FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
------------------------
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August 2005
AETERNA ZENTARIS INC.
------------------------------------
1405, boul. du Parc-Technologique
Quebec, Quebec
Canada, G1P 4P5
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F X
------ ------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
----- -----
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
---------
DOCUMENTS INDEX
Documents Description
---------------------
--------------- ----------------------------------------------------------------
1. Press release dated August 3, 2005 - AEterna Zentaris
Reports 2005 Second Quarter Financial and Operating Results
--------------- ----------------------------------------------------------------
AETERNA ZENTARIS
AEterna Zentaris Inc. 1405 du Parc-Technologique Blvd.
Quebec (Quebec) Canada G1P 4P5 T 418 652-8525 F 418 652-0881
www.aeternazentaris.com
PRESS RELEASE
For immediate release
AETERNA ZENTARIS REPORTS 2005 SECOND QUARTER FINANCIAL AND OPERATING RESULTS
ALL AMOUNTS ARE IN CANADIAN DOLLARS
Second quarter 2005 highlights:
Financial
>> Consolidated revenues of $74.8 million, compared to $65.8 million for
Q2 2004;
>> Consolidated R&D expenses of $7.6 million, compared to $8.7 million
for Q2 2004;
>> Consolidated earnings from operations of $4.3 million, compared to
$9.2 million for Q2 2004;
>> Consolidated net earnings of $16.4 million, or $0.36 per share,
compared to $1.3 million, or $0.03 per share for Q2 2004;
>> Consolidated cash and short-term position was $64 million at the end
of Q2 2005.
Product development
>> Ozarelix (D-63153) - Initiation of Phase II trials in
hormone-sensitive prostate cancer and benign prostate hyperplasia in
Europe;
>> Ozarelix (D-63153) - Initiation of a Phase I/II trial in
hormone-sensitive prostate cancer in the United States;
>> Perifosine - Disclosure of positive Phase II results in
hormone-sensitive prostate cancer;
>> EP-1572 - Disclosure of positive Phase I results confirming growth
hormone secretagogue property.
QUEBEC CITY, CANADA, AUGUST 3, 2005 - AEterna Zentaris Inc. (TSX: AEZ;
NASDAQ: AEZS) today reported financial and operating results for the second
quarter ended June 30, 2005. Consolidated revenues for the second quarter
2005 were $74.8 million compared to $65.8 million for the same period in
2004, an increase of 13.7%. Consolidated R&D expenses net of tax credits
amounted to $7.6 million in the second quarter of 2005 compared to $8.7
million in the second quarter of 2004, a decrease of 12.6%. Consolidated
earnings from operations for the second quarter 2005 were $4.3 million,
compared to $9.2 million for the second quarter 2004, a decrease of 53.2%. On
the other hand, the Company's consolidated net earnings were $16.4 million,
or $0.36 per basic share and $0.35 per diluted share for the
AETERNA ZENTARIS
second quarter of 2005 compared to $1.3 million, or $0.03 per
basic and diluted share for the comparable period in 2004.
The $9 million increase in consolidated revenues during the second quarter 2005
is attributable to an increase of $15.1 million revenues from our subsidiary
Atrium combined with a decrease of $6.1 million revenues from our
biopharmaceutical segment. This decrease in the biopharmaceutical revenues is
all attributable to a $6.5 million non-recurring milestone payment gained from
Solvay Pharmaceuticals in the 2004 second quarter. Net earnings for the second
quarter of 2005 include a non-cash and non-recurring gain on dilution of $20.3
million recorded following the decrease of AEterna Zentaris' interest in its
subsidiary Atrium from 61.1% to 50.1% mainly as a result of Atrium's April 6,
2005 IPO.
As of June 30, 2005, the Company had consolidated cash and short-term
investments of $64 million, including $46.7 million dedicated to the
biopharmaceutical segment. The Company generated consolidated positive cash flow
from operating activities of $4.3 million in the second quarter 2005. The burn
rate for the biopharmaceutical segment in the second quarter 2005 was $3 million
as expected.
During the second quarter 2005, the Company continued to advance the product
pipeline with the initiation of three new clinical trials in Europe and the
United States with ozarelix, the new name for D-63153. Ozarelix is a fourth
generation LHRH (Luteinizing Hormone Releasing Hormone) antagonist product
administered as a depot formulation. These trials include one Phase II in Europe
in hormone-sensitive prostate cancer and another Phase II in Europe in benign
prostate hyperplasia, together with a Phase I/II in the United States in
hormone-sensitive prostate cancer that was initiated in collaboration with our
North American partner Spectrum Pharmaceuticals (NASDAQ: SPPI). Ozarelix
(D-63153), which allows for chronic intermittent treatment, could improve
clinical symptoms of these diseases while overcoming some of the limitations
associated with currently marketed therapies.
Furthermore, our lead signal transduction inhibitor in cancer, perifosine,
yielded positive Phase II results in 25 patients suffering from
hormone-sensitive prostate cancer. Investigators concluded that perifosine is
feasible, well-tolerated and can reduce PSA (Prostatic Specific Antigen) in some
patients. Following those results, Phase II trials with perifosine in
combination with androgen ablation and chemotherapy are expected to be initiated
by our North American partner Keryx Biopharmaceuticals (NASDAQ:KERX) later this
year.
In the field of growth hormone modulators, EP-1572 also yielded positive
Phase I results. The study provided clear evidence that this compound is able to
induce a significant rise in growth hormone levels after oral administration in
healthy volunteers. Potential applications include treatment for growth
retardation in children and cachexia associated with chronic disease such as
AIDS and cancer. EP-1572, the orally-administered specific growth hormone
secretagogue in development, presents a major competitive advantage in terms of
ease and convenience of delivery over current treatments which are only
available through injections. Other Phase I clinical trials are currently
ongoing to further assess the potential of EP-1572 in growth hormone related
disorders.
"At the clinical level, the last quarter was marked by the progress of ozarelix,
the new name for D-63153, in prostate cancer and in benign prostate
hyperplasia," said Gilles Gagnon, AEterna Zentaris' President and Chief
Executive Officer. "Ozarelix, which we intend to aggressively
AETERNA ZENTARIS
pursue the development over the next year, is now considered as another lead
product in our promising LHRH antagonist therapeutic approach, along with
cetrorelix which is currently in late-stage clinical trials in benign prostate
hyperplasia and in endometriosis. As for perifosine, our lead product in the
signal transduction inhibitor therapeutic approach, it pursued its progress into
further Phase II trials. In addition, we continued to advance other clinical and
preclinical products through our pipeline according to our strategic drug
development program focused on oncology and endocrinology. In doing so, we feel
confident that we are well on our way of developing a deep pipeline of
innovative products for the benefit of patients coping with serious diseases
while building value for our shareholders," concluded Mr. Gagnon.
Dennis Turpin, Vice President and Chief Financial Officer of AEterna Zentaris,
added, "Our financial position continues to be strong. On a consolidated basis,
we remained cash flow positive and our cash and short-term position reached $64
million as of June 30, 2005. Considering our strong financial position, we will
continue to make high-level R&D investments to maintain and grow a broad
pipeline of drug development programs with both near-term and long-term
potential.
AETERNA ZENTARIS SIX-MONTH CONSOLIDATED FINANCIAL RESULTS
Consolidated revenues for the first half of 2005 increased 21.2% to $150.7
million, compared to $124.3 million for the first half of 2004. The Company
reported year-to-date 2005 consolidated earnings from operations of $12.3
million, compared to $10.8 million for the same period a year earlier.
Consolidated net earnings for the first six months of 2005 were $16.5 million,
or $0.36 per basic and diluted share, compared to a consolidated net loss of
$1.2 million, or $0.03 per basic and diluted share, for the first six months of
2004.
CONFERENCE CALL INFORMATION
Management will be hosting a conference call for the investment community
beginning at 10:00 a.m. Eastern Time today, Wednesday, August 3, to discuss 2005
second quarter financial and operating results and answer questions.
To participate in the live conference call by telephone, please dial
514-807-8791, 416-640-4127 from Canada or 800-814-4941 from outside Canada.
Individuals interested in listening to the conference call on the Internet may
do so by visiting WWW.AETERNAZENTARIS.COM. A replay will be available on the
Company's Web site for 30 days.
ABOUT AETERNA ZENTARIS INC.
AEterna Zentaris Inc. is an oncology and endocrine therapy focused
biopharmaceutical company with proven expertise in drug discovery, development
and marketing. The Company's broad 20 product pipeline leverages six different
therapeutic approaches, including LHRH antagonists and signal transduction
inhibitors. The lead LHRH antagonist compound, cetrorelix, is currently marketed
for IN VITRO fertilization under the brand name Cetrotide(R). Cetrorelix is also
in late-stage clinical development for endometriosis and benign prostatic
hyperplasia (BPH). The lead signal transduction inhibitor compound, perifosine,
is a novel, first-in-class, oral anticancer agent that modulates several key
signal transduction pathways, including AKT, MAPK, and JNK that have been shown
to be critical for the survival of cancer cells. Perifosine has demonstrated
single agent anti-tumor activity in Phase I and Phase II studies and is
currently being studied as a
AETERNA ZENTARIS
single agent and in combination with several forms of anti-cancer treatments for
various forms of cancer, including non-small cell lung cancer and breast cancer.
AEterna Zentaris also owns 50.1% of Atrium Biotechnologies Inc. (TSX: ATB.sv), a
leading developer, manufacturer and marketer of value-added products for the
cosmetics, pharmaceutical, chemical and nutritional industries.
News releases and additional information are available at
www.aeternazentaris.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements made pursuant to the safe
harbor provisions of the U.S. Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties,
which could cause the Company's actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties include, among
others, the availability of funds and resources to pursue R&D projects, the
successful and timely completion of clinical studies, the ability of the Company
to take advantage of business opportunities in the pharmaceutical industry,
uncertainties related to the regulatory process and general changes in economic
conditions. Investors should consult the Company's quarterly and annual filings
with the Canadian and U.S. securities commissions for additional information on
risks and uncertainties relating to the forward-looking statements. Investors
are cautioned not to rely on these forward-looking statements. The Company does
not undertake to update these forward-looking statements.
-30-
CONTACTS
MEDIA RELATIONS
Paul Burroughs
(418) 652-8525 ext. 406
paul.burroughs@aeternazentaris.com
INVESTOR RELATIONS
Ginette Vallieres
(418) 652-8525 ext. 265
ginette.vallieres@aeternazentaris.com
EUROPE
Matthias Seeber
+49 69 42602 3425
matthias.seeber@aeternazentaris.com
ATTACHMENT: Financial summary
AETERNA ZENTARIS
(in thousands of Canadian dollars, except share
and per share data) QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
CONSOLIDATED RESULTS -------------------------------------------------------------------------
Unaudited 2005 2004 2005 2004
-------------------------------------------------------------------------------------------------------------------------
REVENUES 74,828 65,840 150,742 124,289
-------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales 47,958 34,922 93,561 72,050
Selling, general and administrative 12,456 10,712 24,647 20,333
R&D costs, net of tax credits and grants 7,589 8,731 15,499 16,684
Depreciation and amortization 2,500 2,298 4,730 4,461
-------------------------------------------------------------------------
70,503 56,663 138,437 113,528
-------------------------------------------------------------------------
Earnings from operations 4,325 9,177 12,305 10,761
Interest income 529 288 905 782
Interest expenses (3,315) (2,095) (5,963) (3,732)
Foreign exchange gain (loss) (189) 227 66 644
-------------------------------------------------------------------------
EARNINGS BEFORE THE FOLLOWING ITEMS 1,350 7,597 7,313 8,455
Current income taxes (2,650) (8,484) (5,253) (10,908)
Future income taxes (90) 4,160 (1,436) 4,944
Gain on dilution 20,253 - 20,253 -
Non-controlling interest (2,459) (1,943) (4,328) (3,711)
-------------------------------------------------------------------------
NET EARNINGS (LOSS) FOR THE PERIOD 16,404 1,330 16,549 (1,220)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings (loss) per share
Basic 0.36 0.03 0.36 (0.03)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Diluted 0.35 0.03 0.36 (0.03)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of shares
Basic 46,139,814 45,594,326 46,139,814 45,565,884
Diluted 46,448,125 46,457,409 46,506,728 46,115,205
Issued and outstanding shares 46,139,814 45,633,159
JUNE 30, DECEMBER 31,
CONSOLIDATED BALANCE SHEETS 2005 2004
-------------------------------------------------------------------------------------------------------------------------
Cash and short-term investments 63,957 58,090
Other current assets 96,380 86,644
--------------------------------------
160,337 144,734
Long-term assets 214,091 204,494
--------------------------------------
Total assets 374,428 349,228
--------------------------------------
--------------------------------------
Current liabilities 92,455 72,265
Deferred revenues 20,110 25,557
Long-term debt 29,872 64,255
Other long-term liabilities 29,399 32,092
Non-controlling interest 66,432 34,767
--------------------------------------
238,268 228,936
Shareholders' equity 136,160 120,292
--------------------------------------
Total liabilities and shareholders' equity 374,428 349,228
--------------------------------------
--------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AETERNA ZENTARIS INC.
DATE: AUGUST 3, 2005 By: /s/ Mario Paradis
-------------------------------
Mario Paradis
Senior Finance Director and
Corporate Secretary