¨
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Registration Statement Pursuant to Section 12(b) or 12(g) of The Securities Exchange Act of 1934
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ý
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Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the fiscal year ended December 31, 2013
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¨
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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
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NASDAQ Capital 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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F. Work performed by Full-time, Permanent Employees of Principal Accountant
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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.
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Item 1.
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Identity of Directors, Senior Management and Advisers
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A.
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Directors and senior management
|
B.
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Advisers
|
C.
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Auditors
|
Item 2.
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Offer Statistics and Expected Timetable
|
A.
|
Offer statistics
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B.
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Method and expected timetable
|
Item 3.
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Key Information
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A.
|
Selected financial data
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|
|
Years ended December 31,
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|||||||
|
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2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|
|||
Sales
|
|
96
|
|
|
834
|
|
|
250
|
|
License fees and other
|
|
6,079
|
|
|
1,219
|
|
|
4,455
|
|
|
|
6,175
|
|
|
2,053
|
|
|
4,705
|
|
Operating expenses
|
|
|
|
|
|
|
|||
Cost of sales
|
|
51
|
|
|
591
|
|
|
212
|
|
Research and development costs, net of refundable tax credits and grants
|
|
21,284
|
|
|
20,592
|
|
|
24,245
|
|
Selling, general and administrative expenses
|
|
12,316
|
|
|
10,606
|
|
|
11,955
|
|
|
|
33,651
|
|
|
31,789
|
|
|
36,412
|
|
Loss from operations
|
|
(27,476
|
)
|
|
(29,736
|
)
|
|
(31,707
|
)
|
Finance income
|
|
1,748
|
|
|
6,974
|
|
|
6,239
|
|
Finance costs
|
|
(1,512
|
)
|
|
(382
|
)
|
|
(8
|
)
|
Net finance income
|
|
236
|
|
|
6,592
|
|
|
6,231
|
|
Loss before income taxes
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(25,476
|
)
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Net loss from continuing operations
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(26,580
|
)
|
Net income (loss) from discontinued operations
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Net income (loss)
|
|
6,815
|
|
|
(20,412
|
)
|
|
(27,067
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
1,073
|
|
|
(504
|
)
|
|
(789
|
)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|||
Actuarial gain (loss) on defined benefit plans
|
|
2,346
|
|
|
(3,705
|
)
|
|
(1,335
|
)
|
Comprehensive income (loss)
|
|
10,234
|
|
|
(24,621
|
)
|
|
(29,191
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)
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Net loss per share (basic and diluted) from continuing operations
|
|
(0.92
|
)
|
|
(1.17
|
)
|
|
(1.69
|
)
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Net income (loss) (basic and diluted) from discontinued operations
|
|
1.16
|
|
|
0.14
|
|
|
(0.03
|
)
|
Net income (loss) (basic and diluted) per share
|
|
0.24
|
|
|
(1.03
|
)
|
|
(1.72
|
)
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Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|||
Basic
|
|
29,476,455
|
|
|
19,775,073
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15,751,331
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Diluted
|
|
29,476,455
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|
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19,806,687
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15,751,331
|
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As at December 31,
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|||||||
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|
2013
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|
2012
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|
2011
|
|||
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$
|
|
$
|
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$
|
|||
Cash and cash equivalents
|
|
43,202
|
|
|
39,521
|
|
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46,881
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Restricted cash equivalents
|
|
865
|
|
|
826
|
|
|
806
|
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Total assets
|
|
59,196
|
|
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67,655
|
|
|
75,369
|
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Warrant liability (current and non-current)
|
|
18,010
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|
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6,176
|
|
|
9,204
|
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Share capital
|
|
134,101
|
|
|
122,791
|
|
|
101,884
|
|
Shareholders' equity (deficiency)
|
|
17,064
|
|
|
(6,695
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)
|
|
(4,546
|
)
|
B.
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Capitalization and indebtedness
|
C.
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Reasons for the offer and use of proceeds
|
D.
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Risk factors
|
•
|
meet the requirements of these authorities;
|
•
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meet the requirements for informed consent; and
|
•
|
meet the requirements for good clinical practices.
|
•
|
our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel and representatives;
|
•
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the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any future products;
|
•
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the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
|
•
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unforeseen costs and expenses associated with creating an independent sales and marketing organization.
|
•
|
demonstration of clinical efficacy and safety;
|
•
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the prevalence and severity of any adverse side effects;
|
•
|
limitations or warnings contained in the product's approved labeling;
|
•
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availability of alternative treatments for the indications we target;
|
•
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the advantages and disadvantages of our products relative to current or alternative treatments;
|
•
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the availability of acceptable pricing and adequate third-party reimbursement; and
|
•
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the effectiveness of marketing and distribution methods for the products.
|
•
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the duration and results of our clinical trials for our various product candidates going forward;
|
•
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unexpected delays or developments in seeking regulatory approvals;
|
•
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the time and cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;
|
•
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other unexpected developments encountered in implementing our business development and commercialization strategies;
|
•
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the potential addition of commercialized products to our pipeline;
|
•
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the outcome of litigation, if any; and
|
•
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further arrangements, if any, with collaborators.
|
•
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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;
|
•
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the timing of regulatory submissions and approvals;
|
•
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the timing and willingness of any current or future collaborators to invest the resources necessary to commercialize our product candidates;
|
•
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the revenue available from royalties derived from our strategic partners;
|
•
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the nature and timing of licensing fees revenues;
|
•
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the nature and timing of tax credits and grants (R&D);
|
•
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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
|
•
|
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 U.S., 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 U.S., Canada or abroad.
|
•
|
45,312,009 Common Shares issued and outstanding;
|
•
|
no issued and outstanding preferred shares;
|
•
|
20,107,410 Common Shares issuable upon exercise of outstanding warrants; and
|
•
|
2,412,573 stock options outstanding.
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Item 4.
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Information on the Company
|
A.
|
History and development of the Company
|
|
|
|
|||
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Aeterna Zentaris Inc.
(Canada)
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|
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|
|||
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|
|
|
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|
|
|
|
|
|
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|||
Aeterna Zentaris GmbH
(Germany)
|
|
Aeterna Zentaris, Inc.
(Delaware)
|
|||
|
|
|
|||
|
|
|
|
||
|
100%
|
|
|
||
|
|
|
|||
Zentaris IVF GmbH
(Germany)
|
|
|
|
|
|
|
|
|
|
|
B.
|
Business overview
|
(3)
|
Sponsored entirely by our licensee partners (Spectrum Pharmaceuticals, World (ex-Japan, Korea and other Asian countries) – Handok Pharmaceuticals, Korea and other Asian countries for benign prostatic hyperplasia ("BPH") indication – Nippon Kayaku, Japan for oncology indications).
|
(4)
|
Sponsored entirely by our licensee partners (Yakult Honsha, Japan – Handok Pharmaceuticals, Korea – Hikma Pharmaceuticals, Middle East/North Africa).
|
1.0
|
ONCOLOGY
|
1.1
|
TUMOR TARGETING CYTOTOXIC CONJUGATES AND CYTOTOXICS
|
1.1.1
|
Zoptarelin doxorubicin
–
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)/PI3K inhibitor
|
Sanofi
|
Phase 2
|
BKM120/PI3K inhibitor
|
Novartis
|
Phase 1/2
|
TK1258/FGFR inhibitor
|
Novartis
|
Phase 1/2
|
GDC/0980
PI3K/mTOR inhibitor
|
Genentech
|
Phase 2
|
Lenvatinib (E7080)/
Multi-kinase inhibitor
|
Eisai
|
Phase 2
|
Sunitinib malate/Tyrosine kinase inhibitor
|
NCI
|
Phase 2
|
*
|
Source: Competitor company's website and www.clinicaltrials.gov.
|
1.1.2
|
Zoptarelin doxorubicin – Triple-Negative Breast Cancer
|
1.1.3
|
Zoptarelin doxorubicin – Bladder Cancer
|
1.1.4
|
Zoptarelin doxorubicin – Prostate Cancer
|
1.1.5
|
AEZS-137 (Disorazol Z) / AEZS-138 (LHRH-Disorazol Z)
|
1.2
|
TUBULIN INHIBITORS / VASCULAR TARGETING AGENTS
|
1.2.1
|
AEZS-112
|
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 administered 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-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
|
MACIMORELIN
|
2.1.1
|
MACRILEN™ (macimorelin) – Use for evaluation of 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
|
Macimorelin – Cancer Cachexia
|
2.2
|
LHRH ANTAGONISTS
|
2.2.1
|
Cetrotide
®
|
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 zoptarelin doxorubicin 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 zoptarelin doxorubicin 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 zoptarelin doxorubicin 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.
|
•
|
U.S. patent 6,861,409 protects the compound macimorelin and U.S. patent 7,297,681 protects other related growth hormone
|
•
|
European patent 1 289 951 protects the compound macimorelin 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. EP patent 1 289 951 and EP patent 1 344 773 both expire in June 2021. A patent term extension of up to five years by SPC may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese patent 3 522 265 protects the compound macimorelin 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 in case approval has been achieved prior to patent expiration.
|
•
|
Canadian patent 2,407,659 protects the compound
macimorelin
and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This Canadian patent expires in June 2021.
|
•
|
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
macimorelin
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
macimorelin
. 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
macimorelin
. The Japanese patent 4 852 728 expires in February 2027.
|
•
|
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
in case approval has been achieved prior to patent expiration.
|
•
|
U.S. and Japanese patent applications (both filed in November 2007) recently received a Notice of Allowance. Granted patents will expire in November 2027.
|
•
|
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 in case approval has been achieved prior to patent expiration.
|
•
|
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 in case approval has been achieved prior to patent expiration.
|
•
|
U.S. patent 8,202,883 protects compound AEZS-129. This U.S. patent will expire in May 2029 (including patent term adjustment ("PTA"). A patent term extension of up to five years may be possible.
|
•
|
U.S. patent 8,507,486 protects compound AEZS-136. This U.S. patent will expire in May 2028. A patent term extension of up to five years may be possible.
|
•
|
U.S. patent 8,536,332 protects methods of treatment for compound AEZS-129. This U.S. patent will expire in May 2028. A patent term extension of up to five years may be possible.
|
•
|
U.S. patent 8,604,196 protects methods of treatment for compound AEZS-136. This U.S. patent will expire in May 2028 and is subject to a terminal disclaimer based on US 8,507,486 (07/04Z/2). A patent term extension of up to five years may be possible.
|
•
|
U.S. patent application US-2012-0258080 seeks protection for compound AEZS-134 as well as methods of treatment for this compound. When granted, the U.S. patent would expire in April 2032. A patent term extension of up to five years may be possible.
|
•
|
European Patent Application EP2,164,849 seeks protection for compounds AEZS-129 and -136 as well as methods of treatment for these compounds. When granted, the EP patent would expire in May 2028. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
European Patent Application No. EP2,694,067 seeks protection for compound AEZS-134 as well as methods of treatment for this compound. When granted, the EP patent would expire in April 2032. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese Patent Application No. 2010-506945 seeks protection for compound AEZS-129 as well as methods of treatment for this compound. When granted, the JP patent would expire in May 2028. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese Patent Application No. 2014-6832 seeks protection for compounds AEZS-136 as well as methods of treatment for this compound. When granted, the JP patent would expire in May 2028. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese patent application based on PCT/EP2012/056138 seeks protection for compound AEZS-134 as well as methods of treatment for this compound. When granted, the JP patent would expire in April 2032. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
U.S. patent 7,741,277 protects compound AEZS-138 (disorazole Z - LHRH conjugate). This U.S. patent will expire in January 2028 (including PTA). A patent term extension of up to five years may be possible.
|
•
|
U.S. patent 8,470,776 protects methods of treatment for compound AEZS-138 (disorazole Z - LHRH conjugate). This U.S. patent will expire in February 2029 (including PTA). A patent term extension of up to five years may be possible.
|
•
|
European patent application 2,066,679 protects compound AEZS-138 (disorazole Z - LHRH conjugate) as well as methods of treatment for this compound. When granted, this EP patent will expire in September 2027. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
•
|
Japanese patent 5,340,155 protects compound AEZS-138 (disorazole Z - LHRH conjugate) as well as methods of treatment for this compound. This JP patent will expire in September 2027. A SPC of up to five years may be possible in case approval has been achieved prior to patent expiration.
|
Patent No.
|
|
Title
|
|
Country
|
|
Expiry Date
|
Zoptarelin doxorubicin
|
|
|
|
|
|
|
U.S. 5,843,903
|
|
Targeted cytotoxic anthracycline analogs
|
|
United States
|
|
2015-11-27
|
EP 0 863 917
|
|
Targeted cytotoxic anthracycline analogs
|
|
Europe
|
|
2016-11-14
|
JP 3 987 575
|
|
Targeted cytotoxic anthracycline analogs
|
|
Japan
|
|
2016-11-14
|
|
|
|
|
|
|
|
Macimorelin
|
|
|
|
|
|
|
U.S. 6,861,409
|
|
Growth hormone secretagogues
|
|
United States
|
|
2022-08-01
|
EP 1 289 951
|
|
Growth hormone secretagogues
|
|
Germany, United Kingdom, France, Switzerland and others
|
|
2021-06-13
|
JP 3 522 265
|
|
Growth hormone secretagogues
|
|
Japan
|
|
2021-06-13
|
CA 2,407,659
|
|
Growth hormone secretagogues
|
|
Canada
|
|
2021-06-13
|
U.S. 8,192,719
|
|
Method and kit to diagnose growth hormone deficiency
|
|
United States
|
|
2027-10-12
|
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
|
|
3,561
|
|
|
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
|
▪
|
On January 6, 2014, we announced that the FDA had accepted for substantive review our New Drug Application ("NDA") for our orally available peptidomimetic ghrelin receptor agonist with growth hormone secretagogue activity, MACRILEN™, for the evaluation of adult growth hormone deficiency ("AGHD"). The acceptance for filing of the NDA indicates that the FDA has determined that the application is sufficiently complete to permit a substantive review. The NDA, submitted on November 5, 2013, seeks approval for the commercialization of MACRILEN™, which, if approved, will be the first orally administered drug indicated for the evaluation of AGHD by evaluating the pituitary gland secretion of growth hormone in response to an oral dose of the product. The application is subject to a standard review and will have a Prescription Drug User Fee Act ("PDUFA") date of November 5, 2014. The PDUFA date is the goal date for the FDA to complete its review of the NDA. MACRILEN™
benefits from patent protection covering major markets; in particular, the product is protected in the U.S. at least until October 2027. Phase 3 data have demonstrated the compound to be well tolerated, with accuracy comparable to available intravenous and intramuscular testing procedures.
|
▪
|
On April 10, 2013 we announced the signing of a co-development and profit sharing agreement with Ergomed Clinical Research Ltd. ("Ergomed") as the contract clinical development organization for the Phase 3 ZoptEC
(
Zopt
arelin doxorubicin in
E
ndometrial
C
ancer) trial in women with locally advanced, recurrent or metastatic endometrial cancer who have progressed and who have received one chemotherapeutic regimen with platinum and taxane (either as adjuvant or first-line treatment). The ZoptEC trial is an open-label, randomized, multicenter trial conducted in North America, Europe and Israel under a Special Protocol Assessment with the FDA. The trial compares zoptarelin doxorubicin with doxorubicin as second line therapy and will involve approximately 500 patients. Patient dosing was initiated in July 2013, and the primary efficacy endpoint of the ZoptEC trial is improvement in median Overall Survival.
|
▪
|
On June 3, 2013, we announced encouraging final data for the Phase 1 portion of the ongoing Phase 1/2 trial in men with castration- and taxane-resistant prostate cancer with zoptarelin doxorubicin. Data were presented at the American Society of Clinical Oncology Annual Meeting in Chicago by the principal investigator, Jacek Pinski, MD, PhD, of the University of Southern California's Norris Comprehensive Cancer Center. In general, zoptarelin doxorubicin was well tolerated and demonstrated promising evidence of its anti-tumor activity in this heavily pretreated population. Among the 15 evaluable patients with measurable disease, ten achieved stable disease, and a drop in Prostatic Specific Antigen was noted in three patients. The maximum tolerated dose ("MTD") of zoptarelin doxorubicin in this indication was established at 210 mg/m
2
, which is below the MTD reported in women with refractory endometrial and ovarian cancer. The Phase 2 portion of this trial in prostate cancer is ongoing.
|
▪
|
On October 1, 2013, we announced that we had successfully completed the transactions contemplated by the transfer and service agreement and concurrent agreements with various partners and licensees with respect to the manufacturing rights for Cetrotide
®
, currently marketed by a subsidiary of Merck KGaA of Darmstadt, Germany ("Merck Serono") for therapeutic use as part of
in vitro
fertilization programs. The principal outcome of these agreements is the transfer of manufacturing rights and the grant of a license to Merck Serono for the manufacture, testing, assembling, packaging, storage and release of Cetrotide
®
in all territories (the "Cetrotide
®
Business") in exchange for a non-refundable, one-time payment of €2.5 million (approximately $3.3 million).
|
▪
|
The Cetrotide
®
Business has been presented in our consolidated financial statements as a discontinued operation. As such, relevant amounts impacting elements of our comprehensive income (loss) and cash flows have been retroactively reclassified to reflect the Cetrotide
®
Business as a discontinued operation and are discussed separately from continuing operations in this MD&A.
|
▪
|
On March 11, 2013, we announced that the Phase 3 trial in multiple myeloma was discontinued after an interim analysis by an independent Data Safety Monitoring Board reported that it was highly unlikely the study would achieve a significant difference in its primary endpoint of progression-free survival. We therefore decided not to make any further investment in the development of perifosine.
|
▪
|
On April 15, 2013, we announced the appointment of David Dodd as our President, Chief Executive Officer ("CEO") and director of the Company. Mr. Dodd's executive management experience in the pharmaceutical and biotechnology industries spans more than 35 years. Prior to joining our Company, Mr. Dodd was President, CEO and Chairman of BioReliance Corporation, a leading provider of biological safety and related testing services, and President, CEO and director of Serologicals Corporation. Mr. Dodd also held the roles of President and CEO of Solvay Pharmaceuticals, Inc. and of Chairman of its subsidiary, Unimed Pharmaceuticals, Inc., and held various senior management positions at Wyeth-Ayerst Laboratories, the Mead Johnson Laboratories Division at Bristol-Myers Squibb and at Abbott Laboratories. Mr. Dodd holds a Master's degree from Georgia State University and completed the Harvard Business School Advanced Management Program.
|
▪
|
On November 1, 2013, we announced the appointment of Jude Dinges as our Senior Vice President and Chief Commercial Officer. Mr. Dinges is responsible for all activities regarding the potential commercial launch of MACRILEN™ in AGHD, as well as for identifying future commercial opportunities. Mr. Dinges began his career nearly 30 years ago at Bristol Laboratories and later at Merck & Co. in training, sales, management, marketing and market development and was a key contributor to the successful launch of brands such as Cozaar
®
, Fosamax
®
, Singulair
®
, Maxalt
®
, Vioxx
®
, and Vytorin
®
. Mr. Dinges joined Novartis Pharmaceuticals in 2006, overseeing the launch of Tekturna
®
, and in 2008 became the Respiratory & Infectious Disease Specialty Medicines Director. In 2009, he joined Amgen Inc. as Executive Director of Region Sales, Bone Health Business Unit.
|
▪
|
On January 3, 2014, we announced the appointment of Richard Sachse, MD, PhD, as our Senior Vice President, Chief Scientific Officer and Managing Director. Dr. Sachse, who is based in Frankfurt, holds a degree in medicine from the Friedrich-Alexander-University Erlangen and a board certification in Clinical Pharmacology and has over 20 years' experience as a physician and scientist. He has extensive expertise in a variety of different therapeutic areas, including endocrinology and oncology. In addition to registration studies, Dr. Sachse is especially experienced in the design and implementation of translational programs to bridge research programs to the clinic, as well as in the design and implementation of clinical pharmacology programs, including all required profiling studies and activities, enabling successful registration of products at the international level. Before joining Aeterna Zentaris, Dr. Sachse was Vice President and Head of Global Translational Medicine at Boehringer Ingelheim. From 1996 to 2000, he was International Project Leader at the Bayer AG Institute for Clinical Pharmacology and Principal Investigator at the Bayer Clinical Pharmacology Unit. From 2001 to 2006, Dr. Sachse held a variety of management positions within early and late phase clinical development programs, including responsibilities for completed Phase 3 programs leading to successful New Drug Application / Marketing Authorization Application submissions. In 2007, he became Senior Director, Head of Experimental Medicine, at UCB in Belgium, before being appointed Vice President, Head of Global Translational Medicine, at Boehringer Ingelheim in 2010.
|
▪
|
Between May 22, 2013 and December 31, 2013, we sold a total of approximately 1.7 million common shares under our At‑The-Market ("ATM") sales program at an average price of $1.76 per share, resulting in aggregate gross proceeds of approximately $3.0 million. This ATM sales program allows the Company to sell, at market prices prevailing at the time of sale, up to a maximum of 2.5 million of our common shares through ATM issuances on the NASDAQ for aggregate gross proceeds not to exceed $4.6 million. Between January 1, 2014 and March 20, 2014, we issued a total of 0.2 million common shares under this ATM sales program for aggregate gross proceeds of $0.3 million.
|
▪
|
On July 30, 2013, we completed a registered direct offering of 5.2 million units at a purchase price of $1.50 per unit, generating net proceeds of approximately $7.0 million. Each unit consisted of one common share and 0.5 of a warrant to purchase one common share. Each warrant is exercisable at any time after January 30, 2014 for a period of five years from the date of issuance at an exercise price of $1.85 per share.
|
▪
|
On November 25, 2013 we completed a public offering of 13.1 million units, generating net proceeds of approximately $13.7 million. Each unit consisted of one common share and one whole warrant to purchase one common share, at a purchase price of $1.15 per unit. Each warrant is exercisable for a period of five years at an original exercise price of $1.60 per share, subject to certain anti-dilution provisions.
|
▪
|
Subsequent to year-end, on January 14, 2014, we completed a public offering of 11.0 million units, generating net proceeds of approximately $12.2 million, with each unit consisting of one common share and 0.8 of a warrant to purchase one common share, at a purchase price of $1.20 per unit. Each warrant is exercisable for a period of five years at an original exercise price of $1.25 per share, which is subject to certain anti-dilution provisions.
|
▪
|
On August 28, 2013, we announced that our request to transfer our listing to the NASDAQ Capital Market from the NASDAQ Global Market had been approved by the NASDAQ Listing Qualifications Staff. Our common shares continue to trade on the NASDAQ Capital Market, effective August 29, 2013.
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands, except share and per share data)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales
|
|
—
|
|
|
—
|
|
|
96
|
|
|
834
|
|
|
250
|
|
License fees and other
|
|
—
|
|
|
281
|
|
|
6,079
|
|
|
1,219
|
|
|
4,455
|
|
|
|
—
|
|
|
281
|
|
|
6,175
|
|
|
2,053
|
|
|
4,705
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
—
|
|
|
—
|
|
|
51
|
|
|
591
|
|
|
212
|
|
Research and development costs, net of refundable tax credits and grants
|
|
5,345
|
|
|
5,523
|
|
|
21,284
|
|
|
20,592
|
|
|
24,245
|
|
Selling, general and administrative expenses
|
|
2,627
|
|
|
2,877
|
|
|
12,316
|
|
|
10,606
|
|
|
11,955
|
|
|
|
7,972
|
|
|
8,400
|
|
|
33,651
|
|
|
31,789
|
|
|
36,412
|
|
Loss from operations
|
|
(7,972
|
)
|
|
(8,119
|
)
|
|
(27,476
|
)
|
|
(29,736
|
)
|
|
(31,707
|
)
|
Finance income
|
|
65
|
|
|
689
|
|
|
1,748
|
|
|
6,974
|
|
|
6,239
|
|
Finance costs
|
|
(2,689
|
)
|
|
(700
|
)
|
|
(1,512
|
)
|
|
(382
|
)
|
|
(8
|
)
|
Net finance (costs) income
|
|
(2,624
|
)
|
|
(11
|
)
|
|
236
|
|
|
6,592
|
|
|
6,231
|
|
Loss before income taxes
|
|
(10,596
|
)
|
|
(8,130
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(25,476
|
)
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Net loss from continuing operations
|
|
(10,596
|
)
|
|
(8,130
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(26,580
|
)
|
Net income (loss) from discontinued operations
|
|
2,353
|
|
|
1,183
|
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Net (loss) income
|
|
(8,243
|
)
|
|
(6,947
|
)
|
|
6,815
|
|
|
(20,412
|
)
|
|
(27,067
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|||||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
424
|
|
|
(204
|
)
|
|
1,073
|
|
|
(504
|
)
|
|
(789
|
)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Actuarial gain (loss) on defined benefit plans
|
|
2,346
|
|
|
(3,705
|
)
|
|
2,346
|
|
|
(3,705
|
)
|
|
(1,335
|
)
|
Comprehensive (loss) income
|
|
(5,473
|
)
|
|
(10,856
|
)
|
|
10,234
|
|
|
(24,621
|
)
|
|
(29,191
|
)
|
Net loss per share (basic and diluted) from continuing operations
|
|
(0.28
|
)
|
|
(0.34
|
)
|
|
(0.92
|
)
|
|
(1.17
|
)
|
|
(1.69
|
)
|
Net income (loss) (basic and diluted) from discontinuing operations
|
|
0.06
|
|
|
0.05
|
|
|
1.16
|
|
|
0.14
|
|
|
(0.03
|
)
|
Net (loss) income (basic and diluted) per share
|
|
(0.22
|
)
|
|
(0.29
|
)
|
|
0.24
|
|
|
(1.03
|
)
|
|
(1.72
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
37,274,129
|
|
|
24,181,462
|
|
|
29,476,455
|
|
|
19,775,073
|
|
|
15,751,331
|
|
Diluted
|
|
37,274,129
|
|
|
24,181,462
|
|
|
29,476,455
|
|
|
19,806,687
|
|
|
15,751,331
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Third-party costs
|
|
2,828
|
|
|
2,345
|
|
|
10,049
|
|
|
8,679
|
|
|
10,077
|
|
Employee compensation and benefits
|
|
1,629
|
|
|
2,145
|
|
|
7,864
|
|
|
8,590
|
|
|
10,028
|
|
Facilities rent and maintenance
|
|
466
|
|
|
401
|
|
|
1,758
|
|
|
1,661
|
|
|
1,835
|
|
Other costs*
|
|
540
|
|
|
744
|
|
|
2,130
|
|
|
2,530
|
|
|
2,688
|
|
R&D tax credits and grants
|
|
(118
|
)
|
|
(112
|
)
|
|
(517
|
)
|
|
(868
|
)
|
|
(383
|
)
|
|
|
5,345
|
|
|
5,523
|
|
|
21,284
|
|
|
20,592
|
|
|
24,245
|
|
(in thousands, except percentages)
|
|
Three-month periods ended December 31,
|
||||||||||
Product Candidate
|
|
2013
|
|
2012
|
||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||
Zoptarelin doxorubicin
|
|
1,667
|
|
|
58.9
|
|
|
282
|
|
|
12.0
|
|
MACRILEN™, macimorelin
|
|
284
|
|
|
10.0
|
|
|
30
|
|
|
1.3
|
|
Erk/PI3K inhibitors
|
|
312
|
|
|
11.0
|
|
|
199
|
|
|
8.5
|
|
Perifosine
|
|
—
|
|
|
—
|
|
|
1,434
|
|
|
61.2
|
|
Disorazol Z
|
|
139
|
|
|
4.9
|
|
|
55
|
|
|
2.3
|
|
Other
|
|
426
|
|
|
15.2
|
|
|
345
|
|
|
14.7
|
|
|
|
2,828
|
|
|
100.0
|
|
|
2,345
|
|
|
100.0
|
|
(in thousands, except percentages)
|
|
Years ended December 31,
|
||||||||||||||||
Product Candidate
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
Zoptarelin doxorubicin
|
|
4,934
|
|
|
49.1
|
|
|
2,133
|
|
|
24.6
|
|
|
1,652
|
|
|
16.4
|
|
MACRILEN™, macimorelin
|
|
1,238
|
|
|
12.3
|
|
|
112
|
|
|
1.3
|
|
|
1,156
|
|
|
11.5
|
|
Erk/PI3K inhibitors
|
|
1,128
|
|
|
11.2
|
|
|
1,727
|
|
|
19.9
|
|
|
1,860
|
|
|
18.5
|
|
Perifosine
|
|
1,134
|
|
|
11.3
|
|
|
3,801
|
|
|
43.8
|
|
|
3,726
|
|
|
37.0
|
|
Disorazol Z
|
|
659
|
|
|
6.6
|
|
|
331
|
|
|
3.8
|
|
|
256
|
|
|
2.5
|
|
Other
|
|
956
|
|
|
9.5
|
|
|
575
|
|
|
6.6
|
|
|
1,427
|
|
|
14.1
|
|
|
|
10,049
|
|
|
100.0
|
|
|
8,679
|
|
|
100.0
|
|
|
10,077
|
|
|
100.0
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Finance income
|
|
|
|
|
|
|
|
|
|
|
|||||
Gains due to changes in foreign currency exchange rates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,197
|
|
Change in fair value of warrant liability
|
|
—
|
|
|
634
|
|
|
1,563
|
|
|
6,746
|
|
|
2,533
|
|
Interest income
|
|
65
|
|
|
55
|
|
|
185
|
|
|
228
|
|
|
223
|
|
Gain on held-for-trading financial instrument
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,278
|
|
|
|
65
|
|
|
689
|
|
|
1,748
|
|
|
6,974
|
|
|
6,231
|
|
Finance costs
|
|
|
|
|
|
|
|
|
|
|
|||||
Losses due to changes in foreign currency exchange rates
|
|
(805
|
)
|
|
(700
|
)
|
|
(1,512
|
)
|
|
(382
|
)
|
|
—
|
|
Change in fair value of warrant liability
|
|
(1,884
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(2,689
|
)
|
|
(700
|
)
|
|
(1,512
|
)
|
|
(382
|
)
|
|
—
|
|
|
|
(2,624
|
)
|
|
(11
|
)
|
|
236
|
|
|
6,592
|
|
|
6,231
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
Euro to US$ average conversion rate
|
|
1.3617
|
|
1.2975
|
|
1.3288
|
|
1.2858
|
|
1.3919
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales and royalties
|
|
3,057
|
|
|
9,165
|
|
|
63,755
|
|
|
30,704
|
|
|
31,056
|
|
License fees and other*
|
|
3,717
|
|
|
99
|
|
|
4,589
|
|
|
908
|
|
|
292
|
|
|
|
6,774
|
|
|
9,264
|
|
|
68,344
|
|
|
31,612
|
|
|
31,348
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
3,071
|
|
|
7,489
|
|
|
30,002
|
|
|
26,229
|
|
|
27,348
|
|
Research and development costs, net of tax credits and grants
|
|
—
|
|
|
—
|
|
|
8
|
|
|
12
|
|
|
272
|
|
Selling, general and administrative expenses
|
|
1,350
|
|
|
592
|
|
|
4,279
|
|
|
2,639
|
|
|
4,215
|
|
|
|
4,421
|
|
|
8,081
|
|
|
34,289
|
|
|
28,880
|
|
|
31,835
|
|
Net income (loss) from discontinued operations
|
|
2,353
|
|
|
1,183
|
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
(in thousands, except for per share data)
|
|
Quarters ended
|
||||||||||
|
|
December 31, 2013
|
|
September 30,
2013
|
|
June 30,
2013
|
|
March 31, 2013
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
|
|
—
|
|
|
17
|
|
|
96
|
|
|
6,062
|
|
Loss from operations
|
|
(7,972
|
)
|
|
(8,648
|
)
|
|
(9,693
|
)
|
|
(1,163
|
)
|
Net (loss) income from continuing operations
|
|
(10,596
|
)
|
|
(7,799
|
)
|
|
(9,848
|
)
|
|
1,003
|
|
Net (loss) income
|
|
(8,243
|
)
|
|
3,842
|
|
|
9,330
|
|
|
1,886
|
|
Net (loss) income per share from continuing operations (basic and diluted)*
|
|
(0.28
|
)
|
|
(0.26
|
)
|
|
(0.39
|
)
|
|
0.04
|
|
Net (loss) income per share (basic and diluted)*
|
|
(0.22
|
)
|
|
0.13
|
|
|
0.37
|
|
|
0.07
|
|
(in thousands, except for per share data)
|
|
Quarters ended
|
||||||||||
|
|
December 31, 2012
|
|
September 30, 2012
|
|
June 30,
2012
|
|
March 31, 2012
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
|
|
281
|
|
|
265
|
|
|
402
|
|
|
1,105
|
|
Loss from operations
|
|
(8,119
|
)
|
|
(6,447
|
)
|
|
(7,672
|
)
|
|
(7,498
|
)
|
Net (loss) income from continuing operations
|
|
(8,130
|
)
|
|
(7,321
|
)
|
|
4,468
|
|
|
(12,161
|
)
|
Net (loss) income
|
|
(6,947
|
)
|
|
(6,554
|
)
|
|
4,540
|
|
|
(11,451
|
)
|
Net (loss) income per share from continuing operations (basic and diluted)*
|
|
(0.34
|
)
|
|
(0.39
|
)
|
|
0.24
|
|
|
(0.69
|
)
|
Net (loss) income per share (basic and diluted)*
|
|
(0.29
|
)
|
|
(0.35
|
)
|
|
0.25
|
|
|
(0.65
|
)
|
*
|
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)
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Cash and cash equivalents
|
|
43,202
|
|
|
39,521
|
|
Trade and other receivables and other current assets
|
|
2,453
|
|
|
13,780
|
|
Restricted cash
|
|
865
|
|
|
826
|
|
Property, plant and equipment
|
|
1,351
|
|
|
2,147
|
|
Other non-current assets
|
|
11,325
|
|
|
11,391
|
|
Total assets
|
|
59,196
|
|
|
67,665
|
|
Payables and other current liabilities
|
|
7,242
|
|
|
10,470
|
|
Current portion of deferred revenues
|
|
—
|
|
|
5,235
|
|
Warrant liability (current and non-current portions)
|
|
18,010
|
|
|
6,176
|
|
Non-financial non-current liabilities*
|
|
16,880
|
|
|
52,479
|
|
Total liabilities
|
|
42,132
|
|
|
74,360
|
|
Shareholders' equity (deficiency)
|
|
17,064
|
|
|
(6,695
|
)
|
Total liabilities and shareholders' equity (deficiency)
|
|
59,196
|
|
|
67,665
|
|
|
|
As at December 31, 2013
|
|||||||
(in thousands)
|
|
Minimum lease payments
|
|
Minimum sublease payments
|
|
Utilities
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Less than 1 year
|
|
1,795
|
|
|
(226
|
)
|
|
640
|
|
1 – 3 years
|
|
2,562
|
|
|
(451
|
)
|
|
559
|
|
4 – 5 years
|
|
515
|
|
|
(244
|
)
|
|
—
|
|
More than 5 years
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
4,872
|
|
|
(921
|
)
|
|
1,199
|
|
(in thousands)
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2011
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Cash and cash equivalents - Beginning of period
|
|
24,829
|
|
|
33,202
|
|
|
39,521
|
|
|
46,881
|
|
|
31,998
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash used in operating activities from continuing operations
|
|
(6,184
|
)
|
|
(6,481
|
)
|
|
(30,131
|
)
|
|
(25,681
|
)
|
|
(22,454
|
)
|
Cash provided by (used in) operating activities from discontinued operations
|
|
9,622
|
|
|
(2,282
|
)
|
|
10,147
|
|
|
(5,134
|
)
|
|
(3,789
|
)
|
|
|
3,438
|
|
|
(8,763
|
)
|
|
(19,984
|
)
|
|
(30,815
|
)
|
|
(26,243
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Net proceeds from issuance of common shares and warrants
|
|
14,795
|
|
|
15,097
|
|
|
23,708
|
|
|
23,619
|
|
|
36,250
|
|
Net proceeds from the exercise of share purchase warrants and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
589
|
|
|
2,306
|
|
|
|
14,795
|
|
|
15,097
|
|
|
23,708
|
|
|
24,208
|
|
|
38,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash (used in) provided by investing activities from continuing operations
|
|
(21
|
)
|
|
(113
|
)
|
|
(85
|
)
|
|
(272
|
)
|
|
2,463
|
|
Net cash provided by investing activities from discontinued operations
|
|
113
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
|
92
|
|
|
(113
|
)
|
|
28
|
|
|
(272
|
)
|
|
2,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
48
|
|
|
98
|
|
|
(71
|
)
|
|
(481
|
)
|
|
107
|
|
Cash and cash equivalents - End of period
|
|
43,202
|
|
|
39,521
|
|
|
43,202
|
|
|
39,521
|
|
|
46,881
|
|
(in thousands)
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
18,010
|
|
|
2,205
|
|
|
(2,172
|
)
|
Total impact on net income – increase / (decrease)
|
|
|
|
2,205
|
|
|
(2,172
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
(in thousands)
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
27,452
|
|
|
1,373
|
|
|
(1,373
|
)
|
Warrant liability
|
|
18,010
|
|
|
(901
|
)
|
|
900
|
|
Total impact on net income – increase / (decrease)
|
|
|
|
472
|
|
|
(473
|
)
|
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
|
|
|
|
|
|
Dodd, David A.
|
|
President and Chief Executive Officer
|
South Carolina, United States
|
|
|
|
|
|
Dinges, Jude
|
|
Senior Vice President and Chief Commercial Officer
|
Georgia, United States
|
|
|
|
|
|
Dorais, José P.
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Egbert, Carolyn
|
|
Director
|
Texas, United States
|
|
|
|
|
|
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
|
|
|
|
|
|
Sachse, Richard
|
|
Senior Vice President, Chief Scientific Officer/Chief Medical Officer
|
Mittelbiberach, Germany
|
|
|
|
|
|
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 2013
(in units of home country currency) |
Chairman's Retainer
|
|
45,000
|
Board Member 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
|
|
12/14/2004
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Egbert, Carolyn
|
|
12/06/2012
|
|
7,500
|
|
|
US$2.17
|
|
12/05/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/08/2013
|
|
5,000
|
|
|
US$1.86
|
|
05/07/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11/27/2013
|
|
25,000
|
|
|
US$1.12
|
|
11/26/2023
|
|
US$6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The number of securities underlying unexercised options represents all awards outstanding as at December 31, 2013.
|
(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 the NASDAQ, as applicable, on the last trading day of the fiscal year (December 31, 2013) of CAN$1.47 and US$1.38, respectively, and the exercise price of the options, multiplied by the number of unexercised options.
|
Name
|
|
Fees earned
($)
|
|
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
|
|
14,564
|
|
|
6,766
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
51,361
|
|
Dorais, José P.
|
|
28,711
|
|
|
14,984
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
496
|
|
|
|
74,222
|
|
Egbert, Carolyn
|
|
17,000
|
|
|
13,000
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
79,320
|
|
(4)
|
|
139,351
|
|
Ernst, Juergen
|
|
82,054
|
|
|
17,950
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
7,928
|
|
|
|
137,964
|
|
Lapalme, Pierre
|
|
18,449
|
|
|
9,688
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
58,168
|
|
Limoges, Gérard
|
|
29,822
|
|
|
14,567
|
|
|
—
|
|
|
30,031
|
|
|
—
|
|
|
—
|
|
|
496
|
|
|
|
74,915
|
|
(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 the NASDAQ on the last trading day preceding the date of grant (US$1.86 for options granted on May 8, 2013 and US$1.12 for options granted on November 27, 2013) multiplied by the Black-Scholes factor as at such date (80.01% for options granted on May 8, 2013 and 80.68% for options granted on November 27, 2013) 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)
|
Represents fees paid for special tasks delegated to Ms. Egbert and approved by the Governance Committee in connection with the search for, and the appointment of, a new President and Chief Executive Officer and various transition and integration work related thereto.
|
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 the opportunity for executives to participate in 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 2013
|
|
|
Results for 2013
|
|
Perifosine
|
l
|
Ensure interim analysis in multiple myeloma by Data Safety Monitoring Board ("DSMB") to permit futility analysis and go-no-go decision to complete the Phase 3 program in a timely manner
|
l
|
Discontinuation of the Phase 3 trial in multiple myeloma following an interim analysis by an independent DSMB
|
|
|
|
l
|
Closing of all sites involved in the trial and review of Yakult Honsha Co., Ltd. strategic alliance
|
Cetrotide
®
|
l
|
Conclude the licensing out of all global manufacturing rights of Cetrotide
®
|
l
|
Successfully completed the transfer of the manufacturing rights to Merck Serono a subsidiary of Merck KGaA ("Merck Serono")
|
|
l
|
Ensure transition of the manufacturing activities with the different partners
|
l
|
Non-refundable one-time payment received of approximately $3.3 million plus other payments related to the transfer of certain assets
|
|
|
|
l
|
Transition Service Agreement in place with Merck Serono to facilitate the completion/integration of the manufacturing of Cetrotide
®
|
MACRILEN™ (macimorelin)
|
l
|
Submit a New Drug Application ("NDA") in the United States in the evaluation of adult growth hormone deficiency ("AGHD")
|
l
|
NDA submitted to evaluate AGHD in November 2013, post year-end, the FDA confirmed acceptance for filing and that the NDA review is ongoing with a Prescription Drug User Fee Act ("PDUFA") date November 5, 2014
|
|
|
|
l
|
The NDA was submitted at a later date than originally expected
|
|
l
|
Prepare a commercial plan for the future launch of MACRILEN™ (macimorelin)
|
l
|
Completed after hiring of our Senior Vice President and Chief Commercial Officer, Jude Dinges
|
Zoptarelin doxorubicin
ZoptEC (
Zopt
arelin doxorubicin in
E
ndometrial
C
ancer) Phase 3 program
|
l
|
Complete Phase 3 trial design and submit to FDA a Special Protocol Assessment ("SPA") and the equivalent in Europe in endometrial cancer
|
l
|
SPA agreement obtained from FDA, the Phase 3 ZoptEC trial was also discussed and a scientific advice was also agreed with the European Medicines Agency ("EMA")
|
|
l
|
Ensure CRO partnership with performance objectives and control of corresponding costs
|
l
|
Co-development and profit-sharing agreement signed with Ergomed as a CRO for the execution of the Phase 3 ZoptEC trial in endometrial cancer. Ergomed has agreed to assume 30% of the clinical and regulatory costs up to $10 million and will receive pre-established single digit percentage on net income and up to specified maximum amount
|
|
l
|
Start recruitment in the different countries (sites and patients) and achieve pre-established recruitment rate
|
l
|
Initiated > 50% of clinical sites for the ZoptEC trial before year-end 2013
|
AEZS-120
|
l
|
Initiate a Phase 1 trial
|
l
|
Approval of Danish regulatory authorities received for the initiation of a proof-of-concept Phase 1 trial in prostate cancer, however, the trial has not yet started pending the result of additional scientific evaluation being performed
|
Finance and budget
|
l
|
Budget management
|
l
|
With the different strategic partnerships, including Ergomed and the transfer of Cetrotide
®
manufacturing rights, as well as the tight control of the operations, the burn rate was reduced to $1.7 million per month on average which was lower than the pre-established operating budget
|
|
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
|
Cash flow from financing activities net of transaction costs was $23.7 million in 2013. Cash and cash equivalents balance was $43.2 million at year-end, which is significantly higher than what was initially budgeted
|
Organization structure
|
l
|
Review and reorganize senior management and key employees by function (as opposed to by site), realign reporting lines and empower senior management and key employees to take ownership of, and responsibility over, their respective functions and tasks
|
l
|
Successful organization review was done within the first six months of the arrival of our Chief Executive Officer and implementation of the new structure is ongoing
|
|
|
Aeterna Zentaris
|
|
Reference Group
|
Location
|
|
North America and Europe
|
|
North America
|
Industries
|
|
Biopharmaceutical
|
|
Biopharmaceutical
|
Revenues
Last fiscal year
|
|
33.7
(1)
|
|
17.5
(2)
|
Market Capitalization
As at April 30, 2013
|
|
46.1
|
|
155.0
|
Net Loss
Last fiscal year
|
|
20.4
(1)
|
|
17.4
(2)
|
(1)
|
For the year ended December 31, 2012, as presented in the Company's 2012 audited consolidated financial statements, which were presented in conformity with IFRS as issued by the IASB.
|
(2)
|
The Reference Group for the financial year ended December 31, 2013 was selected in June 2013, 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 granted under the Company's stock option plan established for the benefit of its directors, certain executive officers and other participants as may be designated from time to time by either the Board or the Governance Committee (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 Participant whether or not such Participant 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, or
|
◦
|
any extension to the term of an option beyond its Outside Expiry Date to a Participant 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 Participant, or the extension of an option beyond the Outside Expiry Date in respect of any Participant 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 the Company's shareholders on a
pro rata
basis provided such distribution is approved by the Company'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 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
(3)
|
|||||||
|
|
(mm-dd-yyyy)
|
|
(#)
|
|
(CAN$ or US$)
|
|
(mm-dd-yyyy)
|
|
(CAN$ or US$)
|
|
|
|
(#)
|
|
($)
|
|||||||
Dodd, David A.
(4)
|
|
04/15/2013
|
|
300,000
|
|
|
US$1.98
|
|
|
04/14/2023
|
|
|
—
|
|
|
—
|
|
|
175,000
(5)
|
|
|
—
(5)
|
|
|
|
04/15/2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
(5)
|
|
|
—
(5)
|
|
Engel, Juergen
(6)
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Turpin, Dennis
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Blake, Paul
(7)
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pelliccione, Nicholas J.
(7)
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dinges, Jude
(8)
|
|
11/27/2013
|
|
150,000
|
|
|
US$1.12
|
|
|
11/26/2023
|
|
|
US$39,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The number of securities underlying unexercised options represents all awards outstanding at December 31, 2013.
|
(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 the NASDAQ, as applicable, on the last trading day of the year (December 31, 2013) of CAN$1.47 and US$1.38, respectively, and the exercise price of the options, multiplied by the number of unexercised options.
|
(3)
|
"Market or Payout Value of Share-based Awards that have Not Vested" at financial year-end is calculated based on the excess, if any, of the closing price of a Common Share on the last trading day of the year (December 31, 2013) over $1.98, being the closing price of a Common Share on the NASDAQ on the last trading day preceding the effective date of Mr. Dodd's appointment multiplied by 175,000 or 200,000, as applicable. See also note (5) below.
|
(4)
|
David A. Dodd was appointed President and Chief Executive Officer effective April 15, 2013 and was granted 300,000 stock options in connection with such appointment.
|
(5)
|
Pursuant to Mr. Dodd's Employment Agreement, the Company agreed to pay Mr. Dodd two separate share-based retention bonuses as follows: (1) the Company shall pay Mr. Dodd a retention bonus if he remains employed through December 31, 2014 equal to (a) the excess, if any, of the closing price of a Common Share on the last regular trading day in 2014 over $1.98, being the closing price of a
|
(6)
|
Juergen Engel served as President and Chief Executive Officer up until April 15, 2013.
|
(7)
|
Messrs. Blake and Pelliccione ceased to be employed by Aeterna Zentaris as of March 13, 2014.
|
(8)
|
Jude Dinges was appointed Senior Vice President and Chief Commercial Officer effective November 1, 2013 and was granted 150,000 stock options in connection with such appointment.
|
Name
|
|
Option-based awards — Value
vested during the year
(1)
|
|
Share-based awards —
Value
vested during the year
|
|
Non-equity incentive
plan
compensation — Value
earned
during the year
|
|
|
($)
|
|
($)
|
|
($)
|
Dodd, David A.
|
|
—
|
|
—
|
|
50,000
|
Engel, Juergen
|
|
—
|
|
—
|
|
—
|
Turpin, Dennis
|
|
—
|
|
—
|
|
66,677
|
Blake, Paul
(2)
|
|
—
|
|
—
|
|
—
|
Pelliccione, Nicholas J.
(2)
|
|
—
|
|
—
|
|
—
|
Dinges, Jude
|
|
—
|
|
—
|
|
—
|
(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 NASDAQ and the exercise price on such vesting date.
|
(2)
|
Messrs. Blake and Pelliccione ceased to be employed by Aeterna Zentaris as of March 13, 2014.
|
Name
|
|
Number
of years
of
credited
service
|
|
Annual benefits payable
|
|
Accrued
obligation at
start of year
(2)
|
|
Compensatory
change
|
|
Non-
compensatory
change
|
|
Accrued
obligation at
year end
(3)(4)
|
||
|
|
At year
end
|
|
At age 65
(1)
|
|
|||||||||
|
|
(#)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Engel, Juergen
|
|
34
|
|
207,696
|
|
193,142
|
|
4,240,141
|
|
(318,754)
|
|
171,400
|
|
3,885,090
|
(1)
|
In light of the fact that Mr. Engel attained the age of 65 during the 2010 year, by way of exception to other currency conversions in this Circular, the amount in this column has been converted from euros to US$ based on the annual average exchange rate for the financial year ended December 31, 2010, which was €1.000 = US$1.326.
|
(2)
|
By way of exception to other currency conversions in this Circular, the amount in this column has been converted from euros to US$ based on the exchange rate on December 31, 2012, which was €1.000 = US$1.319.
|
(3)
|
The figure in the column "Accrued obligation at year end" was further reduced by an amount of $207,696 representing the amount of mandatory pension payments made to Mr. Engel during 2013.
|
(4)
|
By way of exception to other currency conversions in this Circular, the amount in this column has been converted from euros to US$ based on the exchange rate on December 31, 2013, which was €1.000 = US$1.378.
|
|
|
|
|
|
|
|
Non-equity incentive plan compensation
|
|
|
|
|
|||||||||
Name and principal position
|
Years
|
Salary
|
Share
based
awards
|
Option
based
awards
(1)
|
Annual
incentive
plan
|
Long-term
incentive
plans
|
Pension
Value
|
All other
compensation
(2)
|
Total
compensation
|
|||||||||||
|
|
($)
|
($)
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||
Dodd, David A.
President and Chief Executive Officer
|
2013
|
328,846
|
|
(3)
|
414,048
|
|
(4)
|
474,606
|
|
50,000
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
1,279,000
|
|
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
2011
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Engel, Juergen
Former President and Chief Executive Officer
|
2013
|
148,825
|
|
(6)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,679,920
|
|
(7)(8)
|
1,828,745
|
|
2012
|
443,601
|
|
|
—
|
|
|
237,876
|
|
—
|
|
—
|
|
797,849
|
|
200,974
|
|
(8)
|
1,680,300
|
|
|
2011
|
505,260
|
|
|
—
|
|
|
336,420
|
|
160,764
|
|
—
|
|
590,136
|
|
214,212
|
|
(8)
|
1,806,792
|
|
|
Turpin, Dennis
Senior Vice President and Chief Financial Officer
|
2013
|
331,652
|
|
|
—
|
|
|
—
|
|
66,677
|
|
—
|
|
—
|
|
4,763
|
|
(9)
|
403,092
|
|
2012
|
341,605
|
|
|
—
|
|
|
149,787
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
491,392
|
|
|
2011
|
332,434
|
|
|
—
|
|
|
131,198
|
|
80,509
|
|
—
|
|
—
|
|
5,056
|
|
(9)
|
549,197
|
|
|
Blake, Paul
(10)
Former Senior Vice President and Chief Medical Officer
|
2013
|
384,300
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
395,800
|
|
2012
|
384,300
|
|
|
—
|
|
|
143,902
|
|
—
|
|
—
|
|
—
|
|
11,000
|
|
(5)
|
539,202
|
|
|
2011
|
370,223
|
|
|
—
|
|
|
136,622
|
|
89,670
|
|
—
|
|
—
|
|
11,000
|
|
(5)
|
607,515
|
|
|
Pelliccione, Nicholas J.
(10)
Former Senior Vice President, Regulatory Affairs and Quality Assurance
|
2013
|
333,600
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
345,100
|
|
2012
|
333,600
|
|
|
—
|
|
|
125,000
|
|
—
|
|
—
|
|
—
|
|
11,000
|
|
(5)
|
469,600
|
|
|
2011
|
321,062
|
|
|
—
|
|
|
130,178
|
|
77,739
|
|
—
|
|
—
|
|
11,000
|
|
(5)
|
539,979
|
|
|
Dinges, Jude
Senior Vice President and Chief Commercial
Officer
|
2013
|
121,988
|
|
(11)
|
—
|
|
|
135,542
|
|
—
|
|
—
|
|
—
|
|
2,354
|
|
(5)
|
259,884
|
|
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
2011
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(1)
|
The value of option-based awards represents the closing price of the Common Shares on the NASDAQ on the last trading day preceding the date of grant (US$1.98 for options granted on April 15, 2013 and US$1.12 for options granted on November 27, 2013) multiplied by the Black-Scholes factor as at such date (79.90% for options granted on April 15, 2013 and 80.68% for options granted on November 27, 2013) and the number of stock options granted on such date.
|
(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, 2013. 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 former President and Chief Executive Officer, Juergen Engel, "All Other Compensation" includes a termination or severance payment, as well as mandatory pension payments paid to him after he attained age 65. See also note (7) below.
|
(3)
|
Represents the salary actually earned by and paid to Mr. Dodd following his appointment as President and Chief Executive Officer on April 15, 2013.
|
(4)
|
The value of Mr. Dodd's share-based awards represents the closing price of the Common Shares on the NASDAQ on the last trading day preceding the date of grant (US$1.98 for share appreciation rights ("SARS") granted on April 15, 2013) multiplied by the Black-Scholes factor as at such date (175,000 SARS at a factor of 54% and 200,000 SARS at a factor of 58%) and the number of SARS granted on such date.
|
(5)
|
Represents 401(k) employer contributions to Messrs. Dodd's, Blake's, Pelliccione's and Dinges's retirement savings plans.
|
(6)
|
Represents the salary actually earned by and paid to Mr. Engel in his capacity as President and Chief Executive Officer until his departure from the Corporation effective April 15, 2013.
|
(7)
|
Under the terms of a release agreement, Mr. Engel received a termination or severance payment of approximately US$1.4 million.
|
(8)
|
Represents mandatory pension payments made to the former President and Chief Executive Officer in 2011, 2012 and 2013 after he attained age 65.
|
(9)
|
Represents RRSP employer contribution to Mr. Turpin's retirement savings plan.
|
(10)
|
Messrs. Blake and Pelliccione ceased to be employed by Aeterna Zentaris as of March 13, 2014.
|
(11)
|
Represents consultant fees paid to Mr. Dinges between May 12, 2013 and October 31, 2013 combined with the salary actually paid to him following his appointment as Senior Vice President and Chief Commercial Officer on November 1, 2013.
|
C.
|
Board Practices
|
D.
|
Employees
|
E.
|
Share ownership
|
Name
|
No. of Common Shares owned or held
|
Percent
(1)
|
No. of stock options held
(2)
|
No. of currently exercisable options
|
||||
Aubut, Marcel
|
18,750
|
|
*
|
|
69,165
|
|
29,722
|
|
Blake, Paul
|
11,725
|
|
*
|
|
151,945
|
|
121,157
|
|
Dinges, Jude
|
3,391
|
|
*
|
|
150,000
|
|
—
|
|
Dodd, David A.
|
8,333
|
|
*
|
|
300,000
|
|
—
|
|
Dorais, José P.
|
—
|
|
*
|
|
53,333
|
|
13,890
|
|
Egbert, Carolyn
|
—
|
|
*
|
|
37,500
|
|
5,000
|
|
Ernst, Juergen
|
9,808
|
|
*
|
|
85,831
|
|
46,388
|
|
Lapalme, Pierre
|
—
|
|
*
|
|
56,666
|
|
17,223
|
|
Limoges, Gérard
|
1,499
|
|
*
|
|
69,165
|
|
29,722
|
|
Pelliccione, Nicholas J.
|
4,625
|
|
*
|
|
121,483
|
|
94,229
|
|
Turpin, Dennis
|
3,541
|
|
*
|
|
169,994
|
|
138,105
|
|
Total
|
61,672
|
|
0.14
|
|
1,265,082
|
|
495,436
|
|
(1)
|
Based on 45,312,009 Common Shares outstanding as at December 31, 2013.
|
(2)
|
For information regarding option expiration dates and exercise price refer to the tables included under Item 6.B.
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
A.
|
Major shareholders
|
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
|
||||
2013
|
3.23
|
|
1.03
|
|
3.27
|
|
1.08
|
|
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
|
|
|
|
|
|
|
||||
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
|
|
|
|
|
|
|
||||
2013
|
|
|
|
|
||||
Fourth quarter
|
1.65
|
|
1.03
|
|
1.71
|
|
1.08
|
|
Third quarter
|
1.98
|
|
1.37
|
|
2.09
|
|
1.41
|
|
Second quarter
|
2.10
|
|
1.73
|
|
2.18
|
|
1.74
|
|
First quarter
|
3.23
|
|
1.88
|
|
3.27
|
|
1.90
|
|
|
|
|
|
|
||||
Most recent 6 months
|
|
|
|
|
||||
March 2014
(1)
|
1.49
|
|
1.23
|
|
1.66
|
|
1.37
|
|
February 2014
|
1.32
|
|
1.23
|
|
1.46
|
|
1.37
|
|
January 2014
|
1.49
|
|
1.19
|
|
1.58
|
|
1.29
|
|
December 2013
|
1.44
|
|
1.08
|
|
1.52
|
|
1.13
|
|
November 2013
|
1.65
|
|
1.03
|
|
1.71
|
|
1.08
|
|
October 2013
|
1.51
|
|
1.35
|
|
1.56
|
|
1.41
|
|
September 2013
|
1.70
|
|
1.48
|
|
1.79
|
|
1.55
|
|
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 Mr. Dodd, (i) the equivalent of thirty-six months of his then 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, (iii) any earned retention bonus, and (iv) an amount equivalent to 12 months of the then annual cost to provide the other benefits to which he is entitled, or the cost to purchase coverage by the Company under COBRA for such benefits, whichever is applicable; and
|
•
|
for Mr. Turpin, the Change of Control Payment (which will terminate on June 29, 2014 as described above) 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.
|
•
|
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,
|
◦
|
in the case of Mr. Dodd, the occurrence, without his express written consent, of any of the following acts: (i) a material reduction of his total compensation (including annual base salary plus annual bonus, benefits and number of stock options) as in effect on the date of his Employment Agreement or as same may be increased from time to time, provided such reduction is not warranted and due to company performance; (ii) any change in his direct reporting relationship to the Board; (iii) any reduction in his duties and responsibilities as President and Chief Executive Officer of the Company; or (iv) a physical change of one hundred miles of more in his principal place of business;
|
◦
|
in the case of Mr. Turpin, 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
|
◦
|
in the case of Mr. Dinges, the occurrence, without his express written consent, of any of the following acts: (i) a more than 25% reduction of his base annual salary as in effect on the date of his Employment Agreement or as the same may be increased from time to time, provided such reduction is not warranted and due to either company performance or failure of Mr. Dinges to achieve performance standards or objectives as determined by the President of the Company in his/her sole and absolute discretion and judgment; or (ii) a material reduction in his duties and responsibilities as the Company's Chief Commercial Officer.
|
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 equivalents.
|
•
|
Financial liabilities at FVTPL are currently comprised of the Company's warrant liability.
|
•
|
Other financial liabilities include trade accounts payable and accrued liabilities and other long-term liabilities.
|
(a)
|
Credit risk
|
(b)
|
Market risk
|
(in thousands)
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
18,010
|
|
|
2,205
|
|
|
(2,172
|
)
|
Total impact on net income – increase / (decrease)
|
|
|
|
2,205
|
|
|
(2,172
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
(in thousands)
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
27,452
|
|
|
1,373
|
|
|
(1,373
|
)
|
Warrant liability
|
|
18,010
|
|
|
(901
|
)
|
|
900
|
|
Total impact on net income – increase / (decrease)
|
|
|
|
472
|
|
|
(473
|
)
|
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, 2013
|
|
December 31, 2012
|
||
|
|
$
|
|
$
|
||
ASSETS
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Cash and cash equivalents (note 7)
|
|
43,202
|
|
|
39,521
|
|
Trade and other receivables (note 8)
|
|
1,953
|
|
|
7,993
|
|
Inventory (note 9)
|
|
—
|
|
|
4,084
|
|
Prepaid expenses and other current assets
|
|
500
|
|
|
1,703
|
|
|
|
45,655
|
|
|
53,301
|
|
Restricted cash equivalents (note 10)
|
|
865
|
|
|
826
|
|
Property, plant and equipment (note 11)
|
|
1,351
|
|
|
2,147
|
|
Other non-current assets
|
|
725
|
|
|
797
|
|
Identifiable intangible assets (note 12)
|
|
708
|
|
|
1,128
|
|
Goodwill (note 13)
|
|
9,892
|
|
|
9,466
|
|
|
|
59,196
|
|
|
67,665
|
|
LIABILITIES
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
||
Payables and accrued liabilities (note 14)
|
|
7,242
|
|
|
10,470
|
|
Current portion of deferred revenues (notes 5 and 6)
|
|
—
|
|
|
5,235
|
|
|
|
7,242
|
|
|
15,705
|
|
Deferred revenues (notes 5 and 6)
|
|
—
|
|
|
34,663
|
|
Warrant liability (note 15)
|
|
18,010
|
|
|
6,176
|
|
Employee future benefits (note 19)
|
|
15,407
|
|
|
17,231
|
|
Provisions and other non-current liabilities (note 16)
|
|
1,473
|
|
|
585
|
|
|
|
42,132
|
|
|
74,360
|
|
SHAREHOLDERS' EQUITY (DEFICIENCY)
|
|
|
|
|
||
Share capital (note 17)
|
|
134,101
|
|
|
122,791
|
|
Other capital
|
|
86,107
|
|
|
83,892
|
|
Deficit
|
|
(203,925
|
)
|
|
(213,086
|
)
|
Accumulated other comprehensive income (loss)
|
|
781
|
|
|
(292
|
)
|
|
|
17,064
|
|
|
(6,695
|
)
|
|
|
59,196
|
|
|
67,665
|
|
|
|
|
Juergen Ernst
Director
|
|
Gérard Limoges
Director
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Changes in Shareholders' Equity (Deficiency)
|
For the years ended December 31, 2013, 2012 and 2011
|
(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, 2013
|
|
25,329,288
|
|
|
122,791
|
|
|
83,892
|
|
|
(213,086
|
)
|
|
(292
|
)
|
|
(6,695
|
)
|
Net income
|
|
|
|
|
—
|
|
|
—
|
|
|
6,815
|
|
|
—
|
|
|
6,815
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,073
|
|
|
1,073
|
|
Actuarial gain on defined benefit plans (note 19)
|
|
|
|
|
—
|
|
|
—
|
|
|
2,346
|
|
|
—
|
|
|
2,346
|
|
Comprehensive income
|
|
|
|
—
|
|
|
—
|
|
|
9,161
|
|
|
1,073
|
|
|
10,234
|
|
|
Share issuance in connection with registered direct and public offerings (note 17)
|
|
18,300,000
|
|
|
8,573
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,573
|
|
Share issuances in connection with "At-the-Market" drawdowns (note 17)
|
|
1,682,721
|
|
|
2,737
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,737
|
|
Share-based compensation costs
|
|
|
|
|
—
|
|
|
2,215
|
|
|
—
|
|
|
—
|
|
|
2,215
|
|
Balance - December 31, 2013
|
|
45,312,009
|
|
|
134,101
|
|
|
86,107
|
|
|
(203,925
|
)
|
|
781
|
|
|
17,064
|
|
|
|
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 19)
|
|
|
|
—
|
|
|
—
|
|
|
(3,705
|
)
|
|
—
|
|
|
(3,705
|
)
|
|
Comprehensive loss
|
|
|
|
—
|
|
|
—
|
|
|
(24,117
|
)
|
|
(504
|
)
|
|
(24,621
|
)
|
|
Share issuance in connection with a public offering
|
|
6,600,000
|
|
|
11,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,265
|
|
Share issuances in connection with "At-the-Market" drawdowns, net of transaction costs
|
|
1,190,973
|
|
|
8,382
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,382
|
|
Share issuances pursuant to the exercise of warrants (note 15)
|
|
52,383
|
|
|
819
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
819
|
|
Share issuances pursuant to the exercise of stock options (note 17)
|
|
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
|
)
|
1
|
Issued and paid in full.
|
2
|
Adjusted to reflect the October 2, 2012 six-to-one share consolidation (see note 1 – Summary of business, liquidity risk, reporting entity, share consolidation and basis of preparation and note 17 – Share capital).
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Changes in Shareholders' Equity (Deficiency)
|
For the years ended December 31, 2013, 2012 and 2011
|
(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, 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 19)
|
|
|
|
|
—
|
|
|
—
|
|
|
(1,335
|
)
|
|
—
|
|
|
(1,335
|
)
|
Comprehensive loss
|
|
|
|
—
|
|
|
—
|
|
|
(28,402
|
)
|
|
(789
|
)
|
|
(29,191
|
)
|
|
Issuances pursuant to registered direct offerings, net of transaction costs
|
|
3,244,094
|
|
|
35,881
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,881
|
|
Issuance pursuant to the exercise of warrants (note 15)
|
|
284,545
|
|
|
4,861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,861
|
|
Issuance pursuant to the exercise of stock options (note 17)
|
|
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
|
)
|
1
|
Issued and paid in full.
|
2
|
Adjusted to reflect the October 2, 2012 six-to-one share consolidation (see note 1 – Summary of business, liquidity risk, reporting entity, share consolidation and basis of preparation and note 17 – Share capital).
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Comprehensive Income (Loss)
|
For the years ended December 31, 2013, 2012 and 2011
|
(in thousands of US dollars, except share and per share data)
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|
|||
Sales
|
|
96
|
|
|
834
|
|
|
250
|
|
License fees and other (note 5)
|
|
6,079
|
|
|
1,219
|
|
|
4,455
|
|
|
|
6,175
|
|
|
2,053
|
|
|
4,705
|
|
Operating expenses (note 18)
|
|
|
|
|
|
|
|||
Cost of sales
|
|
51
|
|
|
591
|
|
|
212
|
|
Research and development costs, net of refundable tax credits and grants
|
|
21,284
|
|
|
20,592
|
|
|
24,245
|
|
Selling, general and administrative expenses
(notes 11 and 12)
|
|
12,316
|
|
|
10,606
|
|
|
11,955
|
|
|
|
33,651
|
|
|
31,789
|
|
|
36,412
|
|
Loss from operations
|
|
(27,476
|
)
|
|
(29,736
|
)
|
|
(31,707
|
)
|
Finance income (note 20)
|
|
1,748
|
|
|
6,974
|
|
|
6,239
|
|
Finance costs (note 20)
|
|
(1,512
|
)
|
|
(382
|
)
|
|
(8
|
)
|
Net finance income
|
|
236
|
|
|
6,592
|
|
|
6,231
|
|
Loss before income taxes
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(25,476
|
)
|
Income tax expense (note 22)
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Net loss from continuing operations
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(26,580
|
)
|
Net income (loss) from discontinued operations (note 6)
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Net income (loss)
|
|
6,815
|
|
|
(20,412
|
)
|
|
(27,067
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
1,073
|
|
|
(504
|
)
|
|
(789
|
)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|||
Actuarial gain (loss) on defined benefit plans
|
|
2,346
|
|
|
(3,705
|
)
|
|
(1,335
|
)
|
Comprehensive income (loss)
|
|
10,234
|
|
|
(24,621
|
)
|
|
(29,191
|
)
|
Net loss per share (basic and diluted) from continuing operations (note 26)
|
|
(0.92
|
)
|
|
(1.17
|
)
|
|
(1.69
|
)
|
Net income (loss) (basic and diluted) from discontinued operations (notes 6 and 26)
|
|
1.16
|
|
|
0.14
|
|
|
(0.03
|
)
|
Net income (loss) (basic and diluted) per share
|
|
0.24
|
|
|
(1.03
|
)
|
|
(1.72
|
)
|
Weighted average number of shares outstanding
(notes 17 and 26):
|
|
|
|
|
|
|
|||
Basic
|
|
29,476,455
|
|
|
19,775,073
|
|
|
15,751,331
|
|
Diluted
|
|
29,476,455
|
|
|
19,806,687
|
|
|
15,751,331
|
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Cash Flows
|
For the years ended December 31, 2013, 2012 and 2011
|
(in thousands of US dollars)
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|||
Net loss from continuing operations
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(26,580
|
)
|
Items not affecting cash and cash equivalents:
|
|
|
|
|
|
|
|||
Change in fair value of warrant liability (note 15)
|
|
(1,563
|
)
|
|
(6,746
|
)
|
|
(2,533
|
)
|
Depreciation, amortization and impairment (notes 11 and 12)
|
|
949
|
|
|
1,234
|
|
|
1,690
|
|
Share-based compensation costs (note 15)
|
|
2,215
|
|
|
1,797
|
|
|
1,333
|
|
Gain on held-for-trading financial instrument
|
|
—
|
|
|
—
|
|
|
(1,278
|
)
|
Employee future benefits (note 19)
|
|
(172
|
)
|
|
335
|
|
|
492
|
|
Amortization of deferred revenues (note 5)
|
|
(6,046
|
)
|
|
(1,077
|
)
|
|
(1,284
|
)
|
Foreign exchange loss (gain) on items denominated in foreign currencies
|
|
1,078
|
|
|
614
|
|
|
(1,955
|
)
|
Gain on disposal of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
Amortization of prepaid expenses and other non-cash items
|
|
8,007
|
|
|
5,124
|
|
|
4,207
|
|
Changes in operating assets and liabilities (note 21)
|
|
(7,359
|
)
|
|
(3,818
|
)
|
|
3,480
|
|
Net cash provided by (used in) operating activities of discontinued operations (note 6)
|
|
10,147
|
|
|
(5,134
|
)
|
|
(3,789
|
)
|
Net cash used in operating activities
|
|
(19,984
|
)
|
|
(30,815
|
)
|
|
(26,243
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|||
Proceeds from issuances of common shares and warrants, net of cash transaction costs of $2,119 in 2013, $1,665 in 2012 and $1,204 in 2011 (note 17)
|
|
23,708
|
|
|
23,619
|
|
|
36,250
|
|
Proceeds from the exercise of share purchase warrants (note 15)
|
|
—
|
|
|
437
|
|
|
2,222
|
|
Proceeds from the exercise of stock options (note 17)
|
|
—
|
|
|
209
|
|
|
145
|
|
Repayment of long-term payable
|
|
—
|
|
|
(57
|
)
|
|
(61
|
)
|
Net cash provided by financing activities
|
|
23,708
|
|
|
24,208
|
|
|
38,556
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|||
Proceeds from the sale of short-term investment
|
|
—
|
|
|
—
|
|
|
3,242
|
|
Purchase of identifiable intangible assets (note 12 )
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
Purchase of property, plant and equipment (note 11)
|
|
(85
|
)
|
|
(272
|
)
|
|
(736
|
)
|
Disposals of property, plant and equipment (note 11)
|
|
—
|
|
|
—
|
|
|
26
|
|
Net cash provided by investing activities of discontinued operations (note 6)
|
|
113
|
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) investing activities
|
|
28
|
|
|
(272
|
)
|
|
2,463
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(71
|
)
|
|
(481
|
)
|
|
107
|
|
Net change in cash and cash equivalents
|
|
3,681
|
|
|
(7,360
|
)
|
|
14,883
|
|
Cash and cash equivalents – Beginning of the year
|
|
39,521
|
|
|
46,881
|
|
|
31,998
|
|
Cash and cash equivalents – End of the year
|
|
43,202
|
|
|
39,521
|
|
|
46,881
|
|
Cash and cash equivalents components (note 7):
|
|
|
|
|
|
|
|||
Cash
|
|
27,877
|
|
|
15,441
|
|
|
15,112
|
|
Cash equivalents
|
|
15,325
|
|
|
24,080
|
|
|
31,769
|
|
|
|
43,202
|
|
|
39,521
|
|
|
46,881
|
|
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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(a)
|
Classification
|
(b)
|
Recognition and measurement
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(c)
|
Impairment
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
(b)
|
Critical judgments in applying the Company's accounting policies
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
4
|
Recent accounting pronouncements
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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 licensing initiatives
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
6
|
Discontinued operations
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Revenues*
|
|
|
|
|
|
|
|||
Sales and royalties
|
|
63,755
|
|
|
30,704
|
|
|
31,056
|
|
License fees and other
|
|
4,589
|
|
|
908
|
|
|
292
|
|
|
|
68,344
|
|
|
31,612
|
|
|
31,348
|
|
Operating expenses
|
|
|
|
|
|
|
|||
Cost of sales
|
|
30,002
|
|
|
26,229
|
|
|
27,348
|
|
Research and development costs, net of tax credits and grants
|
|
8
|
|
|
12
|
|
|
272
|
|
Selling, general and administrative expenses
|
|
4,279
|
|
|
2,639
|
|
|
4,215
|
|
|
|
34,289
|
|
|
28,880
|
|
|
31,835
|
|
Net income (loss) from discontinued operations
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Components of operating expenses presented as discontinued include the following:
|
|
|
|
|
|
|
|||
Subcontractor fees
|
|
24,930
|
|
|
25,515
|
|
|
25,667
|
|
Raw material purchases
|
|
579
|
|
|
1,189
|
|
|
1,849
|
|
Change in inventory
|
|
4,173
|
|
|
(560
|
)
|
|
(261
|
)
|
Impairment of equipment
|
|
268
|
|
|
—
|
|
|
—
|
|
Depreciation of equipment
|
|
52
|
|
|
85
|
|
|
93
|
|
Cost of sales
|
|
30,002
|
|
|
26,229
|
|
|
27,348
|
|
Goods and services**
|
|
2,987
|
|
|
2,651
|
|
|
3,394
|
|
Royalty and patent expenses related to onerous contracts
|
|
1,300
|
|
|
—
|
|
|
—
|
|
Impairment of intangible asset
|
|
—
|
|
|
—
|
|
|
1,093
|
|
|
|
34,289
|
|
|
28,880
|
|
|
31,835
|
|
*
|
In addition to recurring sales of Cetrotide
®
, the revenues presented above include the aforementioned non-refundable, one-time payment of €2,500,000 (approximately $3,300,000), as well as royalty revenues of $33,631,000 in 2013 ($4,175,000 in 2012 and $4,556,000 in 2011), which represent the amortization of proceeds received in connection with the Company's transaction with HRP.
|
**
|
Goods and services include royalty expenses, professional fees, marketing services, insurance, travel and representation costs.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|||
Net income (loss) from discontinued operations
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Items not affecting cash and cash equivalents:
|
|
|
|
|
|
|
|||
Provision for onerous contracts
|
|
1,300
|
|
|
—
|
|
|
—
|
|
Depreciation, amortization and impairment
|
|
320
|
|
|
85
|
|
|
1,186
|
|
Amortization of deferred revenues
|
|
(33,631
|
)
|
|
(4,175
|
)
|
|
(4,556
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||
Trade and other receivables
|
|
6,212
|
|
|
(2,397
|
)
|
|
(646
|
)
|
Inventory
|
|
4,061
|
|
|
(1,230
|
)
|
|
518
|
|
Prepaid expenses and other current assets
|
|
882
|
|
|
(760
|
)
|
|
28
|
|
Payables and accrued liabilities
|
|
(2,996
|
)
|
|
611
|
|
|
168
|
|
Provisions and other non-current liabilities
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) operating activities of discontinued operations
|
|
10,147
|
|
|
(5,134
|
)
|
|
(3,789
|
)
|
7
|
Cash and cash equivalents
|
|
|
As at December 31,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Cash on hand and balances with banks
|
|
27,877
|
|
|
15,441
|
|
Interest-bearing deposits with maturities of three months or less
|
|
15,325
|
|
|
24,080
|
|
|
|
43,202
|
|
|
39,521
|
|
8
|
Trade and other receivables
|
|
|
As at December 31,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Trade accounts receivable
|
|
1,709
|
|
|
7,323
|
|
Value added tax
|
|
2
|
|
|
428
|
|
Other
|
|
242
|
|
|
242
|
|
|
|
1,953
|
|
|
7,993
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
9
|
Inventory
|
|
|
As at December 31,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Raw materials
|
|
—
|
|
|
1,691
|
|
Work in progress
|
|
—
|
|
|
1,931
|
|
Finished goods
|
|
—
|
|
|
462
|
|
|
|
—
|
|
|
4,084
|
|
10
|
Restricted cash equivalents
|
11
|
Property, plant and equipment
|
|
|
Cost
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2012
|
|
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
|
|
Additions
|
|
44
|
|
|
15
|
|
|
26
|
|
|
—
|
|
|
85
|
|
Disposals / Retirements
|
|
(853
|
)
|
|
(452
|
)
|
|
(8
|
)
|
|
—
|
|
|
(1,313
|
)
|
Impact of foreign exchange rate changes
|
|
419
|
|
|
59
|
|
|
80
|
|
|
52
|
|
|
610
|
|
At December 31, 2013
|
|
9,054
|
|
|
1,237
|
|
|
1,852
|
|
|
1,196
|
|
|
13,339
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Accumulated depreciation
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2012
|
|
7,126
|
|
|
1,478
|
|
|
1,664
|
|
|
768
|
|
|
11,036
|
|
Disposals / Retirements
|
|
(79
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(82
|
)
|
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
|
|
Disposals / Retirements
|
|
(822
|
)
|
|
(352
|
)
|
|
(8
|
)
|
|
—
|
|
|
(1,182
|
)
|
Impairment loss*
|
|
268
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
268
|
|
Recurring depreciation expense
|
|
461
|
|
|
6
|
|
|
30
|
|
|
50
|
|
|
547
|
|
Impact of foreign exchange rate changes
|
|
370
|
|
|
57
|
|
|
78
|
|
|
40
|
|
|
545
|
|
At December 31, 2013
|
|
8,016
|
|
|
1,222
|
|
|
1,821
|
|
|
929
|
|
|
11,988
|
|
|
|
Carrying amount
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At December 31, 2012
|
|
1,705
|
|
|
104
|
|
|
33
|
|
|
305
|
|
|
2,147
|
|
At December 31, 2013
|
|
1,038
|
|
|
15
|
|
|
31
|
|
|
267
|
|
|
1,351
|
|
12
|
Identifiable intangible assets
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013
|
|
Year ended December 31, 2012
|
||||||||||||||
|
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balances – Beginning of the year
|
|
38,172
|
|
|
(37,044
|
)
|
|
1,128
|
|
|
37,982
|
|
|
(36,213
|
)
|
|
1,769
|
|
Retirement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(431
|
)
|
|
431
|
|
|
—
|
|
Impairment loss*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(184
|
)
|
|
(184
|
)
|
Recurring amortization expense*
|
|
—
|
|
|
(454
|
)
|
|
(454
|
)
|
|
—
|
|
|
(472
|
)
|
|
(472
|
)
|
Impact of foreign exchange rate changes
|
|
1,718
|
|
|
(1,684
|
)
|
|
34
|
|
|
621
|
|
|
(606
|
)
|
|
15
|
|
Balances – End of the year
|
|
39,890
|
|
|
(39,182
|
)
|
|
708
|
|
|
38,172
|
|
|
(37,044
|
)
|
|
1,128
|
|
13
|
Goodwill
|
|
|
Cost
|
|
Accumulated impairment loss
|
|
Carrying amount
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance as at January 1, 2012
|
|
9,313
|
|
|
—
|
|
|
9,313
|
|
Impact of foreign exchange rate changes
|
|
153
|
|
|
—
|
|
|
153
|
|
Balance as at December 31, 2012
|
|
9,466
|
|
|
—
|
|
|
9,466
|
|
Impact of foreign exchange rate changes
|
|
426
|
|
|
—
|
|
|
426
|
|
Balance as at December 31, 2013
|
|
9,892
|
|
|
—
|
|
|
9,892
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Trade accounts payable
|
|
4,802
|
|
|
6,671
|
|
Salaries, employment taxes and benefits
|
|
402
|
|
|
707
|
|
Accrued R&D costs
|
|
666
|
|
|
1,530
|
|
Accrued Cetrotide
®
services and deliveries
|
|
—
|
|
|
434
|
|
Current portion of provisions (note 16)
|
|
441
|
|
|
94
|
|
Other accrued liabilities
|
|
931
|
|
|
1,034
|
|
|
|
7,242
|
|
|
10,470
|
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance – Beginning of the year
|
|
6,176
|
|
|
9,204
|
|
|
14,367
|
|
Share purchase warrants issued during the year (note 17)
|
|
13,397
|
|
|
4,100
|
|
|
—
|
|
Share purchase warrants exercised during the year
|
|
—
|
|
|
(382
|
)
|
|
(2,638
|
)
|
Change in fair value of share purchase warrants
|
|
(1,563
|
)
|
|
(6,746
|
)
|
|
(2,533
|
)
|
Impact of foreign exchange rate changes
|
|
—
|
|
|
—
|
|
|
8
|
|
|
|
18,010
|
|
|
6,176
|
|
|
9,204
|
|
Less: current portion
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
Balance – End of the year
|
|
18,010
|
|
|
6,176
|
|
|
9,162
|
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
||||||
Balance – Beginning of the year
|
|
4,407,410
|
|
|
5.14
|
|
|
1,511,179
|
|
|
8.62
|
|
|
2,153,872
|
|
|
9.17
|
|
Issued
|
|
15,700,000
|
|
|
1.55
|
|
*
|
2,970,000
|
|
|
3.45
|
|
|
—
|
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
(52,383
|
)
|
|
8.24
|
|
|
(284,545
|
)
|
|
7.81
|
|
Expired
|
|
—
|
|
|
—
|
|
|
(21,386
|
)
|
|
9.00
|
|
|
(358,148
|
)
|
|
12.59
|
|
Balance – End of the year
|
|
20,107,410
|
|
|
2.34
|
|
|
4,407,410
|
|
|
5.14
|
|
|
1,511,179
|
|
|
8.62
|
|
*
|
As discussed in note 17 – Share capital, in connection with the public offering closed on November 25, 2013, 13,100,000 share purchase warrants were issued with an original exercise price of $1.60 per share, subject to adjustment. The above weighted average exercise price reflects an adjusted exercise price of $1.49 per share following a dilutive issuance of shares on December 31, 2013. See also note 29 – Subsequent events.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Warrants outstanding
|
||||
Exercise price
|
|
Number
|
|
Weighted average remaining contractual life (years)
|
||
1.49
|
|
13,100,000
|
|
|
4.90
|
|
1.85
|
|
2,600,000
|
|
|
4.58
|
|
3.45
|
|
2,970,000
|
|
|
3.80
|
|
7.50
|
|
122,221
|
|
|
0.81
|
|
8.24
|
|
530,424
|
|
|
1.47
|
|
9.00
|
|
740,737
|
|
|
1.80
|
|
10.29
|
|
44,028
|
|
|
1.46
|
|
|
|
20,107,410
|
|
|
4.45
|
|
|
|
Warrants currently exercisable
|
||||
Exercise price
|
|
Number
|
|
Weighted average remaining contractual life (years)
|
||
1.49
|
|
13,100,000
|
|
|
4.90
|
|
3.45
|
|
2,970,000
|
|
|
3.80
|
|
7.50
|
|
122,221
|
|
|
0.81
|
|
8.24
|
|
530,424
|
|
|
1.47
|
|
9.00
|
|
740,737
|
|
|
1.80
|
|
10.29
|
|
44,028
|
|
|
1.46
|
|
|
|
17,507,410
|
|
|
4.43
|
|
|
|
|
|
October 2009
Investor Warrants |
|
April 2010
Investor Warrants |
|
June 2010
Investor Warrants |
|
June 2010
Compensation Warrants |
|
October 2012 Investor
Warrants |
|
July 2013
Warrants |
|
November 2013
Warrants |
|
|||||||
Number of equivalent shares
|
|
|
|
122,221
|
|
|
740,737
|
|
|
530,424
|
|
|
44,028
|
|
|
2,970,000
|
|
|
2,600,000
|
|
|
13,100,000
|
|
|
Market-value per share price
|
|
|
|
1.38
|
|
|
1.38
|
|
|
1.38
|
|
|
1.38
|
|
|
1.38
|
|
|
1.38
|
|
|
1.38
|
|
|
Exercise price
|
|
|
|
7.50
|
|
|
9.00
|
|
|
8.24
|
|
|
10.29
|
|
|
3.45
|
|
|
1.85
|
|
|
1.49
|
|
*
|
Risk-free annual interest rate
|
|
(a)
|
|
0.13%
|
|
|
0.33%
|
|
|
0.25%
|
|
|
0.24%
|
|
|
1.16%
|
|
|
1.54%
|
|
|
1.69%
|
|
|
Expected volatility
|
|
(b)
|
|
68.03%
|
|
|
112.70%
|
|
|
80.81%
|
|
|
81.05%
|
|
|
94.05%
|
|
|
100.97%
|
|
|
101.93%
|
|
|
Expected life (years)
|
|
(c)
|
|
0.81
|
|
|
1.80
|
|
|
1.47
|
|
|
1.46
|
|
|
3.80
|
|
|
4.58
|
|
|
4.90
|
|
|
Expected dividend yield
|
|
(d)
|
|
0.00%
|
|
|
0.00%
|
|
|
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.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
16
|
Provisions and other non-current liabilities
|
|
|
As at December 31,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Onerous contract provisions (see below)
|
|
1,291
|
|
|
436
|
|
Other
|
|
182
|
|
|
149
|
|
|
|
1,473
|
|
|
585
|
|
|
|
Cetrotide
®
onerous contracts*
|
|
Onerous lease**
|
|
Total
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance at January 1, 2013
|
|
—
|
|
|
530
|
|
|
530
|
|
Additional provision recognized
|
|
1,300
|
|
|
—
|
|
|
1,300
|
|
Utilization of provision
|
|
(56
|
)
|
|
(97
|
)
|
|
(153
|
)
|
Unwinding of discount and effect of change in the discount rate
|
|
52
|
|
|
3
|
|
|
55
|
|
Balance at December 31, 2013
|
|
1,296
|
|
|
436
|
|
|
1,732
|
|
Less: current portion
|
|
(342
|
)
|
|
(99
|
)
|
|
(441
|
)
|
|
|
954
|
|
|
337
|
|
|
1,291
|
|
*
|
Recorded following the transfer of the Cetrotide
®
Business, as discussed in note 6 – Discontinued operations.
|
**
|
Represents the present value of the future lease payments that the Company is obligated to make pursuant to a non-cancellable operating lease, net of estimated future sub-lease income. The estimate may vary as a result of changes in the utilization of the leased premises and of the sub-lease arrangement. The remaining term of the lease is four years as at December 31, 2013.
|
17
|
Share capital
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Canadian dollar-denominated options
|
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
||||||
Balance – Beginning of the year
|
|
727,875
|
|
|
12.71
|
|
|
1,031,328
|
|
|
14.99
|
|
|
1,093,047
|
|
|
15.32
|
|
Granted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|
11.58
|
|
Exercised*
|
|
—
|
|
|
—
|
|
|
(25,582
|
)
|
|
8.51
|
|
|
(26,724
|
)
|
|
5.33
|
|
Forfeited
|
|
(9,932
|
)
|
|
12.61
|
|
|
(57,437
|
)
|
|
15.07
|
|
|
(7,777
|
)
|
|
9.24
|
|
Expired
|
|
(65,164
|
)
|
|
10.77
|
|
|
(220,434
|
)
|
|
23.22
|
|
|
(29,718
|
)
|
|
37.08
|
|
Balance – End of the year
|
|
652,779
|
|
|
12.91
|
|
|
727,875
|
|
|
12.71
|
|
|
1,031,328
|
|
|
14.99
|
|
*
|
The weighted average share price at time of exercise was CAN$11.25 for the year ended December 31, 2012 (CAN$11.68 for the year ended December 31, 2011).
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
US dollar-denominated options
|
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
||||||
Balance – Beginning of the year
|
|
1,328,492
|
|
|
4.27
|
|
|
287,950
|
|
|
11.59
|
|
|
48,886
|
|
|
16.98
|
|
Granted*
|
|
630,000
|
|
|
1.56
|
|
|
1,060,445
|
|
|
2.40
|
|
|
239,064
|
|
|
10.49
|
|
Forfeited
|
|
(198,698
|
)
|
|
3.37
|
|
|
(19,903
|
)
|
|
10.44
|
|
|
—
|
|
|
—
|
|
Balance – End of the year
|
|
1,759,794
|
|
|
3.40
|
|
|
1,328,492
|
|
|
4.27
|
|
|
287,950
|
|
|
11.59
|
|
|
|
CAN$ options outstanding as at December 31, 2013
|
|||||||
Exercise price
(CAN$)
|
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(CAN$)
|
|||
3.30 to 4.80
|
|
101,722
|
|
|
4.90
|
|
|
3.59
|
|
4.81 to 7.02
|
|
167,295
|
|
|
5.94
|
|
|
5.70
|
|
7.03 to 9.78
|
|
160,588
|
|
|
6.07
|
|
|
8.99
|
|
9.79 to 21.21
|
|
99,992
|
|
|
3.11
|
|
|
15.72
|
|
21.22 to 53.28
|
|
123,182
|
|
|
1.52
|
|
|
33.22
|
|
|
|
652,779
|
|
|
4.54
|
|
|
12.91
|
|
|
|
CAN$ options exercisable as at December 31, 2013
|
|||||||
Exercise price
(CAN$)
|
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(CAN$)
|
|||
3.30 to 4.80
|
|
101,722
|
|
|
4.90
|
|
|
3.59
|
|
4.81 to 7.02
|
|
167,295
|
|
|
5.94
|
|
|
5.70
|
|
7.03 to 9.78
|
|
160,588
|
|
|
6.07
|
|
|
8.99
|
|
9.79 to 21.21
|
|
99,159
|
|
|
3.07
|
|
|
15.76
|
|
21.22 to 53.28
|
|
123,182
|
|
|
1.52
|
|
|
33.22
|
|
|
|
651,946
|
|
|
4.54
|
|
|
12.91
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
US$ options outstanding as at December 31, 2013
|
|||||||
Exercise price
(US$)
|
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(US$)
|
|||
1.12 to 2.15
|
|
630,000
|
|
|
9.58
|
|
|
1.56
|
|
2.16 to 2.92
|
|
756,580
|
|
|
8.93
|
|
|
2.17
|
|
2.93 to 10.17
|
|
122,499
|
|
|
5.82
|
|
|
3.48
|
|
10.18 to 10.68
|
|
201,829
|
|
|
7.93
|
|
|
10.44
|
|
10.69 to 23.76
|
|
48,886
|
|
|
3.57
|
|
|
16.98
|
|
|
|
1,759,794
|
|
|
8.68
|
|
|
3.40
|
|
|
|
US$ options exercisable as at December 31, 2013
|
|||||||
Exercise price
(US$)
|
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(US$)
|
|||
2.40 to 2.92
|
|
504,390
|
|
|
8.93
|
|
|
2.17
|
|
2.93 to 10.17
|
|
88,058
|
|
|
4.83
|
|
|
3.46
|
|
10.18 to 10.68
|
|
159,614
|
|
|
7.93
|
|
|
10.44
|
|
10.69 to 23.76
|
|
48,886
|
|
|
3.57
|
|
|
16.98
|
|
|
|
800,948
|
|
|
7.95
|
|
|
4.86
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
|
|
|
|
|
2011
|
|
Expected dividend yield
|
|
(a)
|
|
0.0%
|
|
Expected volatility
|
|
(b)
|
|
81.0%
|
|
Risk-free annual interest rate
|
|
(c)
|
|
1.8%
|
|
Expected life (years)
|
|
(d)
|
|
6.82
|
|
Weighted average share price
|
|
|
|
CAN$11.58
|
|
Weighted average exercise price
|
|
|
|
CAN$11.58
|
|
Weighted average grant date fair value
|
|
|
|
CAN$8.43
|
|
(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,
|
||
|
|
|
|
2013
|
|
2012
|
Expected dividend yield
|
|
(a)
|
|
0.0%
|
|
0.0%
|
Expected volatility
|
|
(b)
|
|
98.1%
|
|
95.4%
|
Risk-free annual interest rate
|
|
(c)
|
|
1.46%
|
|
0.98%
|
Expected life (years)
|
|
(d)
|
|
6.63
|
|
6.77
|
Weighted average share price
|
|
|
|
US$1.56
|
|
US$2.40
|
Weighted average exercise price
|
|
|
|
US$1.56
|
|
US$2.40
|
Weighted average grant date fair value
|
|
|
|
US$1.26
|
|
US$1.93
|
(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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
18
|
Operating expenses
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Subcontractor fees
|
|
51
|
|
|
—
|
|
|
—
|
|
Raw material purchases
|
|
—
|
|
|
591
|
|
|
212
|
|
Cost of sales
|
|
51
|
|
|
591
|
|
|
212
|
|
Salaries, employment taxes and short-term benefits
|
|
10,235
|
|
|
10,827
|
|
|
12,716
|
|
Post-employment benefits
|
|
684
|
|
|
1,032
|
|
|
1,177
|
|
Termination benefits
|
|
1,445
|
|
|
189
|
|
|
182
|
|
Share-based compensation costs
|
|
2,367
|
|
|
1,455
|
|
|
1,333
|
|
Total employee benefits expenses
|
|
14,731
|
|
|
13,503
|
|
|
15,408
|
|
Goods and services
(1)
|
|
15,954
|
|
|
14,663
|
|
|
17,033
|
|
Leasing costs, net of sublease payments of $226,000 in 2013, $226,000 in 2012 and $179,000 in 2011
(2)
|
|
1,879
|
|
|
1,751
|
|
|
2,153
|
|
Refundable tax credits and grants
|
|
(517
|
)
|
|
(868
|
)
|
|
(383
|
)
|
Share-based compensation costs related to collaborators
|
|
(148
|
)
|
|
342
|
|
|
—
|
|
Transaction costs related to share purchase warrants
|
|
1,165
|
|
|
370
|
|
|
—
|
|
Depreciation and amortization
|
|
949
|
|
|
1,050
|
|
|
1,378
|
|
Impairment losses
|
|
—
|
|
|
184
|
|
|
312
|
|
Operating foreign exchange (gains) losses
|
|
(413
|
)
|
|
203
|
|
|
299
|
|
|
|
18,869
|
|
|
17,695
|
|
|
20,792
|
|
|
|
33,651
|
|
|
31,789
|
|
|
36,412
|
|
(1)
|
Goods and services include third-party R&D costs, laboratory supplies, professional fees, marketing services, insurance and travel expenses.
|
(2)
|
Leasing costs also include changes in the onerous lease provision (note 16 – Provisions and other non-current liabilities), other than attributable to the unwinding of the discount.
|
19
|
Employee future benefits
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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
|
||||||||||||||
|
|
Years ended December 31,
|
|
Years ended December 31,
|
||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance – Beginning of year
|
|
16,062
|
|
|
11,769
|
|
|
10,492
|
|
|
1,169
|
|
|
1,111
|
|
|
1,041
|
|
Current service cost
|
|
219
|
|
|
139
|
|
|
185
|
|
|
57
|
|
|
134
|
|
|
206
|
|
Interest cost
|
|
421
|
|
|
491
|
|
|
555
|
|
|
31
|
|
|
46
|
|
|
54
|
|
Actuarial (gain) loss arising from changes in financial assumptions
|
|
(2,346
|
)
|
|
3,705
|
|
|
1,335
|
|
|
(258
|
)
|
|
79
|
|
|
46
|
|
Benefits paid
|
|
(357
|
)
|
|
(337
|
)
|
|
(354
|
)
|
|
(274
|
)
|
|
(219
|
)
|
|
(196
|
)
|
Impact of foreign exchange rate changes
|
|
647
|
|
|
295
|
|
|
(444
|
)
|
|
37
|
|
|
18
|
|
|
(40
|
)
|
Balance – End of year
|
|
14,646
|
|
|
16,062
|
|
|
11,769
|
|
|
762
|
|
|
1,169
|
|
|
1,111
|
|
Amounts recognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In comprehensive income (loss)
|
|
(640
|
)
|
|
(630
|
)
|
|
(740
|
)
|
|
170
|
|
|
(259
|
)
|
|
(306
|
)
|
In other comprehensive income(loss)
|
|
1,699
|
|
|
(4,000
|
)
|
|
(891
|
)
|
|
(37
|
)
|
|
(18
|
)
|
|
40
|
|
|
|
Pension benefit plans
|
|
Other benefit plans
|
||||||||
|
|
Years ended December 31,
|
|
Years ended December 31,
|
||||||||
Actuarial assumptions
|
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
Discount rate
|
|
3.37
|
|
2.60
|
|
4.20
|
|
3.37
|
|
2.60
|
|
4.20
|
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
|
|
|
2013
|
|
2012
|
||
Retiring at the end of the reporting period:
|
|
|
|
|
||
Male
|
|
19
|
|
|
19
|
|
Female
|
|
23
|
|
|
23
|
|
Retiring 20 years after the end of the reporting period:
|
|
|
|
|
||
Male
|
|
22
|
|
|
22
|
|
Female
|
|
26
|
|
|
26
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
$
|
|
2014
|
|
531
|
|
2015
|
|
574
|
|
2016
|
|
603
|
|
2017
|
|
618
|
|
2018
|
|
641
|
|
Over five years
|
|
26,654
|
|
|
|
29,621
|
|
20
|
Finance income and finance costs
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Finance income
|
|
|
|
|
|
|
|||
Gains due to changes in foreign currency exchange rates
|
|
—
|
|
|
—
|
|
|
2,197
|
|
Change in fair value of warrant liability
|
|
1,563
|
|
|
6,746
|
|
|
2,533
|
|
Interest income
|
|
185
|
|
|
228
|
|
|
223
|
|
Gain on held-for-trading financial instrument
|
|
—
|
|
|
—
|
|
|
1,278
|
|
|
|
1,748
|
|
|
6,974
|
|
|
6,231
|
|
Finance costs
|
|
|
|
|
|
|
|||
Losses due to changes in foreign currency exchange rates
|
|
(1,512
|
)
|
|
(382
|
)
|
|
—
|
|
|
|
(1,512
|
)
|
|
(382
|
)
|
|
—
|
|
|
|
236
|
|
|
6,592
|
|
|
6,231
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
21
|
Supplemental disclosure of cash flow information
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||
Trade and other receivables
|
|
(3
|
)
|
|
2,780
|
|
|
(2,686
|
)
|
Inventory
|
|
112
|
|
|
670
|
|
|
(779
|
)
|
Prepaid expenses and other current assets
|
|
(6,454
|
)
|
|
(4,154
|
)
|
|
(4,096
|
)
|
Other non-current assets
|
|
(124
|
)
|
|
(364
|
)
|
|
(456
|
)
|
Payables and accrued liabilities
|
|
(900
|
)
|
|
(2,447
|
)
|
|
2,802
|
|
Provisions and other non-current liabilities
|
|
10
|
|
|
(49
|
)
|
|
(24
|
)
|
Deferred revenues
|
|
—
|
|
|
—
|
|
|
8,614
|
|
Income taxes
|
|
—
|
|
|
(254
|
)
|
|
105
|
|
|
|
(7,359
|
)
|
|
(3,818
|
)
|
|
3,480
|
|
22
|
Income taxes
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Current tax expense
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Deferred tax:
|
|
|
|
|
|
|
|||
Origination and reversal of temporary differences
|
|
(4,253
|
)
|
|
7,282
|
|
|
9,017
|
|
Change in enacted tax rates
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
Adjustments in respect of prior years
|
|
418
|
|
|
44
|
|
|
3,428
|
|
Change in unrecognized tax assets
|
|
3,835
|
|
|
(7,326
|
)
|
|
(12,341
|
)
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Combined Canadian federal and provincial statutory income tax rate
|
|
26.9
|
%
|
|
26.9
|
%
|
|
28.4
|
%
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Income tax (expense) recovery based on combined statutory income tax rate
|
|
(1,833
|
)
|
|
5,494
|
|
|
7,290
|
|
Change in unrecognized tax assets
|
|
3,835
|
|
|
(7,326
|
)
|
|
(12,341
|
)
|
Permanent difference attributable to the use of local currency for tax reporting
|
|
(892
|
)
|
|
14
|
|
|
378
|
|
Permanent difference attributable to net change in fair value of warrant liability
|
|
(217
|
)
|
|
1,182
|
|
|
661
|
|
Share-based compensation costs
|
|
(596
|
)
|
|
(421
|
)
|
|
(441
|
)
|
Difference in statutory income tax rate of foreign subsidiaries
|
|
(809
|
)
|
|
997
|
|
|
893
|
|
Permanent difference attributable to unrealized foreign exchange gain/loss
|
|
131
|
|
|
(22
|
)
|
|
(32
|
)
|
Change in enacted rates used
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
Foreign witholding tax
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Adjustments in respect of prior years
|
|
418
|
|
|
44
|
|
|
3,428
|
|
Other
|
|
(37
|
)
|
|
38
|
|
|
268
|
|
|
|
—
|
|
|
—
|
|
|
(1,104
|
)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
|
||
Non-current:
|
|
|
|
|
||
Operating losses carried forward
|
|
2,465
|
|
|
840
|
|
Intangible assets
|
|
10,080
|
|
|
—
|
|
|
|
12,545
|
|
|
840
|
|
Deferred tax liabilities
|
|
|
|
|
||
Current:
|
|
|
|
|
||
Deferred revenues
|
|
1,262
|
|
|
—
|
|
|
|
1,262
|
|
|
—
|
|
Non-current:
|
|
|
|
|
||
Property, plant and equipment
|
|
50
|
|
|
160
|
|
Deferred revenues
|
|
10,157
|
|
|
—
|
|
Warrant liability
|
|
1,076
|
|
|
626
|
|
Other
|
|
—
|
|
|
54
|
|
|
|
11,283
|
|
|
840
|
|
|
|
12,545
|
|
|
840
|
|
Deferred tax assets (liabilities), net
|
|
—
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
||||
|
|
2013
|
|
2012
|
||
|
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
|
||
Current:
|
|
|
|
|
||
Onerous contract provisions
|
|
87
|
|
|
—
|
|
Inventory
|
|
—
|
|
|
9
|
|
Deferred revenues
|
|
—
|
|
|
464
|
|
|
|
87
|
|
|
473
|
|
Non-current:
|
|
|
|
|
||
Operating losses carried forward
|
|
59,813
|
|
|
49,453
|
|
Research and development costs
|
|
11,988
|
|
|
12,642
|
|
Unused tax credits
|
|
10,386
|
|
|
10,904
|
|
Employee future benefits
|
|
2,135
|
|
|
2,772
|
|
Property, plant and equipment
|
|
1,260
|
|
|
1,376
|
|
Share issue expenses
|
|
712
|
|
|
867
|
|
Onerous contract provisions
|
|
435
|
|
|
159
|
|
Intangible assets
|
|
248
|
|
|
12,271
|
|
Deferred revenues
|
|
—
|
|
|
182
|
|
Other
|
|
—
|
|
|
145
|
|
|
|
86,977
|
|
|
90,771
|
|
Unrecognized deferred tax assets
|
|
87,064
|
|
|
91,244
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
United States
|
|
|
|
$
|
|
2028
|
|
372
|
|
2029
|
|
178
|
|
|
|
550
|
|
23
|
Capital disclosures
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
24
|
Financial instruments and financial risk management
|
December 31, 2013
|
|
Loans and
receivables |
|
Financial
liabilities at FVTPL |
|
Other
financial liabilities |
|
Total
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents (note 7)
|
|
43,202
|
|
|
—
|
|
|
—
|
|
|
43,202
|
|
Trade and other receivables (note 8)
|
|
1,899
|
|
|
—
|
|
|
—
|
|
|
1,899
|
|
Restricted cash equivalents (note 10)
|
|
865
|
|
|
—
|
|
|
—
|
|
|
865
|
|
Payables and accrued liabilities (note 14)
|
|
—
|
|
|
—
|
|
|
(6,687
|
)
|
|
(6,687
|
)
|
Warrant liability (note 15)
|
|
—
|
|
|
(18,010
|
)
|
|
—
|
|
|
(18,010
|
)
|
Other non-current liabilities (note 16)
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(140
|
)
|
|
|
45,966
|
|
|
(18,010
|
)
|
|
(6,827
|
)
|
|
21,129
|
|
December 31, 2012
|
|
Loans and
receivables |
|
Financial
liabilities at FVTPL |
|
Other
financial liabilities |
|
Total
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents (note 7)
|
|
39,521
|
|
|
—
|
|
|
—
|
|
|
39,521
|
|
Trade and other receivables (note 8)
|
|
7,565
|
|
|
—
|
|
|
—
|
|
|
7,565
|
|
Restricted cash equivalents (note 10)
|
|
826
|
|
|
—
|
|
|
—
|
|
|
826
|
|
Payables and accrued liabilities (note 14)
|
|
—
|
|
|
—
|
|
|
(10,282
|
)
|
|
(10,282
|
)
|
Warrant liability (note 15)
|
|
—
|
|
|
(6,176
|
)
|
|
—
|
|
|
(6,176
|
)
|
Other non-current liabilities (note 16)
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
(149
|
)
|
|
|
47,912
|
|
|
(6,176
|
)
|
|
(10,431
|
)
|
|
31,305
|
|
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, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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
|
(c)
|
Market risk
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
18,010
|
|
|
2,205
|
|
|
(2,172
|
)
|
Total impact on net income – increase / (decrease)
|
|
|
|
2,205
|
|
|
(2,172
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
27,452
|
|
|
1,373
|
|
|
(1,373
|
)
|
Warrant liability
|
|
18,010
|
|
|
(901
|
)
|
|
900
|
|
Total impact on net income – increase / (decrease)
|
|
|
|
472
|
|
|
(473
|
)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
25
|
Commitments and contingencies
|
|
|
Minimum lease payments
|
|
Minimum sub-lease payments
|
|
Utilities
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Less than 1 year
|
|
1,795
|
|
|
(226
|
)
|
|
640
|
|
1 - 3 years
|
|
2,562
|
|
|
(451
|
)
|
|
559
|
|
4 - 5 years
|
|
515
|
|
|
(244
|
)
|
|
—
|
|
More than 5 years
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
4,872
|
|
|
(921
|
)
|
|
1,199
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
26
|
Net income (loss) per share
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Net loss from continuing operations
|
|
(27,240
|
)
|
|
(23,144
|
)
|
|
(25,476
|
)
|
Net income (loss) from discontinued operations
|
|
34,055
|
|
|
2,732
|
|
|
(487
|
)
|
Net income (loss)
|
|
6,815
|
|
|
(20,412
|
)
|
|
(25,963
|
)
|
Basic weighted average number of shares outstanding
|
|
29,476,455
|
|
|
19,775,073
|
|
|
15,751,331
|
|
Dilutive effect of stock options
|
|
—
|
|
|
31,614
|
|
|
190,625
|
|
Dilutive effect of share purchase warrants
|
|
—
|
|
|
—
|
|
|
282,903
|
|
Diluted weighted average number of shares outstanding
|
|
29,476,455
|
|
|
19,806,687
|
|
|
16,224,859
|
|
Items excluded from the calculation of diluted net income (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
|
|
2,115,453
|
|
|
1,183,388
|
|
|
613,644
|
|
Warrants (number of equivalent shares)
|
|
7,141,879
|
|
|
1,803,730
|
|
|
—
|
|
27
|
Compensation of key management
|
|
|
Years ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Salaries and short-term employee benefits
|
|
2,280
|
|
|
2,354
|
|
|
2,886
|
|
Post-employment benefits
|
|
58
|
|
|
957
|
|
|
684
|
|
Termination benefits
|
|
1,438
|
|
|
—
|
|
|
—
|
|
Share-based compensation costs
|
|
1,795
|
|
|
941
|
|
|
936
|
|
|
|
5,571
|
|
|
4,252
|
|
|
4,506
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
28
|
Segment information
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(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,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
|
|
$
|
|
$
|
|
$
|
|||
United States
|
|
33,640
|
|
|
5,158
|
|
|
5,492
|
|
Switzerland
|
|
34,081
|
|
|
24,406
|
|
|
24,977
|
|
Japan
|
|
6,586
|
|
|
4,062
|
|
|
5,472
|
|
Other
|
|
212
|
|
|
39
|
|
|
112
|
|
|
|
74,519
|
|
|
33,665
|
|
|
36,053
|
|
Amounts presented:
|
|
|
|
|
|
|
|||
Within discontinued operations
|
|
68,344
|
|
|
31,612
|
|
|
31,348
|
|
Within continuing operations
|
|
6,175
|
|
|
2,053
|
|
|
4,705
|
|
|
|
74,519
|
|
|
33,665
|
|
|
36,053
|
|
29
|
Subsequent events
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012 and 2011
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
Item 19.
|
Exhibits
|
1.1
|
|
Restated Certificate of Incorporation and Restated Articles of Incorporation of the Registrant (incorporated by reference to
Exhibit 99.2 to the Registrant's report on Form 6-K furnished to the Commission on May 25, 2011)
|
1.2
|
|
Certificate of Amendment and Articles of Amendment of the Registrant (incorporated by reference to Exhibit 99.2 to the Registrant's report on Form 6-K furnished to the Commission on October 3, 2012)
|
1.3
|
|
Amended and Restated By-Law One of the Registrant (incorporated by reference to Exhibit 1.3 of the Registrant's annual report on Form 20-F for the financial year ended December 31, 2012 filed with the Commission on March 21, 2013)
|
2.1
|
|
Amended and Restated Shareholder Rights Plan Agreement between the Registrant and Computershare Trust Company of
Canada dated as at March 29, 2010 (incorporated by reference to Exhibit 99.1 to the Registrant's report on Form 6-K
furnished to the Commission on March 29, 2010)
|
4.1
|
|
Second Amended and Restated Stock Option Plan of the Registrant
|
4.2
|
|
Employment Agreement dated July 18, 2007 between Paul Blake, M.D. and the Registrant (incorporated by reference to Exhibit 4.2 of the Registrant's annual report on Form 20-F for the financial year ended December 31, 2007 filed with the Commission on March 28, 2008)
|
4.3
|
|
Termination of the Change of Control Program letter dated June 14, 2013 from the Registrant to Paul Blake
|
4.4
|
|
Employment Agreement dated November 1, 2013 between Jude Dinges and a subsidiary of the Registrant
|
4.5
|
|
Employment Agreement dated April 15, 2013 between David A. Dodd and a subsidiary of the Registrant
|
4.6
|
|
Employment Agreement dated May 7, 2007 between the Registrant and Nicholas J. Pelliccione (incorporated by reference to Exhibit 4.7 of the Registrant's annual report on Form 20-F for the financial year ended December 31, 2007 filed with the Commission on March 28, 2008)
|
4.7
|
|
Termination of the Change of Control Program letter dated June 14, 2013 from the Registrant to Nicholas J. Pelliccione
|
4.8
|
|
Service contract dated January 1, 2014 between Richard Sachse, MD and Aeterna Zentaris GmbH, a subsidiary of the Registrant
|
4.9
|
|
Amendment to Amended Employment Agreement dated as at June 20, 2007 among the Registrant, Aeterna Zentaris, Inc. and Dennis Turpin (incorporated by reference to Exhibit 4.8 of the Registrant's annual report on Form 20-F for the financial year ended December 31, 2007 filed with the Commission on March 28, 2008)
|
4.10
|
|
Termination of the Change of Control Program letter dated June 14, 2013 from the Registrant to Dennis Turpin
|
8.1
|
|
Subsidiaries of the Registrant
|
11.1
|
|
Code of Ethical Conduct of the Registrant (incorporated by reference to Exhibit 11.1 of the Registrant's annual report on
Form 20-F for the financial year ended December 31, 2008 filed with the Commission on March 30, 2009)
|
11.2
|
|
Audit Committee Charter of the Registrant (incorporated by reference to Exhibit 11.2 of the Registrant's annual report on
Form 20-F for the financial year ended December 31, 2010 filed with the Commission on March 31, 2011)
|
12.1
|
|
Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002
|
12.2
|
|
Certification of the Principal Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002
|
13.1
|
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
13.2
|
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
15.1
|
|
Consent of the Independent Auditors
|
AETERNA ZENTARIS INC.
|
|
/s/ Dennis Turpin
|
|
Dennis Turpin, CPA, CA
|
Senior Vice President and Chief Financial Officer
|
1.
|
Purpose of the Plan
|
1.1
|
The purpose of the stock option plan for directors and certain designated officers, employees and suppliers of ongoing services (the "
Plan
") of Aeterna Zentaris Inc. (the "
Corporation
") is to secure for the Corporation and its shareholders the benefit of an incentive interest in share ownership by directors and certain designated officers and employees of the Corporation and its Subsidiaries (as defined below), as the case may be, and by certain designated suppliers of ongoing services.
|
1.2
|
The sole persons eligible to receive grants under this Plan (each, a
"Participant"
) shall be as follows: (i) the most senior executive officers of the Corporation, including the persons occupying the positions of Chief Executive Officer, Chief Financial Officer, Chief Scientific Officer, Chief Commercial Officer, Chief Administrative Officer and Chief Compliance Officer; (ii) such other executive officers of the Corporation or of its Subsidiaries that may, from time to time, report directly to the Chief Executive Officer; (iii) the non-employee, independent members of the Board of Directors of the Corporation (the "
Board
"); and (iv) such other officers or employees of the Corporation or of any of its Subsidiaries, as the case may be, or suppliers of ongoing services, as may be expressly designated by resolution of the Board or its Nominating, Governance and Compensation Committee (the "
Committee
"). For the purposes of this Plan, "
Subsidiaries
" shall 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.
|
2.
|
Administration
|
2.1
|
This Plan shall be administered by the Board or the Committee. The Board or the Committee shall have full and complete latitude to interpret this 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 Participant shall hold options to purchase more than five percent (5%) of the number of Shares issued and outstanding from time to time.
|
3.2
|
In addition: (i) the number of securities issuable to "insiders" (as such term is defined in the TSX Company Manual) of the Corporation, at any time, under all security-based compensation arrangements of the Corporation, cannot exceed ten percent (10%) of its issued and outstanding securities; and (ii) the number of securities issued to insiders of the Corporation, within any one-year period, under all security-based compensation arrangements of the Corporation, cannot exceed ten percent (10%) of its issued and outstanding securities.
|
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, independent director of the Corporation entitled to receive a benefit under this 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, independent directors of the Corporation entitled to receive a benefit under this 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 this 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 time to time designate the Participants in this Plan as contemplated by Section 1.2 hereof, as well as the number of options, if any, that shall or may be granted to such Participants hereunder. Any Participant may hold more than one option. The granting of each option shall be evidenced by a letter from the Corporation addressed to the Participant setting forth the number of Shares covered by such option, the subscription price, the terms and conditions of exercise of the option and the option period.
|
4.2
|
Subject to the provisions of Section 3, the non-employee, independent 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 (as defined below), 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, independent directors in accordance with the foregoing shall be determined by the Board upon recommendation of the Committee.
|
5.
|
Exercise Price
|
5.1
|
The exercise price of an option shall be established by the Board or the Committee at the time of the grant and such price shall not be less than the greater of the closing prices of the Shares on the Nasdaq Stock Market and the Toronto Stock Exchange 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
").
|
6.
|
Option Period
|
6.1
|
Subject to the provisions of Section 6.2, each option granted under this 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 seven years after such date (the "
Outside Expiry Date
"). Subject to the provisions of Section 6.2 and unless otherwise expressly determined by resolution of the Board or the Committee, options granted under this Plan to Participants (other than non-employee, independent directors, in respect of which Section 4.2 shall prevail) 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.
|
6.2
|
Notwithstanding the provisions of Section 6.1, an option shall not be exercisable by a Participant from and after each and every one of the following dates (each, an "
Early Expiry Date
"), unless the Board or the Committee decides otherwise:
|
6.2.1
|
(i) in the case where the Participant is an officer or an employee, the date on which the Participant resigns or voluntarily leaves his employment with the Corporation or one of its Subsidiaries, as the case may be, or the date on which the employment of the Participant with the Corporation or one of its Subsidiaries is terminated for just cause, as the case may be, including, without limiting the scope of the foregoing, in the event of a breach of his obligations to the Corporation, or (ii) in the case where the Participant is a director of the Corporation or one of its Subsidiaries, as the case may be, but is not employed by either the Corporation or one of its Subsidiaries, the date on which such Participant ceases to be a member of the relevant Board of Directors for any reason other than death;
|
6.2.2
|
(i) in the case where the Participant is an officer or employee, six (6) months following the date on which the Participant's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated by reason of death or (ii) in the case where the Participant is a director of the Corporation or any of its Subsidiaries, as the case may be, but is not employed by either the Corporation or any of its Subsidiaries, six (6) months following the date on which such Participant ceases to be a member of the relevant Board of Directors by reason of death;
|
6.2.3
|
in the case where the Participant is an officer or employee, ninety (90) days following the date on which the Participant'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
|
6.2.4
|
in the case where the Participant is a supplier of ongoing services, thirty (30) days following the date on which the Participant 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.
|
6.3
|
Subject to Section 6.4 hereof, all rights conferred by an option under this Plan that shall not have been exercised by either an Early Expiry Date or the Outside Expiry Date shall be forfeited and cancelled.
|
6.4
|
If an Early Expiry Date or the Outside Expiry Date applicable to any option granted under this 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 automatically extended to the date which is seven (7) business days after the last day of the blackout period. The seven (7) business day extension period established in this paragraph is a fixed period which is not subject to Board discretion.
|
7.
|
Exercise of Options
|
7.1
|
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.
|
7.2
|
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 Participant and delivered to the address specified in the notice no later than ten (10) business days following the receipt of such notice and cheque.
|
8.
|
No Assignment
|
8.1
|
No option or interest therein shall be assignable by the Participant other than by will or in accordance with the applicable laws of estates and succession.
|
9.
|
Not a Shareholder
|
9.1
|
A Participant 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.
|
10.
|
Change in Control or Other Fundamental Transaction
|
10.1
|
Notwithstanding anything contained to the contrary in this Plan or in any resolution of the Board in implementation thereof:
|
10.1.1
|
in the event: (i) the Corporation accepts an offer to amalgamate, merge or consolidate with any other entity (other than a wholly-owned Subsidiary) or to sell or license all or substantially all of its assets to any other entity (other than a wholly-owned Subsidiary); (ii) the Corporation signs a support agreement in customary form pursuant to which the Board agrees to support a takeover bid and recommends that shareholders of the Corporation tender their Shares to such takeover bid; or (iii) holders of greater than 50% of the Corporation's then outstanding Shares tender all of their Shares to a takeover bid made to all of the holders of the Shares to purchase all of the then issued and outstanding Shares, then, in each case, all of the outstanding Options shall, without any further action required to be taken by the Corporation, immediately vest. Each Participant shall thereafter be entitled to exercise all of such Options at any time up to and including, but not after the close of business on that date which is ten (10) days following the Closing Date. Upon the expiration of such ten (10)-day period, all rights of the Participant to such Options or to the exercise of same (to the extent not theretofore exercised) shall automatically thereupon terminate and have no further force or effect whatsoever. For the purposes of paragraph 10.1.1, "
Closing Date
" shall mean (x) the closing date of the amalgamation, merger, consolidation, sale or license transaction in the case of clause (i) above; (y) the first expiry date of the takeover bid on which each of the offeror's conditions are either satisfied or waived in the case of clause (ii) above; or (z) the date on which it is publicly announced that holders of greater than 50% of the Corporation's then outstanding Shares have tendered their Shares to a takeover bid in the case of clause (iii) above.
|
11.
|
Modification of the Plan
|
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;
|
11.2
|
any amendment to the number of securities issuable under this Plan (except for any adjustment described in paragraph 12.1.4 hereof);
|
11.3
|
any amendment which would permit any option granted under this Plan to be transferable or assignable other than by will or in accordance with the applicable laws of estates and succession;
|
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 this Plan reserve;
|
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;
|
11.6
|
with respect to any Participant (whether or not such Participant is an "insider" of the Corporation),
|
(i)
|
any reduction in the exercise price of any option after the option has been granted, or
|
(ii)
|
any cancellation of an option and the re-grant of that option under different terms, or
|
(iii)
|
any extension to the term of an option beyond the Outside Expiry Date (except for extensions made pursuant to Section 6.4),
|
11.7
|
any amendment to the method of determining the exercise price of an option granted pursuant to this Plan;
|
11.8
|
the addition of any form of financial assistance or any amendment to a financial assistance provision which is more favorable to employees;
|
11.9
|
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
|
11.10
|
any amendment to this Section 11.
|
12.
|
Amendments and Termination
|
12.1
|
The Board may, subject to receipt of requisite regulatory approval, where required, in its sole discretion, make all other amendments to this 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 this 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 Participant;
|
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;
|
12.1.5
|
discontinuing or terminating this 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.
|
12.3
|
Notwithstanding any provisions to the contrary, any amendment to or termination of this Plan shall in no way amend or otherwise affect the conditions of the options already granted under this Plan to the extent that such options have not then been exercised, unless the rights of the Participant have already expired or have already been fully exercised or unless the Participant affected by such change has already agreed to it.
|
13.
|
Miscellaneous Provisions
|
13.1
|
The Corporation's obligations under the terms of this 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 Participant 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.
|
13.2
|
The participation in this 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 this Plan. Neither this Plan nor any act that is done under the terms of this 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 this 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 this Plan by reason of any previous grant of options under the terms of this Plan.
|
13.4
|
This 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 this 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
|
This Plan and any option granted under the terms of this Plan shall be governed and interpreted according to the laws of the Province of Quebec and the laws of Canada applicable thereto.
|
13.7
|
This Plan modifies and restates the amended and restated stock option plan adopted by the Corporation on March 21, 2013. This Plan confers no other advantage upon the beneficiaries of the stock option plan.
|
1405 boul du Parc Technologique
Quebec (Quebec) G1P 4P5
Canada
|
|
|
|
100 Marketplace, Suite 203
25 Mountainview Blvd.
Basking Ridge, NJ 07920-3452
USA
|
1.
|
The term "
President
," shall mean the President of the Corporation.
|
2.
|
The term "
Parent"
shall mean the Corporation's parent, Aeterna Zentaris Inc.
|
3.
|
The term "
the Group"
shall mean the Parent, subsidiaries and affiliates of the Corporation.
|
4.
|
The term "
the Governance Committee"
shall mean the Corporate Governance, Nominating and Human Resources Committee of the Parent.
|
5.
|
The term "
the Board"
shall mean the Parent's Board of Directors.
|
(a)
|
approved products;
|
(b)
|
post-clinical/pre-market status products;
|
(c)
|
in-licensing/co-promotion/collaborative activities;
|
(d)
|
out-licensing/alliance activities of the Corporation's and the Group's products/portfolio; and
|
(e)
|
any other activities related to the existing or potential portfolio of revenue-generating assets.
|
(f)
|
identifying business development opportunities consistent with stated commercial goals of the Corporation and the Group;
|
(g)
|
providing critical analysis and decision support;
|
(h)
|
developing commercial launch plans for any potential drug or product candidates of the Corporation and the Group;
|
(i)
|
identifying potential product candidates for acquisition or in-licensing; and
|
(j)
|
recruiting potential candidates for employment with the Corporation and/or the Group.
|
(a)
|
Executive is declared bankrupt or insolvent or makes an assignment of his property or is placed under protective supervision, which situations Executive acknowledges to be incompatible with the continuation of his employment.
|
(b)
|
Executive becomes physically or mentally disabled to such an extent as to make him unable to perform the essential functions of his duties normally and adequately for an aggregate of three (3) months during a period of twelve (12) consecutive months. In such a case, Executive may continue to benefit under short-term and long-term disability insurance plans, subject to the terms of such plans, if any. The Corporation's ability to terminate Executive as a result of any disability shall be to the extent permitted by applicable state or federal law.
|
(c)
|
Executive breaches the terms of this Agreement.
|
(d)
|
Executive fundamentally or materially fails to perform his duties as an employee and/or as an officer of the Corporation and/or of the Group, or fails or refuses to follow the directives of the President or the Board.
|
(e)
|
Executive commits fraud, theft, embezzlement or other felony criminal act. Executive agrees that it shall constitute fraud if Executive provides, or causes to be provided, or misrepresents, either verbally or in writing, to the Corporation or any member of the Group, any information with respect to Executive's background, experience, knowledge, skills or abilities.
|
(f)
|
Executive engages in material misconduct or willful or gross negligence in the performance of his duties, causing material damage to the Corporation and/or the Group or to the business of the Corporation and/or the Group.
|
(g)
|
Executive misuses or abuses alcohol, drugs or controlled substances.
|
(h)
|
Executive uses or discloses in an unauthorized way the proprietary, confidential or trade secret information of the Corporation or of the Group.
|
(i)
|
Executive conducts himself publicly, by speech or by behavior, in such a manner as to cause public embarrassment, scandal or ridicule to the Corporation or to the Group, or to any of their respective employees.
|
(a)
|
A more than 25% reduction of Executive's Base Salary as of the Effective Date or as thereafter increased from time to time, provided such reduction is not warranted and due to either company performance or Executive's failure to achieve performance standards
|
(b)
|
A material reduction (absent Executive's consent) in Executive's duties and responsibilities as the Corporation's CCO.
|
(a)
|
As to the time period
, to the duration of Executive's employment and for a period of one (1) year following the date of termination of his employment;
|
(b)
|
As to the geographical area
, the territory in which a specific product had been actively exploited by the Corporation or any member of the Group during the two (2) years preceding the employment termination date. For purposes of this clause, the Corporation and the Group are deemed to have actively exploited such territory for such product if, during the two (2) years immediately preceding the employment termination date:
|
(i)
|
Distribution rights for this product were granted to a distributor of the Corporation or any member of the Group pursuant to a distribution agreement (exclusive or non-exclusive); or if
|
(ii)
|
The Corporation or any member of the Group has completed Phase II clinical development work for this product in this territory, or searched for commercial partners or applied to protect its intellectual property rights in relation to the product and its use, including patent applications in relation to the product or its use, which applications referred to these territories.
|
(c)
|
As to the nature of the activities
, to duties or activities which are identical or substantially similar to those performed or carried on by Executive during the twenty-four (24) months preceding the termination of his employment.
|
(a)
|
products, formulae, processes and composition of products, as well as raw materials and ingredients, of whatever kind, that are used in their manufacture;
|
(b)
|
technical knowledge and methods, quality control processes, inspection methods, laboratory and testing methods, information processing programs and systems, manufacturing processes, plans, drawings, tests, test reports and software;
|
(c)
|
equipment, machinery, devices, tools, instruments and accessories;
|
(d)
|
information with respect to the compensation and performance of employees of the Corporation and the Group;
|
(e)
|
financial information, production cost data, marketing strategies, raw materials supplies, suppliers, staff and client lists and related information, marketing plans, sales techniques and policies, including pricing policies, sales and distribution data and present and future expansion plans; and,
|
(f)
|
research, experiments, inventions, discoveries, developments, improvements, ideas, industrial secrets and know-how.
|
1.1
|
The Corporation wishes to employ at the Effective Date the Executive as its President and Chief Executive Officer and the Executive wishes to be employed at the Effective Date by the Corporation on the terms and conditions set forth herein.
|
1.2
|
The Executive shall report directly to the Corporation's Board of Directors (the "Board") and all other employees of the Corporation and each other corporation or other organization which is controlled directly or indirectly by the Corporation (each an "Affiliate" and collectively the "Affiliates") shall report directly or indirectly to the Executive..
|
2.1
|
The Executive agrees to devote his business time, attention, skill and efforts to the faithful performance and discharge of his duties and responsibilities as the President and Chief Executive Officer of the Corporation in conformity with professional standards, in a prudent and workmanlike manner and in a manner consistent with the obligations imposed under applicable law. The Executive shall promote the interests of the Corporation and its Affiliates in carrying out the Executive's duties and responsibilities and shall not deliberately and knowingly take any action, or fail to take any action which failure could, or reasonably be expected to, have a material and adverse effect on the business of the Corporation or any of its Affiliates.
|
2.2
|
The Executive and the Corporation agree that the Executive's principal place of business initially will be at the Corporation's office in New Jersey and, further, that any reassignment of his principal place of business will be to a place in the United States mutually agreed upon by the Executive and the Chairman of the Board. The Executive understands that his duties and responsibilities will require him to travel on a regular basis to Canada and Europe as well as to other locations in the world from time to time to further the business and interests of the Corporation.
|
2.3
|
The Executive discloses, represents and affirms that he has no obligation toward any person or entity, including former employers, that would be incompatible with this Agreement or that could create an impediment to or conflict of interest with the performance of his duties with the Corporation and its affiliates.
|
2.4
|
The Executive shall be appointed as, or nominated for election as, and recommended for election as, a member of the Board at the first opportunity to effect such appointment or nomination. The Executive also shall be appointed as the Managing Director of the Corporation's Affiliate, Aeterna Zentaris GmbH either on or as soon as practical after the Effective Date. The Executive shall receive no compensation for his services under this Section 2.4 in addition to his compensation otherwise payable under this Agreement.
|
2.5
|
The Corporation and the Executive agree that the Executive may continue to sit upon the board of directors of any corporations or organizations on which he serves on the Effective Date as long as the Chairman of the Board and the Executive mutually agree that his membership on any such board of directors does not unreasonably interfere with the performance of Executive's duties and
|
3.1
|
Annual Base Salary.
The Corporation shall pay the Executive a base annual salary (the
Base Salary
) which initially shall be FOUR HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS US (US$475,000), subject to applicable taxable withholding and deductions and payable in accordance with the Corporation's standard payroll practice for executive officers. The Base Salary shall be reviewed annually by the Board or a committee of the Board and may be increased in accordance with the Corporation's compensation policy. Finally, all or part of the Executive's Base Salary may be paid through the Affiliate doing business at his principal place of business to facilitate proper tax withholding for the Executive and his participation in the employee benefit plans described in Section 5.1.
|
3.2
|
Annual Cash Bonus.
The Executive shall be eligible to earn an annual cash bonus (the
Annual Bonus
), which shall be computed in the target range of 65% to 75% of the Executive's Base Salary. Such Annual Bonus will be calculated upon the achievement of performance objectives that will be established by the Board in consultation with the Executive within thirty (30) days prior to the beginning of a fiscal year. For 2013, any Annual Bonus awarded will be based upon performance objectives established by the Board in consultation with the Executive and subject to pro-ration for the period of service from the Effective Date through the end of 2013. The granting of an Annual Bonus is also based on the business performance of the Corporation and subject to approval by the Board. The Annual Bonus, if any, payable for any calendar year shall be paid no later than March 15 of the following calendar year. Finally, if the Executive's employment terminates (other than for Cause) on or after July 1 of a calendar year, he shall be entitled to the payment of a pro-rata part of any Annual Bonus, which would have been payable if he had continued to be employed by the Corporation through the end of such calendar year.
|
3.3
|
Stock Options.
Subject to any required shareholder or regulatory approval, the Executive shall be eligible to receive an annual grant of stock options to purchase shares of the Corporation's publicly traded common stock (the "Common Stock"), targeted to, but not limited to, the range of 200,000 to 250,000, subject to vesting, exercise, pricing and all other applicable terms of the Corporation's Stock Option Plan. Granting of such annual stock options shall also be subject to the prior approval of the Board, which may adjust upwards or downwards the number of options granted, depending on the number of options available annually. If any shareholder or regulatory approval is required, the Corporation shall promptly undertake all reasonable efforts to secure such approval. For the calendar year 2013 and subject to the approvals described in this paragraph 3.3, the Corporation shall grant 300,000 stock options to the Executive as of the Effective Date and at a strike price equivalent to the share price at the close of the preceding business day, which is anticipated to be April 12, 2013.
|
3.4
|
Retention Bonus.
The Corporation shall pay the Executive a two-part retention bonus as follows: (1) the Corporation shall pay the Executive a retention bonus if he remains employed through Decemer 31, 2014 equal to (a) the excess, if any, of the closing price of a share of Common Stock on the last regular trading day in 2014 over the share price at the close of the business day immediately before the Effective Date times (b) 175,000; and, (2) the Corporation shall pay the Executive a retention bonus if he remains employed through December 31, 2015 equal to (a) the excess, if any, of the closing price of a share of Common Stock on the last regular trading day in 2015 over the share price at the close of the business day immediately before the Effective Date times (b) 200,000. The bonuses payable in (1) and (2) herein shall be paid in US dollars no later than March 15 of the year following the end of 2014 and 2015, respectively..
|
3.5
|
Living Assistance.
The Corporation and the Executive agree that it may become necessary for the Executive to live in temporary housing or quarters at his principal place of business.. To this end, the Corporation agrees that it will pay the reasonable and necessary costs to lease
|
3.6
|
Car Allowance.
The Corporation shall pay the Executive an annual, taxable car allowance of TWENTY THOUSAND US DOLLARS (US$20,000.00), payble in accordance with the Corporation's policy as it applies to executives. The Corporation shall assume and pay all related operating costs of the vehicle, including insurance, registration, maintenance, repairs and fuel expenses.
|
3.7
|
Business Expenses.
The Corporation shall reimburse the Executive, upon presentation of valid receipts or vouchers, for reasonable entertainment, travel and other business expenses, incurred on behalf of or at the request of the Corporation or an Affiliate and which are in accordance with the Corporation's policies and rules; provided, however, (a) the amount of such expenses eligible for reimbursement in any calendar year shall not affect the expenses eligible for reimbursement in another calendar year; (b) no right to such reimbursement may be exchanged or liquidated for another benefit or payment; and, (c) any reimbursements of such expenses shall be made as soon as practicable under the circumstances, but in any event no later than the end of the calendar year following the calendar year in which the related expenses are incurred by the Executive.
|
4.1
|
The Executive shall be entitled to a paid annual vacation of four (4) weeks in accordance with the Corporation's vacation policy for executives. The Executive agrees that exercise of the vacation benefit shall be pre-arranged with the Chairman of the Board. All of the vacation benefit shall be taken during each calendar year and shall not be carried over in any amount into succeeding years. Unused vacation shall not be payable in cash to the Executive. The full annual vacation benefit shall be extended to the Executive for 2013.
|
5.1
|
Subject to eligibility requirements and participation rules, the Executive may participate in all of the employee benefit plans maintained by the Corporation and its Affiliates which are available to employees whose principal place of business is the same as the Executive's principal place of business.
|
6.1
|
At-Will Employment.
Nothing in this Agreement shall be construed to alter the at-will employment relationship between the Corporation and the Executive. Subject to the terms set forth in this Agreement, either the Corporation or the Executive may terminate the Executive's employment at any time for any reason, with or without Cause, as defined in Section 6.2 below.
|
6.2
|
Termination for Cause.
The Executive's employment may be terminated by the Corporation upon simple notice in writing transmitted to the Executive, without the Corporation (or any of its Affiliates) being bound to pay any compensation whatsoever if termination is for any of the following reasons, each of which constitutes Cause:
|
(a)
|
The Executive is declared bankrupt or insolvent or makes an assignment of his property or is placed under protective supervision, which situations the Executive acknowledges to be incompatible with the continuation of his employment.
|
(b)
|
The Executive becomes physically or mentally disabled to such an extent as to make him unable to perform the essential functions of his duties normally and adequately for an aggregate of six (6) months during a period of twelve (12) consecutive months. In such a
|
(c)
|
The Executive breaches the terms of this Agreement.
|
(d)
|
The Executive fundamentally or materially fails to perform his duties as President and Chief Executive Officer of the Corporation and/or as Managing Director of Aeterna Zentaris GmbH.
|
(e)
|
There is a conclusive determination that the Executive has committed any fraud, theft, embezzlement or other criminal act of a similar nature.
|
(f)
|
The Executive has committed serious misconduct or willful or gross negligence in the performance of his duties.
|
(g)
|
The Executive fails or refuses to follow reasonable directives of the Board.
|
(h)
|
The Executive engages in willful or reckless conduct, causing material damage to the Corporation (or its Affiliates) or the Corporation's (or its Affiliates') business.
|
(i)
|
The Executive misuses or abuses alcohol, drugs or controlled substances.
|
(j)
|
The Executive uses or discloses in an unauthorized way the Corporation's (or any of its Affiliates') confidential or trade secret information.
|
(k)
|
The Executive conducts himself publicly, by speech or behavior, in such a manner as to cause public embarrassment, scandal or ridicule to the Corporation, any of its affiliates or any of their employees.
|
(l)
|
Provided, however, no reason set forth in this Section 6.2 shall constitute Cause unless (1) the Executive upon notice is given a reasonable period to effect a cure or a correction; (2) the reason is curable or correctible as determined by the Board; and, (3) the reason clearly and adversely affects the Executive's ability to continue to perform his duties and responsibilities under this Agreement.
|
6.3.
|
Good Reason
.
The Executive shall have the right to resign at any time for any of the following reasons, each of which shall constitute Good Reason:
|
(a)
|
A material reduction of the Executive's total compensation (including his Base Salary, Annual Bonus opportunities, benefits and stock option grant opportunities) as in effect on the Effective Date or as thereafter increased from time to time, provided such reduction is not warranted and due to company performance.
|
(b)
|
Any change in the Executive's direct reporting relationship to the Board.
|
(c)
|
Any reduction (absent the Executive's express, written consent) in the Executive's duties and responsibilities as the Corporation's President and Chief Executive Officer.
|
(d)
|
A physical change of one hundred miles or more in the Executive's principal place of business absent his express, written consent.
|
(e)
|
Provided, however, no reason set forth in this Section 6.3 shall constitute Good Reason unless the Corporation upon express, written notice is given a reasonable period to effect a cure or a correction.
|
6.4.
|
Termination by Death.
In the event of the Executive's death during his period of employment, the Corporation's obligation to make payments under this Agreement shall terminate on the date of death, except the Corporation shall pay the Executive's estate or surviving designated beneficiary or beneficiaries, as appropriate, any earned but unpaid salary and bonus and reimburse business expenses incurred but not reimbursed as of his date of death. Vesting of any stock options outstanding on the date of death shall be exercisable only to the extent the Executive's right to exercise was vested on his date of death.
|
6.5.
|
Voluntary Termination.
If the event Executive wishes to resign for any reason other than Good Reason or the Corporation wishes to terminate his employment without Cause, the Executive shall give, or receive, as applicable at least thirty (30) days prior written notice of such resignation or termination, whichever is applicable. Any such notice shall not relieve either the Executive or the Corporation of their mutual obligations to perform under this Agreement or to relieve the Corporation to compensate the Executive during such notice period for any earned but unpaid salary and bonus and reimburse business expenses incurred but not reimbursed as of his date of termination.
|
6.6.
|
Termination Without Cause Or Resignation For Good Reason
. In the event that the Executive has a "separation from service" within the meaning of a §409A of the US Internal Revenue Code of 1986, as amended (a "Separation from Service") as a result of the Corporation terminating the Executive's employment without Cause or the Executive resigning for Good Reason, (1) Executive's right to exercise all then outstanding stock options granted to him shall fully and immediately vest on the effective date of his Separation from Service and any outstanding and unpaid retention bonus under Section 3.4 of this Agreement shall be calculated as if the date of his Separation from Service was, as applicable, the end of 2014 and 2015 and paid to the Executive; (2) the Corporation shall pay to Executive in a lump sum (less applicable tax withholdings) an amount equal to two times the sum of his then Base Salary, his then Annual Bonus, the amount of his then car allowance (as described in Section 3.6 above); and, (3) the Corporation shall provide the benefits then provided to the Executive under Section 5 above by purchasing up to eighteen (18) months of the coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"). All payments due under this Section 6.6 shall be paid in US dollars by the Corporation no later than ten (10) business days after the date of the Executive's Separation from Service unless there is a requirement to delay the payments under this Section 6.6 for six (6) months to avoid a tax on the Executive under §409A of the US Internal Revenue Code of 1986 (the "Code"), the payment shall be so delayed by six (6) months and one day.
|
7.1
|
For purposes of this Section 7, a
Change of Control
shall be deemed to have occurred in any of the following circumstances:
|
(a)
|
Subject to the exceptions set forth in Schedule A attached hereto and incorporated within, upon the purchase or acquisition, in one or more transactions, by a Person or one or more Persons who are affiliates of one another or who are acting jointly or in concert (as such expressions are defined in the Securities Act (Ontario) (the
Acquiring Person
) of a beneficial interest in securities of the Corporation representing in any circumstance fifty percent (50%) or more of the voting rights attaching to the then outstanding securities of the Corporation; or
|
(b)
|
upon a sale or other disposition of all or substantially all of the Corporation's assets; or
|
(c)
|
upon a plan of liquidation or dissolution of the Corporation; or
|
(d)
|
if, for any reason, including an amalgamation, merger or consolidation of the Corporation with or into another company, the individuals who at the date hereof constitute the Board (and any new directors whose appointments by the Board or whose nomination for election by the Corporation's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the date hereof or whose appointment or nomination for election was previously so approved cease to constitute a majority of members of the Board; or,
|
(e)
|
upon termination of Executive either without Cause or by resignation for Good Reason.
|
7.2
|
If the Executive has a Separation from Service within twelve (12) months following a Change of Control as a result of a termination of his employment by the Corporation without Cause or his resignation for Good Reason, the Executive shall receive the following:
|
(a)
|
An amount equivalent to thirty-six (36) months of his then annual base salary;
|
(b)
|
An amount equivalent to two (2) times (2x) the Annual Bonus, if any, to which the Executive would have been entitled to receive in the year during which the Change of Control occurred;
|
(c)
|
The Executive's right to exercise all then outstanding stock options granted to him shall fully and immediately vest on the date of his Separation from Service and any outstanding and unpaid retention bonus under Section 3.4 shall be calculated as if the date of his Separation from Service was, as applicable, the end of 2014 and 2015 and paid to the Executive; and,
|
(d)
|
The then annual cost to provide, or the cost to purchase by the Corporation coverage under COBRA, whichever is applicable, to provide the benefits then provided to Executive under Section 5.
|
7.3
|
The Corporation shall pay to the Executive in a lump sum in US dollars within ten (10) business days after the effective date of his Separation from Service following a Change of Control, the amounts described in 7.2 of this Section 7. In the event the Executive dies before he has received payment of these amounts, the Corporation will pay these amounts to his estate or surviving designated beneficiary or beneficiaries, as appropriate. Finally, if there is a requirement to delay the payments called for in this Section 7.3 for six (6) months to avoid a tax on the Executive under §409A of the Code, the payment shall be so delayed by six (6) months and one (1) day
|
8.1
|
The Executive shall not compete with the Corporation nor with any of its affiliates, directly or indirectly. He shall not participate in any capacity whatsoever in a business that would directly or indirectly compete with the Corporation or with any of its affiliates, specifically one involved in the development and commercialization of the specific endocrine therapies and oncology treatments, which the Corporation and its affiliates are actively developing, including, without limitation, as an executive, director, officer, employer, principal, agent, fiduciary, administrator of another's property, associate, independent contractor, franchisor, franchisee, distributor or consultant unless such participation is fully disclosed to the Board and approved in writing in advance by the Chairman of the Board. In addition, the Executive shall not have any interest whatsoever in such an enterprise, including, without limitation, as owner, shareholder, partner, limited partner, lender or silent partner. This non-competition covenant is limited as follows:
|
8.1.1
|
As to the time period
, to the duration of the Executive's employment and for a period of one (1) year following the date of termination of his employment;
|
8.1.2
|
As to the geographical area
, the territory in which a specific product had been actively exploited by the Corporation and/or its affiliates during the two years preceding the employment termination date. For purposes of this clause, the Corporation and its affiliates are deemed to have actively exploited such territory for such product if, during the two (2) years immediately preceding the termination date:
|
(i)
|
Distribution rights for this product were granted to a distributor of the Corporation and/or its affiliates, pursuant to a distribution agreement (exclusive or non-exclusive) except if such distribution agreement ceased to have effect, prior to the termination date, pursuant to the terms of such distribution agreement and provided that neither the Corporation nor any of its affiliates actively searched for other distributors for the territory covered by this Agreement; or if
|
(ii)
|
The Corporation and/or its affiliates have completed Phase II clinical development work for this product in this territory, or searched for commercial partners or applied to protect its intellectual property rights in relation to the product and its use, including patent applications in relation to the product or its use, which applications referred to these territories.
|
8.1.3
|
As to the nature of the activities
, to duties or activities which are identical or substantially similar to those performed or carried on by the Executive during the twenty-four (24) months preceding the termination of his employment.
|
8.2
|
The foregoing stipulation shall nevertheless not prevent the Executive from buying or holding shares or other securities of a corporation or entity other than the Corporation whose securities are publicly traded on a recognized stock exchange where the securities so held by the Executive do not represent more than five percent (5%) of the voting shares of such other corporation or entity and do not allow for its control.
|
8.3
|
The Executive also undertakes, for the same period and in respect of the same territory referred to hereinabove in sub-sections 8.1.1. and 8.1.2. not to solicit clients or do anything whatsoever to
|
8.4
|
The Executive also undertakes, for the same period and in respect of the same territory referred to hereinabove in sub-sections 8.1.1. and 8.1.2. not to induce, attempt to induce or otherwise interfere in the relations which the Corporation or which any of its affiliates has with their distributors, suppliers, representatives, agents and other parties with whom the Corporation or any of its affiliates deals.
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8.5
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The Executive also undertakes, for the same period and in respect of the same territory referred to in sub-sections 8.1.1. and 8.1.2. not to induce, attempt to induce or otherwise solicit the personnel of the Corporation to leave their employment with the Corporation or any of its affiliates nor to hire the personnel of the Corporation or any of its affiliates for any enterprise in which the Executive has an interest.
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8.6
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The Executive acknowledges that the provisions of this Section 8 are limited as to the time period, the geographic area and the nature of the activities to what the parties deem necessary to protect the legitimate interests of the Corporation and its affiliates, while allowing the Executive to earn his living.
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8.7
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Nothing in this Section 8 shall operate to reduce or extinguish the obligations of the Executive arising at law or under this contract which survive at the termination of this Agreement in reason of their nature and, in particular, without limiting the foregoing, the Executive's duty of loyalty and obligation to act faithfully, honestly and ethically.
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9.1
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The Executive acknowledges that he has received and will receive or conceive, in carrying on or in the course of his work during his employment with the Corporation, confidential information pertaining to the activities, the technologies, the operations and the business, past, present and future, of the Corporation or its affiliates or related or associated companies, which information is not in the public domain. The Executive acknowledges that such confidential information belongs to the Corporation and/or its affiliates and that its disclosure or unauthorized use could be damaging or prejudicial to the Corporation and/or its affiliates and contrary to their best interests.
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9.2
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The term confidential information includes, among other things:
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9.2.1
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products, formulae, processes and composition of products, as well as raw materials and ingredients, of whatever kind, that are used in their manufacture;
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9.2.2
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technical knowledge and methods, quality control processes, inspection methods, laboratory and testing methods, information processing programs and systems, manufacturing processes, plans, drawings, tests, test reports and software;
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9.2.3
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equipment, machinery, devices, tools, instruments and accessories;
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9.2.4
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financial information, production cost data, marketing strategies, raw materials supplies, suppliers, staff and client lists and related information, marketing plans, sales techniques and policies, including pricing policies, sales and distribution data and present and future expansion plans; and,
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9.2.5
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research, experiments, inventions, discoveries, developments, improvements, ideas, industrial secrets and know-how.
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9.3
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The Executive agrees to keep confidential and not disclose to any third party both the existence and the terms of this Agreement, except if disclosure is required by regulation or law In the event Executive is required to disclose the existence or terms of this Agreement pursuant to subpoena or other duly issued court order, Executive shall give prompt notice to the Corporation of such subpoena or court order to allow the Corporation sufficient opportunity to contest such subpoena or court order.
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10.1
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The Executive hereby assigns and agrees to assign to the Corporation all of his intellectual property rights as of their creation and to make full and prompt disclosure to the Corporation of all information relating to anything made or designed by him or that may be made or designed by him during the period of his employment, whether alone or jointly with other persons, or within a period of two (2) years following the termination of his employment and resulting from or arising out of any work performed by the Executive on behalf of the Corporation (or its affiliates) or connected with any matter relating or possibly relating to any business in which the Corporation or any of its affiliates or related or associated companies is involved unless specifically released from such obligation in writing by the Corporation's Board of Directors.
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10.2
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In addition, the Executive renounces all moral rights in any document or work realized during the period of his employment related to his employment by the Corporation. The Executive acknowledges that the Corporation has the right to use, modify or reproduce any such document or work realized by the Executive, at its entire discretion, without the Executive's authorization and without his name being mentioned.
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10.3
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At any time during the period of his employment or after the termination of his employment, the Executive shall sign, acknowledge and deliver, at the Corporation's expense, but without compensation other than a reasonable sum for his time devoted thereto if his employment has then terminated, any document required by the Corporation to give effect to Section 10.1, including patent applications and documents evidencing the assignment of ownership. The Executive shall also provide such other assistance as the Corporation or one of its affiliates may require with respect to any proceeding or litigation relating to the protection or defense of intellectual property rights belonging to the Corporation or any of its affiliates.
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10.4
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The entirety of this Section 10 shall be binding on the Executive's heirs, assignees and legal representatives.
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11.1
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Any property of the Corporation, including any file, sketch, drawing, letter, report, memorandum or other document, any equipment, machinery, tool, instrument or other device, any diskette, recording tape, compact disc, software, electronic communication device or any other property, which comes into the Executive's control or possession during his employment with the Corporation in the performance or in the course of his duties, regardless of whether he has participated in its preparation or design, how it may have come under his control or into his
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12.1
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As of the effective date hereof, this Agreement supersedes and cancels any prior agreement, verbal or written, with respect to the Executive's employment with the Corporation.
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13.1
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To be valid and enforceable, any amendment to this Agreement must be confirmed in writing by each of the Corporation and the Executive.
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14.1
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Any notice given hereunder shall be given in writing and sent by registered or certified mail or hand-delivered. If such notice is sent by registered or certified mail, it shall be deemed to have been received five (5) business days following the date of its mailing if the postal services are working normally. If such is not the case, the notice must be hand-delivered or served by bailiff, at the discretion of the sender. In the case of hand-delivery or service, the notice shall be deemed to have been received the same day. It is agreed that if the delivery date is a non- business day, the notice shall be deemed to have been received on the following business day.
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15.1
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This Agreement shall be binding on the successors, heirs, assignees and legal representatives of all of the parties hereto.
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16.1
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This Agreement shall be governed by and interpreted in accordance with the laws, including conflicts of laws, by the State of Delaware in the United States of America.
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17.1
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If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement, which can be given effect without the invalid provisions or applications and, to this end, the provisions of this Agreement are declared to be severable.
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18.1
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The Corporation and the Executive hereby expressly agree that with respect to any dispute arising under this Agreement, such dispute shall be resolved through binding mediation. Any
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19.1
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All of the parties hereto expressly agree that this Agreement be drafted, read and interpreted in the English language.
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20.1.
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This Agreement may be executed in counterparts, each of which shall be deemed one and the same Agreement.
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21.1.
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The Corporation shall reimburse the Executive in a total amount not to exceed Five Thousand Dollars US (US$5,000.00) for his reasonable legal fees and expenses incurred in connection with the negotiation of this Agreement.
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(i)
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the Corporation or any corporation controlled by the Corporation;
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(ii)
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any Person who becomes the beneficial owner of
fifty percent (50%)
or more of the outstanding Voting Shares as a result of one or any combination of: (a) a Voting Share Reduction: (b) an Exempt Acquisition; or (c) a Pro Rata Acquisition; provided, however, that if a Person shall become the Beneficial Owner of
fifty percent (50%)
or more of the outstanding Voting Shares by reason of one or any combination of a Voting Share Reduction, an Exempt Acquisition or a Pro Rata Acquisition, and thereafter becomes the Beneficial Owner of an additional one percent (1%) of any Voting Share then outstanding (otherwise than pursuant to an additional Voting Share Reduction, Exempt Acquisition or Pro Rata Acquisition), then, as of the date that such Persona becomes a Beneficial Owner of such additional Voting Shares, such Person shall become an
Acquiring Person
; or
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(iii)
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an underwriter or member of a banking or selling group acting in such capacity that becomes the Beneficial Owner of
fifty percent (50%)
or more of the Voting Shares in connection with a distribution of securities pursuant to an underwriting agreement with the Corporation.
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(a)
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Beneficial Owner or Beneficially Own
means a Person or any of such Person's affiliates or associates, as such terms are defined in Canada's
National Instrument 45-106 - Prospectus and
Registration
Exemptions,
who, by law or in equity, is deemed to own or to be the owner of any securities.
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(b)
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Exempt Acquisition
means an acquisition whereby a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person and, in the event that a waiver is granted by the Corporation's Board of Directors, such acquisition shall be deemed not to have occurred for the purposes hereof. Any such waiver may only be given on the condition that such Person, within ten (10) days after the foregoing determination by the Corporation's Board of Directors or such later date as the Corporation's Board of Directors may determine (the
Disposition Date
), has reduced its Beneficial Ownership of Voting Shares such that the Person is no longer an Acquiring Person and such waiver shall only be effective if the reduction has occurred within such ten (10) day or longer period.
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(c)
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Person
means any individual, firm, partnership, association, trust, trustee, executor, administrator, legal personal representative, government, governmental body or authority, corporation, or other incorporated or unincorporated organization, syndicate or other entity.
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(d)
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Pro Rata Acquisition
means an acquisition by a Person of Voting Shares pursuant to (i) any dividend reinvestment plan, stock purchase plan or other plan of the Corporation
made
available to all holders of Voting Shares (other than holders resident in any jurisdiction where participation in such plan is restricted or impractical as a result of applicable law); (ii) a stock dividend, a stock split or other event pursuant to which such Person becomes the Beneficial Owner of Voting
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(e)
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Voting Shares
means the shares of the capital of the Corporation to which generally attach voting rights which, as of the date
hereof
, are the common shares of the capital of the Corporation.
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(f)
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Voting Share Reduction
means an acquisition or redemption by the Corporation or any corporation controlled by the Corporation of Voting Shares which, by reducing the number of Voting Shares of the Corporation outstanding, increases the percentage of Voting Shares of the Corporation Beneficially Owned by any Person to fifty percent (50%) or more of the Voting Shares then outstanding.
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1405 boul du Parc Technologique
Quebec (Quebec) G1P 4P5
Canada
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100 Marketplace, Suite 203
25 Mountainview Blvd.
Basking Ridge, NJ 07920-3452
USA
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DIENSTVERTRAG
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SERVICE CONTRACT
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zwischen
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between
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Aeterna Zentaris GmbH, vertreten durch die Ge-sellschafterversammlung, Weismüllerstraße 45, 60314 Frankfurt am Main
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Aeterna Zentaris GmbH, represented by its share-holders’ meeting, Weismüllerstraße 45, 60314 Frankfurt am Main
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- nachstehend "
Gesellschaft
" genannt -
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- hereinafter referred to as the “
Com-pany
”-
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vertreten durch die Gesellschafterver-sammlung
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represented by the shareholders’
meeting
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Und
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and
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Herrn Dr. Richard Sach-se,[Adresse]
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Dr. Richard Sachse, [Ad-dress]
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- nachstehend "Dr. Sachse" -
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- hereinafter "Dr. Sachse" -
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DOCSMTL: 5406141/2
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Artikel 1 - Aufgabenbereich und Pflichten
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Article 1 - Position and Scope of
Duties
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1.1
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Herr Dr. Sachse mit beidseitiger Unterschrift unter diesen Vertrag mit Wirkung zum 1. Januar 2014 zum Senior Vice President und Chief Scientific Officer („CSO“) der Muttergesellschaft der Gesell-schaft, Aeterna Zentaris Inc, („AEZS Inc.“) sowie als Ge-schäftsführer der Gesellschaft be-stellt worden. Der Begriff „Grup-pe“ bedeutet im Rahmen dieses Dienstvertrages AEZS Inc. ge-meinsam mit sämtlichen Beteili-gungsgesellschaften, unter ande-rem auch der Gesellschaft. Mit die-sem Dienstvertrag wird ein Dienst-verhältnis zwischen den Parteien geschlossen. In seiner Funktion ist Dr. Sachse neben dem Vorsitzen-den der Geschäftsführung für die Leitung der Gesellschaft sowie - auf Verlangen der Gesellschafter - der Tochter- und Beteiligungsge-sellschaften verantwortlich. Er ver-tritt die Gesellschaft gemeinsam
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1.1
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Upon execution of this Service Contract and effective January 01, 2014 (the “Effective Date”), Dr. Sachse shall be appointed Senior Vice President and Chief Scientific Officer (“CSO”) of the Company´s parent company, Aeterna Zentaris Inc (“AEZS Inc.), as well as Managing Direc-tor of the Company. For the pur-poses of this Service Contract, the term “Group” refers to AEZS Inc. together with all of its sub-sidiaries, including, for greater certainty, the Company. By way of this contract, the parties enter into a service relationship. In his capacity as Managing Director, Dr. Sachse is, in addition to be-ing the chairman of the manag-ing board responsible for the management of the Company and - upon request of the share-holders - of certain other mem-bers of the Group. He represents
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mit einem anderen Geschäftsführer oder einem Prokuristen. In seiner Funktion als CSO berichtet Dr. Sachse an den Präsident und Chief Executive Officer der AEZS Inc oder eine andere Person, wie durch die Gesellschaft festgelegt.
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the company together with a fur-ther Managing Director or the “Prokurist” (authorized signato-ry). In his CSO function, Dr. Sachse shall report directly to the President and Chief Executive Officer of AEZS Inc or to such other person or officer as may be designated from time to time by the Company.
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1.2
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Die Gesellschafter behalten sich das Recht vor, jederzeit weitere Geschäftsführer zu bestellen und/oder Dr. Sachse andere und/-oder weitere Tätigkeiten zuzuwei-sen oder Zuweisungen aufzuhe-ben.
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1.2
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The shareholders may, at any time, appoint additional mana-gers ("Geschäftsführer") and/or assign different and/or additional responsibilities to Dr. Sachse or cancel responsibilities.
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1.3
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Dr. Sachse wird seine Pflichten mit der Sorgfalt eines ordentlichen Kaufmanns nach Maßgabe der Be-stimmungen dieses Vertrages, des Gesellschaftsvertrages, der Ge-schäftsordnung , der allgemeinen Richtlinien und besonderen An-weisungen der Gesellschafter und der Gesetze erfüllen und dabei den Belangen der Gruppe in wirt-
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1.3
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Dr. Sachse shall perform his du-ties as Managing Director by ob-serving the diligence of a prudent businessman in accordance with the provisions of this Service Contract, the Company's Articles of Association, the Standing Or-ders for the Management Board, the general and specific directi-ves or instructions given by the
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schaftlicher, finanzieller und orga-nisatorischer Hinsicht Sorge tra-gen.
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shareholders, and in accordance with the law. He will act in keep-ing with the economic, financial and organizational concerns of the Group.
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1.4
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Dr. Sachse nimmt die Rechte und Pflichten des Arbeitgebers im Sin-ne der arbeits- und sozialrechtli-chen Vorschriften wahr.
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1.4
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Dr. Sachse shall fulfil at all times the rights and obligations of an employer according to the appli-cable labour and social law.
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1.5
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Der Dienstsitz ist Frankfurt am Main Die Gesellschaft behält sich vor, Dr. Sachse auch andere seinen Kenntnissen und Fähig-keiten sowie seiner Vorbildung entsprechende und zumutbare Verantwortungen und Aufgaben zu übertragen und/oder ihn an einen anderen Arbeitsplatz oder Tätigkeitsort innerhalb der Ge-sellschaft oder der Gruppe zu versetzen. Dr. Sachse ist zu Dienstreisen und längerfristiger Tätigkeit bei Beteiligungsgesell-schaften in In- und Ausland be- reit.
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1.5
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The principal place of business shall be Frankfurt. The Company shall have the right to delegate additional responsibilities and duties to Dr. Sachse which corre-spond to his experience, skills and knowledge and to transfer his principle place of business within the Company or to other members of the Group. Dr. Sach-se understands and agrees that carrying out his duties and re-sponsibilities requires him to travel for business reasons and to work for a longer period of time at one of the Group´s locations abroad.
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1.6
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Dr. Sachse versichert, dass er weder einen Interessenkonflikt noch-
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1.6
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Dr. Sachse hereby attests and confirms that he has no conflicts
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Verpflichtungen irgendwelcher Art gegenüber dritten Personen oder Gesellschaften hat, ein-schließlich früheren Arbeitgebern, welche nicht im Einklang mit die-sem Dienstvertrag und der Durch-führung seiner Pflichten unter diesem Dienstvertrag stehen.
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of interests with or any obligation toward any person or entity, including former employers, that would be incompatible with this Service Contract and the perfor-mance of his duties as described in this Service Contract .
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Artikel 2 Aufgaben
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Article 2 Duties
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Die Pflichten von Herrn Dr. Sachse gegenüber der Gesellschaft sowie der AEZS Inc. und anderen Mit-gliedern der Gruppe beinhalten die folgenden:
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Dr. Sachse´s duties
vis-a-vis
the Com-pany, AEZS Inc. as well as all other members of the Group shall include the following:
Performing all duties incident to the
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Durchführung sämtlicher Pflichten, die mit der Funktion als Chief Scienti-fic Officer einhergehen und solche Aufgaben, wie sie von Zeit zu Zeit vom Chief Scientific Officer der Gruppe beschrieben werden kön-nen.
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office of Chief Scientific Officer of the Group and such other duties as may be prescribed from time to time by the Chief Executive Officer of the Group.
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Artikel 3 - Nebentätigkeiten
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Article 3 - Other Activities
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Dr. Sachse verpflichtet sich, seine gan-
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Dr. Sachse shall devote his full work-
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ze Arbeitszeit und Arbeitskraft der Ge-sellschaft zu widmen. Es ist ihm wäh- rend der Dauer dieses Vertrages nicht gestattet, eine bezahlte oder unbezahlte Tätigkeit auszuüben einschließlich ei- ner Teilzeitbeschäftigung, es sei denn, es liegt eine ausdrückliche vorherige schriftliche Zustimmung der Gesell-schafter vor. Die Erteilung oder Nich-terteilung einer solchen Zustimmung steht in dem freien Ermessen der Ge-sellschafter.
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ing time and ability to the Company's business. Any other activity for or without remuneration including any part time work, is subject to the ex- plicit prior written consent of the shareholders. The shareholder(s) may refuse to grant such consent without giving reasons therefor.
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Artikel 4 - Genehmigungsbedürftige Geschäfte
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Article 4 - Transactions Subject to Consent
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Für alle Geschäfte, die über die regulä- re Tätigkeit der Gesellschaft hinausge-hen, bedarf Dr. Sachse der vorherigen schriftlichen Zustimmung der Gesell-schafter. Näheres, insbesondere der Umfang der zustimmungspflichtigen Geschäfte, ergibt sich aus der Ge-schäftsordnung der Geschäftsführung.
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Dr. Sachse shall obtain the prior writ-ten approval of the shareholder(s) to effect any transactions outside the usual scope of business. Details, par-ticularly with respect to such transac-tions that require consent of the Quotaholders´ meeting, are evident from the management guidelines.
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Artikel 5 - Erfindungen
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Article 5 - Inventions
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5.1
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Alle Rechte an Erfindungen, un-
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5.1
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All rights pertaining to inven-
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abhängig von ihrer Patent- oder Gebrauchsmusterschutzfähigkeit, an technischen Verbesserungsvor-schlägen und an Computersoft-ware, die von Dr. Sachse während der Dauer dieses Vertrages ge-macht und entwickelt werden (ins-gesamt im Folgenden "Erfindun-gen" genannt) stehen ausschließ-lich der Gesellschaft zu, ohne dass eine zusätzliche Vergütung gezahlt wird. Dr. Sachse hat die Gesell-schaft oder eine von ihr benannte Person unverzüglich über Erfin-dungen in Kenntnis zu setzen und die Gesellschaft bei der Erlangung von Patentschutz oder sonstigen gewerblichen Schutzrechten auf Wunsch zu unterstützen.
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tions, whether patentable or not, and to proposals for technical improvements made and to com-puter software developed by Dr. Sachse (hereinafter jointly called "Inventions") during the term of this Service Contract shall be deemed acquired by the Compa-ny without paying extra compen-sation therefor. Dr. Sachse shall inform the Company or a person designated by the Company of any Inventions immediately in writing and shall assist the Com-pany in acquiring patent or other industrial property rights, if the Company so desires.
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5.2
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Der vorstehende Absatz 5.1 gilt für alle Erfindungen, gleichgültig
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5.2
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Subsection 5.1 above shall apply to any Inventions no matter whether
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(a) ob sie im Zusammenhang mit einem Geschäftszweig der Gruppe stehen oder nicht,
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(a) they are related to the busi-ness of the Group or not,
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(b) ob sie auf Erfahrungen der Gruppe beruhen oder nicht,
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(b) they are based on experi- ence and Know-how of any
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member of the Group or not, or
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(c) ob sie aus der Dr. Sachse bei der Gruppe obliegenden Tä-tigkeit entstanden sind oder nicht, oder
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(c) they are emanated from such duties of activities as are to be performed by Dr. Sachse within the Group, or
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(d) ob sie während der betriebs-üblichen Arbeitszeit oder au-ßerhalb der Arbeitszeit ge-macht worden sind.
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(d) they are materialized during or outside normal business hours of the Group.
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5.3
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Die Rechte der Gesellschaft an den ihr gemäß diesem Dienstvertrag zustehenden Erfindungen werden durch Änderungen dieses Dienst-vertrages und seiner Beendigung nicht berührt.
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5.3
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The Company's right to Inven-tions acquired hereunder shall in no way be affected by any amendments to or the termina- tion of this Service Contract.
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Artikel 6 - Vergütung
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Article 6 - Remuneration
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6.1
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Grundgehalt: Dr. Sachse erhält ein Bruttojahresgehalt von EUR 200.000, 00 (zweihundert-tausend Euros) zahlbar in zwölf gleichen monatlichen Beträgen am Ende eines Monats. Das Bruttojah-resgehalt wird jährlich mit Wir-kung zum Beginn eines Kalender-jahres überprüft.
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6.1
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Base Salary: Dr. Sachse shall be paid a gross annual base salary in the amount of EUR 200,000.00 (two hundred thousand Euros) payable at the end of each month in 12 equal monthly instalments. The annual base salary is eligible for revision annually and any such revision shall be effective at the beginning of each calendar
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year.
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6.2
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Bonuszahlung: Dr. Sachse hat zu-sätzlich Anspruch auf einen jährli-chen Bonus, sofern die betriebs-wirtschaftlichen Ergebnisse der Gesellschaft einen solchen recht-fertigen und das Nominating, Governance and Compensation Committee (“Governance Com-mittee”) und/oder der Aufsichts- rat der AEZS Inc. diesen geneh-migt hat. Bei der Bemessung des Bonus wird neben dem wirtschaft-lichen Erfolg der Gesellschaft auch das Erreichen individueller Ziele, die jährlich durch das Governance Committee und / oder den Aufsichtsrat der AEZS Inc. gemeinsam mit dem Chief Execut-ive Officer der Gruppe festzulegen sind, berücksichtigt. Der Zielbonus berechnet sich in der Größenord-nung von 50 % des Grundgehalts und ist vollständig im Ermessen des Governance Committees und des Aufsichtsrats der AEZS Inc.
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6.2
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Cash Bonus: Dr. Sachse shall additionally be entitled to earn an annual bonus, if the economic re-sults of the company justify payment of such bonus and sub-ject to the determination and ap-proval of the Nominating, Gov-ernance and Compensation Committee (the “Governance Committee”) and/or the Board of Directors of AEZS Inc. The tar- get amount for any such bonus shall be 50% of the base salary. Bonus attainment will be as-sessed according to the overall operational and corporate per-formance of the Group as well as the achievement of individual objectives as set by the Govern-ance Committee and/or the Board of Directors of AEZS Inc. in conjunction with the Group’s Chief Executive Officer on an annual basis. The cash bonus is subject to the full discretion of the Governance Committee and the Board of Directors of AEZS
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Inc.
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6.3
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Aktienoptionen: Abhängig von der Genehmigung durch den Auf-sichtsrat der AEZS Inc. und / oder des Governance Committees, er-hält Dr. Sachse für das Jahr 2014 150,000 Aktienoptionen, welche ihn berechtigen, Stammaktien der AEZS Inc. zu kaufen. Diese Akti-enoptionen unterliegen was ihre Verfallbarkeit, Ausübung, Preis und sämtliche sonstige anwendba-ren Regelungen angeht, dem Stock Option Plan der AEZS Inc. Ab-hängig von einer „blackout peri-od“, welche durch AEZS Inc. auf-erlegt wird und durch welche Insi-dern verboten würde, mit Wertpa-pieren der AEZS Inc. zu handeln, ist vorgesehen, dass diese 150,000 Aktienoptionen Herrn Dr. Sachse so bald wie möglich nach Ab-schluss dieses Dienstvertrages er-teilt werden, in jedem Fall jedoch innerhalb der ersten Quartals 2014. Nachfolgend dieser erstmaligen Gewährung von Aktienoptionen, ist Herr Dr. Sachse zukünftig be-
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6.3
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Stock Options: Subject to the approval of AEZS Inc.’s Board of Directors and/or its Govern-ance Committee, Dr. Sachse shall be eligible to receive in 2014 150,000 stock options to purchase common shares of the capital of AEZS Inc., subject to vesting, exercise, pricing and all other applicable terms of the Stock Option Plan of AEZS Inc. Subject to the foregoing and to the existence of any blackout pe-riod imposed by AEZS Inc. that would prevent the trading by in-siders in securities of AEZS Inc., it is intended that such 150,000 stock options would be granted to Dr. Sachse as soon as practi-cable following the execution of this Service Contract and, in any event, no later than the end of the first fiscal quarter of 2014.
Following the initial stock option grant as set forth in the preceding paragraph, Dr. Sachse shall be
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rechtigt, zusätzliche Aktienoptio-nen unter dem Stock Option Plan zu erhalten, jeweils im Ermessen des Aufsichtsrats der AEZS Inc. und / oder seiner Governance Committees, nachfolgend der Empfehlung des Chief Executive Officers der Gruppe.
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eligible to receive additional stock option grants in the future under the Stock Option Plan at the discretion of AEZS Inc.’s Board of Directors and/or its Governance Committee acting upon the recommendation of the Group’s Chief Executive Officer.
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6.4
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Durch Zahlung der oben genann-ten Vergütung sind alle Tätigkei-ten von Dr. Sachse nach diesem Dienstvertrag abgegolten. Insbe-sondere hat Dr. Sachse keinen An-spruch auf Bezahlung von Über-stunden oder Wochenendarbeit.
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6.4
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By payment of the above men-tioned remuneration, all activities which Dr. Sachse has to perform under this Service Contract shall be compensated. In particular, Dr. Sachse shall not be entitled to any additional compensation of overtime work or work during weekends.
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Artikel 7 - Nebenleistungen
|
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Article 7 - Other Benefits
|
||
7.1
|
Reisekosten und sonstige notwen-digen Auslagen, die von Dr. Sach-se im Interesse der Gesellschaft aufgewendet werden, werden Dr. Sachse im Rahmen des in Deutschland steuerrechtlich Zuläs-sigen erstattet.
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7.1
|
Travel expenses and other neces- sary expenses incurred by Dr. Sach- se in the furtherance of the Compa-ny's business shall be reimbursed according to the guidelines of the Company and within the framework of the principles applicable in Ger-many for tax purposes.
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7.2
|
Die Gesellschaft wird Dr. Sachse einen Dienstwagen entsprechend der bei der Gesellschaft geltenden Richtlinie für geschäftliche und private Zwecke zur Verfügung stellen. Alle Steuern, die durch das Recht von Dr. Sachse zur Privat-nutzung des Dienstwagens ent-stehen, werden von Dr. Sachse ge-tragen. Alle sonstigen Kosten des Dienstwagens (Betriebs- und Un-terhaltungskosten) trägt die Ge-sellschaft. Im Fall einer Freistel-lung ist der Wagen zurückzuge-ben, ohne dass Dr. Sachse ein Zu-rückbehaltungsrecht oder Nut-zungsausfallansprüche hätte.
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7.2
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The Company shall provide Dr. Sachse with a company car ac-cording to the Company’s guide-line for business and private use. The value of the private use per month as determined by the German tax regulations for the particular type of car shall con-stitute additional compensation to Dr. Sachse which will be sub-ject to wage withholding tax. The costs of maintenance and use of the company car shall be borne by the Company. In case of a re-lease from work the Company may take back the car at any time. In this case, Dr. Sachse shall have no right of retention and no damage compensation claim.
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7.3
|
Die Gesellschaft erstattet Dr. Sachse für die Dauer vom 01.01.2014 bis 30.06.2014 die Kosten seiner Unterkunft in Frank-furt.
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7.3
|
For the period from January 01, 2014 to June 30, 2014, the Com-pany shall assume and directly pay for the cost of an apartment for Dr. Sachse in Frankfurt.
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7.4
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Für die betriebliche Altersversor-gung gilt die Betriebsvereinba-rung über die rückgedeckte Ver-sicherungskasse in ihrer jeweili-gen Fassung entsprechend. Ab 01.07.2014 erhält Dr. Sachse durch die Gesellschaft eine frei-willige arbeitgeberfinanzierte Al-tersversorgung nach Maßgabe der dazu bestehenden Vereinbarun-gen. Mit der Unterzeichnung die-ses Dienstvertrages wandelt er ab dem Juli 2014 einen Betrag in Höhe von 2 % seines versor-gungsfähigen Bruttoentgelts bis zur Beitragsbemessungsgrenze in der gesetzlichen Rentenversiche-rung für den Erwerb von Versor-gungsanwartschaften um. Durch seine freiwillige Entscheidung kann der Betrag von 2 % auf 3 % erhöht werden. Die Gesellschaft wendet den umgewandelten Be-trag der Unterstützungskasse zu, welche die arbeitgeberfinanzierte Altersversorgung durchführt.
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7.4
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For the Company’s pension scheme, the employer works council agreement regarding the pension fund in its respective version is applicable for Dr. Sachse. Starting July 01, 2014, Dr. Sachse will receive a volun-tary employer-financed retire-ment provision as stated in this agreement. Upon execution of this Service Agreement and start-ing in July 2014, Dr. Sachse shall convert 2% of his gross salary up to the maximum of the respective threshold in the annuity assur-ance in order to receive a right to future pension benefits. By way of voluntary decision this sum can be increased from 2% to 3%. The Company allocates this con-verted salary to the pension fund, which conducts the employer-financed retirement provision.
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Artikel 8 - Arbeitsverhinderung
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Article 8 - Inability to Perform Du-
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ties
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8.1
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Dr. Sachse ist verpflichtet, der Ge-sellschaft jede Arbeitsverhinde-rung und ihre voraussichtliche Dauer unverzüglich anzuzeigen. Auf Verlangen sind die Gründe der Arbeitsverhinderung mitzutei-len.
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8.1
|
In case Dr. Sachse shall be unable to perform his duties under this Service Contract, he shall inform the Company of such absence and its prospective duration without delay. Upon request, he shall inform the Company of the specific reasons of such absence.
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8.2
|
Im Falle unverschuldeter Arbeits-unfähigkeit durch Krankheit oder Unfall erhält Dr. Sachse bei Vor-lage entsprechender ärztlicher Be-scheinigungen für die Dauer von bis zu sechs (6) Wochen sein mo-natliches Brutto-Grundgehalt ge-mäß Artikel 6.1 dieses Vertrages weiter. Stirbt Dr. Sachse während der Dauer dieses Dienstvertrages, so erhalten seine unterhaltsberech-tigten Hinterbliebenen für einen Zeitraum von drei Monaten sein monatliches Brutto-Grundgehalt gemäß Artikel 6.1 dieses Vertra-ges.
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8.2
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In the event of incapacity to per-form the duties under this Ser- vice Contract due to illness or accident and without Dr. Sach- se´s fault, he shall be entitled to a continuation of his monthly gross base salary according to Article 6.1 of this Service Contract for a duration of up to six (6) weeks, provided the relevant doctor’s certificates are furnished. If Dr. Sachse dies during the term of this Service Contract, his de-pendents can claim to be paid his monthly gross base salary ac-cording to Article 6.1 of this Service Contract for a duration
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of three months.
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Artikel 9 - Urlaub
|
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Article 9 - Vacation
|
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9.1
|
Dr. Sachse hat Anspruch auf einen Urlaub von 30 Arbeitstagen; Samstage werden dabei nicht mit-gerechnet.
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9.1 Dr. Sachse shall be entitled to an annual vacation of 30 working days excluding Satur-days.
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9.2
|
Der Zeitpunkt seines Urlaubes ist unter Berücksichtigung der be-trieblichen Notwendigkeiten und den persönlichen Wünschen von Dr. Sachse in Abstimmung mit den Gesellschaftern festzulegen, wobei die persönlichen Wünsche von Dr. Sachse sowie die Interes-sen der Gruppe zu berücksichtigen sind.
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9.2
|
The time of vacation shall be determined in agreement with the shareholder(s), thereby taking in-to consideration the personal wishes of Dr. Sachse and the in-terests of the Group.
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Artikel 10 - Verschwiegenheitspflicht
|
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Article 10 - Confidentiality
|
||
10.1
|
Dr. Sachse verpflichtet sich, alle ihm anvertrauten oder sonst be-kanntgewordenen geschäftliche, betrieblichen oder technischen In-formationen, die sich auf die Ge-sellschaft oder andere Mitglieder der Gruppe beziehen und vertrau-lichen Charakter haben, Dritten
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10.1
|
Dr. Sachse shall not disclose to any third party or use for person-al gain, any confidential tech- nical or other business infor-mation which has been entrusted to him, or which has otherwise become known to Dr. Sachse and which relates to the Company or
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nicht zu offenbaren und nicht für seine eigenen Zwecke zu verwen-den. Dies gilt insbesondere hin-sichtlich der Einzelheiten der Be-triebsorganisation, hinsichtlich der Beziehungen zu Kunden und Auf-traggebern und des technischen Know-How der Gruppe. Diese Verpflichtung gilt sowohl während der Dauer dieses Anstel-lungsverhältnisses als auch nach seiner Beendigung.
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to any other members of the Group. In particular, no infor-mation may be disclosed con-cerning the organization of the business, the relation with cus-tomers and suppliers and the Group’s know-how. This obliga-tion shall not expire upon termi-nation of the Service Contract but shall continue to remain in force thereafter.
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10.2
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Geschäftliche Unterlagen aller Art, einschließlich der auf dienstliche Angelegenheiten und Tätigkeiten sich beziehenden persönlichen Aufzeichnungen, sind sorgfältig aufzubewahren und dürfen nur zu geschäftlichen Zwecken verwen-det werden. Das Anfertigen von Abschriften oder Auszügen sowie das Kopieren von Zeichnungen, Kostenberechnungen, Statistiken und ähnlichem und andere Ge-schäftsunterlagen ist nur für dienstliche Zwecke zulässig.
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10.2
|
Business records of any kind, including private notes con-cerning the affairs and activities of the Group, shall be carefully kept and shall be used only for business purposes. No copies or extract or duplicates of drawings, calculations, statistics and the like nor of any other business records may be copied or ex-tracted for purposes other than for the Group’s business.
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10.3
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Bei Beendigung des Anstellungs-verhältnisses hat Dr. Sachse von
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10.3
|
Upon termination of this Service Contract, Dr. Sachse shall return
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sich aus alle in seinem Besitz be-findlichen Geschäftsunterlagen, Mitteilungen oder Akten in schrift-licher oder elektronischer Form, sowie Abschriften und Kopien da-von herauszugeben. Darüber hin-aus wird Herr Dr. Sachse sämtli- che Arbeitsgeräte, welche ihm von der Gesellschaft zur Verfügung gestellt wurden, und in deren Ei-gentum stehen zurückgeben. Dies beinhaltet Computer, Computer-zubehör, Mobiltelefon und ähnli-ches Dr. Sachse steht kein Zu-rückbehaltungsrecht an Firmenei-gentum zu.
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all business documents, commu-nications or records in written or electronic form as well as all copies thereof. In addition, Dr. Sachse shall return all business equipment provided to him and owned by the Company, includ-ing but not limited to his com-puter, computer adjunct equip-ment, cellular telephone and the like. Dr. Sachse shall have no right of retention of any Compa-ny property.
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Artikel 11 Wettbewerbsverbot
|
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Article 11 Non-compete
|
||
11.1
|
Dr. Sachse soll in keiner Weise in Wettbewerb mit der Gesellschaft oder der Gruppe treten. Er soll in keiner Funktion an einer Gesell-schaft teilhaben, welche direkt o-der indirekt im Wettbewerb zur Gesellschaft oder der Gruppe steht. Dies beinhaltet Gesellschaf-
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11.1
|
Dr. Sachse shall not compete with the Company or the Group, di-rectly or indirectly. He shall not participate in any capacity what-soever in a business that would directly or indirectly compete with the Company or with any member of the Group, including
|
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ten, die mit der Entwicklung und Vermarktung von speziellen The-rapien in der Endokrinologie und Onkologie befasst sind, welche auch die Gesellschaft oder die Gruppe aktive entwickeln. Dies beinhaltet eine potentielle Tätig-keit als leitender Angestellter, Aufsichtsrat, Makler, Treuhänder, Vermögensverwalter, Gesellschaf-ter, Unternehmer, Franchisegeber, Franchisenehmer, Händler oder Berater, insofern eine solche Teil-habe nicht vollständig offengelegt und von der Gesellschaft und der Gruppe im Vorhinein schriftlich genehmigt wurde. Dr. Sachse wird darüber hinaus keine Anteile jed-weder Art an einer solchen Gesell-schaft haben, weder als Eigentü-mer, Aktionär, Partner, Partner mit beschränkter Haftung, Darlehens-geber oder stiller Teilhaber. Diese Wettbewerbsklausel ist wie folgt beschränkt:
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one involved in the development and commercialization of the specific endocrine therapies and oncology treatments, which the Company or any member of the Group is actively developing, in-cluding, without limitation, as an executive, director, officer, em-ployer, principal, agent, fiduci-ary, administrator of another’s property, associate, independent contractor, franchisor, franchi-see, distributor or consultant un-less such participation is fully disclosed to and approved in writing in advance by the Com-pany or the Group. In addition, Dr. Sachse shall not have any in-terest whatsoever in such an en-terprise, including, without limi-tation, as owner, shareholder, partner, limited partner, lender or silent partner. This non-competition covenant is limited as follows:
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(a)
|
Zeitlich auf die Dauer dieses Dienstvertrages sowie ein Jahr
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(a) As to the time period, to the duration of this Agreement and for a pe-
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(b)
|
nach Beendigung dieses Dienst-vertrages.
Geographisch auf das Gebiet, in
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riod of one (1) year fol-lowing the date of termi-nation of this Agreement:
|
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welchem ein spezielles Produkt während der letzten zwei Jahre vor Beendigung dieses Dienstver-trages aktiv durch die Gesell- schaft oder die Gruppe vertrieben wurde. Die Gesellschaft und die Gruppe haben dann im Rahmen dieses Absatzes ein Produkt aktiv während der letzten zwei Jahre vor Beendigung dieses Dienstver-tages vertrieben, wenn:
(i) Vertriebsrechte für die-ses Produkt an einen Vertragshändler der Gesellschaft oder der Gruppe aufgrund eines (exklusiven oder nicht-exklusiven) Vertriebs-vertrages vergeben
wurden
(ii) Die Gesellschaft oder die Gruppe eine Phase II Studie für dieses Produkt im j
eweiligen Gebiet beendet hat o-
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(b)
|
As to the geographical area, the territory in which a specific product had been actively ex-ploited by the Corpora-tion or any member of the Group during the two (2) years preceding the employment termination date. For purposes of this clause, the Corpora-tion and the Group are deemed to have actively exploited such territory for such product if, dur-ing the two (2) years im-mediately preceding the employment termination date:
(i)
Distribution rights for this product were granted to a distributor of the Corporation or
|
(c)
|
der sich nach kommer-ziellen Partnern umge-sehen hat oder Patente für dieses Produkt und seinen Gebrauch an-gemeldet oder gesi- chert hat
(a)
Inhaltlich auf die Tätigkeiten und Pflichten, welche identisch oder im wesentlichen gleich sind wie jene, die von Dr. Sachse während der 24 Monate vor Beendigung dieses Dienstvertrages ausgeführt wurden.
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(c)
|
any member of the Group pursuant to a distribution agreement (exclu-sive or non-exclusive); or if
(ii)
The Corporation or any member of the Group has completed Phase II clinical deve-lopment work for this product in this territory, or searched for commercial part-ners or applied to protect its intellec-tual property rights in relation to the product and its use.
As to the nature of the activities, to duties or ac-tivities which are identi-cal or substantially simi-lar to those performed or
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carried on by Dr. Sachse during the twenty-four (24) months preceding the termination of this Agreement.
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11.2
|
Der vorstehenden Bedingungen sollen jedoch Dr. Sachse nicht da-ran hindern, Aktien oder andere Wertpapiere einer Gesellschaft zu kaufen oder zu besitzen, mit Aus-nahme der AEZS Inc., deren Wertpapiere öffentlich an einer anerkannten Börse gehandelt wer-den, insofern diese Wertpapiere, welche im Besitz von Dr. Sachse sind, nicht mehr als fünf Prozent (5%) der Stammaktien dieser Ge-sellschaft ausmachen und sie ihn nicht dazu ermächtigen, darüber Kontrolle auszuüben.
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11.2
|
The foregoing stipulation shall nevertheless not prevent Dr. Sachse from buying or holding shares or other securities of a corporation or entity, other than AEZS Inc., whose securities are publicly traded on a recognized stock exchange where the securi-ties so held by Dr. Sachse do not represent more than five percent (5%) of the voting shares of such other corporation or entity and do not allow for its control.
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11.3
|
Sollte Dr. Sachse nach Beendigung dieses Dienstvertrages aufgrund des nachvertraglichen Wettbe-werbsverbots keine Neubeschäfti-
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11.3
|
Should Dr. Sachse, due to the post-termination non-compete clause not find a new employ-ment, the Company will continue
|
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gung finden, erhält er sein Grund-gehalt nach Artikel 6.1 weiter ge-zahlt. Mit Aufnahme einer neuen Beschäftigung, spätestens nach Ablauf der Wettbewerbsverbots-dauer von einem Jahr nach Been-digung dieses Dienstvertrages, ent-fällt diese Zahlung.
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to pay him his base salary in ac-cordance with Article 6.1 above. Once he starts a new employ-ment, in any case once the non-compete period ends one year af-ter termination of this service agreement, these payments will cease.
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Artikel 12 - Vertragsdauer und Kün-
|
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Article 12 - Term of Employment
|
||
digung
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and Notice
|
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12.1
|
Dieser Dienstvertrag ist auf unbe-stimmte Dauer geschlossen. Das Anstellungsverhältnis endet jedoch spätestens mit Ablauf des Monats, in dem Dr. Sachse das gesetzliche Rentenalter in Deutschland er-reicht, ohne dass es einer Kündi-gung bedarf.
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12.1
|
This Service Contract shall not have any fixed or minimum term. It shall, however, end without the need to give notice not later than the expiry of the month during which Dr. Sachse attains the minimum age of legal retirement in Germany.
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12.2
|
Die Gesellschaft ist berechtigt, den
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Dienstvertrag mit einer Frist von 6 Mo-naten zum Monatsende grundlos zu kün-digen. Im Falle einer Kündigung unter diesem Absatz 12.2 hat Dr. Sachse ledig-lich Anspruch auf die Grundvergütung für die Zeit der Kündigungsfrist.Darüber hinausgehende Ansprüche auf eine Bo-
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12.2
|
The Company shall be entitled to terminate this Service Contract without cause by giving Dr. Sach-se 6 months’ prior notice effective to the end of any calendar month. In case of termination without cause under this Section 12.2, Dr. Sachse is only eligible to his base
|
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nuszahlung oder sonstige Zahlungen bestehen nicht.
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salary for the duration of the ter-mination period. No exceeding claims to a cash bonus or others exist.
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12.3
|
Im Falle der Kündigung des Dienstverhältnisses nach Art. 12.2 ist die Gesellschaft berechtigt, Dr. Sachse für die Restlaufzeit des Vertrages von seinen Dienstpflich-ten unter Fortzahlung seines Geh-altes zu entbinden. In diesem Falle kann die Gesellschaft Dr. Sachse das Recht einräumen, sich auch bereits während der Kündigungs-frist eine neue Beschäftigung zu suchen. Sollte er eine neue Be-schäftigung aufnehmen, entfällt ab diesem Zeitpunkt die Pflicht der Gesellschaft zur Zahlung des Ge-halts.
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12.3
|
In case this Service Contract has been terminated according to Section 12.2, the Company is en-titled to relieve Dr. Sachse from work at any time. In this case, the Company shall continue to pay the salary to Dr. Sachse for a period of 6 months after the no-tice has become effective. In case the Company admits Dr. Sachse to start a new employment within the cancellation period the Com-pany shall be relieved from its obligation to pay said salary from the date of the new em-ployment.
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12.4
|
Im Falle einer fristlosen Kündigung aus besonderem Grund durch die Gesellschaft erhält Dr. Sachse keine Zahlungen über den Kündigungs-zeitpunkt hinaus.
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12.4
|
In case of termination of this Service Contract by the Compa-ny with cause, Dr. Sachse will not receive any payments after the date on which Dr. Sachse is first advised by the Company of such termination with cause.
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12.5
|
Die Kündigung bedarf der Schrift-form, wobei Telefax und sonstige telekommunikative Übermitt- lungswege i.S. von § 127 Abs.2 BGB ausreichen.
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12.5
|
Notice of termination must be given in writing; fax or any other telecommunication device within the meaning of Sec. 127 para. 2 German Civil Code will suffice.
|
Artikel 13- Weitere Bestimmungen
|
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Article 13- Final Provisions
|
||
13.1
|
Änderungen oder Ergänzungen, dieses Vertrages bedürfen der Schriftform und müssen sowohl von der Gesellschaft als auch von Dr. Sachse unterzeichnet sein..
|
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13.1
|
Any amendments of or additions to this Service Contract shall be made in writing signed by each of the Company and Dr. Sachse in order to be effective.
|
13.2
|
Dieser Dienstvertrag und seine Auslegung unterliegen deutschem Recht und deutschem Gerichts- stand am Sitz der Gesellschaft. Bei Auslegungszweifeln entscheidet die deutsche Fassung dieses zwei-sprachigen Vertragstextes.
|
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13.2
|
This Service Contract and its interpretation are governed by German law. The place of juris-diction shall be the corporate seat of the Company. In cases of doubt, the German version of this bilingual Contract shall prevail.
|
13.3
|
Dieser Dienstvertrag enthält die gesamte Vereinbarung zwischen den Parteien. Bereits getroffene Vereinbarungen zwischen den Par-teien über ein Arbeits- oder Dienstverhältnis werden hiermit
|
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13.3
|
This Service Contract represents the entire agreement and under-standing of the parties. This Ser-vice Contract supersedes and re-places all other previously issued contracts regarding the employ-
|
|
aufgehoben. Über diesen Dienst-vertrag hinausgehende schriftliche oder mündliche Absprachen sind nicht getroffen worden.
|
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|
ment between the parties. No written or verbal agreements out-side this Service Contract have been made.
|
13.4
|
Dieser Dienstvertrag ist seitens Dr Sachse nur mit vorheriger schrift-licher Zustimmung der Gesell- schaft teilweise oder vollständig übertragbar.
|
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13.4
|
Dr. Sachse may only assign this Service Contract in whole or in part with the Company´s prior written consent.
|
13.5
|
Dr. Sachse erkennt hiermit an, dass die AEZS Inc. sowie jedes andere Mitglied der Gruppe durch diesen Dienstvertrag begünstigt sein sol- len und Ansprüche aus diesem Dienstvertrag direkt gegen Dr. Sachse durchsetzen können.
|
|
13.5
|
Dr. Sachse hereby agrees and acknowledges that AEZS Inc. and each other member of the Group shall be beneficiaries of this Ser-vice Contract and that they shall be entitled to enforce claims here-under directly against Dr. Sachse.
|
1405 boul du Parc Technologique
Quebec (Quebec) G1P 4P5
Canada
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100 Marketplace, Suite 203
25 Mountainview Blvd.
Basking Ridge, NJ 07920-3452
USA
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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;
|
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
|
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/ David A. Dodd
|
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David A. Dodd
|
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President and Chief Executive Officer
|
|
(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)
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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
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(d)
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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.
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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):
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/s/ Dennis Turpin
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Dennis Turpin
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Senior Vice President and Chief Financial Officer
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(principal financial officer)
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/s/ David A. Dodd
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David A. Dodd
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President and Chief Executive Officer
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/s/ Dennis Turpin
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Dennis Turpin
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Senior Vice President and Chief Financial Officer
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