¨
|
Registration Statement Pursuant to Section 12(b) or 12(g) of The Securities Exchange Act of 1934
|
ý
|
Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the fiscal year ended December 31, 2012
|
¨
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Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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¨
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Shell Company Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Title of Each Class
|
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Name of Each Exchange on Which Registered
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Common Shares
|
|
NASDAQ Global Market
Toronto Stock Exchange
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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Item 5.
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Item 6.
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Item 7.
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Item 8.
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Item 9.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16A.
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Item 16B.
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Item 16C.
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Item 16D.
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Item 16E.
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Item 16F.
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Item 16G.
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Item 16H.
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Item 17.
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Item 18.
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Item 19.
|
Item 1.
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Identity of Directors, Senior Management and Advisers
|
A.
|
Directors and senior management
|
B.
|
Advisors
|
C.
|
Auditors
|
Item 2.
|
Offer Statistics and Expected Timetable
|
A.
|
Offer statistics
|
B.
|
Method and expected timetable
|
Item 3.
|
Key Information
|
A.
|
Selected financial data
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|||
Sales and royalties
|
31,538
|
|
|
31,306
|
|
|
24,857
|
|
License fees and other
|
2,127
|
|
|
4,747
|
|
|
2,846
|
|
|
33,665
|
|
|
36,053
|
|
|
27,703
|
|
Operating expenses
|
|
|
|
|
|
|||
Cost of sales
|
26,820
|
|
|
27,560
|
|
|
18,700
|
|
Research and development costs, net of refundable tax credits and grants
|
20,604
|
|
|
24,517
|
|
|
21,257
|
|
Selling, general and administrative expenses
|
13,245
|
|
|
16,170
|
|
|
12,552
|
|
|
60,669
|
|
|
68,247
|
|
|
52,509
|
|
Loss from operations
|
(27,004
|
)
|
|
(32,194
|
)
|
|
(24,806
|
)
|
Finance income
|
6,974
|
|
|
6,231
|
|
|
1,792
|
|
Finance costs
|
(382
|
)
|
|
—
|
|
|
(5,437
|
)
|
Net finance (costs) income
|
6,592
|
|
|
6,231
|
|
|
(3,645
|
)
|
Loss before income taxes
|
(20,412
|
)
|
|
(25,963
|
)
|
|
(28,451
|
)
|
Income tax expense
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Net loss
|
(20,412
|
)
|
|
(27,067
|
)
|
|
(28,451
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|||
Items that may be reclassified subsequently to profit or loss
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(504
|
)
|
|
(789
|
)
|
|
1,001
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|||
Actuarial loss on defined benefit plans
|
(3,705
|
)
|
|
(1,335
|
)
|
|
191
|
|
Comprehensive loss
|
(24,621
|
)
|
|
(29,191
|
)
|
|
(27,259
|
)
|
Net loss per share
|
|
|
|
|
|
|||
Basic
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Diluted
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Weighted average number of shares outstanding
|
|
|
|
|
|
|||
Basic
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
Diluted
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
|
|
As at December 31,
|
|||||||
|
|
2012
|
|
2011
|
|
2010
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
39,521
|
|
|
46,881
|
|
|
31,998
|
|
Short-term investments
|
|
—
|
|
|
—
|
|
|
1,934
|
|
Working capital
|
|
42,925
|
|
|
47,695
|
|
|
34,497
|
|
Restricted cash
|
|
826
|
|
|
806
|
|
|
827
|
|
Total assets
|
|
67,665
|
|
|
75,369
|
|
|
61,448
|
|
Warrant liability short-term
|
|
—
|
|
|
42
|
|
|
955
|
|
Warrant liability long-term
|
|
6,176
|
|
|
9,162
|
|
|
13,412
|
|
Long-term payable
|
|
—
|
|
|
29
|
|
|
90
|
|
Share capital
|
|
122,791
|
|
|
101,884
|
|
|
60,900
|
|
Shareholders' (deficiency) equity
|
|
(6,695
|
)
|
|
(4,546
|
)
|
|
(17,575
|
)
|
B.
|
Capitalization and indebtedness
|
C.
|
Reasons for the offer and use of proceeds
|
D.
|
Risk factors
|
•
|
must meet the requirements of these authorities;
|
•
|
must meet requirements for informed consent; and
|
•
|
must meet requirements for good clinical practices.
|
•
|
demonstration of clinical efficacy and safety;
|
•
|
the prevalence and severity of any adverse side effects;
|
•
|
limitations or warnings contained in the product's approved labeling;
|
•
|
availability of alternative treatments for the indications we target;
|
•
|
the advantages and disadvantages of our products relative to current or alternative treatments;
|
•
|
the availability of acceptable pricing and adequate third-party reimbursement; and
|
•
|
the effectiveness of marketing and distribution methods for the products.
|
•
|
the duration and results of our clinical trials for our various product candidates going forward;
|
•
|
unexpected delays or developments in seeking regulatory approvals;
|
•
|
the time and cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;
|
•
|
other unexpected developments encountered in implementing our business development and commercialization strategies;
|
•
|
the outcome of litigation, if any; and
|
•
|
further arrangements, if any, with collaborators.
|
•
|
the inability to complete product development in a timely manner that results in a failure or delay in receiving the required regulatory approvals to commercialize our product candidates;
|
•
|
the timing of regulatory submissions and approvals;
|
•
|
the timing and willingness of any current or future collaborators to invest the resources necessary to commercialize our product candidates;
|
•
|
the revenue available from royalties derived from our strategic partners;
|
•
|
licensing fees revenues;
|
•
|
tax credits and grants (R&D);
|
•
|
the outcome of litigation, if any;
|
•
|
changes in foreign currency fluctuations;
|
•
|
the timing of achievement and the receipt of milestone payments from current or future collaborators; and
|
•
|
failure to enter into new or the expiration or termination of current agreements with collaborators.
|
•
|
not all of our strategic partners are contractually prohibited from developing or commercializing, either alone or with others, products and services that are similar to or competitive with our product candidates and, with respect to our strategic partnership agreements that do contain such contractual prohibitions or restrictions, prohibitions or restrictions do not always apply to our partners' affiliates and they may elect to pursue the development of any additional product candidates and pursue technologies or products either on their own or in collaboration with other parties, including our competitors, whose technologies or products may be competitive with ours;
|
•
|
our strategic partners may under-fund or fail to commit sufficient resources to marketing, distribution or other development of our products;
|
•
|
we may not be able to renew such agreements;
|
•
|
our strategic partners may not properly maintain or defend certain intellectual property rights that may be important to the commercialization of our products;
|
•
|
our strategic partners may encounter conflicts of interest, changes in business strategy or other issues which could adversely affect their willingness or ability to fulfill their obligations to us (for example, pharmaceutical companies historically have re-evaluated their priorities following mergers and consolidations, which have been common in recent years in this industry);
|
•
|
delays in, or failures to achieve, scale-up to commercial quantities, or changes to current raw material suppliers or product manufacturers (whether the change is attributable to us or the supplier or manufacturer) could delay clinical studies, regulatory submissions and commercialization of our product candidates; and
|
•
|
disputes may arise between us and our strategic partners that could result in the delay or termination of the development or commercialization of our product candidates, resulting in litigation or arbitration that could be time-consuming and expensive, or causing our strategic partners to act in their own self-interest and not in our interest or those of our shareholders or other stakeholders.
|
•
|
clinical and regulatory developments regarding our product candidates;
|
•
|
delays in our anticipated development or commercialization timelines;
|
•
|
developments regarding current or future third-party collaborators;
|
•
|
other announcements by us regarding technological, product development or other matters;
|
•
|
arrivals or departures of key personnel;
|
•
|
governmental or regulatory action affecting our product candidates and our competitors' products in the United States, Canada and other countries;
|
•
|
developments or disputes concerning patent or proprietary rights;
|
•
|
actual or anticipated fluctuations in our revenues or expenses;
|
•
|
general market conditions and fluctuations for the emerging growth and biopharmaceutical market sectors; and
|
•
|
economic conditions in the United States, Canada or abroad.
|
•
|
25,329,288 common shares issued and outstanding;
|
•
|
no issued and outstanding preferred shares;
|
•
|
4,407,410 common shares issuable upon exercise of outstanding warrants; and
|
•
|
2,056,367 stock options outstanding.
|
Item 4.
|
Information on the Company
|
A.
|
History and development of the Company
|
|
|
|
|||
|
Aeterna Zentaris Inc.
(Canada)
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|||
Aeterna Zentaris GmbH
(Germany)
|
|
Aeterna Zentaris, Inc.
(Delaware)
|
|||
|
|
|
|||
|
|
|
|
||
|
100%
|
|
|
||
|
|
|
|||
Zentaris IVF GmbH
(Germany)
|
|
|
|
|
|
|
|
|
|
|
B.
|
Business overview
|
Discovery
|
|
Preclinical
|
|
Phase 1
|
|
Phase 2
|
|
Phase 3
|
|
Commercial
|
~120,000 compound library
|
|
AEZS-120
Prostate cancer vaccine
(oncology)
AEZS-129, 134 and 136
PI3K/Erk inhibitors (oncology)
AEZS-137
(disorazol Z) (oncology)
AEZS-125
(LHRH-
disorazol Z)
(oncology)
|
|
AEZS-112
(oncology)
|
|
AEZS-108
• Triple-negative breast cancer
• Ovarian cancer
• Castration- and taxane-resistant prostate cancer
• Refractory bladder cancer
Ozarelix
• Prostate cancer
AEZS-130
• Therapeutic in cancer cachexia
Perifosine
(Phase 1/2)
• Neuroblastoma
• Glioma
• Pediatric solid tumors
|
|
AEZS-108
• Endometrial cancer (not yet recruiting)
AEZS-130
• Diagnostic in adult growth hormone deficiency (endocrinology)
|
|
Cetrotide
®
(
in vitro
fertilization)
|
1.0
|
ONCOLOGY
|
1.1
|
TUMOR TARGETING CYTOTOXIC CONJUGATES AND CYTOTOXICS
|
1.1.1
|
AEZS-108 - Ovarian and Endometrial Cancer
|
Product / mode of action*
|
Company*
|
Development Status*
|
Ixabepilone / microtubule inhibitor
|
Bristol-Myers Squibb
|
Phase 3
|
Letrozole / non-steroidal aromatase inhibitor
|
Novartis
|
Phase 2 and Phase 3
|
SAR245408 (XL-147)/oral pan-PI3K inhibitor
|
Sanofi
|
Phase 2
|
BKM120/PI3K inhibitor
|
Novartis
|
Phase 2
|
*
|
Source: Competitor company's website and www.clinicaltrials.gov.
|
1.1.2
|
AEZS-108 - Triple-Negative Breast Cancer
|
1.1.3
|
AEZS-108 - Bladder Cancer
|
1.1.4
|
AEZS-108 - Prostate Cancer
|
1.1.5
|
AEZS-108 - Companion Diagnostic Tool
|
1.1.6
|
AEZS-137 (Disorazol Z) / AEZS-125 (LHRH-Disorazol Z)
|
1.2
|
TUBULIN INHIBITORS / VASCULAR TARGETING AGENTS
|
1.2.1
|
AEZS-112 - Development of a Low Molecular Weight Tubulin Inhibitor with Antiangiogenic Properties
|
1.3
|
IMMUNOTHERAPY / VACCINES
|
1.3.1
|
AEZS-120
|
•
|
The proof-of-concept has been shown in a tumor-challenge mouse model using the anticipated clinical application schedule.
|
•
|
Biosafety and biodistribution studies did not reveal a different safety profile compared to the carrier strain.
|
•
|
Pharmacological and toxicological studies did not reveal differences to the approved carrier strain.
|
•
|
In all, the non-clinical studies suggest that the safety and toxicological profile of AEZS-120 is similar to the approved carrier strain S. typhi Ty21a, which has already been safely applied in more than 250 million doses.
|
1.4
|
SIGNAL TRANSDUCTION INHIBITORS
|
1.4.1
|
Erk/PI3K inhibitors and dual kinase inhibitors
|
1.4.1.1
|
AEZS-126/129
|
1.4.1.2
|
AEZS-136
|
•
|
Effective dual targeting of Raf-Mek-Erk and PI3K-Akt pathway
|
•
|
Unique inhibitor with excellent activity against PI3K and Erk
|
•
|
Induction of cell cycle arrest in G1 phase and apoptosis
|
•
|
Broad anti-proliferative activity
in vitro
|
•
|
Favorable
in vitro
ADMET and
in vivo
PK profile
|
•
|
Well tolerated up to daily doses of 90mg/kg for 4 weeks
|
•
|
In vivo
antitumor efficacy after oral administration
|
1.4.2
|
Perifosine
|
2.0
|
ENDOCRINOLOGY
|
2.1
|
AEZS-130 - ORAL GHRELIN AGONIST
|
2.1.1
|
AEZS-130 - Diagnostic test for AGHD
|
•
|
Measurement of blood levels of Insulin Growth Factor ("IGF")-1, which is typically used as the first test when GHD is suspected. However, this test is not used to definitively rule out GHD as many growth hormone deficient patients show normal IGF-1 levels;
|
•
|
Insulin Tolerance Test ("ITT"), which is considered to be the "gold standard" for GH secretion provocative tests but requires constant patient monitoring while the test is administered and is contra-indicated in patients with seizure disorders, with cardiovascular disease and in brain injured patients and elderly patients. ITT is administered i.v.;
|
•
|
GHRH + Arginine test, which is an easier test to perform in an office setting and has a good safety profile but is considered to be costly to administer compared to ITT and Glucagon. This test is contra-indicated in patients with renal failure. GHRH + Arginine is approved in the EU and has been proposed to be the best alternative to ITT, but it is no longer available in the United States. This test is administered i.v.; and
|
•
|
Glucagon test, which is simple to perform and is considered relatively safe by endocrinologists but is contraindicated in malnourished patients and patients who have not eaten for more than 48 hours. Since there is a suspicion that this test may cause hypoglycemia, it may not be appropriate in diabetic populations. This test is administered i.m.
|
2.1.2
|
AEZS-130 - Cancer Cachexia
|
2.2
|
LHRH ANTAGONISTS
|
2.2.1
|
Cetrorelix
|
2.2.1.1
|
Cetrorelix
In Vitro
Fertilization (Controlled Ovulation Stimulation/Assisted Reproductive Technologies ("COS/ART")
|
2.2.2
|
Ozarelix
|
2.2.2.1
|
Prostate Cancer Clinical Trials
|
•
|
U.S. patent 5,843,903 provides protection in the United States for the compound AEZS-108 and other related targeted cytotoxic anthracycline analogs, pharmaceutical compositions comprising the compounds as well as their medical use for the treatment of cancer. This U.S. patent expires in November 2015. A patent term extension of up to five years may be possible.
|
•
|
European patent 0 863 917 B1 provides protection in Europe for the compound AEZS-108 and other related targeted cytotoxic anthracycline analogs, pharmaceutical compositions comprising the compounds as well as their medical use for the treatment of tumors. This European patent expires in November 2016. A patent term extension of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese patent 3 987 575 provides protection in Japan for the compound AEZS-108 and other related targeted cytotoxic anthracycline analogs, pharmaceutical compositions comprising the compounds as well as their medical use for the treatment of tumors. This Japanese patent expires in November 2016. A patent term extension of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
European patent 2 092 067 B1 provides protection in Europe for microorganisms as carriers of heterogeneous nucleotide sequences coding for antigens and protein toxins, a process of manufacturing thereof as well as corresponding plasmids or expression vectors, useful as medicaments, in particular as tumor vaccines for the treatment of various tumors. This European patent expires in November 2027. A patent term extension of up to five years may be possible.
|
•
|
U.S. and Japanese patent applications have been filed for AEZS-120 in November 2007. Patent applications are still pending. Granted patents will expire in November 2027.
|
•
|
U.S. patent 6,861,409 protects the compound AEZS-130 and U.S. patent 7,297,681 protects other related growth hormone secretagogue compounds, each also protecting pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This U.S. patent 6,861,409 expires in August 2022. A patent term extension of up to five years may be possible.
|
•
|
European patent 1 289 951 protects the compound AEZS-130 and European patent 1 344 773 protects other related growth hormone secretagogue compounds, pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This European patent 1 289 951 expires in June 2021. A patent term extension of up to five years by SPC may be possible.
|
•
|
Japanese patent 3 522 265 protects the compound AEZS-130 and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This Japanese patent expires in June 2021. A patent term extension of up to five years may be possible.
|
•
|
U.S. patent 8,192,719 protects a method of assessing pituitary-related growth hormone deficiency in a human or animal subject comprising an oral administration of the compound AEZS-130 and determination of the level of growth hormone in the sample and assessing whether the level of growth hormone in the sample is indicative of growth hormone deficiency. This U.S. patent 8,192,719 expires in October 2027.
|
•
|
European patent 1 984 744 protects a method of assessing pituitary-related growth hormone deficiency by oral administration of AEZS-130. The European patent 1 984 744 expires in February 2027.
|
•
|
Japanese patent 4 852 728 protects a method of assessing pituitary-related growth hormone deficiency by oral administration of AEZS-130. The Japanese patent 4 852 728 expires in February 2027.
|
•
|
European patent 0 299 402 provides protection in European countries for the compound cetrorelix and other LHRH antagonists. This patent will expire in July 2013 pursuant to granted requests for SPC.
|
•
|
U.S. patent 5,198,533 provided protection in U.S.A. for the compound cetrorelix per se. This patent expired in extended status in October 2010.
|
•
|
Japanese patent 2 944 669 provides protection in Japan for the compound cetrorelix and other LHRH antagonists. This patent will expire in July 2013 pursuant to granted requests for patent term extension.
|
•
|
U.S. patent 6,828,415 protects a method for preparing sterile lyophilizate formulations of cetrorelix. It specifically protects the lyophilization process used to manufacture Cetrotide
®
. This U.S. patent will expire in December 2021.
|
•
|
European patent 0 611 572 protects a method for preparing sterile lyophilizate formulations of cetrorelix. It specifically protects the lyophilization process used to manufacture Cetrotide
®
. This patent will expire in February 2014.
|
•
|
Japanese patent 4 033 919 protects a method for preparing sterile lyophilizate formulations of cetrorelix. It specifically protects the lyophilization process used to manufacture Cetrotide
®
. This patent will expire in February 2014.
|
•
|
U.S. patent 7,790,686 protects an aqueous injectable solution of the compound cetrorelix or other LHRH antagonists in an organic, pharmaceutically acceptable acid. This patent will expire in October 2023.
|
•
|
European patent 1 448 221 protects an aqueous injectable solution of the compound cetrorelix or other LHRH antagonists in an organic, pharmaceutically acceptable acid. This patent will expire in November 2022.
|
•
|
U.S. patent 6,627,609 provides protection in the United States for the compound ozarelix and related third-generation LHRH antagonists and pharmaceutical compositions comprising them. This U.S. patent will expire in March 2020. A patent term extension of up to five years may be possible.
|
•
|
European patent 1 163 264 provides protection in Europe for the compound ozarelix and related third-generation LHRH antagonists and pharmaceutical compositions comprising them. This European patent will expire in March 2020. A SPC of up to five years may be possible.
|
•
|
Japanese patent 3 801 867 provides protection in Japan for the compound ozarelix and related third-generation LHRH antagonists and pharmaceutical compositions comprising them. This Japanese patent will expire in March 2020. A patent term extension of up to five years may be possible.
|
*
|
Includes Patent Term Extension.
|
C.
|
Organizational structure
|
|
|
|
|||
|
Aeterna Zentaris Inc.
(Canada)
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|||
Aeterna Zentaris GmbH
(Germany)
|
|
Aeterna Zentaris, Inc.
(Delaware)
|
|||
|
|
|
|||
|
|
|
|
||
|
100%
|
|
|
||
|
|
|
|||
Zentaris IVF GmbH
(Germany)
|
|
|
|
|
|
|
|
|
|
|
D.
|
Property, plants and equipment
|
Location
|
|
Use of space
|
|
Square Footage
|
|
Type of interest
|
|
1405 du Parc Technologique Blvd., Quebec City (Quebec), Canada
|
|
Fully occupied for management, R&D and administration
|
|
4,400
|
|
|
Leased
|
25 Mountainview Blvd., Suite 203, Basking Ridge, NJ 07920
|
|
Fully occupied for management, R&D and administration
|
|
3,188
|
|
|
Leased
|
Weismüllerstr. 50
D-60314
Frankfurt-am-Main, Germany
|
|
Fully occupied for management, R&D, business development and administration
|
|
46,465
|
|
|
Leased
|
Item 5.
|
Operating and Financial Review and Prospects
|
•
|
Special Protocol Assessment ("SPA") was granted by the United States Food and Drug Administration ("FDA") for the initiation of a Phase 3 study in advanced recurrent endometrial cancer. This study is an open-label, randomized, and multicenter trial which will be conducted in North America and Europe, comparing AEZS-108 with doxorubicin as second-line therapy for locally-advanced, recurrent or metastatic endometrial cancer. The trial will involve approximately 500 patients and the primary efficacy endpoint is improvement in median overall survival.
|
•
|
Initiation of the Phase 2 portion of the Phase 1/2 trial in castration- and taxane-resistant prostate cancer ("CRPC"). The National Institutes of Health ("NIH") awarded a three-year $1.6 million grant to an investigator in order to support this study. Results for the Phase 1 portion demonstrated that AEZS-108 was well tolerated and early evidence of antitumor activity was observed in men with CRPC.
|
•
|
Phase 3 trial results for AEZS-130, as a diagnostic test for adult growth hormone deficiency ("AGHD") presented at the 6
th
International Congress of the Growth Hormone Research ("GRS") and Insulin-like Growth Factor ("IGF") Society in Munich, Germany. The data expanded on the previously disclosed data in June 2012 at the 94
th
ENDO Annual Meeting and Expo ("ENDO"). Both sets of data confirm AEZS-130's potential of possibly becoming the first approved oral diagnostic test for AGHD.
|
•
|
Subsequent to year-end, New Drug Application ("NDA") as a diagnostic test for AGHD remains in preparation.
|
•
|
Phase 3 trial results for perifosine + capecitabine ("Xeloda
®
") showed no benefit in overall survival and in progression-free survival in the refractory colorectal cancer ("CRC") setting.
|
•
|
On March 11, 2013, we announced that an independent DSMB recommended discontinuing the Phase 3 study comparing the efficacy and safety of perifosine to placebo when combined with bortezomib ("Velcade
®
") and dexamethasone in patients with relapsed or relapsed/refractory multiple myeloma. Based on the outcome of its preplanned interim analysis of efficacy and safety, the DSMB recommended that patient enrollment be stopped and the study discontinued. The DSMB reported that it was highly unlikely the study would achieve a significant difference in its primary endpoint, progression-free survival; no safety concerns were raised. Based on the foregoing, we determined to discontinue the Phase 3 study of perifosine in multiple myeloma.
|
•
|
During the year 2012, we issued a total of 1.2 million common shares (retroactively adjusted to reflect the Share Consolidation described below) under the January 2012 At-The-Market ("ATM") Program for aggregate gross proceeds of $8.8 million.
|
•
|
We consolidated our issued and outstanding common shares on a 6-to-1 basis (the "Share Consolidation"), effective as of October 2, 2012, in order to regain compliance with The NASDAQ Stock Market ("NASDAQ"
)
minimum bid price requirement. Our common shares began trading on a consolidated basis on October 5, 2012 and we regained NASDAQ compliance on October 19, 2012.
|
•
|
On October 17, 2012, we completed a public offering (the "Offering") of 6.6 million units at a purchase price of $2.50 per unit, generating net proceeds of $15.1 million.
|
Discovery
|
|
Preclinical
|
|
Phase 1
|
|
Phase 2
|
|
Phase 3
|
|
Commercial
|
~120,000 compound library
|
|
AEZS-120
Prostate cancer vaccine
(oncology)
AEZS-129, 134 and 136
PI3K/Erk inhibitors(oncology)
AEZS-137
(disorazol Z) (oncology)
AEZS-125
(LHRH-
disorazol Z)
(oncology)
|
|
AEZS-112
(oncology)
|
|
AEZS-108
• Triple-negative breast cancer
• Ovarian cancer
• Castration- and taxane-resistant prostate cancer
• Refractory bladder cancer
Ozarelix
• Prostate cancer
AEZS-130
• Therapeutic in cancer cachexia
Perifosine
(Phase 1/2)
• Neuroblastoma
• Glioma
• Pediatric solid tumors
|
|
AEZS-108
• Endometrial cancer (not yet recruitin
g)
AEZS-130
• Diagnostic in adult growth hormone deficiency (endocrinology)
|
|
Cetrotide
®
(
in vitro
fertilization)
|
|
|
Three-month periods ended December 31,
|
|
Years ended
December 31,
|
|||||||||||
(in thousands, except share and per share data)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2010
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales and royalties
|
|
9,165
|
|
|
9,317
|
|
|
31,538
|
|
|
31,306
|
|
|
24,857
|
|
License fees and other
|
|
380
|
|
|
3,310
|
|
|
2,127
|
|
|
4,747
|
|
|
2,846
|
|
|
|
9,545
|
|
|
12,627
|
|
|
33,665
|
|
|
36,053
|
|
|
27,703
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
7,489
|
|
|
8,114
|
|
|
26,820
|
|
|
27,560
|
|
|
18,700
|
|
Research and development costs, net of refundable tax credits and grants
|
|
5,523
|
|
|
7,793
|
|
|
20,604
|
|
|
24,517
|
|
|
21,257
|
|
Selling, general and administrative expenses
|
|
3,469
|
|
|
5,408
|
|
|
13,245
|
|
|
16,170
|
|
|
12,552
|
|
|
|
16,481
|
|
|
21,315
|
|
|
60,669
|
|
|
68,247
|
|
|
52,509
|
|
Loss from operations
|
|
(6,936
|
)
|
|
(8,688
|
)
|
|
(27,004
|
)
|
|
(32,194
|
)
|
|
(24,806
|
)
|
Finance income
|
|
689
|
|
|
1,434
|
|
|
6,974
|
|
|
6,231
|
|
|
1,792
|
|
Finance costs
|
|
(700
|
)
|
|
(2
|
)
|
|
(382
|
)
|
|
—
|
|
|
(5,437
|
)
|
Net finance (costs) income
|
|
(11
|
)
|
|
1,432
|
|
|
6,592
|
|
|
6,231
|
|
|
(3,645
|
)
|
Loss before income taxes
|
|
(6,947
|
)
|
|
(7,256
|
)
|
|
(20,412
|
)
|
|
(25,963
|
)
|
|
(28,451
|
)
|
Income tax expense
|
|
—
|
|
|
(263
|
)
|
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Net loss
|
|
(6,947
|
)
|
|
(7,519
|
)
|
|
(20,412
|
)
|
|
(27,067
|
)
|
|
(28,451
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Items that may be reclassified subsequently to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
(204
|
)
|
|
169
|
|
|
(504
|
)
|
|
(789
|
)
|
|
1,001
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|||||
Actuarial loss on defined benefit plans
|
|
(3,705
|
)
|
|
(1,335
|
)
|
|
(3,705
|
)
|
|
(1,335
|
)
|
|
191
|
|
Comprehensive loss
|
|
(10,856
|
)
|
|
(8,685
|
)
|
|
(24,621
|
)
|
|
(29,191
|
)
|
|
(27,259
|
)
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
(0.29
|
)
|
|
(0.44
|
)
|
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Diluted
|
|
(0.29
|
)
|
|
(0.44
|
)
|
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Weighted average number of shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
24,181,462
|
|
|
17,185,156
|
|
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
Diluted
|
|
24,181,462
|
|
|
17,185,156
|
|
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2010
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Employee compensation and benefits
|
|
2,145
|
|
|
3,152
|
|
|
8,590
|
|
|
10,028
|
|
|
9,226
|
|
Third-party costs
|
|
2,345
|
|
|
3,576
|
|
|
8,679
|
|
|
10,244
|
|
|
8,138
|
|
Facilities rent and maintenance
|
|
401
|
|
|
459
|
|
|
1,661
|
|
|
1,835
|
|
|
1,773
|
|
Other costs*
|
|
744
|
|
|
661
|
|
|
2,542
|
|
|
2,793
|
|
|
2,807
|
|
R&D tax credits and grants
|
|
(112
|
)
|
|
(55
|
)
|
|
(868
|
)
|
|
(383
|
)
|
|
(687
|
)
|
|
|
5,523
|
|
|
7,793
|
|
|
20,604
|
|
|
24,517
|
|
|
21,257
|
|
*
|
Includes depreciation and amortization charges.
|
(in thousands, except percentages)
|
|
Three-month periods ended December 31,
|
||||||||||||
Product
|
|
Status
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
$
|
|
%
|
|
$
|
|
%
|
||||
Perifosine
|
|
Phases 2 and 3
|
|
1,434
|
|
|
61.2
|
|
|
1,366
|
|
|
38.2
|
|
AEZS-108
|
|
Phase 2 and 3
|
|
282
|
|
|
12.0
|
|
|
510
|
|
|
14.3
|
|
AEZS-130
|
|
Phase 3
|
|
30
|
|
|
1.3
|
|
|
101
|
|
|
2.8
|
|
PI3K/Erk inhibitors
|
|
Preclinical
|
|
199
|
|
|
8.5
|
|
|
589
|
|
|
16.5
|
|
Other
|
|
Preclinical
|
|
400
|
|
|
17.0
|
|
|
1,010
|
|
|
28.2
|
|
|
|
|
|
2,345
|
|
|
100.0
|
|
|
3,576
|
|
|
100.0
|
|
(in thousands, except percentages)
|
|
Years ended December 31,
|
||||||||||||||||||
Product
|
|
Status
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
|
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
Perifosine
|
|
Phases 2 and 3
|
|
3,801
|
|
|
43.8
|
|
|
3,726
|
|
|
36.4
|
|
|
968
|
|
|
11.9
|
|
AEZS-108
|
|
Phase 2 and 3
|
|
2,133
|
|
|
24.6
|
|
|
1,652
|
|
|
16.1
|
|
|
2,089
|
|
|
25.7
|
|
AEZS-130
|
|
Phase 3
|
|
112
|
|
|
1.3
|
|
|
1,156
|
|
|
11.3
|
|
|
865
|
|
|
10.6
|
|
PI3K/Erk inhibitors
|
|
Preclinical
|
|
1,727
|
|
|
19.9
|
|
|
1,860
|
|
|
18.2
|
|
|
923
|
|
|
11.4
|
|
Other
|
|
Preclinical and clinical
|
|
906
|
|
|
10.4
|
|
|
1,850
|
|
|
18.0
|
|
|
3,293
|
|
|
40.4
|
|
|
|
|
|
8,679
|
|
|
100.0
|
|
|
10,244
|
|
|
100.0
|
|
|
8,138
|
|
|
100.0
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2010
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Finance income
|
|
|
|
|
|
|
|
|
|
|||||
Net gains due to changes in foreign currency exchange rates
|
—
|
|
|
1,118
|
|
|
—
|
|
|
2,197
|
|
|
932
|
|
Change in fair value of warrant liability
|
634
|
|
|
221
|
|
|
6,746
|
|
|
2,533
|
|
|
—
|
|
Interest income
|
55
|
|
|
93
|
|
|
228
|
|
|
223
|
|
|
173
|
|
Gain on held-for-trading financial instrument
|
—
|
|
|
—
|
|
|
—
|
|
|
1,278
|
|
|
687
|
|
|
689
|
|
|
1,432
|
|
|
6,974
|
|
|
6,231
|
|
|
1,792
|
|
Finance costs
|
|
|
|
|
|
|
|
|
|
|||||
Net losses due to changes in foreign currency exchange rates
|
(700
|
)
|
|
—
|
|
|
(382
|
)
|
|
—
|
|
|
—
|
|
Change in fair value of warrant liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,437
|
)
|
|
(700
|
)
|
|
—
|
|
|
(382
|
)
|
|
—
|
|
|
(5,437
|
)
|
|
(11
|
)
|
|
1,432
|
|
|
6,592
|
|
|
6,231
|
|
|
(3,645
|
)
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2010
|
Euro to US$ average conversion rate
|
|
1.2975
|
|
1.3477
|
|
1.2858
|
|
1.3919
|
|
1.3273
|
(in thousands, except for per share data)
|
Quarters ended
|
||||||||||
|
December 31, 2012
|
|
September 30, 2012
|
|
June 30,
2012
|
|
March 31, 2012
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
|
9,545
|
|
|
7,139
|
|
|
7,471
|
|
|
9,510
|
|
Loss from operations
|
(6,936
|
)
|
|
(5,680
|
)
|
|
(7,600
|
)
|
|
(6,788
|
)
|
Net (loss) income
|
(6,947
|
)
|
|
(6,554
|
)
|
|
4,540
|
|
|
(11,451
|
)
|
Net (loss) income per share*
|
|
|
|
|
|
|
|
||||
Basic
|
(0.29
|
)
|
|
(0.35
|
)
|
|
0.25
|
|
|
(0.65
|
)
|
Diluted
|
(0.29
|
)
|
|
(0.35
|
)
|
|
0.25
|
|
|
(0.65
|
)
|
|
Quarters ended
|
||||||||||
|
December 31, 2011
|
|
September 30, 2011
|
|
June 30,
2011
|
|
March 31, 2011
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
|
12,627
|
|
|
9,514
|
|
|
6,523
|
|
|
7,389
|
|
Loss from operations
|
(8,688
|
)
|
|
(8,244
|
)
|
|
(7,971
|
)
|
|
(7,291
|
)
|
Net (loss) income
|
(7,519
|
)
|
|
1,078
|
|
|
(10,569
|
)
|
|
(10,057
|
)
|
Net (loss) income per share*
|
|
|
|
|
|
|
|
||||
Basic
|
(0.44
|
)
|
|
0.07
|
|
|
(0.70
|
)
|
|
(0.72
|
)
|
Diluted
|
(0.44
|
)
|
|
0.06
|
|
|
(0.70
|
)
|
|
(0.72
|
)
|
*
|
Net (loss) income per share is based on the weighted average number of shares outstanding during each reporting period, which may differ on a quarter-to-quarter basis. As such, the sum of the quarterly net (loss) income per share amounts may not equal year-to-date net (loss) income per share.
|
|
As at December 31,
|
||||
(in thousands)
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Cash and cash equivalents
|
39,521
|
|
|
46,881
|
|
Trade and other receivables and other current assets
|
13,780
|
|
|
13,258
|
|
Restricted cash
|
826
|
|
|
806
|
|
Property, plant and equipment
|
2,147
|
|
|
2,512
|
|
Other non-current assets
|
11,391
|
|
|
11,912
|
|
Total assets
|
67,665
|
|
|
75,369
|
|
Payables and other current liabilities
|
15,675
|
|
|
17,784
|
|
Long-term payable (current and non-current portions)
|
30
|
|
|
88
|
|
Warrant liability (current and non-current portions)
|
6,176
|
|
|
9,204
|
|
Non-financial non-current liabilities*
|
52,479
|
|
|
52,839
|
|
Total liabilities
|
74,360
|
|
|
79,915
|
|
Shareholders' deficiency
|
(6,695
|
)
|
|
(4,546
|
)
|
Total liabilities and shareholders' deficiency
|
67,665
|
|
|
75,369
|
|
*
|
Comprised mainly of non-current portion of deferred revenues, employee future benefits and provision.
|
|
|
As at December 31, 2012
|
|||||||
(in thousands)
|
|
Minimum lease payments
|
|
Minimum sublease payments
|
|
Utilities
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Less than 1 year
|
|
1,669
|
|
|
(226
|
)
|
|
610
|
|
1 – 3 years
|
|
3,215
|
|
|
(451
|
)
|
|
861
|
|
4 – 5 years
|
|
997
|
|
|
(451
|
)
|
|
105
|
|
More than 5 years
|
|
29
|
|
|
(19
|
)
|
|
—
|
|
Total
|
|
5,910
|
|
|
(1,147
|
)
|
|
1,576
|
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
6,176
|
|
|
768
|
|
|
(783
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
768
|
|
|
(783
|
)
|
|
|
Carrying
amount |
|
Balances denominated in US$
|
|||||
|
|
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
24,551
|
|
|
1,228
|
|
|
(1,228
|
)
|
Warrant liability
|
|
6,176
|
|
|
(309
|
)
|
|
309
|
|
Total impact on net loss – decrease / (increase)
|
|
|
|
919
|
|
|
(919
|
)
|
|
|
Carrying
amount |
|
Balances denominated in CA$
|
|||||
|
|
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
7,064
|
|
|
353
|
|
|
(353
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
|
353
|
|
|
(353
|
)
|
Item 6.
|
Directors, Senior Management and Employees
|
A.
|
Directors and senior management
|
Name and Place of Residence
|
|
Position with Aeterna Zentaris
|
|
|
|
Aubut, Marcel
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Blake, Paul
|
|
Senior Vice President and Chief Medical Officer
|
Pennsylvania, United States
|
|
|
|
|
|
Dorais, José P.
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Egbert, Carolyn
|
|
Director
|
Texas, United States
|
|
|
|
|
|
Engel, Juergen
|
|
President and Chief Executive Officer and Director
|
Alzenau, Germany
|
|
|
|
|
|
Ernst, Juergen
|
|
Chairman of the Board and Director
|
Brussels, Belgium
|
|
|
|
|
|
Lapalme, Pierre
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Limoges, Gérard
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Métivier, Amélie
|
|
Assistant Secretary
|
Quebec, Canada
|
|
|
|
|
|
Meyers, Michael
|
|
Director
|
California, United States
|
|
|
|
|
|
Pelliccione, Nicholas
|
|
Senior Vice President, Regulatory Affairs and Quality Assurance
|
New York, United States
|
|
|
|
|
|
Shapiro, Elliot
|
|
Corporate Secretary
|
Quebec, Canada
|
|
|
|
|
|
Turpin, Dennis
|
|
Senior Vice President and Chief Financial Officer
|
Quebec, Canada
|
|
|
B.
|
Compensation
|
1.
|
Compensation of Outside Directors
|
Type of Compensation
|
Annual compensation for the year 2012
(in units of home country currency)
|
Chairman's Retainer
|
45,000
|
Board Retainer
|
15,000
|
Board Meeting Attendance Fees
|
1,000 per meeting
|
Audit Committee Chair Retainer
|
15,000
|
Audit Committee Member Retainer
|
4,000
|
Audit Committee Meeting Attendance Fees
|
1,000 per meeting
|
Governance Committee Chair Retainer
|
12,000
|
Governance Committee Member Retainer
|
2,000
|
Governance Committee Meeting Attendance Fees
|
1,000 per meeting
|
|
Option-based Awards
|
Share-based Awards
|
||||||||
Name
|
Issuance Date
|
Number of
Securities
Underlying
Unexercised
Options
(1)
|
Option
Exercise Price
|
Option
Expiration Date
|
Value of
Unexercised In-the-money
Options
(2)
|
Issuance Date
|
Number of
Shares or
Units of Shares
that have Not
Vested
|
Market or Payout
Value of Share-based
Awards that have Not Vested
|
||
|
(mm-dd-yyyy)
|
(#)
|
(CAN$ or US$)
|
(mm-dd-yyyy)
|
(CAN$ or US$)
|
(mm-dd-yyyy)
|
(#)
|
($)
|
||
Aubut, Marcel
|
12/11/2003
|
5,000
|
|
CAN$10.44
|
12/10/2013
|
—
|
|
—
|
—
|
—
|
|
12/14/2004
|
2,500
|
|
CAN$34,98
|
12/13/2014
|
—
|
|
—
|
—
|
—
|
|
12/13/2005
|
2,500
|
|
CAN$21.18
|
12/12/2015
|
—
|
|
—
|
—
|
—
|
|
01/04/2007
|
833
|
|
CAN$27.90
|
01/03/2017
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
4,166
|
|
CAN$10.92
|
12/10/2017
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
2,500
|
|
CAN$3.30
|
12/08/2018
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
3,333
|
|
CAN$5.70
|
12/08/2019
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
5,000
|
|
CAN$9.12
|
12/07/2020
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
8,333
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
Dorais, José P.
|
12/08/2010
|
5,000
|
|
CAN$9.12
|
12/07/2020
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
8,333
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
Egbert, Carolyn
|
12/06/2012
|
7,500
|
|
US$2.17
|
12/05/2022
|
US$1,575
|
|
—
|
—
|
—
|
Ernst, Juergen
|
02/25/2005
|
2,500
|
|
CAN$30.54
|
02/24/2015
|
—
|
|
—
|
—
|
—
|
|
12/13/2005
|
2,500
|
|
CAN$21.18
|
12/12/2015
|
—
|
|
—
|
—
|
—
|
|
01/04/2007
|
833
|
|
CAN$27.90
|
01/03/2017
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
4,166
|
|
CAN$10.92
|
12/10/2017
|
—
|
|
—
|
—
|
—
|
|
11/14/2008
|
16,666
|
|
CAN$3.90
|
11/13/2018
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
2,500
|
|
CAN$3.30
|
12/08/2018
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
3,333
|
|
CAN$5.70
|
12/08/2019
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
5,000
|
|
CAN$9.12
|
12/07/2020
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
8,333
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
Lapalme, Pierre
|
12/09/2009
|
3,333
|
|
CAN$5.70
|
12/08/2019
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
5,000
|
|
CAN$9.12
|
12/07/2020
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
8,333
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
Limoges, Gérard
|
12/14/2004
|
2,500
|
|
CAN$34,98
|
12/13/2014
|
—
|
|
—
|
—
|
—
|
|
12/13/2005
|
2,500
|
|
CAN$21,18
|
12/12/2015
|
—
|
|
—
|
—
|
—
|
|
01/04/2007
|
833
|
|
CAN$27,90
|
01/03/2017
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
4,166
|
|
CAN$10.92
|
12/10/2017
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
2,500
|
|
CAN$3.30
|
12/08/2018
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
3,333
|
|
CAN$5.70
|
12/08/2019
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
5,000
|
|
CAN$9.12
|
12/07/2020
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
8,333
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
Meyers, Michael
|
05/27/2011
|
3,333
|
|
US$14.16
|
05/26/2021
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
6,666
|
|
US$10.44
|
12/06/2021
|
—
|
|
—
|
—
|
—
|
|
05/09/2012
|
10,000
|
|
US$3.54
|
05/08/2022
|
—
|
|
—
|
—
|
—
|
(1)
|
The number of securities underlying unexercised options represent all awards outstanding as at December 31, 2012.
|
(2)
|
"Value of unexercised in-the-money options" at financial year-end is calculated based on the difference between the closing prices of the common shares on the TSX or NASDAQ, as applicable, on the last trading day of the fiscal year (December 31, 2012) of CAN$2.37 and US$2.38, respectively, and the exercise price of the options, multiplied by the number of unexercised options.
|
Name
|
Fees earned
($)
|
Share-based
Awards
|
Option-based
Awards
(2)
|
Non-Equity Incentive
Plan Compensation
|
Pension
Value
|
All Other
Compensation
(3)
|
Total
|
||||||
Retainer
(1)
|
Attendance
(1)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||||
Aubut, Marcel
|
15,009
|
|
4,503
|
|
—
|
27,672
|
|
—
|
—
|
—
|
|
47,184
|
|
Dorais, José P.
|
27,016
|
|
8,005
|
|
—
|
27,672
|
|
—
|
—
|
—
|
|
62,693
|
|
Egbert, Carolyn
(4)
|
5,707
|
|
3,500
|
|
—
|
13,374
|
|
—
|
—
|
—
|
|
22,581
|
|
Ernst, Juergen
|
79,720
|
|
10,286
|
|
—
|
27,672
|
|
—
|
—
|
2,572
|
|
120,250
|
|
Lapalme, Pierre
|
19,011
|
|
9,506
|
|
—
|
27,672
|
|
—
|
—
|
—
|
|
56,189
|
|
Limoges, Gérard
|
32,019
|
|
11,507
|
|
—
|
27,672
|
|
—
|
—
|
—
|
|
71,198
|
|
Meyers, Michael
|
19,000
|
|
8,000
|
|
—
|
27,672
|
|
—
|
—
|
—
|
|
54,672
|
|
(1)
|
These amounts represent the portion paid in cash to the Outside Directors and are paid in each director's home country currency.
|
(2)
|
The value of option-based awards represents the closing price of the common shares on NASDAQ on the last trading day preceding the date of grant (US$3.54 for options granted on May 9, 2012 and US$2.17 for options granted to Carolyn Egbert on December 6, 2012) multiplied by the Black-Scholes factor as at such date (78.17% for options granted on May 9, 2012 and 82.174% for options granted to Carolyn Egbert on December 6, 2012) and the number of stock options granted on such date.
|
(3)
|
These amounts represent fees paid in cash for special tasks or overseas travelling and are also paid in each director's home country currency.
|
(4)
|
Carolyn Egbert was appointed director on August 14, 2012 and has been a member of the Governance Committee since
December 6, 2012.
|
2.
|
Compensation of Executive Officers
|
•
|
providing the opportunity for an executive to earn compensation that is competitive with the compensation received by executives employed by a group of comparable North American companies;
|
•
|
providing executives with an equity-based incentive plan, namely a stock option plan;
|
•
|
aligning employee compensation with company corporate objectives; and
|
•
|
attracting and retaining highly qualified individuals in key positions.
|
Objectives for 2012
|
|
Results for 2012
|
|||
Clinical / Regulatory
|
|
|
|||
Advancement of product pipeline / Optimize regulatory strategy with lead authorities
|
|
|
|
|
|
l
|
Perifosine
|
|
l
|
Despite the negative results of perifosine in refractory colorectal cancer, the Company:
|
|
|
|
|
|
-
|
regained in full the North American rights to perifosine from Keryx and continued the Phase 3 trial in multiple myeloma following the review of different opinion leaders;
|
|
|
|
|
-
|
successfully managed alliances with partners Yakult Honsha Co. Ltd. (Japan), Handok Pharmaceuticals (South Korea) and Hikma Pharmaceuticals (MENA region); and
|
|
|
|
|
-
|
initiated a Phase 1 bridging study in Japan by the Company's partner for the Japanese market, Yakult Honsha Co. Ltd.
|
l
|
AEZS-108
|
|
l
|
Special Protocol Assessment (SPA) was granted by the Food and Drug Administration (FDA) for the initiation of a Phase 3 study in advanced recurrent endometrial cancer
|
|
|
|
|
l
|
Initiated the Phase 2 portion of a Phase 1/2 trial in castration- and taxane-resistant prostate cancer supported by the NIH
|
|
l
|
AEZS-130
|
|
l
|
Presented at 2 international conferences the Phase 3 results for AEZS-130, as a diagnostic test for AGHD
|
|
|
|
|
l
|
Initiated a Phase 2 study in cancer-induced cachexia under CRADA with the Michael E. DeBakey Veterans Affairs Medical Center, which is funding the study
|
|
|
|
|
l
|
Continued the preparation of the filing of a New Drug Application (NDA) for the registration of AEZS-130 as a diagnostic test for AGHD
|
|
l
|
AEZS-120
|
|
l
|
Presented preclinical data at an international conference underlining the feasibility of an oral therapeutic vaccination approach against prostate cancer
|
|
l
|
Cetrotide
®
|
|
l
|
Successful management of higher Cetrotide
®
demand; reduction of cost of goods
|
|
Business Development/Alliance Management
|
|
|
|
|
|
l
|
Ensure successful alliance management with existing drug development and commercialization partners
|
|
l
|
Continued to maintain excellent relations with alliance partners and identified new partners for potential alliances
|
|
Financial
|
|
|
|
|
|
l
|
Ensure the continued funding of ongoing drug development programs for a minimum period of time while maintaining flexibility to execute different forms of financing
|
|
l
|
Completed At-the-Market Financing (ATM) for aggregate net proceeds of $8.5 million
|
|
|
|
|
l
|
Completed a registered follow-on financing generating net proceeds of $15.1 million
|
|
|
|
|
l
|
Cash and cash equivalents as of December 31, 2012 totaled $39.5 million
|
|
l
|
Budget management
|
|
l
|
Tight budget control, effective management of liquidity and capital resources, including proceeds generated in financings described in the above bullet points
|
|
Investor Relations
|
|
|
|
|
|
l
|
Increase awareness: volume
|
|
l
|
Initiation and continuation of coverage by several analysts
|
|
l
|
Improve targeted investors
|
|
l
|
Presented at several strategic healthcare and partnership conferences and continued to build the Company's investor base and awareness
|
|
Human Resources
|
|
|
|
|
|
l
|
Maintain high level of motivation at all levels (and sites) of the Company and low level staff turnover
|
|
l
|
Maintained HR-attrition policy while progressing development pipeline
|
|
Aeterna Zentaris
|
Survey Reference Group
|
Location
|
North America and Europe
|
North America
|
Industries
|
Biopharmaceutical
|
Biopharmaceutical
|
Revenues
Last fiscal year
|
36.1
(1)
|
24.8
(2)
|
Market Capitalization
As at October 31, 2012
|
54.5
|
257.7
|
Net Loss
Last fiscal year
|
27.1
(1)
|
24.6
(2)
|
(1)
|
For the year ended December 31, 2011, as presented in the Company's 2011 audited consolidated financial statements, which were presented in conformity with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
|
(2)
|
The Reference Group for the financial year ended December 31, 2012 was selected in October 2012
and these data are based on their most recently completed fiscal year at such time.
|
(i)
|
base salary;
|
(ii)
|
non-equity incentives - consisting of an annual bonus linked to both individual and corporate performance;
|
(iii)
|
long-term equity incentives - consisting solely of stock options under the Company's Stock Option Plan established for the benefit of its directors, executive officers and employees (the "Stock Option Plan"); and
|
(iv)
|
other elements of compensation - consisting of benefits, perquisites and retirement benefits.
|
•
|
any amendment to Section 3.2 of the Stock Option Plan (which sets forth the limit on the number of options that may be granted to insiders) that would have the effect of permitting, without having to obtain shareholder approval on a "disinterested vote" at a duly convened shareholders' meeting, the grant of any option(s) under the Stock Option Plan otherwise prohibited by Section 3.2;
|
•
|
any amendment to the number of securities issuable under the Stock Option Plan (except for certain permitted adjustments, such as in the case of stock splits, consolidations or reclassifications);
|
•
|
any amendment which would permit any option granted under the Stock Option Plan to be transferable or assignable other than by will or in accordance with the applicable laws of estates and succession;
|
•
|
the addition of a cashless exercise feature, payable in cash or securities, which does not provide for a full deduction of the number of underlying securities from the Stock Option Plan reserve;
|
•
|
the addition of a deferred or restricted share unit component or any other provision which results in employees receiving securities while no cash consideration is received by the Company;
|
•
|
with respect to any option holder whether or not such option holder is an "insider" and except in respect of certain permitted adjustments, such as in the case of stock splits, consolidations or reclassifications:
|
◦
|
any reduction in the exercise price of any option after the option has been granted, or
|
◦
|
any cancellation of an option and the re-grant of that option under different terms;
|
•
|
any extension to the term of an option beyond its Outside Expiry Date to an option holder who is an "insider" (except for extensions made in the context of a "blackout period");
|
•
|
any amendment to the method of determining the exercise price of an option granted pursuant to the Stock Option Plan;
|
•
|
the addition of any form of financial assistance or any amendment to a financial assistance provision which is more favourable to employees; and
|
•
|
any amendment to the foregoing amending provisions requiring Board, shareholder and regulatory approvals.
|
•
|
amendments of a "housekeeping" or clerical nature or to clarify the provisions of the Stock Option Plan;
|
•
|
amendments regarding any vesting period of an option;
|
•
|
amendments regarding the extension of an option beyond an Early Expiry Date in respect of any option holder, or the extension of an option beyond the Outside Expiry Date in respect of any option holder who is a "non-insider" of the Company;
|
•
|
adjustments to the number of issuable common shares underlying, or the exercise price of, outstanding options resulting from a split or a consolidation of the common shares, a reclassification, the payment of a stock dividend, the payment of a special cash or non-cash distribution to our shareholders on a pro rata basis provided such distribution is approved by our shareholders in accordance with applicable law, a recapitalization, a reorganization or any other event which necessitates an equitable adjustment to the outstanding options in proportion with corresponding adjustments made to all outstanding common shares;
|
•
|
discontinuing or terminating the Stock Option Plan; and
|
•
|
any other amendment which does not require shareholder approval under the terms of the Stock Option Plan.
|
|
Option-based Awards
|
Share-based Awards
|
|||||||||||
Name
|
Issuance Date
|
Number of
Securities
Underlying
Unexercised
Options
(1)
|
Option
Exercise Price
|
Option
Expiration Date
|
Value of
Unexercised In-the-money
Options
(2)
|
Issuance Date
|
Number of
Shares or
Units of shares
that have Not
Vested
|
Market or Payout
Value of Share-based
Awards that have Not Vested
|
|||||
|
(mm-dd-yyyy)
|
(#)
|
(CAN$ or US$)
|
(mm-dd-yyyy)
|
(CAN$ or US$)
|
|
(#)
|
($)
|
|||||
Engel, Juergen
|
12/11/2003
|
|
10,000
|
|
CAN$10.44
|
|
12/10/2013
|
|
—
|
|
—
|
—
|
—
|
|
12/14/2004
|
|
16,666
|
|
CAN$34.98
|
|
12/13/2014
|
|
—
|
|
—
|
—
|
—
|
|
12/13/2005
|
|
8,333
|
|
CAN$21.18
|
|
12/12/2015
|
|
—
|
|
—
|
—
|
—
|
|
01/04/2007
|
|
8,333
|
|
CAN$27.90
|
|
01/03/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
|
8,333
|
|
CAN$10.92
|
|
12/10/2017
|
|
—
|
|
—
|
—
|
—
|
|
11/14/2008
|
|
33,333
|
|
CAN$3.90
|
|
11/13/2018
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
|
12,500
|
|
CAN$3.30
|
|
12/08/2018
|
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
|
27,500
|
|
CAN$5.70
|
|
12/08/2019
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
|
37,125
|
|
CAN$9.12
|
|
12/07/2020
|
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
|
44,499
|
|
US$10.44
|
|
12/06/2021
|
|
—
|
|
—
|
—
|
—
|
|
12/06/2012
|
|
133,400
|
|
US$2.17
|
|
12/05/2022
|
|
US$28,014
|
|
—
|
—
|
—
|
Turpin, Dennis
|
12/11/2003
|
|
10,000
|
|
CAN$10.44
|
|
12/10/2013
|
|
—
|
|
—
|
—
|
—
|
|
12/14/2004
|
|
15,000
|
|
CAN$34.98
|
|
12/13/2014
|
|
—
|
|
—
|
—
|
—
|
|
12/13/2005
|
|
8,333
|
|
CAN$21.18
|
|
12/12/2015
|
|
—
|
|
—
|
—
|
—
|
|
01/04/2007
|
|
8,333
|
|
CAN$27.90
|
|
01/03/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
|
8,333
|
|
CAN$10.92
|
|
12/10/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
|
19,166
|
|
CAN$5.70
|
|
12/08/2019
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
|
9,475
|
|
CAN$9.12
|
|
12/07/2020
|
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
|
17,353
|
|
US$10.44
|
|
12/06/2021
|
|
—
|
|
—
|
—
|
—
|
|
12/06/2012
|
|
84,000
|
|
US$2.17
|
|
12/05/2022
|
|
US$17,640
|
|
—
|
—
|
—
|
Blake, Paul
|
07/27/2007
|
|
7,500
|
|
US$18.30
|
|
07/26/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
|
8,333
|
|
US$10.92
|
|
12/10/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
|
8,333
|
|
CAN$3.30
|
|
12/08/2018
|
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
|
18,333
|
|
CAN$5.70
|
|
12/08/2019
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
|
10,675
|
|
CAN$9.12
|
|
12/07/2020
|
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
|
18,071
|
|
US$10.44
|
|
12/06/2021
|
|
—
|
|
—
|
—
|
—
|
|
12/06/2012
|
|
80,700
|
|
US$2.17
|
|
12/05/2022
|
|
US$16,947
|
|
—
|
—
|
—
|
Seeber, Matthias
(3)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
—
|
—
|
Pelliccione, Nicholas J.
|
05/07/2007
|
|
4,166
|
|
US$23.76
|
|
05/06/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/11/2007
|
|
8,333
|
|
US$10.92
|
|
12/10/2017
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2008
|
|
3,333
|
|
CAN$3.30
|
|
12/08/2018
|
|
—
|
|
—
|
—
|
—
|
|
12/09/2009
|
|
10,000
|
|
CAN$5.70
|
|
12/08/2019
|
|
—
|
|
—
|
—
|
—
|
|
12/08/2010
|
|
8,333
|
|
CAN$9.12
|
|
12/07/2020
|
|
—
|
|
—
|
—
|
—
|
|
12/07/2011
|
|
17,218
|
|
US$10.44
|
|
12/06/2021
|
|
—
|
|
—
|
—
|
—
|
|
12/06/2012
|
|
70,100
|
|
US$2.17
|
|
12/05/2022
|
|
US$14,721
|
|
—
|
—
|
—
|
(1)
|
The number of securities underlying unexercised options represents all awards outstanding at December 31, 2012.
|
(2)
|
"Value of unexercised in-the-money options" at financial year-end is calculated based on the difference between the closing prices of the common shares on the TSX or NASDAQ, as applicable, on the last trading day of the year (December 31, 2012) of CAN$2.37 and US$2.38, respectively, and the exercise price of the options, multiplied by the number of unexercised options.
|
(3)
|
All stock options held by Mr. Seeber were forfeited on December 31, 2012 in connection with his voluntary departure from the Company.
|
Name
|
Option-based awards - Value
vested during the year
(1)
|
Share-based awards - Value
vested during the year
|
Non-equity incentive plan
compensation - Value earned
during the year
|
|
($)
|
($)
|
($)
|
Engel, Juergen
|
—
|
—
|
—
|
Turpin, Dennis
|
—
|
—
|
—
|
Seeber, Matthias
(2)
|
—
|
—
|
—
|
Blake, Paul
|
—
|
—
|
—
|
Pelliccione, Nicholas J.
|
—
|
—
|
—
|
(1)
|
Represents the aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between the closing price of the common shares on the TSX or NASDAQ, as applicable, and the exercise price on such vesting date.
|
(2)
|
All stock options held by Mr. Seeber were forfeited on December 31, 2012 in connection with his voluntary departure from the Company.
|
(1)
|
By way of exception to other currency conversions in this document, all amounts in the above table have been converted from euros to US$ based on the exchange rate on December 31, 2012, which was €1.000 = US$1.319.
|
(2)
|
The figure in the column "Accrued obligation at year end" was further reduced by an amount of $206,089 representing the amount of mandatory pension payments made to Dr. Engel during 2012.
|
Name and principal
position
|
Years
|
|
Salary
|
|
Share based
awards
|
|
Option based
awards
(1)
|
|
Non-equity incentive
plan compensation
|
|
Pension
Value
|
|
All other
compensation
(2)
|
|
Total
compensation
|
||||||||||||
|
Annual
incentive
plan
|
|
Long-term
incentive
plans
|
|
|||||||||||||||||||||||
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
||||||||||
Engel, Juergen
President and CEO
|
2012
|
|
443,601
|
|
(3)
|
|
—
|
|
|
237,876
|
|
|
—
|
|
|
—
|
|
|
797,849
|
|
|
200,974
|
|
(4)
|
|
1,680,300
|
|
2011
|
|
505,260
|
|
|
|
—
|
|
|
336,420
|
|
|
160,764
|
|
|
—
|
|
|
590,136
|
|
|
214,212
|
|
(4)
|
|
1,806,792
|
|
|
2010
|
|
419,348
|
|
|
|
—
|
|
|
265,763
|
|
|
109,395
|
|
|
—
|
|
|
34,605
|
|
|
68,593
|
|
(5)
|
|
897,704
|
|
|
Turpin, Dennis
Senior Vice President and CFO
|
2012
|
|
341,605
|
|
|
|
—
|
|
|
149,787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
491,392
|
|
2011
|
|
332,434
|
|
|
|
—
|
|
|
131,198
|
|
|
80,509
|
|
|
—
|
|
|
—
|
|
|
5,056
|
|
(6)
|
|
549,197
|
|
|
2010
|
|
309,978
|
|
|
|
—
|
|
|
67,828
|
|
|
55,169
|
|
|
—
|
|
|
—
|
|
|
7,518
|
|
(6)
|
|
440,493
|
|
|
Seeber, Matthias
Former Senior Vice President, Administration and Legal Affairs
|
2012
|
|
327,879
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135,172
|
|
(7)
|
|
463,051
|
|
2011
|
|
342,512
|
|
|
|
—
|
|
|
131,576
|
|
|
82,818
|
|
|
—
|
|
|
—
|
|
|
56,966
|
|
(8)
|
|
613,872
|
|
|
2010
|
|
288,162
|
|
|
|
—
|
|
|
62,011
|
|
|
51,051
|
|
|
—
|
|
|
—
|
|
|
38,217
|
|
(8)
|
|
439,441
|
|
|
Blake, Paul
Senior Vice President and Chief Medical Officer
|
2012
|
|
384,300
|
|
|
|
—
|
|
|
143,902
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
539,202
|
|
2011
|
|
370,223
|
|
|
|
—
|
|
|
136,622
|
|
|
89,670
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
607,515
|
|
|
2010
|
|
359,876
|
|
|
|
—
|
|
|
76,418
|
|
|
64,050
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
511,344
|
|
|
Pelliccione, Nicholas J.
Senior Vice President Regulatory Affairs and Quality Assurance
|
2012
|
|
333,600
|
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
469,600
|
|
2011
|
|
321,062
|
|
|
|
—
|
|
|
130,178
|
|
|
77,739
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
539,979
|
|
|
2010
|
|
311,992
|
|
|
|
—
|
|
|
59,655
|
|
|
50,001
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
(9)
|
|
432,648
|
|
(1)
|
The value of option-based awards represents the closing price of the common shares on NASDAQ on the last trading day preceding the date of grant (US$2.17 for options granted on December 6, 2012, US$10.44 for options granted on December 7, 2011 and CAN$9.12 equivalent to US$8.82 for options granted on December 8, 2010) multiplied by the Black-Scholes factor as at such dates (82,174% for options granted on December 6, 2012, 72.414% for options granted on December 7, 2011 and 80.921% for options granted on December 8, 2010) and the number of stock options granted on such dates.
|
(2)
|
"All Other Compensation" represents perquisites and other personal benefits which, in the aggregate, amount to $50,000 or more, or are equivalent to 10% or more of a Named Executive Officer's total salary for the financial year ended December 31, 2012. The type and amount of each perquisite, the value of which exceeds 25% of the total value of perquisites, is separately disclosed for each Named Executive Officer, if applicable. In the case of the President and CEO, "All Other Compensation" also includes mandatory pension payments paid to him commencing in 2010. See note (4) below.
|
(3)
|
In accordance with Dr. Engel's employment agreement, he was entitled to be paid a base salary in the amount of $501,462 (converted from euros to US$ based on an annual salary of €390,000) for 2012. However, Dr. Engel voluntarily offered to reduce his salary by an amount of $57,861 in 2012.
|
(4)
|
Represents mandatory pension payments made to Dr. Engel in each of 2012 and 2011.
|
(5)
|
Represents DUPK/RUK (Germany) employer contributions to Dr. Engel's retirement savings plans from January 1, 2010 to August 31, 2010. The reported amount also includes $67,169 in mandatory pension payments made to Dr. Engel after attaining age 65 commencing on September 1, 2010 for the remainder of 2010. See Section 6.5.2, "Pension Plan", above.
|
(6)
|
Represents RRSP employer contribution to Mr. Turpin's retirement savings plan.
|
(7)
|
Represents DUPK/RUK (Germany) employer contribution to Mr. Seeber's retirement savings plan. The reported amount also includes $64,290 paid to Mr. Seeber upon his departure on December 31, 2012 in recognition of his contribution and service over the years with the Company.
|
(8)
|
Represents DUPK/RUK (Germany) employer contribution to Mr. Seeber's retirement savings plan.
|
(9)
|
Represents 401(k) employer contributions to Messrs. Blake's and Pelliccione's retirement savings plans.
|
C.
|
Board Practices
|
D.
|
Employees
|
E.
|
Share ownership
|
(1)
|
Ba
sed on 25,329,288 com
mon shares outstanding as at March 21, 2013.
|
(2)
|
For information regarding option expiration dates and exercise price refer to the tables included under Item 6.B.
|
(3)
|
All stock options held by Mr. Seeber were forfeited on December 31, 2012 in connection with his voluntary departure from the Company.
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
A.
|
Major shareholders
|
Name of Shareholder
|
Common Shares
|
Total Percentage of Voting Rights
|
1 Globe Capital LLC
|
1,796,433
|
7.09%
|
B.
|
Related party transactions
|
C.
|
Interests of experts and counsel
|
Item 8.
|
Financial Information
|
A.
|
Consolidated statements and other financial information
|
B.
|
Significant changes
|
Item 9.
|
The Offering and Listing
|
A.
|
Offer and listing details
|
|
NASDAQ (US$)
|
TSX (CAN$)
|
||||||
|
High
|
Low
|
High
|
Low
|
||||
2012
|
12.90
|
|
1.87
|
|
12.84
|
|
1.87
|
|
2011
|
15.48
|
|
8.58
|
|
15.06
|
|
8.46
|
|
2010
|
12.54
|
|
4.74
|
|
12.84
|
|
4.80
|
|
2009
|
16.98
|
|
2.76
|
|
18.66
|
|
3.42
|
|
2008
|
10.80
|
|
2.40
|
|
11.10
|
|
2.64
|
|
|
|
|
|
|
||||
2011
|
|
|
|
|
||||
Fourth quarter
|
10.68
|
|
8.58
|
|
10.80
|
|
8.82
|
|
Third quarter
|
14.10
|
|
8.58
|
|
13.56
|
|
8.46
|
|
Second quarter
|
15.48
|
|
10.92
|
|
15.06
|
|
10.50
|
|
First quarter
|
11.98
|
|
9.30
|
|
11.58
|
|
9.24
|
|
|
|
|
|
|
||||
2012
|
|
|
|
|
||||
Fourth quarter
|
4.12
|
|
1.87
|
|
4.08
|
|
1.87
|
|
Third quarter
|
5.06
|
|
2.35
|
|
5.04
|
|
2.34
|
|
Second quarter
|
4.80
|
|
2.29
|
|
4.80
|
|
2.40
|
|
First quarter
|
12.90
|
|
9.36
|
|
12.84
|
|
9.42
|
|
|
|
|
|
|
||||
Most recent 6 months
|
|
|
|
|
||||
March 2013
(1)
|
2.62
|
|
1.91
|
|
2.67
|
|
1.95
|
|
February 2013
|
3.04
|
|
2.41
|
|
3.03
|
|
2.45
|
|
January 2013
|
3.23
|
|
2.53
|
|
3.27
|
|
2.48
|
|
December 2012
|
2.47
|
|
2.17
|
|
2.49
|
|
2.14
|
|
November 2012
|
2.32
|
|
1.87
|
|
2.29
|
|
1.87
|
|
October 2012
|
4.12
|
|
2.15
|
|
4.08
|
|
2.07
|
|
September 2012
|
5.06
|
|
2.90
|
|
5.04
|
|
2.82
|
|
B.
|
Plan of distribution
|
C.
|
Markets
|
D.
|
Selling shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the issuer
|
A.
|
Share capital
|
B.
|
Memorandum and articles of association
|
•
|
relates primarily to his or her remuneration as a director, officer, employee or agent of the Company or an affiliate;
|
•
|
is for indemnity or insurance for director's liability as permitted by the CBCA; or
|
•
|
is with an affiliate of the Company.
|
•
|
borrow money upon the credit of the Company;
|
•
|
issue, reissue, sell or pledge debt obligations of the Company;
|
•
|
give a guarantee on behalf of the Company to secure performance of an obligation of any person; and
|
•
|
mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Company, owned or subsequently acquired, to secure any obligation of the Company.
|
(a)
|
he or she acted in good faith in the best interests of the Company; and
|
(b)
|
in the case of a criminal or an administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds to believe that his or her conduct was lawful.
|
1.
|
the first date (the "Stock Acquisition Date") of a public announcement of facts indicating that a person has become an Acquiring Person; and
|
2.
|
the date of the commencement of, or first public announcement of the intention of any person (other than the Company or any of its subsidiaries) to commence a take-over bid or a share exchange bid for more than 20% of the outstanding common shares of the Company other than a Permitted Bid or a Competing Permitted Bid (as defined below), so long as such take-over bid continues to satisfy the requirements of a Permitted Bid or a Competing Permitted Bid), as the case may be.
|
1.
|
the take-over bid must be made by means of a take-over bid circular;
|
2.
|
the take-over bid must be made to all holders of common shares wherever resident, on identical terms and conditions, other than the bidder;
|
3.
|
the take-over bid must not permit common shares tendered pursuant to the bid to be taken up or paid for:
|
a)
|
prior to the close of business on a date which is not less than 60 days following the date of the bid, and
|
b)
|
then only if at such date more than 50% of the then outstanding common shares held by shareholders other than any other Acquiring Person, the bidder, the bidder's affiliates or associates, persons acting jointly or in concert with the bidder and any employee benefit plan, deferred profit-sharing plan, stock participation plan or trust for the benefit of employees of the Company or any of its subsidiaries, unless the beneficiaries of such plan or trust direct the manner in which the common shares are to be voted or direct whether the common shares are to be tendered to a take-over bid (the "Independent Shareholders"), have been deposited or tendered to the take-over bid and not withdrawn;
|
4.
|
the take-over bid must allow common shares to be deposited, unless the take-over bid is withdrawn, at any time up to the close of business on the date that the common shares are to be first taken up and paid for;
|
5.
|
the take-over bid must allow common shares to be withdrawn until taken up and paid for; and
|
6.
|
if more than 50% of the then outstanding common shares held by Independent Shareholders are deposited or tendered to the take-over bid within the 60-day period and not withdrawn, the bidder must make a public announcement of that fact and the take-over bid must remain open for deposits and tenders of common shares for not less than ten days from the date of such public announcement.
|
C.
|
Material contracts
|
•
|
for Dr. Engel, (i) the equivalent of 24 months of his then prevailing annual base salary, (ii) an amount equivalent to twice the annual bonus, if any, which he would have been entitled to receive in the year during which the Change of Control occurred, and (iii) an amount equivalent to 24 months of the value of the benefits which were in force at the time of termination of his employment, calculated on a yearly basis, including car allowance, but excluding operating costs;
|
•
|
for Mr. Turpin, the Change of Control Payment would be the same as in the context of a termination of employment described above, except that the 1.5 multiple of his bonus payment would be based on his potential bonus for the year in which the Change of Control occurs as opposed to his actual bonus received for the preceding financial year; and
|
•
|
for Dr. Blake and Dr. Pelliccione (i) the equivalent of 18 months of their then prevailing annual base salaries, (ii) an amount equivalent to 1.5 times the annual bonus, if any, which the executive would have been entitled to receive in the year during which the Change of Control occurred, and (iii) an amount equivalent to 18 months of the value of the benefits which were in force at the time of termination of the executive's employment, calculated on a yearly basis, including car allowance, but excluding operating costs.
|
•
|
a "Change of Control" shall be deemed to have occurred in any of the following circumstances: (i) subject to certain exceptions, upon the acquisition by a person (or one or more persons who are affiliates of one another or who are acting jointly or in concert)
of a beneficial interest in securities of the Company representing in any circumstance 50% or more of the voting rights attaching to the then outstanding securities of the Company; (ii) upon a sale or other disposition of all or substantially all of the Company's assets; (iii) upon a plan of liquidation or dissolution of the Company; or (iv) if, for any reason, including an amalgamation, merger or consolidation of the Company with or into another company, the individuals who, as at the date of the relevant Employment Agreement, constituted the Board (and any new directors whose appointment by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors as at the date of the relevant Employment Agreement or whose appointment or nomination for election was previously so approved) cease to constitute a majority of the members of the Board;
|
•
|
termination of employment by the Company "for Cause" includes (but is not limited to) (i) if the executive commits any fraud, theft, embezzlement or other criminal act of a similar nature, and (ii) if the executive is guilty of serious misconduct or willful negligence in the performance of his duties; and
|
•
|
termination of employment by the executive officer for "Good Reason" means the occurrence, without the executive's express written consent, of any of the following acts: (i) a material reduction of the executive's total compensation (including annual base salary plus annual bonus, benefits and number of stock options) as in effect on the date of the relevant Employment Agreement or as same may be increased from time to time; (ii) a material reduction or change in the executive's duties, authority, responsibilities, accountability or a change in the business or corporate structure of the Company which materially affects his or her authority, compensation or ability to perform duties or responsibilities (such as shifting from a policy-making to a policy-implementation
position); (iii) a forced relocation; or (iv) a material change in the terms and conditions of the change of control provisions included in the relevant Employment Agreement.
|
D.
|
Exchange controls
|
E.
|
Taxation
|
•
|
dealers in stocks, securities or currencies;
|
•
|
securities traders that use a mark-to-market accounting method;
|
•
|
banks and financial institutions;
|
•
|
insurance companies;
|
•
|
regulated investment companies;
|
•
|
real estate investment trusts;
|
•
|
tax-exempt organizations;
|
•
|
retirement plans, individual plans, individual retirement accounts and tax-deferred accounts;
|
•
|
partnerships or other pass-through entities for U.S. federal income tax purposes and their partners or members;
|
•
|
persons holding common shares as part of a hedging or conversion transaction straddle or other integrated or risk reduction transaction;
|
•
|
persons who or that are, or may become, subject to the expatriation provisions of the Code;
|
•
|
persons whose functional currency is not the U.S. dollar; and
|
•
|
direct, indirect or constructive owners of 10% or more of the total combined voting power of all classes of our voting stock.
|
•
|
an individual citizen or resident of the United States;
|
•
|
a corporation or other entity classified as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust, if (a) a court within the United States is able to exercise primary supervision over the administration of such trust and one or more "U.S. persons" (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (b) a valid election is in effect to be treated as a U.S. person for U.S. federal income tax purposes.
|
F.
|
Dividends and paying agents
|
G.
|
Statement by experts
|
H.
|
Documents on display
|
I.
|
Subsidiary information
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk
|
•
|
The Company's loans and receivables are comprised of cash and cash equivalents, trade and other receivables and restricted cash.
|
•
|
Financial liabilities at FVTPL are currently comprised of the Company's warrant liability.
|
•
|
Other financial liabilities include trade accounts payable and accrued liabilities, long-term payable and other long-term liabilities.
|
(a)
|
Credit risk
|
(b)
|
Market risk
|
|
|
Carrying
amount
|
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
6,176
|
|
|
768
|
|
|
(783
|
)
|
Total impact on net loss – decrease/(increase)
|
|
|
|
768
|
|
|
(783
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
|
|
Carrying
amount
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
24,551
|
|
|
1,228
|
|
|
(1,228
|
)
|
Warrant liability
|
|
6,176
|
|
|
(309
|
)
|
|
309
|
|
Total impact on net loss – decrease/(increase)
|
|
|
|
919
|
|
|
(919
|
)
|
|
|
|
|
Balances denominated in CA$
|
|||||
|
|
Carrying
amount
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
7,064
|
|
|
353
|
|
|
(353
|
)
|
Total impact on net loss – decrease/(increase)
|
|
|
|
353
|
|
|
(353
|
)
|
(1)
|
Hypothetical change based on historical quarterly closing rates analysis.
|
Item 12.
|
Description of Securities Other than Equity Securities
|
A.
|
Debt securities
|
B.
|
Warrants and rights
|
C.
|
Other securities
|
D.
|
American depositary shares
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
Item 14.
|
Material Modification to the Rights of Security Holders and Use of Proceeds
|
Item 15.
|
Controls and Procedures
|
Item 16A.
|
Audit Committee Financial Expert
|
Item 16B.
|
Code of Ethics
|
Item 16C.
|
Principal Accountant Fees and Services
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Item 16F.
|
Changes in Registrant's Certifying Accountant
|
Item 16G.
|
Corporate Governance
|
Item 16H.
|
Mine Safety Disclosure
|
Item 17
|
Financial Statements
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Financial Position
|
(in thousands of US dollars)
|
|
December 31, 2012
|
|
December 31, 2011
|
||
|
$
|
|
$
|
||
ASSETS
|
|
|
|
||
Current assets
|
|
|
|
||
Cash and cash equivalents (note 6)
|
39,521
|
|
|
46,881
|
|
Trade and other receivables (note 7)
|
7,993
|
|
|
8,325
|
|
Inventory (note 8)
|
4,084
|
|
|
3,456
|
|
Prepaid expenses and other current assets
|
1,703
|
|
|
1,477
|
|
|
53,301
|
|
|
60,139
|
|
Restricted cash (note 9)
|
826
|
|
|
806
|
|
Property, plant and equipment (note 10)
|
2,147
|
|
|
2,512
|
|
Other non-current assets
|
797
|
|
|
830
|
|
Identifiable intangible assets (note 11)
|
1,128
|
|
|
1,769
|
|
Goodwill (note 12)
|
9,466
|
|
|
9,313
|
|
|
67,665
|
|
|
75,369
|
|
LIABILITIES
|
|
|
|
||
Current liabilities
|
|
|
|
||
Payables and accrued liabilities (note 13)
|
10,440
|
|
|
12,257
|
|
Current portion of deferred revenues (note 5)
|
5,235
|
|
|
5,310
|
|
Income taxes (note 21)
|
—
|
|
|
259
|
|
Current portion of long-term payable
|
30
|
|
|
59
|
|
|
15,705
|
|
|
17,885
|
|
Deferred revenues (note 5)
|
34,663
|
|
|
39,242
|
|
Warrant liability (note 14)
|
6,176
|
|
|
9,162
|
|
Long-term payable
|
—
|
|
|
29
|
|
Employee future benefits (note 18)
|
17,231
|
|
|
12,880
|
|
Provision and other non-current liabilities (note 15)
|
585
|
|
|
717
|
|
|
74,360
|
|
|
79,915
|
|
SHAREHOLDERS' DEFICIENCY
|
|
|
|
||
Share capital (note 16)
|
122,791
|
|
|
101,884
|
|
Other capital
|
83,892
|
|
|
82,327
|
|
Deficit
|
(213,086
|
)
|
|
(188,969
|
)
|
Accumulated other comprehensive (loss) income
|
(292
|
)
|
|
212
|
|
|
(6,695
|
)
|
|
(4,546
|
)
|
|
67,665
|
|
|
75,369
|
|
|
|
|
Juergen Ernst
Director
|
|
Gérard Limoges
Director
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Changes in Shareholders' Deficiency
|
For the years ended December 31, 2012, 2011 and 2010
|
(in thousands of US dollars, except share data)
|
|
Common shares (number of)
1-2
|
|
Share capital
|
|
Other capital
|
|
Deficit
|
|
Accumulated other comprehensive income (loss)
|
|
Total
|
||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance - January 1, 2012
|
17,460,349
|
|
|
101,884
|
|
|
82,327
|
|
|
(188,969
|
)
|
|
212
|
|
|
(4,546
|
)
|
Net loss
|
|
|
|
—
|
|
|
—
|
|
|
(20,412
|
)
|
|
—
|
|
|
(20,412
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(504
|
)
|
|
(504
|
)
|
Actuarial loss on defined benefit plans (note 18)
|
|
|
|
—
|
|
|
—
|
|
|
(3,705
|
)
|
|
—
|
|
|
(3,705
|
)
|
Comprehensive loss
|
|
|
|
—
|
|
|
—
|
|
|
(24,117
|
)
|
|
(504
|
)
|
|
(24,621
|
)
|
Share issuance in connection with a public offering (note 16)
|
6,600,000
|
|
|
11,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,265
|
|
Share issuances in connection with "At-the-Market" drawdowns (note 16)
|
1,190,973
|
|
|
8,382
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,382
|
|
Share issuances pursuant to the exercise of warrants (note 14)
|
52,383
|
|
|
819
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
819
|
|
Share issuances pursuant to the exercise of stock options (note 16)
|
25,583
|
|
|
441
|
|
|
(232
|
)
|
|
—
|
|
|
—
|
|
|
209
|
|
Share-based compensation costs
|
—
|
|
|
—
|
|
|
1,797
|
|
|
—
|
|
|
—
|
|
|
1,797
|
|
Balance - December 31, 2012
|
25,329,288
|
|
|
122,791
|
|
|
83,892
|
|
|
(213,086
|
)
|
|
(292
|
)
|
|
(6,695
|
)
|
|
Common shares (number of)
1-2
|
|
Share capital
|
|
Other capital
|
|
Deficit
|
|
Accumulated other comprehensive income (loss)
|
|
Total
|
||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance - January 1, 2011
|
13,904,986
|
|
|
60,900
|
|
|
81,091
|
|
|
(160,567
|
)
|
|
1,001
|
|
|
(17,575
|
)
|
Net loss
|
|
|
—
|
|
|
—
|
|
|
(27,067
|
)
|
|
—
|
|
|
(27,067
|
)
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(789
|
)
|
|
(789
|
)
|
|
Actuarial loss on defined benefit plans (note 18)
|
|
|
—
|
|
|
—
|
|
|
(1,335
|
)
|
|
—
|
|
|
(1,335
|
)
|
|
Comprehensive loss
|
|
|
|
—
|
|
|
—
|
|
|
(28,402
|
)
|
|
(789
|
)
|
|
(29,191
|
)
|
Share issuances in connection with "At-the-Market" drawdowns, net of transaction costs
|
3,244,094
|
|
|
35,881
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,881
|
|
Share issuances pursuant to the exercise of warrants (note 14)
|
284,545
|
|
|
4,861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,861
|
|
Share issuances pursuant to the exercise of stock options (note 16)
|
26,724
|
|
|
242
|
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
145
|
|
Share-based compensation costs
|
—
|
|
|
—
|
|
|
1,333
|
|
|
—
|
|
|
—
|
|
|
1,333
|
|
Balance - December 31, 2011
|
17,460,349
|
|
|
101,884
|
|
|
82,327
|
|
|
(188,969
|
)
|
|
212
|
|
|
(4,546
|
)
|
2
|
Adjusted to reflect the October 2, 2012 6-to-1 share consolidation (see note 1 – Summary of business, liquidity risk, reporting entity and basis of preparation and note 16 – Share capital)
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Changes in Shareholders' Deficiency
|
For the years ended December 31, 2012, 2011 and 2010
|
(in thousands of US dollars, except share data)
|
|
Common shares (number of)
1-2
|
|
Share capital
|
|
Other capital
|
|
Deficit
|
|
Accumulated other comprehensive income (loss)
|
|
Total
|
||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance - January 1, 2010
|
10,514,992
|
|
|
41,524
|
|
|
79,943
|
|
|
(132,307
|
)
|
|
—
|
|
|
(10,840
|
)
|
Net loss
|
|
|
|
—
|
|
|
—
|
|
|
(28,451
|
)
|
|
—
|
|
|
(28,451
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,001
|
|
|
1,001
|
|
Actuarial gain on defined benefit plans (note 18)
|
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
—
|
|
|
191
|
|
Comprehensive loss
|
|
|
—
|
|
|
—
|
|
|
(28,260
|
)
|
|
1,001
|
|
|
(27,259
|
)
|
|
Issuances pursuant to registered direct offerings, net of transaction costs
|
3,319,513
|
|
|
18,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,391
|
|
Issuance pursuant to the exercise of warrants (note 14)
|
49,803
|
|
|
829
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
829
|
|
Issuance pursuant to the exercise of stock options (note 16)
|
20,678
|
|
|
156
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
112
|
|
Share-based compensation costs
|
—
|
|
|
—
|
|
|
1,192
|
|
|
—
|
|
|
—
|
|
|
1,192
|
|
Balance - December 31, 2010
|
13,904,986
|
|
|
60,900
|
|
|
81,091
|
|
|
(160,567
|
)
|
|
1,001
|
|
|
(17,575
|
)
|
2
|
Adjusted to reflect the October 2, 2012 6-to-1 share consolidation (see note 1 – Summary of business, liquidity risk, reporting entity and basis of preparation and note 16 – Share capital)
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Comprehensive Loss
|
For the years ended December 31, 2012, 2011 and 2010
|
(in thousands of US dollars, except share and per share data)
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|||
Sales and royalties
|
31,538
|
|
|
31,306
|
|
|
24,857
|
|
License fees and other
|
2,127
|
|
|
4,747
|
|
|
2,846
|
|
|
33,665
|
|
|
36,053
|
|
|
27,703
|
|
Operating expenses (note 17)
|
|
|
|
|
|
|||
Cost of sales
|
26,820
|
|
|
27,560
|
|
|
18,700
|
|
Research and development costs, net of refundable tax credits and grants
|
20,604
|
|
|
24,517
|
|
|
21,257
|
|
Selling, general and administrative expenses
(notes 10 and 11)
|
13,245
|
|
|
16,170
|
|
|
12,552
|
|
|
60,669
|
|
|
68,247
|
|
|
52,509
|
|
Loss from operations
|
(27,004
|
)
|
|
(32,194
|
)
|
|
(24,806
|
)
|
Finance income (note 19)
|
6,974
|
|
|
6,231
|
|
|
1,792
|
|
Finance costs (note 19)
|
(382
|
)
|
|
—
|
|
|
(5,437
|
)
|
Net finance (costs) income
|
6,592
|
|
|
6,231
|
|
|
(3,645
|
)
|
Loss before income taxes
|
(20,412
|
)
|
|
(25,963
|
)
|
|
(28,451
|
)
|
Income tax expense (notes 5 and 21)
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Net loss
|
(20,412
|
)
|
|
(27,067
|
)
|
|
(28,451
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|||
Items that may be reclassified subsequently to profit or loss
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(504
|
)
|
|
(789
|
)
|
|
1,001
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|||
Actuarial loss on defined benefit plans
|
(3,705
|
)
|
|
(1,335
|
)
|
|
191
|
|
Comprehensive loss
|
(24,621
|
)
|
|
(29,191
|
)
|
|
(27,259
|
)
|
Net loss per share (note 25)
|
|
|
|
|
|
|||
Basic
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Diluted
|
(1.03
|
)
|
|
(1.72
|
)
|
|
(2.26
|
)
|
Weighted average number of shares outstanding
(notes 16 and 25)
|
|
|
|
|
|
|||
Basic
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
Diluted
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Cash Flows
|
For the years ended December 31, 2012, 2011 and 2010
|
(in thousands of US dollars)
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|||
Net loss
|
(20,412
|
)
|
|
(27,067
|
)
|
|
(28,451
|
)
|
Items not affecting cash and cash equivalents
|
|
|
|
|
|
|||
Change in fair value of warrant liability (note 14)
|
(6,746
|
)
|
|
(2,533
|
)
|
|
5,437
|
|
Depreciation, amortization and impairment (notes 10 and 11)
|
1,319
|
|
|
2,876
|
|
|
1,573
|
|
Share-based compensation costs (note 16)
|
1,797
|
|
|
1,333
|
|
|
1,192
|
|
Non-cash consideration received in connection with an amended licensing agreement
|
—
|
|
|
—
|
|
|
(1,263
|
)
|
Gain on held-for-trading financial instrument
|
—
|
|
|
(1,278
|
)
|
|
(687
|
)
|
Employee future benefits (note 18)
|
335
|
|
|
492
|
|
|
249
|
|
Amortization of deferred revenues
|
(5,252
|
)
|
|
(5,840
|
)
|
|
(5,873
|
)
|
Foreign exchange (gain) loss on items denominated in foreign currencies
|
614
|
|
|
(1,955
|
)
|
|
(965
|
)
|
(Gain) loss on disposal of property, plant and equipment
|
—
|
|
|
(26
|
)
|
|
28
|
|
Amortization of prepaid expenses and other non-cash items
|
5,124
|
|
|
4,207
|
|
|
4,587
|
|
Changes in operating assets and liabilities (note 20)
|
(7,594
|
)
|
|
3,548
|
|
|
(7,539
|
)
|
Net cash used in operating activities
|
(30,815
|
)
|
|
(26,243
|
)
|
|
(31,712
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|||
Proceeds from issuances of common shares and warrants, net of cash transaction costs of $1,665 in 2012, $1,204 in 2011 and $1,506 in 2010 (note 16)
|
23,619
|
|
|
36,250
|
|
|
25,580
|
|
Proceeds from the exercise of share purchase warrants (note 14)
|
437
|
|
|
2,222
|
|
|
396
|
|
Proceeds from the exercise of stock options (note 16)
|
209
|
|
|
145
|
|
|
112
|
|
Repayment of long-term payable
|
(57
|
)
|
|
(61
|
)
|
|
(59
|
)
|
Net cash provided by financing activities
|
24,208
|
|
|
38,556
|
|
|
26,029
|
|
Cash flows from investing activities
|
|
|
|
|
|
|||
Proceeds from the sale of short-term investment
|
—
|
|
|
3,242
|
|
|
—
|
|
Purchase of identifiable intangible assets (note 11 )
|
—
|
|
|
(69
|
)
|
|
—
|
|
Purchase of property, plant and equipment (note 10)
|
(272
|
)
|
|
(736
|
)
|
|
(82
|
)
|
Disposals of property, plant and equipment (note 10)
|
—
|
|
|
26
|
|
|
32
|
|
Net cash provided by (used in) investing activities
|
(272
|
)
|
|
2,463
|
|
|
(50
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
(481
|
)
|
|
107
|
|
|
(369
|
)
|
Net change in cash and cash equivalents
|
(7,360
|
)
|
|
14,883
|
|
|
(6,102
|
)
|
Cash and cash equivalents – Beginning of the year
|
46,881
|
|
|
31,998
|
|
|
38,100
|
|
Cash and cash equivalents – End of the year
|
39,521
|
|
|
46,881
|
|
|
31,998
|
|
Cash and cash equivalents components (note 6):
|
|
|
|
|
|
|||
Cash
|
15,441
|
|
|
15,112
|
|
|
12,922
|
|
Cash equivalents
|
24,080
|
|
|
31,769
|
|
|
19,076
|
|
|
39,521
|
|
|
46,881
|
|
|
31,998
|
|
1
|
Summary of business, liquidity risk, reporting entity, share consolidation and basis of preparation
|
(a)
|
Statement of compliance
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(b)
|
Principles of consolidation
|
(c)
|
Foreign currency
|
2
|
Summary of significant accounting policies
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
Methods
|
|
Annual rates and period
|
Equipment
|
Declining balance and straight-line
|
|
20%
|
Furniture and fixtures
|
Declining balance and straight-line
|
|
10% and 20%
|
Computer equipment
|
Straight-line
|
|
25% and 33
1
/
3
%
|
Leasehold improvements
|
Straight-line
|
|
Remaining lease term
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(a)
|
Classification
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(b)
|
Recognition and measurement
|
(c)
|
Impairment
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
3
|
Critical accounting estimates and judgments
|
a)
|
Critical accounting estimates and assumptions
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
b)
|
Critical judgement in applying the entity's accounting policies
|
4
|
Recent accounting pronouncements
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
5
|
Development, commercialization and license agreement
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
6
|
Cash and cash equivalents
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Cash on hand and balances with banks
|
15,441
|
|
|
15,112
|
|
Three months or less interest-bearing deposits
|
24,080
|
|
|
31,769
|
|
|
39,521
|
|
|
46,881
|
|
7
|
Trade and other receivables
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Trade accounts receivable
|
7,323
|
|
|
7,716
|
|
Value added tax
|
428
|
|
|
439
|
|
Other
|
242
|
|
|
170
|
|
|
7,993
|
|
|
8,325
|
|
8
|
Inventory
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Raw materials
|
1,691
|
|
|
1,608
|
|
Work in progress
|
1,931
|
|
|
1,848
|
|
Finished goods
|
462
|
|
|
—
|
|
|
4,084
|
|
|
3,456
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
9
|
Restricted cash
|
10
|
Property, plant and equipment
|
|
Cost
|
|||||||||||||
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2011
|
8,939
|
|
|
1,551
|
|
|
1,738
|
|
|
1,156
|
|
|
13,384
|
|
Additions
|
684
|
|
|
—
|
|
|
46
|
|
|
6
|
|
|
736
|
|
Disposals / Retirements
|
(96
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(98
|
)
|
Impact of foreign exchange rate changes
|
(330
|
)
|
|
(49
|
)
|
|
(58
|
)
|
|
(37
|
)
|
|
(474
|
)
|
At December 31, 2011
|
9,197
|
|
|
1,502
|
|
|
1,724
|
|
|
1,125
|
|
|
13,548
|
|
Additions
|
180
|
|
|
87
|
|
|
5
|
|
|
—
|
|
|
272
|
|
Disposals / Retirements
|
(79
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(82
|
)
|
Impact of foreign exchange rate changes
|
146
|
|
|
26
|
|
|
28
|
|
|
19
|
|
|
219
|
|
At December 31, 2012
|
9,444
|
|
|
1,615
|
|
|
1,754
|
|
|
1,144
|
|
|
13,957
|
|
|
Accumulated depreciation
|
|||||||||||||
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2011
|
6,749
|
|
|
1,352
|
|
|
1,672
|
|
|
515
|
|
|
10,288
|
|
Disposals / Retirements
|
(96
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(98
|
)
|
Impairment loss
|
—
|
|
|
134
|
|
|
—
|
|
|
178
|
|
|
312
|
|
Recurring depreciation expense
|
728
|
|
|
39
|
|
|
50
|
|
|
101
|
|
|
918
|
|
Impact of foreign exchange rate changes
|
(255
|
)
|
|
(47
|
)
|
|
(56
|
)
|
|
(26
|
)
|
|
(384
|
)
|
At December 31, 2011
|
7,126
|
|
|
1,478
|
|
|
1,664
|
|
|
768
|
|
|
11,036
|
|
Disposals / Retirements
|
(79
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(82
|
)
|
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Recurring depreciation expense
|
564
|
|
|
8
|
|
|
34
|
|
|
57
|
|
|
663
|
|
Impact of foreign exchange rate changes
|
128
|
|
|
25
|
|
|
26
|
|
|
14
|
|
|
193
|
|
At December 31, 2012
|
7,739
|
|
|
1,511
|
|
|
1,721
|
|
|
839
|
|
|
11,810
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Carrying amount
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At December 31, 2011
|
|
2,071
|
|
|
24
|
|
|
60
|
|
|
357
|
|
|
2,512
|
|
At December 31, 2012
|
|
1,705
|
|
|
104
|
|
|
33
|
|
|
305
|
|
|
2,147
|
|
11
|
Identifiable intangible assets
|
|
Year ended December 31, 2012
|
|
Year ended December 31, 2011
|
||||||||||||||
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balances - At January 1
|
37,982
|
|
|
(36,213
|
)
|
|
1,769
|
|
|
39,141
|
|
|
(35,842
|
)
|
|
3,299
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
69
|
|
Retirement
|
(431
|
)
|
|
431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Impairment loss
|
—
|
|
|
(184
|
)
|
|
(184
|
)
|
|
—
|
|
|
(1,093
|
)
|
|
(1,093
|
)
|
Recurring amortization expense
|
—
|
|
|
(472
|
)
|
|
(472
|
)
|
|
—
|
|
|
(553
|
)
|
|
(553
|
)
|
Impact of foreign exchange rate changes
|
621
|
|
|
(606
|
)
|
|
15
|
|
|
(1,228
|
)
|
|
1,275
|
|
|
47
|
|
Balances - At December 31
|
38,172
|
|
|
(37,044
|
)
|
|
1,128
|
|
|
37,982
|
|
|
(36,213
|
)
|
|
1,769
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
12
|
Goodwill
|
|
Cost
|
|
Accumulated impairment loss
|
|
Carrying amount
|
|||
|
$
|
|
$
|
|
$
|
|||
Balance as at January 1, 2011
|
9,614
|
|
|
—
|
|
|
9,614
|
|
Impact of foreign exchange rate changes
|
(301
|
)
|
|
—
|
|
|
(301
|
)
|
Balance as at December 31, 2011
|
9,313
|
|
|
—
|
|
|
9,313
|
|
Impact of foreign exchange rate changes
|
153
|
|
|
—
|
|
|
153
|
|
Balance as at December 31, 2012
|
9,466
|
|
|
—
|
|
|
9,466
|
|
13
|
Payables and accrued liabilities
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Trade accounts payable
|
6,671
|
|
|
8,062
|
|
Salaries, employment taxes and benefits
|
707
|
|
|
1,958
|
|
Current portion of warrant liability
|
—
|
|
|
42
|
|
Accrued R&D costs
|
1,530
|
|
|
1,056
|
|
Accrued Cetrotide
®
services and deliveries
|
434
|
|
|
160
|
|
Other accrued liabilities
|
1,098
|
|
|
979
|
|
|
10,440
|
|
|
12,257
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
14
|
Warrant liability
|
|
Years ended December 31,
|
||||||||
|
2012
|
|
2011
|
|
2010
|
|
|||
|
$
|
|
$
|
|
$
|
|
|||
Balance – Beginning of the year
|
9,204
|
|
|
14,367
|
|
|
1,664
|
|
*
|
Share purchase warrants granted during the year (note 16)
|
4,100
|
|
|
—
|
|
|
7,341
|
|
|
Share purchase warrants exercised during the year
|
(382
|
)
|
|
(2,638
|
)
|
|
(429
|
)
|
|
Change in fair value of share purchase warrants
|
(6,746
|
)
|
|
(2,533
|
)
|
|
5,437
|
|
|
Change in value attributable to foreign exchange rate changes
|
—
|
|
|
8
|
|
|
354
|
|
|
|
6,176
|
|
|
9,204
|
|
|
14,367
|
|
|
Less: current portion
|
—
|
|
|
(42
|
)
|
|
(955
|
)
|
|
Balance – End of the year
|
6,176
|
|
|
9,162
|
|
|
13,412
|
|
|
*
|
Includes current portion of $0 and non-current portion of $1,664.
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
||||||
Balance – Beginning of the year
|
|
1,511,179
|
|
|
8.62
|
|
|
2,153,872
|
|
|
9.17
|
|
|
685,088
|
|
|
10.21
|
|
Granted
|
|
2,970,000
|
|
|
3.45
|
|
|
—
|
|
|
—
|
|
|
1,518,587
|
|
|
8.67
|
|
Exercised
|
|
(52,383
|
)
|
|
8.24
|
|
|
(284,545
|
)
|
|
7.81
|
|
|
(49,803
|
)
|
|
7.95
|
|
Expired
|
|
(21,386
|
)
|
|
9.00
|
|
|
(358,148
|
)
|
|
12.59
|
|
|
—
|
|
|
—
|
|
Balance – End of the year
|
|
4,407,410
|
|
|
5.14
|
|
|
1,511,179
|
|
|
8.62
|
|
|
2,153,872
|
|
|
9.17
|
|
|
Warrants outstanding and currently exercisable
|
|||||||
Exercise price
(US$)
|
Number
|
|
Weighted average remaining contractual life (years)
|
|
Total
intrinsic value
|
|||
3.45
|
2,970,000
|
|
|
4.80
|
|
|
—
|
|
7.50
|
122,221
|
|
|
1.81
|
|
|
—
|
|
8.24
|
530,424
|
|
|
2.47
|
|
|
—
|
|
9.00
|
740,737
|
|
|
2.80
|
|
|
—
|
|
10.29
|
44,028
|
|
|
2.46
|
|
|
—
|
|
|
4,407,410
|
|
|
4.07
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
|
|
October 2009
Investor Warrants |
|
April 2010
Investor Warrants |
|
June 2010
Investor Warrants |
|
June 2010
Compensation Warrants |
|
October 2012 Investor
Warrants |
|||||
Number of equivalent shares
|
|
|
|
122,221
|
|
|
740,737
|
|
|
530,424
|
|
|
44,028
|
|
|
2,970,000
|
|
Market-value per share price
|
|
|
|
2.38
|
|
|
2.38
|
|
|
2.38
|
|
|
2.38
|
|
|
2.38
|
|
Exercise price
|
|
|
|
7.50
|
|
|
9.00
|
|
|
8.24
|
|
|
10.29
|
|
|
3.45
|
|
Risk-free annual interest rate
|
|
(a)
|
|
0.23%
|
|
|
0.34%
|
|
|
0.30%
|
|
|
0.30%
|
|
|
0.68%
|
|
Expected volatility
|
|
(b)
|
|
109.43%
|
|
|
101.04%
|
|
|
98.31%
|
|
|
98.46%
|
|
|
108.66%
|
|
Expected life (years)
|
|
(c)
|
|
1.81
|
|
|
2.80
|
|
|
2.47
|
|
|
2.46
|
|
|
4.80
|
|
Expected dividend yield
|
|
(d)
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
(a)
|
Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the warrants.
|
(b)
|
Based on the historical volatility of the Company's stock price over the most recent period consistent with the expected life of the warrants, as well as on future expectations.
|
(c)
|
Based upon time to expiry from the reporting period date.
|
(d)
|
The Company has not paid dividends nor intends to pay dividends in the foreseeable future.
|
15
|
Provision and other non-current liabilities
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Onerous lease provision (see below)
|
436
|
|
|
530
|
|
Other
|
149
|
|
|
187
|
|
|
585
|
|
|
717
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
Year ended December 31,
|
|
|
2012
|
|
|
$
|
|
Balance at January 1, 2012
|
619
|
|
Additional provision recognized
|
—
|
|
Utilization of provision
|
(92
|
)
|
Effect of change in the discount rate
|
—
|
|
Unwinding of discount
|
3
|
|
Balance at December 31, 2012
|
530
|
|
Current portion
|
(94
|
)
|
Non-current portion at December 31, 2012
|
436
|
|
*
|
The provision for onerous lease contract represents the present value of the future lease payments that the Company is presently obligated to make under non-cancellable onerous operating lease contract, less revenue expected to be earned on the lease, including estimated future sub-lease revenue. The estimate may vary as a result of changes in the utilisation of the leased premises and sub-lease arrangement. The unexpired term of the lease is five years.
|
16
|
Share capital
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
|
Canadian Dollar Options
|
|
Canadian Dollar Options
|
|
Canadian Dollar Options
|
||||||||||||
|
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
||||||
Balance – Beginning of the year
|
|
1,031,328
|
|
|
14.99
|
|
|
1,093,047
|
|
|
15.32
|
|
|
986,700
|
|
|
16.31
|
|
Granted
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|
11.58
|
|
|
181,416
|
|
|
9.04
|
|
Exercised
|
|
(25,582
|
)
|
|
8.51
|
|
|
(26,724
|
)
|
|
5.33
|
|
|
(20,678
|
)
|
|
5.40
|
|
Forfeited
|
|
(57,437
|
)
|
|
15.07
|
|
|
(7,777
|
)
|
|
9.24
|
|
|
(12,450
|
)
|
|
5.70
|
|
Expired
|
|
(220,434
|
)
|
|
23.22
|
|
|
(29,718
|
)
|
|
37.08
|
|
|
(41,941
|
)
|
|
19.32
|
|
Balance – End of the year
|
|
727,875
|
|
|
12.71
|
|
|
1,031,328
|
|
|
14.99
|
|
|
1,093,047
|
|
|
15.32
|
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
|
US Dollar Options
|
|
US Dollar Options
|
|
US Dollar Options
|
||||||||||||
|
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
||||||
Balance – Beginning of the year
|
|
287,950
|
|
|
11.59
|
|
|
48,886
|
|
|
16.98
|
|
|
48,886
|
|
|
16.98
|
|
Granted
|
|
1,060,445
|
|
*
|
2.4
|
|
|
239,064
|
|
|
10.49
|
|
|
—
|
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Forfeited
|
|
(19,903
|
)
|
|
10.44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance – End of the year
|
|
1,328,492
|
|
|
4.27
|
|
|
287,950
|
|
|
11.59
|
|
|
48,886
|
|
|
16.98
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
CAN$ options outstanding as at December 31, 2012
|
||||||||||
Exercise price
(CAN$)
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(CAN$)
|
|
Total
intrinsic
value
(CAN$)
|
||||
3.30 to 4.80
|
101,722
|
|
|
5.89
|
|
|
3.59
|
|
|
—
|
|
4.81 to 7.02
|
170,395
|
|
|
6.93
|
|
|
5.70
|
|
|
—
|
|
7.03 to 9.78
|
164,088
|
|
|
7.09
|
|
|
8.99
|
|
|
—
|
|
9.79 to 21.21
|
165,739
|
|
|
2.85
|
|
|
13.63
|
|
|
—
|
|
21.22 to 53.28
|
125,931
|
|
|
2.49
|
|
|
33.22
|
|
|
—
|
|
|
727,875
|
|
|
5.13
|
|
|
12.71
|
|
|
—
|
|
|
CAN$ options exercisable as at December 31, 2012
|
||||||||||
Exercise price
(CAN$)
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(CAN$)
|
|
Total
intrinsic
value
(CAN$)
|
||||
3.30 to 4.80
|
101,722
|
|
|
5.89
|
|
|
3.59
|
|
|
—
|
|
4.81 to 7.02
|
170,395
|
|
|
6.93
|
|
|
5.70
|
|
|
—
|
|
7.03 to 9.78
|
154,092
|
|
|
7.03
|
|
|
8.99
|
|
|
—
|
|
9.79 to 21.21
|
164,073
|
|
|
2.79
|
|
|
13.65
|
|
|
—
|
|
21.22 to 53.28
|
125,931
|
|
|
2.49
|
|
|
33.22
|
|
|
—
|
|
|
716,213
|
|
|
5.08
|
|
|
12.77
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
US$ options outstanding as at December 31, 2012
|
||||||||||
Exercise price
(US$)
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(US$)
|
|
Total
intrinsic
value
(US$)
|
||||
2.17 to 2.39
|
786,280
|
|
|
9.93
|
|
|
2.17
|
|
|
165,119
|
|
2.40 to 2.92
|
141,666
|
|
|
9.43
|
|
|
2.66
|
|
|
—
|
|
2.93 to 10.17
|
132,499
|
|
|
7.01
|
|
|
3.49
|
|
|
—
|
|
10.18 to 10.68
|
215,828
|
|
|
8.93
|
|
|
10.44
|
|
|
—
|
|
10.69 to 23.76
|
52,219
|
|
|
4.81
|
|
|
16.80
|
|
|
—
|
|
|
1,328,492
|
|
|
9.22
|
|
|
4.27
|
|
|
165,119
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
US$ options exercisable as at December 31, 2012
|
||||||||||
Exercise price
(US$)
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(US$)
|
|
Total
intrinsic
value
(US$)
|
||||
2.40 to 2.92
|
16,666
|
|
|
9.44
|
|
|
2.62
|
|
|
—
|
|
2.93 to 10.17
|
67,500
|
|
|
4.75
|
|
|
3.26
|
|
|
—
|
|
10.18 to 10.68
|
98,354
|
|
|
8.93
|
|
|
10.44
|
|
|
—
|
|
10.69 to 23.76
|
49,997
|
|
|
4.65
|
|
|
16.92
|
|
|
—
|
|
|
232,517
|
|
|
6.83
|
|
|
9.19
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||
|
|
|
2011
|
|
2010
|
||
Expected dividend yield
|
(a)
|
|
0.0%
|
|
|
0.0%
|
|
Expected volatility
|
(b)
|
|
81.0%
|
|
|
84.5%
|
|
Risk-free annual interest rate
|
(c)
|
|
1.8%
|
|
|
2.6%
|
|
Expected life (years)
|
(d)
|
|
6.82
|
|
|
6.07
|
|
Weighted average grant date fair value
|
|
|
CAN$8.43
|
|
|
CAN$6.54
|
|
(a)
|
The Company has not paid dividends nor intends to pay dividends in the foreseeable future.
|
(b)
|
Based on the historical volatility of the Company's stock price over the most recent period consistent with the expected life of the stock options, as well as on future expectations.
|
(c)
|
Based on Canadian Government Bond interest rates with a term that is consistent with the expected life of the stock options.
|
(d)
|
Based upon historical data related to the exercise of stock options, on post-vesting employment terminations and on future expectations related to exercise behaviour.
|
|
|
|
Years ended December 31,
|
||
|
|
|
2012
|
|
2011
|
Expected dividend yield
|
(a)
|
|
0.0%
|
|
0.0%
|
Expected volatility
|
(b)
|
|
95.4%
|
|
81.6%
|
Risk-free annual interest rate
|
(c)
|
|
0.98%
|
|
1.4%
|
Expected life (years)
|
(d)
|
|
6.77
|
|
6.82
|
Weighted average grant date fair value
|
|
|
US$1.93
|
|
US$7.63
|
(a)
|
The Company has not paid dividends nor intends to pay dividends in the foreseeable future.
|
(b)
|
Based on the historical volatility of the Company's stock price over the most recent period consistent with the expected life of the stock options, as well as on future expectations.
|
(c)
|
Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the stock options.
|
(d)
|
Based upon historical data related to the exercise of stock options, on post-vesting employment terminations and on future expectations related to exercise behaviour.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
17
|
Operating expenses
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Subcontractor fees
|
25,515
|
|
|
25,667
|
|
|
15,907
|
|
Raw material purchases
|
1,780
|
|
|
2,154
|
|
|
1,897
|
|
Change in inventory
|
(560
|
)
|
|
(261
|
)
|
|
896
|
|
Depreciation of equipment
|
85
|
|
|
—
|
|
|
—
|
|
Cost of sales
|
26,820
|
|
|
27,560
|
|
|
18,700
|
|
Salaries, employment taxes and short-term benefits
|
11,158
|
|
|
13,029
|
|
|
11,885
|
|
Post-employment benefits
|
701
|
|
|
864
|
|
|
665
|
|
Termination benefits
|
189
|
|
|
182
|
|
|
45
|
|
Share-based compensation costs
|
1,455
|
|
|
1,333
|
|
|
1,192
|
|
Total employee benefits expenses
|
13,503
|
|
|
15,408
|
|
|
13,787
|
|
Goods and services
(1)
|
17,229
|
|
|
20,334
|
|
|
17,316
|
|
Lease payments
(2)
, net of sublease payments of $226,000 in 2012 and $179,000 in 2011 and 2010
|
1,751
|
|
|
2,153
|
|
|
1,825
|
|
Refundable tax credits and grants
|
(868
|
)
|
|
(383
|
)
|
|
(687
|
)
|
Share-based compensation costs related to collaborators
|
342
|
|
|
—
|
|
|
—
|
|
Transaction costs related to share purchase warrants
|
370
|
|
|
—
|
|
|
—
|
|
Depreciation and amortization
|
1,135
|
|
|
1,471
|
|
|
1,573
|
|
Impairment losses
|
184
|
|
|
1,405
|
|
|
—
|
|
Operating foreign exchange (gains) loss
|
203
|
|
|
299
|
|
|
(5
|
)
|
Total operating expenses
|
60,669
|
|
|
68,247
|
|
|
52,509
|
|
(1)
|
Goods and services include third-party R&D costs, laboratory supplies, royalty expenses, professional fees, marketing services, insurance as well as travel expenses.
|
(2)
|
Lease expense also includes changes in the onerous lease provision (note 15 – Provision and other non-current liabilities), except for the unwinding of discount.
|
18
|
Employee future benefits
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
Pension benefit plans
|
|
Other benefit plans
|
||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Obligation - Beginning of year
|
11,769
|
|
|
10,492
|
|
|
10,767
|
|
|
1,111
|
|
|
1,041
|
|
|
1,254
|
|
Current service cost
|
139
|
|
|
185
|
|
|
217
|
|
|
134
|
|
|
206
|
|
|
254
|
|
Interest cost
|
491
|
|
|
555
|
|
|
546
|
|
|
46
|
|
|
54
|
|
|
63
|
|
Actuarial (gain) loss
|
3,705
|
|
|
1,335
|
|
|
(191
|
)
|
|
79
|
|
|
46
|
|
|
(370
|
)
|
Benefits paid
|
(337
|
)
|
|
(354
|
)
|
|
(173
|
)
|
|
(219
|
)
|
|
(196
|
)
|
|
(86
|
)
|
Effect of foreign currency exchange rate changes
|
295
|
|
|
(444
|
)
|
|
(674
|
)
|
|
18
|
|
|
(40
|
)
|
|
(74
|
)
|
Obligation - End of year
|
16,062
|
|
|
11,769
|
|
|
10,492
|
|
|
1,169
|
|
|
1,111
|
|
|
1,041
|
|
Amount recognized
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In comprehensive loss
|
(630
|
)
|
|
(740
|
)
|
|
(763
|
)
|
|
(259
|
)
|
|
(306
|
)
|
|
53
|
|
In other comprehensive (loss) income
|
(3,705
|
)
|
|
(1,335
|
)
|
|
191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pension benefit plans
|
|
Other benefit plans
|
||||||||
Actuarial assumptions
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
Discount rate
|
2.60
|
|
4.20
|
|
5.10
|
|
2.60
|
|
4.20
|
|
5.10
|
Pension benefits increase
|
2.00
|
|
2.00
|
|
2.00
|
|
2.00
|
|
2.00
|
|
2.00
|
Rate of compensation increase
|
2.75 to 3.75
|
|
2.75 to 3.75
|
|
2.75 to 3.75
|
|
2.75
|
|
2.75
|
|
2.75
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
$
|
|
2013
|
485
|
|
2014
|
520
|
|
2015
|
555
|
|
2016
|
566
|
|
2017
|
585
|
|
2018 through 2021
|
3,254
|
|
|
5,965
|
|
19
|
Finance income and finance costs
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
20
|
Supplemental disclosure of cash flow information
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|||
Trade and other receivables
|
383
|
|
|
(3,332
|
)
|
|
(2,029
|
)
|
Inventory
|
(560
|
)
|
|
(261
|
)
|
|
896
|
|
Prepaid expenses and other current assets
|
(4,914
|
)
|
|
(4,068
|
)
|
|
(3,344
|
)
|
Other non-current assets
|
(364
|
)
|
|
(456
|
)
|
|
(315
|
)
|
Payables and accrued liabilities
|
(1,836
|
)
|
|
2,970
|
|
|
(1,956
|
)
|
Provision and other non-current liabilities
|
(49
|
)
|
|
(24
|
)
|
|
109
|
|
Deferred revenues
|
—
|
|
|
8,614
|
|
|
—
|
|
Income taxes
|
(254
|
)
|
|
105
|
|
|
(900
|
)
|
|
(7,594
|
)
|
|
3,548
|
|
|
(7,539
|
)
|
21
|
Income taxes
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Current:
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Deferred:
|
|
|
|
|
|
|||
Origination and reversal of temporary differences
|
7,282
|
|
|
9,017
|
|
|
7,632
|
|
Change in enacted tax rates
|
—
|
|
|
(104
|
)
|
|
(272
|
)
|
Adjustments in respect of prior years
|
44
|
|
|
3,428
|
|
|
(176
|
)
|
Change in unrecognized tax assets
|
(7,326
|
)
|
|
(12,341
|
)
|
|
(7,184
|
)
|
Income tax expense
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Combined Canadian federal and provincial statutory income tax rate
|
26.9
|
%
|
|
28.4
|
%
|
|
29.9
|
%
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Income tax recovery based on statutory income tax rate
|
5,494
|
|
|
7,290
|
|
|
8,500
|
|
Change in unrecognized tax assets
|
(7,326
|
)
|
|
(12,341
|
)
|
|
(7,184
|
)
|
Permanent difference attributable to the use of local currency for tax reporting
|
14
|
|
|
378
|
|
|
1,232
|
|
Permanent difference attributable to net change in fair value of warrant liability
|
1,182
|
|
|
661
|
|
|
(1,761
|
)
|
Stock-based compensation costs
|
(421
|
)
|
|
(441
|
)
|
|
(357
|
)
|
Difference in statutory income tax rate of foreign subsidiaries
|
997
|
|
|
893
|
|
|
391
|
|
Permanent difference attributable to unrealized foreign exchange gain/loss
|
(22
|
)
|
|
(32
|
)
|
|
(159
|
)
|
Change in enacted rates used
|
—
|
|
|
(104
|
)
|
|
(272
|
)
|
Expiry of loss carryforwards
|
—
|
|
|
—
|
|
|
(164
|
)
|
Foreign witholding tax
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Adjustments in respect of prior years
|
44
|
|
|
3,428
|
|
|
(176
|
)
|
Other
|
38
|
|
|
268
|
|
|
(50
|
)
|
|
—
|
|
|
(1,104
|
)
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
||
Long-term:
|
|
|
|
||
Operating losses carried forward
|
840
|
|
|
224
|
|
|
840
|
|
|
224
|
|
Deferred tax liabilities
|
|
|
|
||
Property, plant and equipment
|
160
|
|
|
197
|
|
Warrant liability
|
626
|
|
|
—
|
|
Other
|
54
|
|
|
27
|
|
|
840
|
|
|
224
|
|
Deferred tax assets (liabilities), net
|
—
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
||
Inventory
|
9
|
|
|
740
|
|
Deferred revenues
|
464
|
|
|
507
|
|
|
473
|
|
|
1,247
|
|
Long term:
|
|
|
|
||
Operating losses carried forward
|
49,453
|
|
|
38,665
|
|
Intangible assets
|
12,271
|
|
|
13,170
|
|
Research and development costs
|
12,642
|
|
|
12,310
|
|
Unused tax credits
|
10,904
|
|
|
10,667
|
|
Employee future benefits
|
2,772
|
|
|
1,534
|
|
Property, plant and equipment
|
1,376
|
|
|
1,301
|
|
Share issue expenses
|
867
|
|
|
813
|
|
Deferred revenues
|
182
|
|
|
589
|
|
Onerous lease provision
|
159
|
|
|
186
|
|
Other
|
145
|
|
|
139
|
|
|
90,771
|
|
|
79,374
|
|
Unrecognized deferred tax assets
|
91,244
|
|
|
80,621
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
22
|
Capital disclosures
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
23
|
Financial instruments and financial risk management
|
December 31, 2012
|
Loans and
receivables |
|
Financial
liabilities at FVTPL |
|
Other
financial liabilities |
|
Total
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents (note 6)
|
39,521
|
|
|
—
|
|
|
—
|
|
|
39,521
|
|
Trade and other receivables (note 7)
|
7,993
|
|
|
—
|
|
|
—
|
|
|
7,993
|
|
Restricted cash (note 9)
|
826
|
|
|
—
|
|
|
—
|
|
|
826
|
|
Payables and accrued liabilities (note 13)
|
—
|
|
|
—
|
|
|
(10,346
|
)
|
|
(10,346
|
)
|
Long-term payable*
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
Warrant liability (note 14)*
|
—
|
|
|
(6,176
|
)
|
|
—
|
|
|
(6,176
|
)
|
Other non-current liabilities (note 15)
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
(149
|
)
|
|
48,340
|
|
|
(6,176
|
)
|
|
(10,525
|
)
|
|
31,639
|
|
December 31, 2011
|
Loans and
receivables |
|
Financial
liabilities at FVTPL |
|
Other
financial liabilities |
|
Total
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents (note 6)
|
46,881
|
|
|
—
|
|
|
—
|
|
|
46,881
|
|
Trade and other receivables (note 7)
|
8,325
|
|
|
—
|
|
|
—
|
|
|
8,325
|
|
Restricted cash (note 9)
|
806
|
|
|
—
|
|
|
—
|
|
|
806
|
|
Payables and accrued liabilities (note 13)
|
—
|
|
|
—
|
|
|
(12,126
|
)
|
|
(12,126
|
)
|
Long-term payable
*
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
Warrant liability (note 14)
*
|
—
|
|
|
(9,204
|
)
|
|
—
|
|
|
(9,204
|
)
|
Other non-current liabilities (note 15)
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
(187
|
)
|
|
56,012
|
|
|
(9,204
|
)
|
|
(12,401
|
)
|
|
34,407
|
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2 –
|
Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices).
|
Level 3 –
|
Inputs for an asset or liability that are not based on observable market data (unobservable inputs).
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(a)
|
Credit risk
|
(b)
|
Liquidity risk
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(c)
|
Market risk
|
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
6,176
|
|
|
768
|
|
|
(783
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
|
768
|
|
|
(783
|
)
|
|
|
Carrying
amount |
|
Balances denominated in US$
|
|||||
|
|
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
24,551
|
|
|
1,228
|
|
|
(1,228
|
)
|
Warrant liability
|
|
6,176
|
|
|
(309
|
)
|
|
309
|
|
Total impact on net loss – decrease / (increase)
|
|
|
|
919
|
|
|
(919
|
)
|
|
|
Carrying
amount |
|
Balances denominated in CA$
|
|||||
|
|
|
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
7,064
|
|
|
353
|
|
|
(353
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
|
353
|
|
|
(353
|
)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
24
|
Commitments, contingencies and guarantee
|
|
Minimum lease payments
|
|
Minimum sub-lease payments
|
|
Utilities
|
|||
|
$
|
|
$
|
|
$
|
|||
Less than 1 year
|
1,669
|
|
|
(226
|
)
|
|
610
|
|
1 - 3 years
|
3,215
|
|
|
(451
|
)
|
|
861
|
|
4 - 5 years
|
997
|
|
|
(451
|
)
|
|
105
|
|
More than 5 years
|
29
|
|
|
(19
|
)
|
|
—
|
|
Total
|
5,910
|
|
|
(1,147
|
)
|
|
1,576
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
25
|
Net loss per share
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Net loss
|
(20,412
|
)
|
|
(27,067
|
)
|
|
(28,451
|
)
|
Basic weighted average number of shares outstanding
|
19,775,073
|
|
|
15,751,331
|
|
|
12,609,902
|
|
Dilutive effect of stock options
|
31,614
|
|
|
190,625
|
|
|
54,413
|
|
Dilutive effect of share purchase warrants
|
—
|
|
|
282,903
|
|
|
—
|
|
Diluted weighted average number of shares outstanding
|
19,806,687
|
|
|
16,224,859
|
|
|
12,664,315
|
|
Items excluded from the calculation of diluted net loss per share because the exercise price was greater than the average market price of the common shares or due to their anti-dilutive effect
|
|
|
|
|
|
|||
Stock options
|
1,183,388
|
|
|
613,644
|
|
|
833,276
|
|
Warrants (number of equivalent shares)
|
1,803,730
|
|
|
—
|
|
|
2,153,898
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
26
|
Compensation of key management
|
|
Years ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
|
$
|
|
$
|
|
$
|
|||
Salaries and short-term employee benefits
|
2,354
|
|
|
2,886
|
|
|
2,524
|
|
Post-employment benefits
|
957
|
|
|
684
|
|
|
114
|
|
Termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
Share-based compensation cost
|
941
|
|
|
936
|
|
|
554
|
|
|
4,252
|
|
|
4,506
|
|
|
3,192
|
|
27
|
Segment information
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2012 and December 31, 2011 and for the years ended December 31, 2012, 2011 and 2010
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
As at December 31,
|
||||
|
2012
|
|
2011
|
||
|
$
|
|
$
|
||
Germany
|
12,713
|
|
|
13,557
|
|
United States
|
2
|
|
|
—
|
|
Canada
|
26
|
|
|
36
|
|
|
12,741
|
|
|
13,593
|
|
28
|
Subsequent events
|
Item 19.
|
Exhibits
|
†
|
Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the U.S. Securities and Exchange
Commission.
|
AETERNA ZENTARIS INC.
|
|
/s/ Dennis Turpin
|
|
Dennis Turpin, CPA, CA
|
Senior Vice President and Chief Financial Officer
|
1.1
|
Place, Time and Notice
. Meetings of shareholders of the Corporation shall be held at the registered office of the Corporation or at such other place and at such time as the Board of Directors, the Chief Executive Officer or the President may determine, from time to time.
|
1.2
|
Electronic Meetings
. If the directors of the Corporation call a meeting of shareholders pursuant to the laws governing the Corporation, those directors may determine that the meeting shall be held in accordance with the regulations, if any, governing the Corporation entirely by means of telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
|
1.3
|
Chairman
. Subject to the provisions of any resolution of the Board of Directors, the Chairman of the Board or, in his absence or inability or refusal or failure to act, a Vice or Deputy Chairman of the Board or, in his absence or inability or refusal or failure to act, the President or, in his absence or inability or refusal or failure to act, the Vice-President or, if there be more than one Vice-President, that one of them who may have been designated for the purpose by the Board of Directors, shall preside at all meetings of shareholders. All of the foregoing officers may attend such meetings but no Vice-President shall act as chairman if the Board of Directors shall have determined that he shall not so act. If all of the foregoing offi-cers be absent or unable or refuse or fail to act, the persons present may choose a chairman.
|
1.4
|
Quorum
. The holder or holders of not less than ten (10) per cent of the outstanding shares of the Corporation carrying voting rights at the meeting, present in person or represented by proxy or by an authorized representative, shall constitute a quorum.
|
1.5
|
Voting Rights.
At all meetings of shareholders, every shareholder entitled to vote thereat, whether present in person or by proxyholder, or, in the case of a body corporate or association by a duly authorized representative, shall be entitled to one (1) vote for each voting share; if, however, in virtue of the law or the articles of the Corporation another scale of voting rights is fixed with respect to a particular matter or to another class of shares, such scale of voting shall be adopted.
|
1.6
|
Particulars of Proxies
. The directors may also permit particulars of proxies for use at or in connection with any such meeting which have been deposited with the Corporation or its agent at a place other than the place of such meeting to be cabled, telecopied or telegrammed to the secretary of the Corporation prior to such meeting. In such event, such proxies, if otherwise in order, shall be valid and any votes cast in accordance therewith shall be counted.
|
1.7
|
Nominations of Directors
. Subject only to the Canada Business Corporations Act (the "Act") and the articles of the Corporation (the "Articles"), only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the board of directors of the Corporation (the "Board") may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:
|
a.
|
by or at the direction of the Board, including pursuant to a notice of meeting;
|
b.
|
by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act, or a requisition of the shareholders made in accordance with the provisions of the Act; or
|
c.
|
by any person (a "Nominating Shareholder"): (A) who, at the close of business on the date of the giving of the notice provided for below in this Section 1.7
and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Section 1.7.
|
a.
|
in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date on which the first public announcement (the "Notice Date") of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the tenth (10th) day following the Notice Date; and
|
b.
|
in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.
|
c.
|
In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder's notice as described above.
|
a.
|
as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares in the capital of the Corporation which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (D) any other information relating to the person that would
|
b.
|
as to the Nominating Shareholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote any shares of the Corporation and any other information relating to such Nominating Shareholder that would be required to be made in a dissident's proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below).
|
a.
|
"public announcement"
shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Corporation under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and
|
b.
|
"Applicable Securities Laws"
means the applicable securities legislation of each relevant province of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province of Canada.
|
2.1
|
Place, Time and Notice
. Immediately after the annual meeting of shareholders in each year, a meeting of such of the newly elected directors as are then present may be held, provided that they shall constitute a quorum, without notice, for the appointment of officers of the Corporation and the transaction of such other business as may come before the meeting.
|
2.2
|
Chairman
. Subject to the provisions of any resolution of the Board of Directors, the Chairman of the Board or, in his absence or inability or refusal or failure to act, any Vice or Deputy Chairman of the Board or, in his absence or inability or refusal or failure to act, the President or, in his absence or inability or refusal or failure to act, the
|
2.3
|
Quorum
. Except where the Corporation has only one director, the Board of Directors may, from time to time, fix by resolution the quorum for meet-ings of the Board of Directors but until otherwise fixed a majority of directors in office, from time to time, shall constitute a quorum.
|
3.1
|
Election
. The Board of Directors may, from time to time, appoint from their number committees of directors, however designated, containing such proportion of Canadian residents as may be required by law.
|
3.2
|
Chairman, Quorum and Procedure
. Any committee of directors shall have the power to appoint a chairman and a vice or deputy chairman, to fix its quorum, which quorum shall consist of not less than a majority of its members, and to determine its procedure.
|
3.3
|
Secretary
. The secretary of the Corporation shall act as secretary of each committee of directors unless some other secretary be appointed by the committee.
|
3.4
|
Powers
. The Board of Directors may delegate to any such committee of directors any of the powers of the board except those which by law a committee of directors has no authority to exercise.
|
3.5
|
Proceedings open to the Board
. All proceedings of committees of directors shall be open to the examination of the Board of Directors of the Corporation and shall be reported to the board of directors if and when the Board of Directors so directs.
|
3.6
|
Meetings
. Meetings of committees of directors may be held at the registered office of the Corporation or at such other place within or outside of Canada as a committee may from time to time determine. Meetings of a committee may be called by or by the order of the president, the chairman of the committee, the vice-chairman or any two (2) members thereof.
|
3.7
|
Remuneration
. The members of a committee of directors shall be entitled to receive such remuneration for their services as members of the committee as the directors may from time to time determine.
|
3.8
|
Removal and Replacement.
The directors may from time to time remove any member of a committee of directors from office.
|
4.1
|
Indemnification.
The Corporation shall, to the full extent provided by law, indemnify a director or officer of the Corporation, a former director or officer of the Corporation or another individual who acts or acted at the Corporation's request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity.
|
1.
|
Purpose of the Plan
|
1.1
|
The purpose of the stock option plan for directors, officers, employees and suppliers of ongoing services (the
"Plan")
of Aeterna Zentaris Inc. (the
"Corporation") i
s to secure for the Corporation and its shareholders the benefit of an incentive interest in share ownership by directors, officers and employees of the Corporation and its Subsidiaries, as the case may be, and by certain designated suppliers of ongoing services.
|
2.1
|
The Plan shall be administered by the Corporation's Board of Directors (the
"Board")
or the Corporate Governance, Nominating and Human Resources Committee, as the same may be constituted from time to time (th
e "Committee").
The Board or the Committee shall have full and complete latitude to interpret the Plan and to establish the rules and regulations applying to it and to make all other determinations it deems necessary or useful for the administration of the Plan, provided that such interpretations, rules, regulations and determinations shall be consistent with the relevant policy statements of the competent securities authorities and the rules of the stock exchanges on which the securities of the Corporation are listed.
|
3.
|
Shares Subject to the Plan
|
3.1
|
The shares issuable further to the exercise of options granted under the Plan are the Common Shares of the Corporation (the
"Shares")
. The total number of Shares that may be issued under the Plan shall not exceed eleven point four percent (11.4%) of the total number of issued and outstanding Shares at any given time. No Optionee (as defined hereinbelow) shall hold options to purchase more than five percent (5%) of the number of Shares issued and outstanding from time to time.
|
3.3
|
In addition: (i) the aggregate fair value of options granted under all security-based compensation arrangements of the Corporation to any one non-employee director of the Corporation entitled to receive a benefit under the Plan, within any one-year period, cannot exceed US$100,000 valued on a Black-Scholes basis and as determined by the Committee; and (ii) the aggregate number of securities issuable to all non-employee directors of the Corporation entitled to receive a benefit under the Plan, within any one-year period, under all security-based compensation arrangements of the Corporation, cannot exceed one percent (1%) of its issued and outstanding securities.
|
3.4
|
All options that are exercised, or that expire or are cancelled without being exercised, shall become available to be granted (or "reloaded") under the terms of the Plan upon such exercise, cancellation or expiration, as the case may be.
|
4.
|
Grant of Options
|
4.1
|
The Board or the Committee shall from to time designate the directors (non-employee directors in the case of directors of the Corporation), officers or employees of the Corporation or any of its Subsidiaries, as the case may be, or suppliers of ongoing services to whom options shall be granted (an
"Optionee")
and the number of Shares covered by each of such options. For the purposes of the Plan,
"Subsidiaries" s
hall mean any legal entity of which the Corporation holds or is the beneficiary, at any time, directly or indirectly, otherwise than as security only, of securities conferring over fifty percent (50%) of the votes enabling it to elect the majority of the directors of such entity as well as any current or future Subsidiary of such legal entity. Any Optionee may hold more than one option. The granting of each option shall be
|
4.2
|
Subject to the provisions of Section 3, the non-employee directors of the Corporation are eligible to receive grants of up to 60,000 options per year. These options shall be vested over a period of three (3) years in equal thirds with the first third becoming vested on the first anniversary of the grant date, the second third becoming vested on the second anniversary of the grant date and the final third becoming vested on the third anniversary of the grant date. The specific number of options to be granted to non-employee directors in accordance with the foregoing shall be determined by the Board upon recommendation of the Committee.
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5.
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Exercise Price
|
5.1
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The exercise price of an option shall be established by the Board or the Committee at the time of the grant and this price shall not be less than the greater of the closing prices of the Shares on the Toronto Stock Exchange and the Nasdaq National Market on the last trading day preceding the date of grant of the option (the
"Grant Date")
. If either of these exchanges is closed or if the Shares did not trade on one of the two exchanges on the last trading day preceding the Grant Date, the exercise price shall be the closing price of the Shares at the open exchange (
"Exercise Price").
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6.
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Option Period
|
6.1
|
Subject to the provisions of Section 6.2, each option granted under the Plan shall be exercisable during a period established by the Board or the Committee (the
"Option Period"). The Option Period shall commence no earlier than the Grant Date and shall terminate no later than ten years after such date (the "Outside Expiry Date").
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6.2
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Notwithstanding the provisions of Section 6.1, an option shall not be exercisable by an Optionee from and after each and every one of the following dates (an
"Early Expiry Date"),
unless the Board or the Committee decides otherwise:
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6.2.3
|
in the case where the Optionee is an officer or employee, thirty (30) days following the date on which the Optionee's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated for any cause or reason other than those mentioned in paragraphs 6.2.1 and 6.2.2 including, without limiting the scope of the foregoing, disability, long-term illness, retirement or early retirement; or
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6.2.4
|
in the case where the Optionee is a supplier of ongoing services, thirty (30) days following the date on which the Optionee ceases to act as a supplier of ongoing services to the Corporation or any of its Subsidiaries, as the case may be, for any cause or reason.
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6.3
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Subject to Section 6.4 hereof, all rights conferred by an option under the Plan that shall not have been exercised by either an Early Expiry Date or the Outside Expiry Date shall be forfeited and cancelled.
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6.4
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If an Early Expiry Date or the Outside Expiry Date applicable to any option granted under the Plan falls within a blackout period imposed by the Corporation under the Corporation's trading restrictions and blackout periods policy (as such policy may be amended from time to time by the Corporation), or within seven (7) business days immediately following such a blackout period, then the applicable Early Expiry Date or the Outside Expiry Date, as the case may be, will be
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7.1
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Subject to the provisions of Section 6, an option may be exercised in whole, at any time, or in part, from time to time, during the Option Period, but in all cases in accordance with the exercise schedule established by the Board or the Committee and applicable at the time of the grant.
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7.2
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An option may be exercised by written notice to the Secretary of the Corporation. Such notice shall set forth the number of options exercised and the number of underlying Shares subscribed for pursuant to such exercise and the address to which the certificate evidencing such Shares is to be delivered. Such notice shall also be accompanied by a certified cheque made payable to the Corporation in the amount of the Exercise Price. The Corporation shall cause a certificate for the number of Shares specified in the notice to be issued in the name of the Optionee and delivered to the address specified in the notice no later than ten (10) business days following the receipt of such notice and cheque.
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8.1
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No option or interest therein shall be assignable by the Optionee other than by will or in accordance with the applicable laws of estates and succession.
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9.1
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An Optionee shall have no rights as a shareholder of the Corporation with respect to any Shares covered by his/her option until he/she shall have become the holder of record of such Shares.
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10.1
|
In the event that, at any time, an offer to purchase is made to all holders of Shares, notice of such offer shall be given by the Corporation to each Optionee and all unexercised options will become exercisable immediately at the Exercise Price, but only to the extent necessary to enable an Optionee to tender his/her Shares in response to the offer should the Optionee so desire.
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11.1
|
any amendment to Section 3.2 that would have the effect of permitting, without having to obtain shareholder approval on a "disinterested vote" at a duly convened shareholders' meeting, the grant of any option(s) under this Plan otherwise prohibited by Section 3.2;
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11.2
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any amendment to the number of securities issuable under the Plan (except for any adjustment described in paragraph 12.1.4 hereof);
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11.3
|
any amendment which would permit any option granted under the Plan to be transferable or assignable other than by will or in accordance with the applicable laws of estates and succession;
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11.4
|
the addition of a cashless exercise feature, payable in cash or securities, which does not provide for a full deduction of the number of underlying securities from the Plan reserve;
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11.5
|
the addition of a deferred or restricted share unit or any other provision which results in employees receiving securities while no cash consideration is received by the Corporation;
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11.6
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with respect to any Optionee (whether or not such Optionee is an "insider" of the Corporation),
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(i)
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any reduction in the exercise price of any option after the option has been granted, or
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(ii)
|
any cancellation of an option and the re-grant of that option under different terms, or
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(iii)
|
any extension to the term of an option beyond the Outside Expiry Date (except for extensions made pursuant to Section 6.4),
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11.7
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any amendment to the method of determining the exercise price of an option granted pursuant to the Plan;
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11.8
|
the addition of any form of financial assistance or any amendment to a financial assistance provision which is more favourable to employees;
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11.9
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any amendment to Section 3.3 that would have the effect of removing or increasing the limitations on the
aggregate number of securities issuable to, and/or the aggregate fair value of options granted or that may be granted to, non-employee directors within any one-year period (except for any adjustment described in paragraph 12.1.4 hereof); and
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11.10
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any amendment to this Section 11.
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12.1
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The Board may, subject to receipt of requisite regulatory approval, where required, in its sole discretion, make all other amendments to the plan that are not contemplated in Section 11 above including, without limitation, the following:
|
12.1.1
|
amendments of a "housekeeping" or clerical nature or to clarify the Plan's provisions;
|
12.1.2
|
amendments regarding any vesting period of an option;
|
12.1.3
|
amendments regarding the extension of an option beyond an Early Expiry Date in respect of any Optionee;
|
12.1.4
|
adjustments to the number of issuable Shares underlying, or the exercise price of, outstanding options resulting from a split or a consolidation of the Shares, a reclassification, the payment of a stock dividend, the payment of a special cash or non-cash distribution to the Corporation's shareholders on a
pro rata
basis provided such distribution is approved by the Corporation's shareholders in accordance with applicable law, a recapitalization, a reorganization or any other event which necessitates an equitable adjustment to the outstanding options in proportion with corresponding adjustments made to all outstanding Shares;
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12.1.5
|
discontinuing or terminating the Plan; and
|
12.1.6
|
any other amendment which does not require shareholder approval under Section 11 hereof.
|
12.2
|
Notwithstanding Section 12.1 above, the Corporation shall not contravene any requirements, rules, laws and regulations of the TSX or of any regulatory authorities.
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12.3
|
Notwithstanding any provisions to the contrary, any amendment to or termination of the Plan shall in no way amend or otherwise affect the conditions of the options already granted under the Plan to the extent that such options have not then been exercised, unless the rights of the optionholder have already expired or have already been fully exercised or unless the optionholder affected by such change has already agreed to it.
|
13.1
|
The Corporation's obligations under the terms of the Plan are subject to all applicable laws, regulations or rules of any governmental agency or other competent authority in respect of the issuance or distribution of securities and to the rules of any stock exchange on which the Shares are listed. Each Optionee shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.
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13.2
|
The participation in the Plan of a director, an officer or an employee of the Corporation or any of its Subsidiaries shall be entirely optional and shall not be interpreted as conferring upon a director, an officer or an employee of the Corporation or any of its Subsidiaries any right or privilege whatsoever, except for the rights and privileges set out expressly in the Plan. Neither the Plan nor any act that is done under the terms of the Plan shall be interpreted as restricting the right of the Corporation or any of its Subsidiaries to terminate the employment of an officer or employee at any time. Any notice of dismissal given to an officer or employee at the time his/her employment is terminated, or any payment in the place and stead of such notice, or any combination of the two, shall not have the effect of extending the duration of the employment for purposes of the Plan.
|
13.3
|
No director, officer or employee of the Corporation or any of its Subsidiaries shall acquire the automatic right to be granted one or more options under the terms of the Plan by reason of any previous grant of options under the terms of the Plan.
|
13.4
|
The Plan does not provide for any guarantee in respect of any loss or profit which may result from fluctuations in the price of the Shares.
|
13.5
|
The Corporation and its Subsidiaries shall assume no responsibility as regards the tax consequences that participation in the Plan will have for a director, an officer or an employee of, or supplier of ongoing services to, the Corporation or any of its Subsidiaries, and such persons are urged to consult their own tax advisors in such regard.
|
13.6
|
The Plan and any option granted under the terms of the Plan shall be governed and interpreted according to the laws of the Province of Quebec and the laws of Canada applicable thereto.
|
13.7
|
Once approved by the Corporation's shareholders, the Plan will modify and restate the stock option plan adopted by the Corporation on November 7, 1995 as amended. This Plan confers no other advantage upon the beneficiaries of the stock option plan.
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(Signature)
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(Full Address)
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(Telephone)
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Aeterna Zentaris Inc.
(Canada)
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100%
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100%
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Aeterna Zentaris GmbH
(Germany)
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Aeterna Zentaris, Inc.
(Delaware)
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100%
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Zentaris IVF GmbH
(Germany)
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1.
|
I have reviewed this annual report on Form 20-F of Aeterna Zentaris Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as at, and for, the periods presented in this report;
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4.
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The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as at the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
/s/ Juergen Engel
|
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Prof. Dr. Juergen Engel
|
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President and Chief Executive Officer
|
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(principal executive officer)
|
1.
|
I have reviewed this annual report on Form 20-F of Aeterna Zentaris Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as at, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as at the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
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5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
/s/ Dennis Turpin
|
|
Dennis Turpin
|
|
Senior Vice President and Chief Financial Officer
|
|
(principal financial officer)
|
/s/ Juergen Engel
|
|
Prof. Dr. Juergen Engel
|
|
President and Chief Executive Officer
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/s/ Dennis Turpin
|
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Dennis Turpin
|
|
Senior Vice President and Chief Financial Officer
|