Commission. The Company is therefore required to file or furnish continuous disclosure information such as interim and annual financial statements, MD&As, proxy circulars, annual reports 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 upon request from the Company s Investor Relations department or on the Internet at the following
Aeterna Zentaris Inc. (Nasdaq: AEZS and TSX: AEZ) is a late-stage drug development company specialized in oncology and endocrine therapy. Our pipeline
encompasses compounds at all stages of development, from drug discovery through to marketed products. The highest priorities in oncology are our Phase 3 program with perifosine in colorectal cancer and multiple myeloma, combined with our
Phase 2 program in multiple cancers, as well as the further advancement of AEZS-108, which recently successfully completed a Phase 2 trial in advanced endometrial and advanced ovarian cancer. AEZS-108 is also in development in other cancer
indications, including castration and taxane-resistant prostate cancer and refractory bladder cancer.
Our pipeline also encompasses other
earlier-stage programs in oncology. AEZS-112, an oral anticancer agent which involves three mechanisms of action (tubulin, topoisomerase II and angiogenesis inhibition) has completed a Phase 1 trial in advanced solid tumors and lymphoma.
Additionally, several novel targeted potential anti-cancer candidates
Third Quarter MD&A 2011
such as AEZS-120, a live recombinant oral tumor vaccine candidate, as well as our PI3K/Erk inhibitors AEZS-129, AEZS-131, and AEZS-132 are currently in pre-clinical development.
Our lead program in endocrinology, a Phase 3 trial with AEZS-130 as a growth hormone stimulation test for the diagnosis of AGHD, has been completed with
positive results. We are currently preparing for a pre-NDA meeting with the FDA for the registration of AEZS-130 in the United States.
Developments for the Three Months Ended September 30, 2011
| Status of our drug pipeline as at November 9, 2011 | ||||||||||
| Discovery | Preclinical | Phase 1 | Phase 2 | Phase 3 | Commercial | |||||
| 120,000 compound library | AEZS-120 Prostate cancer vaccine (oncology) AEZS-129, 131 and 132; Erk/PI3K inhibitors (oncology) | AEZS-112 (oncology) AEZS-130 Therapeutic in cancer cachexia and other indications (endocrinology) | Perifosine Multiple cancers AEZS-108 Endometrial cancer Ovarian cancer Castration and taxane-resistant prostate cancer Refractory bladder cancer | Perifosine Refractory advanced colorectal cancer Multiple myeloma AEZS-130 Diagnostic in adult growth hormone deficiency (endocrinology) | Cetrotide ( in vitro fertilization) | |||||
| Partners | ||||||||||
| Perifosine: Keryx North America Handok Korea Yakult Japan | Perifosine: Keryx North America Handok Korea Yakult Japan | Cetrotide : Merck Serono (World except Japan) Nippon Kayaku / Shionogi Japan |
Perifosine is a novel, oral anticancer treatment that inhibits Akt activation in the phosphoinositide 3-kinase ( PI3K ) pathway. Perifosine, in combination with chemotherapeutic agents, is
currently in Phase 3 studies for the treatment of colorectal cancer and multiple myeloma, as well as in Phase 2 studies for the treatment of other cancers, and is the most advanced anti-cancer compound of its class in late-stage development. The FDA
has granted perifosine orphan-drug designation in multiple myeloma and in neuroblastoma and Fast Track designations in both refractory advanced colorectal cancer and multiple myeloma. Additionally, an agreement was reached with the FDA to conduct
the Phase 3 trials in both of these indications under a Special Protocol Assessment ( SPA ). Perifosine has also been granted Orphan Medicinal Product designation from the EMA in multiple myeloma, and has received positive Scientific
Advice from the EMA for both the advanced colorectal cancer and multiple myeloma programs, with ongoing Phase 3 trials for these indications expected to be sufficient for registration in Europe. Perifosine rights have been licensed to Keryx
Biopharmaceuticals, Inc. ( Keryx ) for North America, to Handok Pharmaceuticals Co. Ltd. for Korea and, during the first quarter of 2011, to Yakult Honsha Co. Ltd. ( Yakult ) for Japan.
On July 12, 2011, we announced that the European Patent Office had granted a patent for the use of alkylphosphocholines, more specifically
perifosine (octadecyl 1,1-dimethylpiperidino-4-yl phosphate), in the preparation of a medicament for the treatment of benign and malignant tumors, prior to and/or during the treatment
Third Quarter MD&A 2011
with approved anti-tumor anti-metabolites such as 5FU ( fluorouracil ) and capecitabine. Filed on July 29, 2003, the patent (EP #1 545 553), entitled Use of Alkyl
Phosphocholines in Combination with Anti-Tumour Medicaments, became effective as of July 13, 2011 and will expire on July 28, 2023.
On July 27, 2011, we announced completion of patient recruitment for the ongoing Phase 3 trial with perifosine in refractory advanced colorectal cancer, involving over 465 patients from 65 sites in
the U.S. This Phase 3 X-PECT (Xeloda + Perifosine Evaluation in Colorectal cancer Treatment) trial is a
randomized (1:1), double-blind trial comparing the efficacy and safety of perifosine + capecitabine vs. placebo + capecitabine. The primary endpoint is overall survival, with secondary endpoints including overall response rate (complete + partial
responses), progression-free survival and safety. Approximately 360 events of death will trigger the unblinding of the study.
August 31, 2011, we announced that the DSMB for the Phase 3 X-PECT study of perifosine in patients with refractory advanced colorectal cancer had completed a pre-specified interim analysis for safety and futility. The DSMB recommended that the
Phase 3 study continue to completion, as planned.
On October 5, 2011, we announced that a manuscript, entitled Randomized
Placebo-Controlled Phase 2 Trial of Perifosine Plus Capecitabine as Second- or Third-Line Therapy in Patients with Metastatic Colorectal Cancer, had been published in the October 3, 2011 online edition of the JCO, in which Phase 2 activity
of perifosine in the treatment of patients with refractory, advanced colorectal cancer ( mCRC ) was reported. The publication highlighted the efficacy and safety data on the 38 mCRC patients participating in this Phase 2, randomized,
multicenter study, comparing perifosine plus capecitabine (P-CAP) to placebo plus capecitabine. Based on the data, in which the combination of P-CAP demonstrated statistical significance with respect to median overall survival and median time to
tumor progression, the investigators concluded that the P-CAP combination showed promising clinical activity compared to single-agent capecitabine, and that the difference in clinical outcome seen with the addition of perifosine was impressive.
Efficacy data from this study had been presented previously in June 2010 at the 46th Annual Meeting of the American Society of Clinical Oncology.
On October 13, 2011, we announced that the manuscript, entitled Perifosine Plus Bortezomib and Dexamethasone in patients with
Relapsed/Refractory Multiple Myeloma Previously Treated with Bortezomib: Results of a Multicenter Phase 1/2 Trial, had been published in the October 10, 2011 online edition of the JCO, in which Phase 1/2 combination activity of
perifosine in the treatment of advanced multiple myeloma patients was reported. Results showed that the Overall Response Rate was 65% for bortezomib-relapsed patients and 32% for patients with bortezomib-refractory disease. Median progression-free
survival was 6.4 months, with a median Progression Free Survival of 8.8 months in the bortezomib-relapsed population. Therapy was generally well-tolerated, and toxicities, including gastrointestinal side-effects and fatigue, proved manageable. No
treatment-related mortality was seen. The investigators concluded the data reported for both safety and efficacy in this patient population were encouraging for the continued study of perifosine. Data from this study had been previously presented at
the 2009 American Society of Hematology conference.
On September 14, 2011, we presented positive final Phase 2 efficacy and safety data for AEZS-108 in advanced endometrial cancer
at the European Society of Gynecological Oncology in Milan, Italy. The primary endpoint was the response rate as defined by the Response Evaluation Criteria in Solid Tumors. Secondary endpoints included safety, time-to-progression and overall
survival. Data showed that AEZS-108, administered as a single agent at a dosage of 267 mg/m2 every 3 weeks was active, well tolerated and that overall survival is similar to that reported for modern triple combination chemotherapy, but was achieved with lower toxicity.
Third Quarter MD&A 2011
On September 26, 2011, we announced positive interim data for the Phase 1 portion of our
Phase 1/2 trial with AEZS-108 in castration and taxane-resistant prostate cancer at the ESMO meeting in Stockholm, Sweden. This is a single arm study with a Phase 1 lead-in to a Phase 2 clinical trial. The primary endpoint of the Phase 1
portion is safety. The primary objective of the Phase 2 portion is to evaluate the clinical benefit of AEZS-108 for these patients. Data showed that AEZS-108 was well tolerated at all dose levels and early evidence of anti-tumor activity was
observed even at low dose level. The Phase 2 extension is planned after completion of the toxicity assessment in the final dose level of the Phase 1 portion of the study. Furthermore, data from correlative studies demonstrated for the first time,
the internalization of AEZS-108 in circulating tumor cells of patients.
On October 25, 2011, we announced that the FDA had granted to
Alberto J. Montero, M.D., Assistant Professor, Department of Medicine, Division of Hematology/Oncology, Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine, an IND approval for the initiation of a randomized
Phase 2 trial in chemotherapy refractory triple-negative (ER/PR/HER2-negative) luteinizing hormone-releasing hormone receptor-positive metastatic breast cancer with AEZS-108. This will be an open-label, randomized, two-arm, multicenter
Phase 2 study involving up to 74 patients. The primary study endpoint will be median time to progression. Secondary endpoints will also include overall response-rate, and overall survival. The study will also evaluate AEZS-108 s toxicity
profile and patients quality of life relative to conventional cytotoxic chemotherapy.
On July 26, 2011, we announced the completion of the Phase 3 study on AEZS-130 as first oral diagnostic test for AGHD and the decision to meet with
FDA for the future filing of an NDA for the registration of AEZS-130 in the United States.
On August 30, 2011, we announced top-line
results for the completed Phase 3 study on AEZS-130 as first oral diagnostic test for AGHD. The results showed that AEZS-130 reached its primary endpoint demonstrating >90% area-under-the-curve of the Receiver Operating Characteristic curve,
which determines the level of specificity and sensitivity of the product. The use of AEZS-130 was shown to be safe and well tolerated overall, throughout the completion of this trial.
On July 20, 2011, we announced that we had successfully reached a key
milestone in the non-clinical development of our live recombinant prostate cancer vaccine candidate, AEZS-120, for oral administration. The program, partially funded through a grant from the German government, encompassed the full development of a
GMP process, including GMP production and quality testing of a clinical batch, as well as a non-clinical safety and toxicology package, as previously agreed with regulatory authorities. Subject to a positive review by German regulatory authorities,