Exhibit 99.1
Aeterna Zentaris Inc.
Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars)
(Unaudited)
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Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Financial Position
(In thousands of US dollars)
(Unaudited)
As of March 31, 2024 | As of December 31, 2023 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | ||||||||
| Trade and other receivables | ||||||||
| Inventory | ||||||||
| Income taxes receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Restricted cash equivalents | ||||||||
| Property and equipment | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Payables and accrued liabilities (note 4) | ||||||||
| Provisions | ||||||||
| Income taxes payable | ||||||||
| Deferred revenues (note 3) | ||||||||
| Lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Deferred revenues (note 3) | ||||||||
| Lease liabilities | ||||||||
| Employee future benefits (note 5) | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity | ||||||||
| Share capital (note 6) | ||||||||
| Warrants | ||||||||
| Contributed surplus | ||||||||
| Deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | ||||||||
Commitments (note 11)
Subsequent event (note 12)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Approved by the Board of Directors
| /s/ Carolyn Egbert | /s/ Dennis Turpin | |
| Carolyn Egbert, Chair of the Board | Dennis Turpin, Director |
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Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
For the three months ended March 31, 2024, and 2023
(In thousands of US dollars)
(Unaudited)
| Share capital | Warrants | Contributed surplus | Deficit | Accumulated other comprehensive loss | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance – December 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||||||||||
| Actuarial gain on defined benefit plans (note 5) | ||||||||||||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation costs | ||||||||||||||||||||||||
| Balance – March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Share capital | Warrants | Contributed surplus | Deficit | Accumulated other comprehensive loss | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance – December 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||||||||||||||||||
| Actuarial loss on defined benefit plans | ( | ) | ( | ) | ||||||||||||||||||||
| Comprehensive income | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Share-based compensation costs | ||||||||||||||||||||||||
| Balance – March 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data)
(Unaudited)
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Revenues (note 3) | ||||||||
| Expenses | ||||||||
| Cost of sales | ||||||||
| Research and development | ||||||||
| Selling, general and administrative (note 10) | ||||||||
| Total expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Gain (loss) due to changes in foreign currency exchange rates | ( | ) | ||||||
| Interest income | ||||||||
| Other finance costs | ( | ) | ( | ) | ||||
| Net finance income (costs) | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax recovery | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Other comprehensive loss: | ||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||
| Foreign currency translation adjustments | ( | ) | ||||||
| Items that will not be reclassified to profit or loss: | ||||||||
| Actuarial gain (loss) on defined benefit plans (note 5) | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Basic and diluted loss per share (note 8) | ) | ) | ||||||
| Weighted average number of shares outstanding (basic and diluted)1 | ||||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Aeterna Zentaris Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the three months ended March 31, 2024, and 2023
(In thousands of US dollars)
(Unaudited)
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Cash flows from operating activities | ||||||||
| Net loss for the period | ( | ) | ( | ) | ||||
| Items not affecting cash and cash equivalents: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation costs | ||||||||
| Employee future benefits | ||||||||
| Net foreign exchange differences | ( | ) | ||||||
| Amortization of deferred revenues | ( | ) | ||||||
| Provisions | ( | ) | ||||||
| Other non-cash items | ||||||||
| Changes in operating assets and liabilities (note 7) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments on lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents – Beginning of period | ||||||||
| Cash and cash equivalents – End of period | ||||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
1. Business overview
Summary of business
Aeterna Zentaris 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 opportunities for the commercialization of macimorelin in North America, Asia and the rest of the world.
The Company is also dedicated to the development of therapeutic assets and has taken steps to establish a pre-clinical pipeline to potentially address unmet medical needs across several indications with a focus on rare or orphan indications.
These unaudited condensed interim consolidated financial statements were approved by the Board of Directors (the “Board”) on May 14, 2024.
2. Basis of presentation
These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting as issued by the International Accounting Standards Board.
The unaudited condensed interim consolidated financial statements do not include all the notes normally included in annual consolidated financial statements. Accordingly, these unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements as of and for the year ended December 31, 2023.
The accounting policies used in these condensed interim consolidated financial statements are consistent with those presented in the Company’s annual consolidated financial statements.
New standards and amendments
Several amendments apply for the first time in 2024, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
Critical accounting estimates and judgements
The preparation of condensed interim consolidated financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of the Company’s assets, liabilities, revenues, expenses and related disclosures. Judgements, 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.
Management reviews, on a regular basis, the Company’s accounting policies, assumptions, estimates and judgements in order to ensure that the condensed interim consolidated financial statements are presented fairly and in accordance with IFRS applicable to interim financial statements. Critical accounting estimates and assumptions, as well as critical judgements 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 and for the year ended December 31, 2023.
3. Revenue
The Company derives revenue from the transfer of goods and services over time and at a point in time in the following categories:
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Royalties | ||||||||
| License fees | ||||||||
| Development services | ||||||||
| Supply chain | ||||||||
The
Company recorded revenue for the transfer of services overtime for the three months ended March 31, 2024, $ (2023 – $
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
Liabilities related to contracts with customers
The following table provides a summary of deferred revenue balances:
| March 31, 2024 | ||||||||||||
| Current | Non-current | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Pharmanovia | ||||||||||||
| NK Meditech | ||||||||||||
| December 31, 2023 | ||||||||||||
| Current | Non-current | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Pharmanovia | ||||||||||||
| NK Meditech | ||||||||||||
4. Payables and accrued liabilities
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Trade accounts payable | ||||||||
| Accrued research and development costs | ||||||||
| Accrued employee benefits | ||||||||
| Payroll tax and other statutory liabilities | ||||||||
| Other accrued liabilities | ||||||||
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
5. Employee future benefits
The change in the Company’s employee future benefit obligations is summarized as follows:
Three months ended March 31, 2024 | Year ended December 31, 2023 | |||||||||||||||
| Pension | Other | |||||||||||||||
| benefit plans | benefit plans | Total | Total | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Change in plan liabilities | ||||||||||||||||
| Balances – Beginning of the year | ||||||||||||||||
| Current service cost (residual value) | ||||||||||||||||
| Interest cost | ||||||||||||||||
| Actuarial loss (gain) arising from changes in financial assumptions | ( | ) | ( | ) | ||||||||||||
| Benefits paid | ( | ) | ( | ) | ( | ) | ||||||||||
| Impact of foreign exchange rate changes | ( | ) | ( | ) | ( | ) | ||||||||||
| Balances – End of the period | ||||||||||||||||
| Change in plan assets | ||||||||||||||||
| Balances – Beginning of the year | ||||||||||||||||
| Interest income from plan assets | ||||||||||||||||
| Employer contributions | ||||||||||||||||
| Employee contributions | ||||||||||||||||
| Benefits paid | ( | ) | ( | ) | ( | ) | ||||||||||
| Remeasurement of plan assets | ||||||||||||||||
| Impact of foreign exchange rate changes | ( | ) | ( | ) | ||||||||||||
| Balances – End of the year | ||||||||||||||||
| Net liability of the unfunded plans | ||||||||||||||||
| Net liability of the funded plans | ||||||||||||||||
| Net amount recognized as Employee future benefits | ||||||||||||||||
| Amounts recognized: | ||||||||||||||||
| In net loss | ||||||||||||||||
| Actuarial gain (loss) on defined benefit plans in other comprehensive (gain) loss | ( | ) | ||||||||||||||
The
calculation of the employee future benefit obligation is sensitive to the discount rate assumption and other assumptions such as the
rate of the pension benefit increase. Discount rates were
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
Share capital
The Company has authorized an unlimited number of common shares (being voting and participating shares) with no par value, as well as an unlimited number of preferred, first and second ranking shares, issuable in series, with rights and privileges specific to each class, with no par value.
Subsequent to the end of the reporting period of March 31, 2024, on May 1, 2024, the Company’s board of directors approved an
amendment to the Company’s articles of incorporation to effect a
| Common shares | Amount | |||||||
| # | $ | |||||||
| Balance – December 31, 2023 | ||||||||
| Balance – March 31, 2024 | ||||||||
Share-based compensation
During
the three months ended March 31, 2024, the Company granted (2023 – ) stock options and (2023 – ) deferred
share units under the Long-Term Incentive Plan. The compensation expense for the three months ended March 31, 2024, was $
| Stock options | Weighted average exercise price | |||||||
| # | $ | |||||||
| Balance – December 31, 2023 | ||||||||
| Forfeited | ( | ) | ||||||
| Balance – March 31, 2024 | ||||||||
| Stock options | Weighted average exercise price | |||||||
| # | $ | |||||||
| Balance – December 31, 2022 | ||||||||
| Granted | ||||||||
| Balance – March 31, 2023 | ||||||||
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
7. Supplemental disclosure of cash flow information
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Payables and accrued liabilities | ||||||||
| Deferred revenues | ( | ) | ||||||
| Provision for restructuring and other costs | ( | ) | ||||||
| Employee future benefits | ( | ) | ( | ) | ||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Net loss | ( | ) | ( | ) | ||||
| Basic and diluted weighted-average shares outstanding | ||||||||
| Basic and diluted loss per share | ) | ) | ||||||
| Items excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: | ||||||||
| Stock options and DSUs | ||||||||
| Warrants | ||||||||
9. Segment information
The Company operates in a operating segment, being the biopharmaceutical segment.
10. Related party transactions
During
the three months ended March 31, 2024, the Company recorded a termination benefit payment of $
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Aeterna Zentaris Inc.
Notes to the Condensed Interim Consolidated Financial Statements
As of March 31, 2024, and for the three months ended March 31, 2024, and 2023
(In thousands of US dollars, except share and per share data and as otherwise noted)
(Unaudited)
11. Commitments
Significant expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:
| TOTAL | ||||
| $ | ||||
| Less than 1 year | ||||
| 1 - 5 years | ||||
In
2021, the Company executed various agreements including in-licensing and similar arrangements with development partners. Such agreements
may require the Company to make payments on achievement of stages of development, launch or revenue milestones, although the Company
generally has the right to terminate these agreements at no penalty. The Company may have to pay up to $
12. Subsequent event
On
December 14, 2023, the Company and Ceapro Inc. (“Ceapro”) jointly announced the signing of a definitive agreement to combine
their operations in an all-stock merger of equals. Pursuant to the agreement, the transaction will be effected by way of a plan of arrangement
under the Canada Business Corporations Act pursuant to which, following the
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