¨
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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, 2014
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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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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
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B.
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Advisers
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C.
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Auditors
|
Item 2.
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Offer Statistics and Expected Timetable
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A.
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Offer statistics
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B.
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Method and expected timetable
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Item 3.
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Key Information
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A.
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Selected financial data
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|
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Years ended December 31,
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|||||||
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2014
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2013
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|
2012
|
|||
|
|
$
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|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|
|||
Sales
|
|
—
|
|
|
96
|
|
|
834
|
|
License fees
|
|
11
|
|
|
6,079
|
|
|
1,219
|
|
|
|
11
|
|
|
6,175
|
|
|
2,053
|
|
Operating expenses
|
|
|
|
|
|
|
|||
Cost of sales
|
|
—
|
|
|
51
|
|
|
591
|
|
Research and development costs, net of refundable tax credits and grants
|
|
23,716
|
|
|
21,284
|
|
|
20,592
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Selling, general and administrative expenses
|
|
13,690
|
|
|
12,316
|
|
|
10,606
|
|
|
|
37,406
|
|
|
33,651
|
|
|
31,789
|
|
Loss from operations
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|
(37,395
|
)
|
|
(27,476
|
)
|
|
(29,736
|
)
|
Finance income
|
|
20,319
|
|
|
1,748
|
|
|
6,974
|
|
Finance costs
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
Net finance income (costs)
|
|
20,319
|
|
|
236
|
|
|
6,592
|
|
Loss before income taxes
|
|
(17,076
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
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Income tax expense
|
|
(111
|
)
|
|
—
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|
|
—
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Net loss from continuing operations
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|
(17,187
|
)
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|
(27,240
|
)
|
|
(23,144
|
)
|
Net income from discontinued operations
|
|
623
|
|
|
34,055
|
|
|
2,732
|
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Net (loss) income
|
|
(16,564
|
)
|
|
6,815
|
|
|
(20,412
|
)
|
Other comprehensive (loss) income:
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|
|
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|
|
|
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Items that may be reclassified subsequently to profit or loss:
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Foreign currency translation adjustments
|
|
(1,158
|
)
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1,073
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|
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(504
|
)
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Items that will not be reclassified to profit or loss:
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|
|
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Actuarial (loss) gain on defined benefit plans
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(1,833
|
)
|
|
2,346
|
|
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(3,705
|
)
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Comprehensive (loss) income
|
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(19,555
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)
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|
10,234
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|
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(24,621
|
)
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Net loss per share (basic and diluted) from continuing operations
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(0.29
|
)
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(0.92
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)
|
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(1.17
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)
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Net income (basic and diluted) from discontinued operations
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0.01
|
|
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1.16
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|
|
0.14
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Net (loss) income (basic and diluted) per share
|
|
(0.28
|
)
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0.24
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|
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(1.03
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)
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Weighted average number of shares outstanding:
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|
|
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|||
Basic
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59,024,730
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29,476,455
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19,775,073
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Diluted
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59,024,730
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29,476,455
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19,806,687
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As at December 31,
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|||||||
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2014
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2013
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2012
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$
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$
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$
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|||
Cash and cash equivalents
|
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34,931
|
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43,202
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39,521
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Restricted cash equivalents
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|
760
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|
|
865
|
|
|
826
|
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Total assets
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47,435
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59,196
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67,655
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Warrant liability
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8,225
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18,010
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6,176
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Share capital
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|
150,544
|
|
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134,101
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|
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122,791
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Shareholders' equity (deficiency)
|
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14,484
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|
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17,064
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(6,695
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)
|
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
|
•
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meet the requirements of these authorities;
|
•
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meet the requirements for informed consent; and
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•
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meet the requirements for good clinical practices.
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•
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our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel and representatives;
|
•
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the inability of our sales personnel to obtain access to or to persuade adequate numbers of physicians to prescribe our products or the products that we in-license or co-promote;
|
•
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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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•
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unforeseen costs and expenses associated with creating an independent sales and marketing organization.
|
•
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the difficulty or inability to secure financing to acquire or in-license products;
|
•
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the incurrence of substantial debt or dilutive issuances of securities to pay for the acquisition or in-licensing of new products;
|
•
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the disruption of our business and diversion of our management's time and attention;
|
•
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higher than expected development, acquisition or in-license and integration costs;
|
•
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exposure to unknown liabilities; and
|
•
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the difficulty in locating products that are in our targeted therapeutic areas and that are compatible with other products in our portfolio.
|
•
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the duration of, changes to 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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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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•
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further arrangements, if any, with collaborators.
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•
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demonstration of clinical efficacy and safety;
|
•
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the prevalence and severity of any adverse side effects;
|
•
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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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•
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the effectiveness of marketing and distribution methods for the products.
|
•
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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 licensees;
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•
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the nature and timing of licensing fee revenues;
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•
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the nature and timing of tax credits and grants for our research and development activities;
|
•
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the outcome of litigation, including the litigation pending against us that is described elsewhere in this Annual Report on Form 20-F;
|
•
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changes in foreign currency fluctuations;
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•
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the timing of achievement and the receipt of milestone payments from current or future collaborators;
|
•
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failure to enter into new or the expiration or termination of current agreements with collaborators; and
|
•
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our ability to secure alternative leasing or subleasing arrangements for our underutilized offices in Frankfurt, Germany, and to achieve related cost savings with respect to our current lease obligations.
|
•
|
not all of the third parties 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 contracts that do contain such contractual prohibitions or restrictions, prohibitions or restrictions do not always apply to the affiliates of the third parties and they may elect to pursue the development of any additional product candidates and pursue technologies or products either on their own or in collaboration with other parties, including our competitors, whose technologies or products may be competitive with ours;
|
•
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the third parties may under-fund or fail to commit sufficient resources to marketing, distribution or other development of our products;
|
•
|
the third parties may cease to conduct business for financial or other reasons;
|
•
|
we may not be able to renew such agreements;
|
•
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the third parties may not properly maintain or defend certain intellectual property rights that may be important to the commercialization of our products;
|
•
|
the third parties 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 the third parties 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 the third parties 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.
|
•
|
90,557,142 Common Shares issued and outstanding;
|
•
|
no issued and outstanding preferred shares;
|
•
|
116,887,987 Common Shares issuable upon exercise of outstanding warrants; and
|
•
|
3,885,200 stock options outstanding.
|
•
|
responding to proxy contests and other actions by activist shareholders may be costly and time-consuming, and may disrupt our operations and divert the attention of management and our employees;
|
•
|
perceived uncertainties as to the potential outcome of any proxy contest may result in our inability to consummate potential acquisitions, collaborations or in-licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and
|
•
|
if individuals that have a specific agenda different from that of our management or other members of our board of directors are elected to our board as a result of any proxy contest, such an election may adversely affect our ability to effectively and timely implement our strategic plan and to create value for our shareholders.
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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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|
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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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|
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|
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100%
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Zentaris IVF GmbH
(Germany)
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B.
|
Business overview
|
•
|
In 2007, a Phase 2 open-label, non-comparative, multicenter two-indication trial stratified with two stages Simon Design was prepared. The study was planned to involve up to 82 patients, with up to 41 patients each with a diagnosis of platinum-resistant ovarian cancer (stratum A) or disseminated endometrial cancer (stratum B). Under coordination by Prof. Günter Emons, M.D., Chairman of the Department of Obstetrics & Gynaecology at the University of Göttingen, Germany, this open-label, multicenter and multinational Phase 2 study "AGO-GYN 5" was conducted by the German AGO Study Group (Arbeitsgemeinschaft Gynäkologische Onkologie / Gynaecological Oncology Working Group), in cooperation with clinical
|
•
|
On November 2, 2009, we announced positive preliminary efficacy data for the Phase 2 study in patients with LHRH-receptor positive platinum-resistant and taxane-pretreated ovarian cancer. All 43 patients who had entered the study had completed their treatment, and a preliminary evaluation had shown that the study had met its predefined primary efficacy endpoint of five or more responders in 41 evaluable patients. Responders, as well as patients with stable disease after completion of treatment with zoptarelin doxorubicin, were to be followed to assess the duration of response and, ultimately, OS.
|
•
|
On November 24, 2009, we announced positive results for the Phase 2 study in patients with endometrial cancer. Preliminary evaluation showed that the study met its predefined primary efficacy endpoint of five or more responders in endometrial cancer patients. Responders, as well as patients with stable disease after completion of treatment with zoptarelin doxorubicin, were to be followed to assess the duration of progression free survival ("PFS") and, ultimately, OS.
|
•
|
On June 7, 2010, Prof. Günter Emons, Chairman, Department of Obstetrics & Gynaecology Georg-August University Göttingen, Germany, presented positive efficacy and safety data for zoptarelin doxorubicin in ovarian cancer at the American Society of Clinical Oncology's ("ASCO") Annual Meeting. The poster (abstract #5035), was entitled
"Phase 2 study of AEZS-108, a targeted cytotoxic LHRH analog, in patients with LHRH receptor-positive platinum resistant ovarian cancer".
Two patients with platinum-resistant ovarian cancer entered the study. Efficacy included PR in five patients (11.9%) and stable disease for more than twelve weeks in eleven patients (26.2%). Based on those data, a clinical benefit rate ("CBR") of 38% was estimated. Median TTP and OS were evaluated at 3.5 months (104 days) and 15.6 months (475 days), respectively. OS compared favourably with data from Doxil
®
and topotecan (8-9 months). In all, tolerability of zoptarelin doxorubicin was good and commonly allowed retreatment as scheduled. Only one patient (2.4%) had a dose reduction, and overall, 25 of 170 (14.7%) courses were given with a delay, including cases in which delay was not related to toxicity. Severe (Grade 3 or 4) toxicity was mainly restricted to rapidly reversible hematologic toxicity (leukopenia / neutropenia) associated with fever in three cases. Good tolerability of zoptarelin doxorubicin was also reflected with only a few patients with non-hematological toxicities of Grade 3 (none with Grade 4), including single cases each of nausea, constipation, poor general condition, and an enzyme elevation. No cardiac toxicity was reported. Final evaluation of the ovarian cancer study revealed six patients with PR based on tumor lesions, plus two responders with tumor marker response including one case with normalization, for an overall response rate of 19% (one unconfirmed CR and seven partial responses). Median TTP and OS were evaluated at three and twelve months, respectively.
|
•
|
On September 14, 2011, positive final Phase 2 efficacy and safety data for zoptarelin doxorubicin in advanced endometrial cancer were presented at the European Society of Gynecological Oncology in Milan, Italy. The data showed that zoptarelin doxorubicin, administered as a single agent at a dosage of 267 mg/m
2
every three weeks was active, well tolerated and that OS was similar to that reported for modern triple combination chemotherapy, but was achieved with lower toxicity. The primary endpoint was the response rate as defined by the RECIST. Secondary endpoints included safety, TTP and OS. In all, of 43 patients treated with zoptarelin doxorubicin, 39 were evaluable for efficacy. Efficacy confirmed by independent response review included two CR, ten PR, and 17 patients with stable disease ("SD"). Based on those data, the estimated overall response rate ("ORR") (ORR = CR+PR) was 30.8% and the CBR (CBR = CR+PR+SD) was 74.4%. Responses in patients previously treated with chemotherapy included one CR, one PR and two SDs in eight of the patients with prior use of platinum/taxane regimens. Median TTP and OS were seven months and 13.7 months, respectively. A final evaluation, not excluding non-evaluable cases, revealed the following results: two CR, eleven PR (including three patients with PR not confirmed at subsequent time point), and 17 patients with SD, for an ORR of 30.2% and CBR of 70%; median TTP and OS at seven and 15 months, respectively. Overall, tolerability of zoptarelin doxorubicin was good and commonly allowed retreatment as scheduled. Severe (Grade 3 or 4) toxicity was mainly restricted to rapidly reversible leukopenia and neutropenia, associated with fever in only one patient who had been treated only three weeks after a surgery. Good tolerability of zoptarelin doxorubicin was also reflected by a low rate of severe non-hematological and possibly drug-related adverse events which included single cases each of nausea, diarrhea, fatigue, general health deterioration, creatinine elevation, and blood potassium decrease. No cardiac toxicity was reported.
|
Product / mode of action*
|
Company*
|
Development Status*/Sponsor
|
Carboplatin / DNA replication inhibitor
|
Teva Pharmaceutical
|
Phase 3 / GOG
|
Paclitaxel / Anti microtubule agent
|
HQ SPCLT Pharma / Abraxis BioScience
|
Phase 3 / GOG
|
Bevacizumab / VEGF inhibitor
|
Genentech
|
Phase 2 / NCI
|
Brivanib / VEGFR-2 and FGFR inhibitor
|
Bristol-Myers Squibb
|
Phase 2 / GOG
|
Buparlisib (BKM120)/PI3K inhibitor
|
Novartis
|
Phase 2 / Argacy-Gineco group
|
Cediranib / VEGFR inhibitor
|
Astra Zeneca
|
Phase 2 / NCI
|
Dovitinib (TKI258)/FGFR inhibitor
|
Novartis
|
Phase 2 / Novartis
|
Everolimus / mTOR inhibitor
|
Novartis
|
Phase 2 / NCI or MD Anderson
|
Ixabepilone / microtubule inhibitor
|
Bristol-Myers Squibb
|
Phase 2 / NCI
|
Lenvatinib (E7080)/Multi-kinase inhibitor
|
Eisai
|
Phase 2 / Eisai
|
Letrozole / non-steroidal aromatase inhibitor
|
Novartis
|
Phase 2 / MD Anderson
|
Metformin / anti-hyperglycemic agent
|
Bristol-Myers Squibb
|
Phase 2 / GOG
|
Nintedanib / multiple RTKs inhibitor and non-RTKs
|
Boehringer Ingelheim
|
Phase 2 / GOG
|
Sunitinib malate/Tyrosine kinase inhibitor
|
Pfizer
|
Phase 2 / NCI
|
Temsirolimus / mTOR inhibitor
|
PF Prism CV
|
Phase 2 / NCI or MD Anderson
|
Trastuzumab / HER3/neu receptor antagonist
|
Genentech
|
Phase 2 / Yale
|
*
|
Source: www.clinicaltrials.gov and competitor company's website.
|
•
|
On December 14, 2010, we announced the initiation of the Phase 1/2 trial.
|
•
|
On September 26, 2011, we announced positive interim data for the Phase 1 portion of the Phase 1/2 trial with zoptarelin doxorubicin in castration-and taxane-resistant prostate cancer at the European Society for Medical Oncology ("ESMO") meeting, Stockholm, Sweden. This is a single arm study with a Phase 1 lead-in to a Phase 2 clinical trial. The primary endpoint of the Phase 1 portion is safety. Twelve patients entered the study: three patients each received zoptarelin doxorubicin at the lower dose levels of 160 and 210 mg/m
2
, and six patients at 267 mg/m
2
. Data on ten patients were presented as two patients were too early for evaluation. Zoptarelin doxorubicin was generally well tolerated and there were no dose limiting toxicities at such time. The only Grade 3 and 4 toxicities were hematologic in nature. At the time, there were three Grade 4 toxicities (two at 210 mg/m
2
and one at 267 mg/m
2
), all of which were asymptomatic. There were six Grade 3 toxicities including two cases of Grade 3 anemia after repeated courses (cycles five and six) and one case of febrile neutropenia that occurred during cycle one. Signs of therapeutic activity included five patients with Prostate Specific Antigen ("PSA") regression. One of these patients treated at the lowest dose level, received eight treatment cycles because the patient demonstrated continued clinical benefit. Three out of four evaluable patients with radiologic evaluable disease achieved stable disease per RECIST. The Phase 2 extension is planned after completion of the toxicity assessment in the final dose level of the Phase 1 portion of the study. In correlative studies, drug uptake was demonstrated for the first time in captured circulating tumor cells of patients, thus validating the principle of targeted tumor therapy with zoptarelin doxorubicin in a clinical setting.
|
•
|
On February 3, 2012, we reported updated results for the Phase 1 portion of the study. The results were based on 13 patients who had been previously treated with androgen-deprivation therapy (LHRH agonist) and at least one taxane-based chemotheraphy regimen, who were treated on three dose levels of zoptarelin doxorubicin: three at 160 mg/m
2
, three at 210 mg/m
2
, and seven at 267 mg/m
2
. Overall, zoptarelin doxorubicin was well tolerated among this group of heavily pretreated older patients. There were two dose-limiting toxicities, each of which having been a case of asymptomatic Grade 4 neutropenia at the 267 mg/m
2
dose level and both patients fully recovered. The Grade 3 and 4 toxicities were primarily hematologic. There was minimal non-hematologic toxicity, most frequently fatigue and alopecia. Despite the low doses of zoptarelin doxorubicin in the first cohorts, there was some evidence of antitumor activity. One patient received eight cycles (at 210 mg/m
2
) due to continued benefit. Among the five evaluable patients with measurable disease, four achieved stable disease. At the time of submission of the abstract, a decrease in PSA was noted in six patients. Six of 13 (46%) treated patients received at least five cycles of therapy with no evidence of disease progression at twelve weeks. Correlative studies on circulating tumor cells ("CTC") demonstrated the uptake of zoptarelin doxorubicin into the targeted tumor.
|
•
|
On November 12, 2012, we announced the initiation of the Phase 2 portion of the ongoing Phase 1/2 study of zoptarelin doxorubicin in prostate cancer. The primary endpoint of the Phase 2 portion is to evaluate the clinical benefit of zoptarelin doxorubicin for these patients. Secondary endpoints include toxicity, time to RECIST and PSA progression, RECIST response rate for patients with measurable disease, PSA response rate, pain palliation and overall survival.
|
•
|
On June 3, 2013, we announced that final data for the Phase 1 portion of the ongoing Phase 1/2 trial with zoptarelin doxorubicin in prostate cancer demonstrated the compound's promising anti-tumor activity. Results were presented by Dr. Pinski during a poster session at the ASCO Annual Meeting in Chicago. Eighteen men with a median of two prior chemotherapy regimens (range 1/5) and a median PSA of 106.4 ng/mL (range 8.4-1624.0) were enrolled. The dose of zoptarelin doxorubicin was escalated from 160 mg/m
2
to 210 mg/m
2
then to 267 mg/m
2
. There were two Dose-Limiting Toxicities ("DLT") in the seven patients receiving zoptarelin doxorubicin at a dose of 267 mg/m
2
(grade 4 neutropenia), establishing 210 mg/m
2
as the Maximum Tolerated Dose ("MTD"). Significant non-hematologic toxicities included one case of grade 3 nausea. No cardiotoxicity was seen on serial evaluation and six patients completed six cycles. Internalization of zoptarelin doxorubicin was consistently visualized in CTCs 1 to 3 hours after dosing. Maximal PSA response was stable or decreased in 8 of 18 men. Among the 15 evaluable patients with measurable disease, ten achieved stable disease and a drop in PSA was noted in three patients. The MTD of zoptarelin doxorubicin in this indication is 210 mg/m
2
, which is below the MTD reported in women with refractory endometrial and ovarian cancer.
|
•
|
On December 29, 2014 we announced that an article on final data for the Phase 1 portion of the ongoing Phase 1/2 trial in prostate cancer with zoptarelin doxorubicin was published in the December issue of
Clinical Cancer Research
. The article outlines data previously disclosed in June 2013 at the American Society of Clinical Oncology's ("ASCO") Annual Meeting. The article is entitled
"Phase I, Dose-Escalation Study of the Targeted Cytotoxic LHRH Analog AEZS-108 in Patients with Castration- and Taxane-Resistant Prostate Cancer"
, Liu SV, Tsao-Wei DD, Xiong S, Groshen S, Dorff TB, Quinn DI, Tai YC, Engel J, Hawes D, Schally AV, Pinski J.
|
•
|
We out-licensed the development compound macimorelin acetate to Ardana Bioscience in 2004. Ardana Bioscience subsequently initiated the clinical development program of macimorelin acetate as an orally active compound intended to be used in the diagnosis of adult growth hormone deficiency. Following agreement with the FDA on the study design, Ardana Bioscience initiated a pivotal Phase 3 study in 2007, which tested the compound compared to a test of growth hormone-releasing hormone ("GHRH") + L-Arginine ("ARG") , using a competitor's compound. The study was discontinued in 2008 due to Ardana Bioscience's bankruptcy. We terminated Ardana Bioscience's license to the compound due to its bankruptcy.
|
•
|
On October 19, 2009, we announced that we had initiated activities intended to complete the clinical development of Macrilen™ for use in evaluating AGHD. We had already assumed the sponsorship of the IND from Ardana Bioscience and discussed with the FDA the best way to complete the ongoing Phase 3 clinical trial and subsequently to file an NDA for approval of Macrilen™ for use in evaluating AGHD. The pivotal Phase 3 trial was designed to investigate the safety and efficacy of the oral administration of Macrilen™ as a growth hormone stimulator for use in evaluating AGHD. It was accepted by the FDA that for the ongoing part of the study, Macrilen™ would not be compared to the GHRH + ARG test because the competitor's compound had been removed from the market.
|
•
|
On June 21, 2010, we presented positive data at the 92
nd
ENDO Meeting on Macrilen™ for evaluation and therapeutic use. The preclinical data showed that Macrilen™ is a potent and safe oral synthetic GH-releasing compound with potential utility in evaluating GHD.
|
•
|
On July 14, 2010, we announced the presentation of a poster on Macrilen™, entitled
"Use of the Orally Active Ghrelin Mimetic AEZS-130 as a Simple Test for the Diagnosis of Growth Hormone (GH) Deficiency (GHD) in adults (AGHD)"
. Merriam G.R., Yuen K., Bonert V., Dobs A, Garcia J., Kipnes M., Molitch M., Swerdloff R., Wang C., Cook D., Altemose I. and Biller B. This poster was presented at the Seventh International Congress of Neuroendocrinology, in Rouen, France.
|
•
|
On October 5, 2010, at the Fifth International Congress of the Growth Hormone Research Society and the Insulin-like Growth Factors Society, we announced that, after the interim Phase 3 analysis, Macrilen™ demonstrated the potential to provide a simple, well tolerated and safe oral product for use in evaluating AGHD.
|
•
|
On December 20, 2010, we announced we had reached agreement with the FDA on a SPA for Macrilen™, enabling us to complete the ongoing registration study required to gain approval for use in evaluating AGHD. The first part of the study, conducted by our former licensee, Ardana, was a two-way cross-over study and included 42 patients with confirmed AGHD or multiple pituitary hormone deficiencies and a low insulin-like growth factor-I. A control group of 10 subjects without AGHD was matched to patients for age, gender, body mass index and (for females) estrogen status.
|
•
|
On July 26, 2011, we announced the completion of the Phase 3 study of Macrilen™ as a first oral product for use in evaluating AGHD and the decision to meet with the FDA for the future filing of an NDA for the registration of Macrilen™ in the United States.
|
•
|
On August 30, 2011, we announced favorable top-line results of our completed Phase 3 study with Macrilen™ as a first oral product for use in evaluating AGHD. The results showed that Macrilen™ had reached its primary endpoint demonstrating >90% area-under-the-curve ("AUC") of the Receiver Operating Characteristic ("ROC") curve, which determines the level of specificity and sensitivity of the product. Importantly, the primary efficacy parameters showed that the study achieved both specificity and sensitivity at a level of 90% or greater. In addition, eight of the ten newly enrolled AGHD patients were correctly classified by a pre-specified peak GH threshold level. The use of Macrilen™ was shown to be safe and well tolerated overall throughout the completion of this trial.
|
•
|
On June 26, 2012, we announced that the final results from a Phase 3 trial for Macrilen™ showed that the drug is safe and effective in evaluating AGHD. Jose M. Garcia, MD, PhD, of the Baylor College of Medicine and the Michael E. DeBakey VA Medical Center (the "DeBakey Center"), disclosed these data during an oral presentation at the 94
th
ENDO Annual Meeting and Expo in Houston, Texas. The study had originally been designed as a cross-over trial of Macrilen™ compared to the GHRH + ARG test in AGHD patients and in controls matched for body mass index ("BMI"), estrogen status, gender
|
•
|
On August 7, 2012, the United States Patent and Trademark Office granted us a patent for the use of Macrilen™ as a product to be used in evaluating AGHD. Filed on February 19, 2007, the patent (US 8,192,719 B2), entitled
"Methods and Kits to Diagnose Growth Hormone Deficiency by Oral Administration of EP1572 or EP1573 Compounds"
, became effective as of June 5, 2012 and will expire on October 12, 2027. The corresponding composition of matter patent (US 6,861,409 B2), filed on June 13, 2001 and granted on March 1, 2005, will expire on August 1, 2022, with the possibility of a patent term extension of up to five years.
|
•
|
On September 25, 2012, the European Patent Office granted us a patent for the use of Macrilen™ related to methods and kits for use in relation to the evaluation of GHD in a human or animal subject. Filed on February 19, 2007, the patent, (EP #1 984 744 B1) entitled
"Methods and Kits to Diagnose Growth Hormone Deficiency"
, was effective as of September 19, 2012 following its publication in the European Patent Bulletin, and it will expire on February 19, 2027.
|
•
|
On September 26, 2012, we received notification from the FDA that Fast Track designation previously applied for had not been granted for Macrilen™ as a product for use in evaluating AGHD.
|
•
|
On October 18, 2012, we announced that results from a multicenter open-label Phase 3 trial for Macrilen™ demonstrated that the drug is safe and effective in evaluating AGHD. George R. Merriam, MD, Director of the Clinical Study Unit at the Veterans Affairs Puget Sound Health Care System, and Professor of Medicine at the University of Washington, Seattle and Tacoma, WA, disclosed these data at the 6
th
International Congress of the GRS and IGF Society in Munich, Germany. His presentation confirmed data previously presented by Dr. Garcia at the 94
th
ENDO Meeting in Houston, Texas in June 2012. Dr. Merriam's presentation drew attention to the effect of BMI on optimizing the cut-off values to improve the sensitivity and specificity of the test. Responses in normal subjects classified as obese, with BMIs above 30, were significantly lower than in leaner subjects. Since GH deficiency can lead to increased body fat, many of the patients also met criteria for obesity, and therefore, a lower peak GH cut-off is more accurate in separating obese normals from obese patients. Based upon these study results, a cut-off of 2.7 µg/L was optimal for subjects with a BMI≥30 and a cut-off of 6.8 µg/L for subjects with a BMI<30. Age had a weaker effect on test performance and gender made no difference. Dr. Merriam's study concluded that GH stimulation with oral Macrilen™ may provide a simple, rapid, safe, and well-tolerated product used in evaluating AGHD, with accuracy comparable to that of the GHRH-ARG test.
|
•
|
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 diagnose GHD because 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 which 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. The ITT is administered i.v.
|
•
|
GHRH + ARG 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 + ARG 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.
|
•
|
Glucagon test, which is simple to perform and is considered relatively safe by endocrinologists. The mechanism of action for this test is unclear. Also, this test takes up to three to four hours. It produces side effects in up to one-third of the patients. 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.
|
•
|
On March 24, 2011, we were awarded a $1.5 million grant from the German Ministry of Education and Research to develop, up to the clinical stage, cytotoxic conjugates of the proprietary cytotoxic compound disorazol Z and peptides targeting G-protein coupled receptors, including the LHRH receptors. The compounds combine the targeting principle being studied in Phase 3 with zoptarelin doxorubicin with the novel cytotoxic disorazol Z. The grant was payable as a partial reimbursement of qualifying expenditures over a three-year period, until January 31, 2014. The qualified project was performed with Morphisto GmbH and the Helmholtz Institute in Saarbrücken, Germany, which received additional funding of approximately US$0.7 million. Researchers from the departments of Gynecology and Obstetrics at both the University of Göttingen and the University of Würzburg, Germany, were also part of the collaboration.
|
•
|
On November 16, 2011, we announced the presentation of a poster at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics on encouraging preclinical data for disorazol Z. The data showed that disorazol Z possesses cytotoxicity in a highly diverse panel of 60 different tumor cell lines, and also underlined the identification of important aspects of this novel natural compound's mechanism of action. Disorazol Z has been identified as a tubulin binding agent with highly potent antitumor properties. Cell cycle analysis revealed that disorazol Z arrested cells in the G2/M cell cycle phase and subsequently induced apoptosis with remarkable potency, as shown by sub-nanomolar EC50 values. Currently, experiments are under way to determine the tubulin binding site for disorazol Z and to identify further mechanisms of action of this novel highly potent agent. To expand our zoptarelin doxorubicin technology platform, we aim to evaluate the utility of disorazol Z as a cytotoxic component in a drug-targeting approach utilizing GPCR ligands as the targeting moieties for the treatment of GPCR over-expressing cancers.
|
•
|
On April 10, 2013, we announced at the American Association for Cancer Research's ("AACR") encouraging updated proof-of-concept results for disorazol Z cytotoxic conjugates, such as AEZS-138, in human ovarian and endometrial cancer xenograft models. Data demonstrated that conjugates of D-Lys6-LHRH and disorazol Z retained strong binding to the LHRH receptor and showed potent inhibition of tubulin polymerization. Cellular cytotoxicity of the conjugates was in the low nanomolar EC50 range. Increased cytotoxicity in cells over-expressing the LHRH receptor, support receptor targeting as a mechanism of action. The LHRH receptor-dependent efficacies of disorazol Z - D-Lys6-LHRH conjugates
in vitro
and in mouse xenograft models that were presented support the principle of tumor targeting by the LHRH receptor as already employed by zoptarelin doxorubicin.
|
•
|
On February 11, 2014, at the 11
th
International Symposium on GnRH, in Salzburg, Austria, we presented further data on the mechanism of action and proof of concept of the disorazol Z cytotoxic conjugate, AEZS-138, which had led to the initiation of its preclinical development during the second quarter of 2013.
|
•
|
U.S. patent 5,843,903 covers 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 patent expires in November 2015.
|
•
|
European patent 0 863 917 B1 covers 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 patent expires in November 2016.
|
•
|
Japanese patent 3 987 575 covers 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 patent expires in November 2016.
|
•
|
Chinese patent ZL96198605.0 covers 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 patent expires in November 2016.
|
•
|
Hong Kong patent 1017363 covers 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 patent expires in November 2016.
|
•
|
U.S. patent 6,861,409 covers macimorelin and U.S. patent 7,297,68 covers other related growth hormone secretagogue compounds, each also covering pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. U.S. patent 6,861,409 and U.S. patent 7,297,681 both expire in August 2022.
|
•
|
European patent 1 289 951 covers macimorelin and European patent 1 344 773 covers 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.
|
•
|
Japanese patent 3 522 265 covers macimorelin and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This patent expires in June 2021.
|
•
|
Canadian patent 2,407,659
covers
macimorelin
and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This patent expires in June 2021.
|
•
|
U.S. patent 8,192,719
covers
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 patent 8,192,719 expires in October 2027.
|
•
|
European patent 1 984 744
covers
a method of assessing pituitary-related growth hormone deficiency by oral administration of
macimorelin
. This expires in February 2027.
|
•
|
Japanese patent 4 852 728
covers
a method of assessing pituitary-related growth hormone deficiency by oral administration of
macimorelin
. This expires in February 2027.
|
•
|
U.S. patent 8,791,118
covers
AEZS-134 as well as methods of treatment for this compound. This patent expires in May 2032 (including PTA).
|
•
|
European Patent Application No. EP2,694,067
covers
AEZS-134 as well as methods of treatment for this compound. If granted, the EP patent would expire in April 2032.
|
•
|
Japanese patent application based on PCT/EP2012/056138
covers
AEZS-134 as well as methods of treatment for this compound. If granted, the patent would expire in April 2032.
|
•
|
U.S. patent 7,741,277
covers
AEZS-138 (disorazole Z - LHRH conjugate). This patent will expire in January 2028 (including PTA).
|
•
|
U.S. patent 8,470,776
covers
methods of treatment for compound AEZS-138 (disorazole Z - LHRH conjugate). This patent will expire in February 2029 (including PTA).
|
•
|
European patent application 2,066,679
covers
AEZS-138 (disorazole Z - LHRH conjugate) as well as methods of treatment for this compound. If granted, this patent will expire in September 2027.
|
•
|
Japanese patent 5,340,155
covers
AEZS-138 (disorazole Z - LHRH conjugate) as well as methods of treatment for this compound. This patent will expire in September 2027.
|
C.
|
Organizational structure
|
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, administration, commercial operations and business development
|
|
3,561
|
|
|
Leasehold
|
315 Sigma Drive, Suite 302D, Summerville SC 29483
|
|
Partially occupied for management, administration, commercial operations and business development
|
|
4,623
|
|
|
Leasehold
|
Weismüllerstr. 50
D-60314
Frankfurt-am-Main, Germany
|
|
Partially occupied for management, R&D, business development and administration
|
|
46,465
|
|
|
Leasehold
|
Item 5.
|
Operating and Financial Review and Prospects
|
•
|
During the fourth quarter, our full-time contract sales force of 19 sales representatives started the field selling in the US of EstroGel
®
, pursuant to the co-promotion services agreement (the "Co-promotion Agreement") entered into with ASCEND Therapeutics US LLC ("ASCEND") in August 2014. The Co-promotion Agreement provides that we or one of our subsidiaries detail and market ASCEND's leading non-patch transdermal hormone replacement therapy product, available under the name EstroGel
®
, in specific agreed-upon US territories, in exchange for a sales commission, which will be payable to us based upon incremental EstroGel
®
sales volumes that are generated over certain pre-established thresholds.
|
•
|
During the year, we completed site initiation, with over 120 sites currently in operation, for our ZoptEC (
Zopt
arelin doxorubicin in
E
ndometrial
C
ancer) Phase 3 trial in women with locally advanced, recurrent or metastatic endometrial cancer. To date, over 400 of the expected 500 patients have been entered into the trial. The ZoptEC Phase 3 trial is an open-label, randomized, multicenter trial conducted in North America, Europe and Israel under a Special Protocol Assessment ("SPA") with the FDA; it compares zoptarelin doxorubicin with doxorubicin as second line therapy. The primary efficacy endpoint is improvement in median Overall Survival.
|
•
|
On December 1, 2014, we entered into a master collaboration agreement, a Technology Transfer and Technical Assistance Agreement ("TTA") and a License Agreement ("LA") with Sinopharm A-Think Pharmaceuticals Co., Ltd. ("Sinopharm") for the development, manufacture and commercialization of zoptarelin doxorubicin ("the Product") in all human uses, in the People's Republic of China, including Hong Kong and Macau (collectively, "the Territory"). Under the terms of the TTA, Sinopharm made a one-time, non-refundable payment of $1.1 million ("Transfer Fee") to us for the transfer of technical documentation and materials, know-how and technical assistance services. Additionally, per the LA, we will be entitled to receive additional consideration upon achieving certain pre-established milestones, including the occurrence of certain regulatory and commercial events in the Territory. Furthermore, we will be entitled to receive royalties on future net sales of the Product in the Territory.
|
•
|
On November 6, 2014, the FDA issued a Complete Response Letter ("CRL") for our New Drug Application ("NDA") for Macrilen™ in the evaluation of adult growth hormone deficiency ("AGHD"). Based on its review, the FDA determined that our NDA could not be approved in its form as submitted. The CRL stated that the planned analysis of our pivotal trial did not meet its stated primary efficacy objective as agreed to in the SPA agreement between the Company and the FDA, and that we will need to demonstrate the efficacy of macimorelin as a diagnostic test for growth hormone deficiency in a new, confirmatory clinical study. The CRL also stated that a serious event of electrocardiogram QT interval prolongation occurred for which attribution to drug could not be excluded. Therefore, a dedicated thorough QT study to evaluate the effect of macimorelin on the QT interval would be necessary. We intend to make a decision regarding the future development of Macrilen™ in the near term, taking into account various considerations, including our prior and upcoming discussions with the FDA.
|
•
|
On April 9, 2014, we announced that we had presented, at the American Association for Cancer Research Annual Meeting in San Diego, a poster, entitled Erk
Inhibition as a Therapeutic Option for the Treatment of Raf- and Mek- Inhibitor Resistant Tumors
, on AEZS-134, a highly potent and selective adenosine triphosphate competitive Erk inhibitor. The poster provided a rationale for new therapeutic opportunities in oncology with this compound, given that preclinical data suggest that Erk inhibitors such as AEZS-134 may provide a treatment option for patients suffering from tumors that are resistant to currently established therapies such as B-Raf and Mek inhibitors.
|
•
|
On May 5, 2014, we announced that we had selected Charleston, South Carolina, as the new location for our North American business and global commercial operations. In conjunction with our plans and commitment to our Charleston office, we expect to be eligible to receive job development investment tax credits pursuant to approval received from the Coordinating Council for Economic Development of South Carolina.
|
•
|
On August 7, 2014, our Nominating, Governance and Compensation Committee approved our global resources optimization program (the "Resource Optimization Program"), which has been rolled out as part of our strategy to transition into a commercially operating specialty biopharmaceutical organization. The Resource Optimization Program, the goal of which is to streamline R&D activities and to increase commercial operations and flexibility, is expected to result in the termination of 30 employees. Employee departures under this program, which commenced during the first quarter of 2015, will continue through August 31, 2015. We expect that overall annualized savings upon completion of the Resource Optimization Program will amount to approximately $2.3 million. Total restructuring costs associated with the Resource Optimization Program recorded during 2014 were approximately $2.5 million, representing our estimated severance payments, onerous lease provision and other directly related costs. Our estimates of restructuring costs and annualized savings may be revised in future periods as new information becomes available.
|
•
|
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 0.80 of a warrant to purchase one common share, at a purchase price of $1.20 per unit (the "January 2014 Offering").
|
•
|
On March 11, 2015, we completed a public offering of 59,677,420 units (the "Units"), generating net proceeds of approximately $34.5 million, with each Unit consisting of either one common share or one warrant to purchase one common share ("Series C Warrant"), 0.75 of a warrant to purchase one common share ("Series A Warrant") and 0.50 of a warrant to purchase one common share ("Series B Warrant"), at a purchase price of $0.62 per Unit (the "March 2015 Offering"). The Series A Warrants are exercisable for a period of five years at an exercise price of $0.81 per share, and the Series B Warrants are exercisable for a period of 18 months at an exercise price of $0.81 per share. Both the Series A and Series B warrants are subject to certain anti-dilution provisions. The Series C Warrants are exercisable for a period of five years at an exercise price of $0.62 per share. Total gross proceeds payable to us in connection with the exercise of the Series C Warrants have been pre-paid by investors and therefore are included in the aforementioned proceeds.
|
•
|
In connection with the March 2015 Offering, the holders of 21,123,332 of the 21,900,000 outstanding warrants issued by us in connection with a previous public offering of units in November 2013 and with the January 2014 Offering, as defined above, entered into an amendment agreement that caused such previously issued warrants to expire and terminate in exchange of a cash payment made by us in the aggregate amount of approximately $5.7 million.
|
•
|
Between July 1, 2014 and December 31, 2014, we issued a total of approximately nine million common shares under our At-the-Market ("ATM") sales agreement entered into May 2014 with MLV & Co. LLC (the "May 2014 ATM Program"), at an average price of $1.36 for aggregate gross proceeds of approximately $12.2 million, less cash and non-cash transaction costs of approximately $0.4 million. The May 2014 ATM Program provides that we may, at our discretion, from time to time during the term of the sales agreement, sell up to a maximum of 14.0 million of our common shares through ATM issuances on the NASDAQ, up to an aggregate amount of $15 million.
|
•
|
On December 18, 2014, we received a notice from the NASDAQ regarding our failure to comply with the NASDAQ's $1.00 minimum bid price requirement. The Company has 180 calendar days, or until June 16, 2015, to regain compliance with the minimum bid price requirement.
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands, except share and per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
834
|
|
License fees
|
|
11
|
|
|
—
|
|
|
11
|
|
|
6,079
|
|
|
1,219
|
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
6,175
|
|
|
2,053
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
591
|
|
Research and development costs, net of refundable tax credits and grants
|
|
6,282
|
|
|
5,345
|
|
|
23,716
|
|
|
21,284
|
|
|
20,592
|
|
Selling, general and administrative expenses
|
|
4,676
|
|
|
2,627
|
|
|
13,690
|
|
|
12,316
|
|
|
10,606
|
|
|
|
10,958
|
|
|
7,972
|
|
|
37,406
|
|
|
33,651
|
|
|
31,789
|
|
Loss from operations
|
|
(10,947
|
)
|
|
(7,972
|
)
|
|
(37,395
|
)
|
|
(27,476
|
)
|
|
(29,736
|
)
|
Finance income
|
|
15,053
|
|
|
65
|
|
|
20,319
|
|
|
1,748
|
|
|
6,974
|
|
Finance costs
|
|
—
|
|
|
(2,689
|
)
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
Net finance income (costs)
|
|
15,053
|
|
|
(2,624
|
)
|
|
20,319
|
|
|
236
|
|
|
6,592
|
|
Income (loss) before income taxes
|
|
4,106
|
|
|
(10,596
|
)
|
|
(17,076
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Income tax expense
|
|
(111
|
)
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
Net income (loss) from continuing operations
|
|
3,995
|
|
|
(10,596
|
)
|
|
(17,187
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Net income from discontinued operations
|
|
158
|
|
|
2,353
|
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
Net income (loss)
|
|
4,153
|
|
|
(8,243
|
)
|
|
(16,564
|
)
|
|
6,815
|
|
|
(20,412
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|||||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
(677
|
)
|
|
424
|
|
|
(1,158
|
)
|
|
1,073
|
|
|
(504
|
)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Actuarial gain (loss) on defined benefit plans
|
|
1,336
|
|
|
2,346
|
|
|
(1,833
|
)
|
|
2,346
|
|
|
(3,705
|
)
|
Comprehensive income (loss)
|
|
4,812
|
|
|
(5,473
|
)
|
|
(19,555
|
)
|
|
10,234
|
|
|
(24,621
|
)
|
Net income (loss) per share (basic and diluted) from continuing operations
|
|
0.06
|
|
|
(0.28
|
)
|
|
(0.29
|
)
|
|
(0.92
|
)
|
|
(1.17
|
)
|
Net income (basic and diluted) from discontinued operations
|
|
—
|
|
|
0.06
|
|
|
0.01
|
|
|
1.16
|
|
|
0.14
|
|
Net income (loss) (basic and diluted) per share
|
|
0.06
|
|
|
(0.22
|
)
|
|
(0.28
|
)
|
|
0.24
|
|
|
(1.03
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
65,383,290
|
|
|
37,274,129
|
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,775,073
|
|
Diluted
|
|
65,383,290
|
|
|
37,274,129
|
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,806,687
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Third-party costs
|
|
3,967
|
|
|
2,828
|
|
|
11,356
|
|
|
10,049
|
|
|
8,679
|
|
Employee compensation and benefits
|
|
1,231
|
|
|
1,629
|
|
|
8,430
|
|
|
7,864
|
|
|
8,590
|
|
Facilities rent and maintenance
|
|
887
|
|
|
466
|
|
|
2,160
|
|
|
1,758
|
|
|
1,661
|
|
Other costs*
|
|
197
|
|
|
540
|
|
|
1,901
|
|
|
2,130
|
|
|
2,530
|
|
R&D tax credits and grants
|
|
—
|
|
|
(118
|
)
|
|
(131
|
)
|
|
(517
|
)
|
|
(868
|
)
|
|
|
6,282
|
|
|
5,345
|
|
|
23,716
|
|
|
21,284
|
|
|
20,592
|
|
(in thousands, except percentages)
|
|
Three-month periods ended December 31,
|
||||||||||
Product Candidate
|
|
2014
|
|
2013
|
||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||
Zoptarelin doxorubicin
|
|
3,609
|
|
|
91.0
|
|
|
1,667
|
|
|
58.9
|
|
Macrilen™, macimorelin
|
|
192
|
|
|
4.8
|
|
|
284
|
|
|
10.0
|
|
Erk inhibitors
|
|
112
|
|
|
2.8
|
|
|
312
|
|
|
11.0
|
|
LHRH - Disorazol Z
|
|
54
|
|
|
1.4
|
|
|
139
|
|
|
4.9
|
|
Other
|
|
—
|
|
|
—
|
|
|
426
|
|
|
15.2
|
|
|
|
3,967
|
|
|
100.0
|
|
|
2,828
|
|
|
100.0
|
|
(in thousands, except percentages)
|
|
Years ended December 31,
|
||||||||||||||||
Product Candidate
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
Zoptarelin doxorubicin
|
|
9,668
|
|
|
85.1
|
|
|
4,934
|
|
|
49.1
|
|
|
2,133
|
|
|
24.6
|
|
Erk inhibitors
|
|
488
|
|
|
4.3
|
|
|
1,128
|
|
|
11.2
|
|
|
1,727
|
|
|
19.9
|
|
Macrilen™, macimorelin
|
|
404
|
|
|
3.6
|
|
|
1,238
|
|
|
12.3
|
|
|
112
|
|
|
1.3
|
|
LHRH - Disorazol Z
|
|
257
|
|
|
2.3
|
|
|
659
|
|
|
6.6
|
|
|
331
|
|
|
3.8
|
|
Perifosine
|
|
196
|
|
|
1.7
|
|
|
1,134
|
|
|
11.3
|
|
|
3,801
|
|
|
43.8
|
|
Other
|
|
343
|
|
|
3.0
|
|
|
956
|
|
|
9.5
|
|
|
575
|
|
|
6.6
|
|
|
|
11,356
|
|
|
100.0
|
|
|
10,049
|
|
|
100.0
|
|
|
8,679
|
|
|
100.0
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Finance income
|
|
|
|
|
|
|
|
|
|
|
|||||
Change in fair value of warrant liability
|
|
14,079
|
|
|
—
|
|
|
18,272
|
|
|
1,563
|
|
|
6,746
|
|
Gains due to changes in foreign currency exchange rates
|
|
924
|
|
|
—
|
|
|
1,879
|
|
|
—
|
|
|
—
|
|
Interest income
|
|
50
|
|
|
65
|
|
|
168
|
|
|
185
|
|
|
228
|
|
|
|
15,053
|
|
|
65
|
|
|
20,319
|
|
|
1,748
|
|
|
6,974
|
|
Finance costs
|
|
|
|
|
|
|
|
|
|
|
|||||
Change in fair value of warrant liability
|
|
—
|
|
|
(1,884
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Losses due to changes in foreign currency exchange rates
|
|
—
|
|
|
(805
|
)
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
|
|
—
|
|
|
(2,689
|
)
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
|
|
15,053
|
|
|
(2,624
|
)
|
|
20,319
|
|
|
236
|
|
|
6,592
|
|
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
(in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales and royalties
|
|
—
|
|
|
3,057
|
|
|
—
|
|
|
63,755
|
|
|
30,704
|
|
License fees and other*
|
|
118
|
|
|
3,717
|
|
|
1,037
|
|
|
4,589
|
|
|
908
|
|
|
|
118
|
|
|
6,774
|
|
|
1,037
|
|
|
68,344
|
|
|
31,612
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
—
|
|
|
3,071
|
|
|
—
|
|
|
30,002
|
|
|
26,229
|
|
Research and development costs, net of tax credits and grants
|
|
8
|
|
|
—
|
|
|
25
|
|
|
8
|
|
|
12
|
|
Selling, general and administrative expenses
|
|
(48
|
)
|
|
1,350
|
|
|
389
|
|
|
4,279
|
|
|
2,639
|
|
|
|
(40
|
)
|
|
4,421
|
|
|
414
|
|
|
34,289
|
|
|
28,880
|
|
Net income from discontinued operations
|
|
158
|
|
|
2,353
|
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
*
|
Includes the non-refundable, one-time payment made by Merck Serono in exchange for the manufacturing rights for Cetrotide
®
and revenues from certain transition services provided pursuant to the aforementioned agreement.
|
(in thousands, except for per share data)
|
|
Three-month periods ended
|
||||||||||
|
|
December 31, 2014
|
|
September 30,
2014
|
|
June 30,
2014
|
|
March 31, 2014
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss from operations
|
|
(10,947
|
)
|
|
(9,843
|
)
|
|
(8,410
|
)
|
|
(8,195
|
)
|
Net income (loss) from continuing operations
|
|
3,995
|
|
|
(11,629
|
)
|
|
(5,249
|
)
|
|
(4,304
|
)
|
Net income (loss)
|
|
4,153
|
|
|
(11,337
|
)
|
|
(5,024
|
)
|
|
(4,356
|
)
|
Net income (loss) per share from continuing operations (basic and diluted)*
|
|
0.06
|
|
|
(0.20
|
)
|
|
(0.09
|
)
|
|
(0.08
|
)
|
Net income (loss) per share (basic and diluted)*
|
|
0.06
|
|
|
(0.20
|
)
|
|
(0.09
|
)
|
|
(0.08
|
)
|
(in thousands, except for per share data)
|
|
Three-month periods 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
|
|
*
|
Net income (loss) 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 income (loss) per share amounts may not equal year-to-date net (loss) income per share.
|
|
|
As at December 31,
|
||||
(in thousands)
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Cash and cash equivalents
1
|
|
34,931
|
|
|
43,202
|
|
Trade and other receivables and other current assets
|
|
1,286
|
|
|
2,453
|
|
Restricted cash equivalents
|
|
760
|
|
|
865
|
|
Property, plant and equipment
|
|
797
|
|
|
1,351
|
|
Other non-current assets
|
|
9,661
|
|
|
11,325
|
|
Total assets
|
|
47,435
|
|
|
59,196
|
|
Payables and other current liabilities
2
|
|
7,304
|
|
|
7,242
|
|
Current portion of deferred revenues
|
|
270
|
|
|
—
|
|
Warrant liability
|
|
8,225
|
|
|
18,010
|
|
Non-financial non-current liabilities
3
|
|
17,152
|
|
|
16,880
|
|
Total liabilities
|
|
32,951
|
|
|
42,132
|
|
Shareholders' equity
|
|
14,484
|
|
|
17,064
|
|
Total liabilities and shareholders' equity
|
|
47,435
|
|
|
59,196
|
|
|
|
As at December 31, 2014
|
||||
(in thousands)
|
|
Minimum lease payments
|
|
Sublease income
|
||
|
|
$
|
|
$
|
||
Less than 1 year
|
|
1,678
|
|
|
(392
|
)
|
1 – 3 years
|
|
1,352
|
|
|
(493
|
)
|
4 – 5 years
|
|
325
|
|
|
(19
|
)
|
Total
|
|
3,355
|
|
|
(904
|
)
|
(in thousands)
|
|
$
|
|
Less than 1 year
|
|
495
|
|
1 – 3 years
|
|
1,014
|
|
4 – 5 years
|
|
1,084
|
|
More than 5 years
|
|
19,867
|
|
Total
|
|
22,460
|
|
(in thousands)
|
|
Three-month periods ended December 31,
|
|
Years ended December 31,
|
|||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Cash and cash equivalents - Beginning of period
|
|
41,952
|
|
|
24,829
|
|
|
43,202
|
|
|
39,521
|
|
|
46,881
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash used in operating activities from continuing operations
|
|
(8,676
|
)
|
|
(6,184
|
)
|
|
(30,787
|
)
|
|
(30,131
|
)
|
|
(25,681
|
)
|
Cash provided by (used in) operating activities from discontinued operations
|
|
93
|
|
|
9,622
|
|
|
(295
|
)
|
|
10,147
|
|
|
(5,134
|
)
|
|
|
(8,583
|
)
|
|
3,438
|
|
|
(31,082
|
)
|
|
(19,984
|
)
|
|
(30,815
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Net proceeds from issuance of common shares and warrants
|
|
2,075
|
|
|
14,795
|
|
|
24,358
|
|
|
23,708
|
|
|
23,619
|
|
Net proceeds from the exercise of share purchase warrants and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
589
|
|
|
|
2,075
|
|
|
14,795
|
|
|
24,358
|
|
|
23,708
|
|
|
24,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash used in provided by investing activities from continuing operations
|
|
(4
|
)
|
|
(21
|
)
|
|
(61
|
)
|
|
(85
|
)
|
|
(272
|
)
|
Net cash provided by investing activities from discontinued operations
|
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
|
(4
|
)
|
|
92
|
|
|
(61
|
)
|
|
28
|
|
|
(272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(509
|
)
|
|
48
|
|
|
(1,486
|
)
|
|
(71
|
)
|
|
(481
|
)
|
Cash and cash equivalents - End of period
|
|
34,931
|
|
|
43,202
|
|
|
34,931
|
|
|
43,202
|
|
|
39,521
|
|
(in thousands)
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
8,225
|
|
|
1,117
|
|
|
(1,147
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
|
1,117
|
|
|
(1,147
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
(in thousands)
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
25,184
|
|
|
1,259
|
|
|
(1,259
|
)
|
Warrant liability
|
|
8,225
|
|
|
(411
|
)
|
|
411
|
|
Total impact on net loss – decrease / (increase)
|
|
|
|
848
|
|
|
(848
|
)
|
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.
|
|
Chairman, 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
|
|
Lead Independent Director
|
Brussels, Belgium
|
|
|
|
|
|
Guenther, Eckhard
|
|
Vice President, Business Development
|
Franfurt, Germany
|
|
|
|
|
|
Lapalme, Pierre
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Limoges, Gérard
|
|
Director
|
Quebec, Canada
|
|
|
|
|
|
Sachse, Richard
|
|
Senior Vice President, Chief Scientific Officer/Chief Medical Officer
|
Mittelbiberach, Germany
|
|
|
|
|
|
Santorelli, Keith
|
|
Vice President, Finance
|
Boston, Massachusetts
|
|
|
|
|
|
Teifel, Michael
|
|
Vice President, Pre-Clinical Development
|
Frankfurt, Germany
|
|
|
|
|
|
Theodore, Philip A.
|
|
Senior Vice President, Chief Administrative Officer and General Counsel
|
South Carolina, United States
|
|
|
|
|
|
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 2014
(in units of home country currency) |
Lead Director Retainer
|
|
40,000
|
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
|
|
12/13/2005
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
|
|
|
|
|
|||
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
|
|
|
|
|
|||
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
|
|
|
|
|
|||
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
|
|
—
|
|
|
|
|
|
|
|
|||
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
|
|
|
|
|
|
|
||||
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Limoges, Gérard
|
|
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
|
|
|
|
|
|
|
|
|
||||
|
|
05/09/2014
|
|
60,000
|
|
|
US$1.07
|
|
05/08/2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The number of securities underlying unexercised options represents all awards outstanding as at December 31, 2014.
|
(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, 2014) of CAN$0.69 and US$0.60, respectively, and the exercise price of the options, multiplied by the number of unexercised options.
|
Name
|
|
Fees earned
($)
|
|
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
|
|
13,582
|
|
|
4,539
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,415
|
|
Dorais, José P.
|
|
22,261
|
|
|
14,877
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,432
|
|
Egbert, Carolyn
|
|
23,429
|
|
|
12,500
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
25,250
|
|
|
112,473
|
|
Ernst, Juergen
|
|
63,913
|
|
|
17,445
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
3,479
|
|
|
136,131
|
|
Lapalme, Pierre
|
|
17,203
|
|
|
6,324
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,822
|
|
Limoges, Gérard
|
|
27,163
|
|
|
9,922
|
|
|
—
|
|
|
51,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,379
|
|
(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$1.07 for options granted on May 9, 2014) multiplied by the Black-Scholes factor as at such date (79.90% for options granted on May 9, 2014) 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.
|
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 2014
|
|
|
Results for 2014
|
|
Financing
|
|
Secure a minimum of $20 million additional cash
|
|
$25 million raised over the first ten months of the year.
|
MACRILEN™ (macimorelin)
|
|
Complete the preparations for the commercial launch of MACRILEN™ (macimorelin)
|
|
The commercial launch preparations were completed on schedule.
|
Zoptarelin doxorubicin
ZoptEC (
Zopt
arelin doxorubicin in
E
ndometrial
C
ancer) Phase 3 program
|
|
Enroll 173 patients in the Phase 3 clinical trial by the end of the first half of 2014 and a total of 345 patients by the end of the year
|
|
The targeted enrollment of patients was achieved on schedule.
|
AEZS-120
|
|
Finalize recommendation regarding a Phase 1 trial
|
|
As a result of additional scientific evaluation, the decision was made to place this project on hold.
|
Product acquisitions
(acquisitions; in-licensing; promotion)
|
|
Close deal on product acquisition of existing approved products with minimum current revenues of $5 million and with a three-year revenue outlook of a minimum of $30 million
|
|
Agreement reached with Ascend Therapeutics USA LLC for the co-promotion of EstroGel
®
; our sales force started selling EstroGel
®
on November 20, 2014.
|
Global Resource Optimization
|
|
Develop a recommendation for the reorganization of the organization and work structure of the R&D team to increase productivity and output, with a goal of reducing the annual burn-rate by a minimum of 25%
|
|
The reorganization plans were finalized and approved and the implementation process was started, with the result that staffing will be reduced by approximately 33% by the end of the first calendar quarter of 2015.
|
|
|
Aeterna Zentaris
|
|
Reference Group
|
Location
|
|
North America and Europe
|
|
North America
|
Industries
|
|
Biopharmaceutical
|
|
Biopharmaceutical
|
Revenues
For fiscal year ended in 2012
|
|
33.7
(1)
|
|
17.5
(2)
|
Market Capitalization
As at April 30, 2013
|
|
46.1
|
|
155.0
|
Net Loss
For fiscal year ended in 2012
|
|
20.4
(1)
|
|
17.4
(2)
|
(1)
|
For the year ended December 31, 2012, as presented in our 2012 audited consolidated financial statements, which were presented in conformity with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
|
(2)
|
The Reference Group for the financial year ended December 31, 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 our stock option plan established for the benefit of our 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 us;
|
•
|
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";
|
•
|
adjustments to the number of issuable Common Shares underlying, or the exercise price of, outstanding options resulting from a split or a consolidation of the Common Shares, a reclassification, the payment of a stock dividend, the payment of a special cash or non-cash distribution to our shareholders on a
pro rata
basis provided such distribution is approved by our shareholders in accordance with applicable law, a recapitalization, a reorganization or any other event which necessitates an equitable adjustment to the outstanding options in proportion with corresponding adjustments made to all outstanding Common Shares;
|
•
|
discontinuing or terminating the Stock Option Plan; and
|
•
|
any other amendment which does not require shareholder approval under the terms of the Stock Option Plan.
|
|
|
Option-based Awards
|
|
Share-based Awards
|
||||||||||||||||||||
Name
|
|
Issuance Date
|
|
Number of
Securities
Underlying
Unexercised
Options
(1)
|
|
Option
Exercise Price
|
|
Option
Expiration Date
|
|
Value of
Unexercised In-the-money
Options
(2)
|
|
Issuance Date
|
|
Number of
Shares or
Units of shares
that have Not
Vested
|
|
Market or Payout
Value of Share-based
Awards that have Not Vested
(3)
|
||||||||
|
|
(mm-dd-yyyy)
|
|
(#)
|
|
(CAN$ or US$)
|
|
(mm-dd-yyyy)
|
|
(CAN$ or US$)
|
|
|
|
(#)
|
|
($)
|
||||||||
Dodd, David A.
|
|
04/15/2013
|
|
300,000
|
|
(4)
|
|
US$1.98
|
|
|
04/14/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
04/15/2013
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
04/15/2013
|
|
|
200,000
(5)
|
|
|
—
|
|
|
|
12/04/2014
|
|
475,000
|
|
|
|
US$0.76
|
|
|
12/04/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Turpin, Dennis
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
12/04/2014
|
|
175,000
|
|
|
|
US$0.76
|
|
|
12/04/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Sachse, Richard
|
|
01/16/2014
|
|
150,000
|
|
(6)
|
|
US$1.29
|
|
|
01/15/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
12/04/2014
|
|
130,000
|
|
|
|
US$0.76
|
|
|
12/04/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dinges, Jude
|
|
11/27/2013
|
|
150,000
|
|
(7)
|
|
US$1.12
|
|
|
11/26/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
12/04/2014
|
|
166,000
|
|
|
|
US$0.76
|
|
|
12/04/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Santorelli, Keith
|
|
05/09/2014
|
|
75,000
|
|
|
|
US$1.07
|
|
|
05/08/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
12/04/2014
|
|
30,000
|
|
|
|
US$0.76
|
|
|
12/04/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The number of securities underlying unexercised options represents all awards outstanding at December 31, 2014.
|
(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, 2014) of CAN$0.69 and US$0.60, 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, 2014) 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 200,000. 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, we agreed to pay Mr. Dodd a retention bonus if he remains employed through December 31, 2015 equal to (a) the excess, if any, of the closing price of a Common Share on the last regular trading day in 2015 over $1.98, being the closing price of a Common Share on the NASDAQ on the last trading day preceding the effective date of Mr. Dodd's appointment multiplied by (b) 200,000. The share-based retention bonus will be paid in US dollars no later than March 15, 2016.
|
(6)
|
Richard Sachse was appointed Senior Vice President and Chief Scientific Officer effective January 1, 2014 and was granted 150,000 stock options in connection with such appointment.
|
(7)
|
Jude Dinges was appointed Senior Vice President and Chief Commercial Officer effective November 1, 2013 and was granted 150,000 stock options in connection with such appointment.
|
Name
|
|
Option-based awards — Value
vested during the year
(1)
|
|
Share-based awards —
Value
vested during the year
|
|
Non-equity incentive
plan
compensation — Value
earned
during the year
|
|
|
($)
|
|
($)
|
|
($)
|
Dodd, David A.
|
|
—
|
|
—
|
|
100,000
|
Turpin, Dennis
|
|
—
|
|
—
|
|
22,013
|
Sachse, Richard
|
|
—
|
|
—
|
|
62,463
|
Dinges, Jude
|
|
—
|
|
—
|
|
25,000
|
Santorelli, Keith
|
|
—
|
|
—
|
|
—
|
(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.
|
|
|
|
|
|
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.
Chairman, President and Chief Executive Officer
|
2014
|
475,000
|
|
|
—
|
|
|
291,914
|
|
100,000
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
878,414
|
|
|
2013
|
328,846
|
|
(3)
|
414,048
|
|
(4
|
)
|
474,606
|
|
50,000
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
1,279,000
|
|
|
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
Turpin, Dennis
Senior Vice President and Chief Financial Officer
|
2014
|
309,299
|
|
|
—
|
|
|
107,547
|
|
22,013
|
|
—
|
|
—
|
|
4,403
|
|
(5)
|
443,262
|
|
|
2013
|
331,652
|
|
|
—
|
|
|
—
|
|
66,677
|
|
—
|
|
—
|
|
4,763
|
|
(5)
|
403,092
|
|
||
2012
|
341,605
|
|
|
—
|
|
|
149,787
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
491,392
|
|
||
Sachse, Richard
Senior Vice President, Chief Scientific Officer and Chief Medical Officer
|
2014
|
265,752
|
|
|
—
|
|
|
235,017
|
|
62,463
|
|
—
|
|
—
|
|
27,239
|
|
(5)
|
590,471
|
|
|
2013
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
Dinges, Jude
Senior Vice President and Chief Commercial
Officer
|
2014
|
320,000
|
|
|
—
|
|
|
102,016
|
|
25,000
|
|
—
|
|
—
|
|
11,500
|
|
(5)
|
458,516
|
|
|
2013
|
121,988
|
|
(6)
|
—
|
|
|
135,542
|
|
—
|
|
—
|
|
—
|
|
2,354
|
|
(5)
|
259,884
|
|
||
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
Santorelli, Keith
Vice President, Finance
|
2014
|
240,000
|
|
|
—
|
|
|
82,554
|
|
—
|
|
—
|
|
—
|
|
8,750
|
|
(5)
|
331,304
|
|
|
2013
|
27,692
|
|
(7)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,108
|
|
(5)
|
28,800
|
|
||
2012
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(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$1.29 for options granted on January 16, 2014, US$1.07 for options granted on May 9, 2014 and US$0.76 for options granted on December 4, 2014) multiplied by the Black-Scholes factor as at such date (80.17% for options granted on January 16, 2014, 79.90% for options granted on May 9, 2014 and 80.86% for options granted on December 4, 2014) 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, 2014. 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.
|
(3)
|
Represents the salary 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 employer contributions to the executive's retirement savings plan.
|
(6)
|
Represents consultant fees paid to Mr. Dinges between May 12, 2013 and October 31, 2013 combined with the salary paid to him following his appointment as Senior Vice President and Chief Commercial Officer on November 1, 2013.
|
(7)
|
Represents the salary earned by and paid to Mr. Santorelli following his appointment as Vice President, Finance on November 11, 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
|
|
*
|
|
126,665
|
|
43,333
|
|
Dinges, Jude
|
3,391
|
|
*
|
|
316,000
|
|
50,000
|
|
Dodd, David A.
|
270,333
|
|
*
|
|
775,000
|
|
100,000
|
|
Dorais, José P.
|
—
|
|
*
|
|
113,333
|
|
30,001
|
|
Egbert, Carolyn
|
192,000
|
|
*
|
|
97,500
|
|
17,501
|
|
Ernst, Juergen
|
134,808
|
|
*
|
|
145,831
|
|
62,499
|
|
Guenther, Eckhard
|
—
|
|
*
|
|
68,310
|
|
44,977
|
|
Lapalme, Pierre
|
—
|
|
*
|
|
116,666
|
|
33,334
|
|
Limoges, Gérard
|
1,499
|
|
*
|
|
126,665
|
|
43,333
|
|
Sachse, Richard
|
—
|
|
*
|
|
280,000
|
|
—
|
|
Santorelli, Keith
|
—
|
|
*
|
|
105,000
|
|
—
|
|
Teifel, Michael
|
—
|
|
*
|
|
52,699
|
|
32,699
|
|
Theodore, Philip A.
|
—
|
|
*
|
|
200,000
|
|
—
|
|
Turpin, Dennis
|
3,541
|
|
*
|
|
329,996
|
|
154,993
|
|
Total
|
624,322
|
|
0.95
|
|
2,853,665
|
|
612,670
|
|
(1)
|
Based on 65,509,077 Common Shares outstanding as at December 31, 2014.
|
(2)
|
For information regarding option expiration dates and exercise price refer to the tables included under the caption "Outstanding Option-Based Awards and Share-Based Awards".
|
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
|
||||
2014
|
1.50
|
|
0.52
|
|
1.66
|
|
0.57
|
|
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
|
|
|
|
|
|
|
||||
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
|
|
|
|
|
|
|
||||
2014
|
|
|
|
|
||||
Fourth quarter
|
1.34
|
|
0.52
|
|
1.51
|
|
0.57
|
|
Third quarter
|
1.50
|
|
1.14
|
|
1.64
|
|
1.23
|
|
Second quarter
|
1.23
|
|
1.05
|
|
1.35
|
|
1.13
|
|
First quarter
|
1.49
|
|
1.17
|
|
1.66
|
|
1.29
|
|
|
|
|
|
|
||||
Most recent 6 months
|
|
|
|
|
||||
March 2015
(1)
|
0.84
|
|
0.51
|
|
1.04
|
|
0.64
|
|
February 2015
|
0.67
|
|
0.51
|
|
0.83
|
|
0.64
|
|
January 2015
|
0.61
|
|
0.52
|
|
0.72
|
|
0.65
|
|
December 2014
|
0.78
|
|
0.57
|
|
0.88
|
|
0.66
|
|
November 2014
|
1.29
|
|
0.52
|
|
1.46
|
|
0.57
|
|
October 2014
|
1.34
|
|
0.97
|
|
1.51
|
|
1.11
|
|
September 2014
|
1.45
|
|
1.32
|
|
1.64
|
|
1.47
|
|
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 our director, officer, employee or agent or an affiliate;
|
•
|
is for indemnity or insurance for director's liability as permitted by the CBCA; or
|
•
|
is with our affiliate.
|
•
|
borrow money upon our credit;
|
•
|
issue, reissue, sell or pledge our debt obligations;
|
•
|
give a guarantee on our behalf to secure performance of an obligation of any person; and
|
•
|
mortgage, hypothecate, pledge or otherwise create a security interest in all or any of our property, owned or subsequently acquired, to secure any of our obligations.
|
(a)
|
he or she acted in good faith in our best interests; 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 us or any of our subsidiaries) to commence a take-over bid or a share exchange bid for more than 20% of our outstanding Common Shares
|
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 our employees or the employees of any of our 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
|
•
|
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 our securities representing in any circumstance 50% or more of the voting rights attaching to our then outstanding securities; (ii) upon a sale or other disposition of all or substantially all of our assets; (iii) upon a plan of liquidation or dissolution of us; or (iv) if, for any reason, including our amalgamation, merger or consolidation 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 our 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 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 our performance; (ii) any change in his direct reporting relationship to the Board; (iii) any reduction in his duties and responsibilities as our President and Chief Executive Officer; 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 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; (ii) a material reduction or change in his duties, authority, responsibilities, accountability or a change in our business or corporate structure which materially affects his authority, compensation or ability to perform duties or responsibilities (such as shifting from a policy-making to a policy-implementation position); (iii) a forced relocation; or (iv) a material change in the terms and conditions of the change of control provisions included in his Employment Agreement that are not otherwise contemplated by his Employment Agreement; and
|
◦
|
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 our performance or failure of Mr. Dinges to achieve performance standards or objectives as determined by our President in his sole and absolute discretion and judgment; or (ii) a material reduction in his duties and responsibilities as our 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, provision for restructuring costs and other non-current liabilities.
|
(a)
|
Credit risk
|
(b)
|
Market risk
|
(in thousands)
|
|
Carrying
amount |
|
-10%
|
|
+10%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Warrant liability
|
|
8,225
|
|
|
1,117
|
|
|
(1,147
|
)
|
Total impact on net income – decrease / (increase)
|
|
|
|
1,117
|
|
|
(1,147
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
(in thousands)
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
25,184
|
|
|
1,259
|
|
|
(1,259
|
)
|
Warrant liability
|
|
8,225
|
|
|
(411
|
)
|
|
411
|
|
Total impact on net income – decrease / (increase)
|
|
|
|
848
|
|
|
(848
|
)
|
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, 2014
|
|
December 31, 2013
|
||
|
|
$
|
|
$
|
||
ASSETS
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Cash and cash equivalents (note 7)
|
|
34,931
|
|
|
43,202
|
|
Trade and other receivables (note 8)
|
|
867
|
|
|
1,953
|
|
Prepaid expenses and other current assets
|
|
419
|
|
|
500
|
|
|
|
36,217
|
|
|
45,655
|
|
Restricted cash equivalents (note 9)
|
|
760
|
|
|
865
|
|
Property, plant and equipment (note 10)
|
|
797
|
|
|
1,351
|
|
Other non-current assets
|
|
622
|
|
|
725
|
|
Identifiable intangible assets (note 11)
|
|
352
|
|
|
708
|
|
Goodwill (note 12)
|
|
8,687
|
|
|
9,892
|
|
|
|
47,435
|
|
|
59,196
|
|
LIABILITIES
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
||
Payables and accrued liabilities (note 13)
|
|
5,799
|
|
|
7,242
|
|
Provision for restructuring costs (note 14)
|
|
1,505
|
|
|
—
|
|
Deferred revenues (note 5)
|
|
270
|
|
|
—
|
|
|
|
7,574
|
|
|
7,242
|
|
Deferred revenues (note 5)
|
|
809
|
|
|
—
|
|
Warrant liability (note 15)
|
|
8,225
|
|
|
18,010
|
|
Employee future benefits (note 19)
|
|
15,053
|
|
|
15,407
|
|
Provisions and other non-current liabilities (note 16)
|
|
1,290
|
|
|
1,473
|
|
|
|
32,951
|
|
|
42,132
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
||
Share capital (note 17)
|
|
150,544
|
|
|
134,101
|
|
Other capital
|
|
86,639
|
|
|
86,107
|
|
Deficit
|
|
(222,322
|
)
|
|
(203,925
|
)
|
Accumulated other comprehensive (loss) income
|
|
(377
|
)
|
|
781
|
|
|
|
14,484
|
|
|
17,064
|
|
|
|
47,435
|
|
|
59,196
|
|
|
|
|
David A. Dodd
Chairman of the Board
|
|
Gérard Limoges
Director
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Changes in Shareholders' Equity (Deficiency)
|
For the years ended December 31, 2014, 2013 and 2012
|
(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, 2014
|
|
45,312,009
|
|
|
134,101
|
|
|
86,107
|
|
|
(203,925
|
)
|
|
781
|
|
|
17,064
|
|
Net loss
|
|
|
|
—
|
|
|
—
|
|
|
(16,564
|
)
|
|
—
|
|
|
(16,564
|
)
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,158
|
)
|
|
(1,158
|
)
|
|
Actuarial loss on defined benefit plans (note 19)
|
|
|
|
—
|
|
|
—
|
|
|
(1,833
|
)
|
|
—
|
|
|
(1,833
|
)
|
|
Comprehensive loss
|
|
|
|
—
|
|
|
—
|
|
|
(18,397
|
)
|
|
(1,158
|
)
|
|
(19,555
|
)
|
|
Share issuance in connection with a public offering (note 17)
|
|
11,000,000
|
|
|
4,340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,340
|
|
Share issuances in connection with "At-the-Market" drawdowns (note 17)
|
|
9,197,068
|
|
|
12,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,103
|
|
Share-based compensation costs
|
|
|
|
—
|
|
|
532
|
|
|
—
|
|
|
—
|
|
|
532
|
|
|
Balance - December 31, 2014
|
|
65,509,077
|
|
|
150,544
|
|
|
86,639
|
|
|
(222,322
|
)
|
|
(377
|
)
|
|
14,484
|
|
|
|
Common shares (number of)
1, 2
|
|
Share capital
|
|
Other capital
|
|
Deficit
|
|
Accumulated other comprehensive (loss) income
|
|
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
|
|
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, 2014, 2013 and 2012
|
(in thousands of US dollars, except share data)
|
|
|
Common shares (number of)
1, 2
|
|
Share capital
|
|
Other capital
|
|
Deficit
|
|
Accumulated other comprehensive income (loss)
|
|
Total
|
||||||
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance - January 1, 2012
|
|
17,460,349
|
|
|
101,884
|
|
|
82,327
|
|
|
(188,969
|
)
|
|
212
|
|
|
(4,546
|
)
|
Net loss
|
|
|
|
—
|
|
|
—
|
|
|
(20,412
|
)
|
|
—
|
|
|
(20,412
|
)
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(504
|
)
|
|
(504
|
)
|
|
Actuarial loss on defined benefit plans (note 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 Comprehensive (Loss) Income
|
For the years ended December 31, 2014, 2013 and 2012
|
(in thousands of US dollars, except share and per share data)
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Revenues
|
|
|
|
|
|
|
|||
Sales
|
|
—
|
|
|
96
|
|
|
834
|
|
License fees (note 5)
|
|
11
|
|
|
6,079
|
|
|
1,219
|
|
|
|
11
|
|
|
6,175
|
|
|
2,053
|
|
Operating expenses (note 18)
|
|
|
|
|
|
|
|||
Cost of sales
|
|
—
|
|
|
51
|
|
|
591
|
|
Research and development costs, net of refundable tax credits and grants (notes 11 and 14)
|
|
23,716
|
|
|
21,284
|
|
|
20,592
|
|
Selling, general and administrative expenses
(notes 10 and 14)
|
|
13,690
|
|
|
12,316
|
|
|
10,606
|
|
|
|
37,406
|
|
|
33,651
|
|
|
31,789
|
|
Loss from operations
|
|
(37,395
|
)
|
|
(27,476
|
)
|
|
(29,736
|
)
|
Finance income (note 20)
|
|
20,319
|
|
|
1,748
|
|
|
6,974
|
|
Finance costs (note 20)
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
Net finance income (costs)
|
|
20,319
|
|
|
236
|
|
|
6,592
|
|
Loss before income taxes
|
|
(17,076
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Income tax expense (notes 5 and 22)
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
Net loss from continuing operations
|
|
(17,187
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Net income from discontinued operations (note 6)
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
Net (loss) income
|
|
(16,564
|
)
|
|
6,815
|
|
|
(20,412
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
(1,158
|
)
|
|
1,073
|
|
|
(504
|
)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|||
Actuarial (loss) gain on defined benefit plans
|
|
(1,833
|
)
|
|
2,346
|
|
|
(3,705
|
)
|
Comprehensive (loss) income
|
|
(19,555
|
)
|
|
10,234
|
|
|
(24,621
|
)
|
Net loss per share (basic and diluted) from continuing operations (note 26)
|
|
(0.29
|
)
|
|
(0.92
|
)
|
|
(1.17
|
)
|
Net income (basic and diluted) from discontinued operations (notes 6 and 26)
|
|
0.01
|
|
|
1.16
|
|
|
0.14
|
|
Net (loss) income (basic and diluted) per share
|
|
(0.28
|
)
|
|
0.24
|
|
|
(1.03
|
)
|
Weighted average number of shares outstanding
(notes 17 and 26):
|
|
|
|
|
|
|
|||
Basic
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,775,073
|
|
Diluted
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,806,687
|
|
Aeterna Zentaris Inc.
|
Consolidated Statements of Cash Flows
|
For the years ended December 31, 2014, 2013 and 2012
|
(in thousands of US dollars)
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|||
Net loss from continuing operations
|
|
(17,187
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Items not affecting cash and cash equivalents:
|
|
|
|
|
|
|
|||
Change in fair value of warrant liability (note 15)
|
|
(18,272
|
)
|
|
(1,563
|
)
|
|
(6,746
|
)
|
Provision for restructuring costs (note 14)
|
|
2,489
|
|
|
—
|
|
|
—
|
|
Depreciation, amortization and impairment (notes 10 and 11)
|
|
878
|
|
|
949
|
|
|
1,234
|
|
Share-based compensation costs (note 17)
|
|
497
|
|
|
2,215
|
|
|
1,797
|
|
Employee future benefits (note 19)
|
|
605
|
|
|
470
|
|
|
889
|
|
Amortization of deferred revenues (note 5)
|
|
—
|
|
|
(6,046
|
)
|
|
(1,077
|
)
|
Foreign exchange (gain) loss on items denominated in foreign currencies
|
|
(1,164
|
)
|
|
1,078
|
|
|
614
|
|
Gain on disposal of property, plant and equipment
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
Amortization of prepaid expenses and other non-cash items
|
|
2,640
|
|
|
6,831
|
|
|
4,756
|
|
Transaction cost allocated to warrants issued (note 17)
|
|
666
|
|
|
1,165
|
|
|
370
|
|
Changes in operating assets and liabilities (note 21)
|
|
(1,873
|
)
|
|
(7,990
|
)
|
|
(4,374
|
)
|
Net cash (used in) provided by operating activities of discontinued operations (note 6)
|
|
(295
|
)
|
|
10,147
|
|
|
(5,134
|
)
|
Net cash used in operating activities
|
|
(31,082
|
)
|
|
(19,984
|
)
|
|
(30,815
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|||
Proceeds from issuances of common shares and warrants, net of cash transaction costs of $1,348 in 2014, $2,119 in 2013 and $1,665 in 2012 (note 17)
|
|
24,358
|
|
|
23,708
|
|
|
23,619
|
|
Proceeds from the exercise of share purchase warrants (note 15)
|
|
—
|
|
|
—
|
|
|
437
|
|
Proceeds from the exercise of stock options (note 17)
|
|
—
|
|
|
—
|
|
|
209
|
|
Repayment of long-term payable
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
Net cash provided by financing activities
|
|
24,358
|
|
|
23,708
|
|
|
24,208
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|||
Purchase of property, plant and equipment (note 10)
|
|
(127
|
)
|
|
(85
|
)
|
|
(272
|
)
|
Disposals of property, plant and equipment (note 10)
|
|
66
|
|
|
—
|
|
|
—
|
|
Net cash provided by investing activities of discontinued operations
|
|
—
|
|
|
113
|
|
|
—
|
|
Net cash (used in) provided by investing activities
|
|
(61
|
)
|
|
28
|
|
|
(272
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(1,486
|
)
|
|
(71
|
)
|
|
(481
|
)
|
Net change in cash and cash equivalents
|
|
(8,271
|
)
|
|
3,681
|
|
|
(7,360
|
)
|
Cash and cash equivalents – Beginning of the year (note 7)
|
|
43,202
|
|
|
39,521
|
|
|
46,881
|
|
Cash and cash equivalents – End of the year (note 7)
|
|
34,931
|
|
|
43,202
|
|
|
39,521
|
|
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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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
|
4
|
Recent accounting pronouncements
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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 arrangements
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Revenues*
|
|
|
|
|
|
|
|||
Sales and royalties
|
|
—
|
|
|
63,755
|
|
|
30,704
|
|
License fees and other
|
|
1,037
|
|
|
4,589
|
|
|
908
|
|
|
|
1,037
|
|
|
68,344
|
|
|
31,612
|
|
Operating expenses
|
|
|
|
|
|
|
|||
Cost of sales
|
|
—
|
|
|
30,002
|
|
|
26,229
|
|
Research and development costs, net of tax credits and grants
|
|
25
|
|
|
8
|
|
|
12
|
|
Selling, general and administrative expenses
|
|
389
|
|
|
4,279
|
|
|
2,639
|
|
|
|
414
|
|
|
34,289
|
|
|
28,880
|
|
Net income from discontinued operations
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
Components of operating expenses presented as discontinued include the following:
|
|
|
|
|
|
|
|||
Subcontractor fees
|
|
—
|
|
|
24,930
|
|
|
25,515
|
|
Raw material purchases
|
|
—
|
|
|
579
|
|
|
1,189
|
|
Change in inventory
|
|
—
|
|
|
4,173
|
|
|
(560
|
)
|
Impairment of equipment
|
|
—
|
|
|
268
|
|
|
—
|
|
Depreciation of equipment
|
|
—
|
|
|
52
|
|
|
85
|
|
Cost of sales
|
|
—
|
|
|
30,002
|
|
|
26,229
|
|
Goods and services**
|
|
191
|
|
|
2,987
|
|
|
2,651
|
|
Royalty and patent expenses related to onerous contracts
|
|
223
|
|
|
1,300
|
|
|
—
|
|
|
|
414
|
|
|
34,289
|
|
|
28,880
|
|
*
|
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), which represent the amortization of proceeds received in connection with the Company's transaction with HRP.
|
**
|
Goods and services include professional fees, marketing services, insurance, travel and representation costs.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|||
Net income from discontinued operations
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
Items not affecting cash and cash equivalents:
|
|
|
|
|
|
|
|||
Provision for onerous contracts
|
|
223
|
|
|
1,300
|
|
|
—
|
|
Depreciation, amortization and impairment
|
|
—
|
|
|
320
|
|
|
85
|
|
Amortization of deferred revenues
|
|
—
|
|
|
(33,631
|
)
|
|
(4,175
|
)
|
Other non-cash items
|
|
96
|
|
|
—
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||
Trade and other receivables
|
|
1,460
|
|
|
6,212
|
|
|
(2,397
|
)
|
Inventory
|
|
—
|
|
|
4,061
|
|
|
(1,230
|
)
|
Prepaid expenses and other current assets
|
|
—
|
|
|
882
|
|
|
(760
|
)
|
Payables and accrued liabilities
|
|
(2,300
|
)
|
|
(2,996
|
)
|
|
611
|
|
Provisions and other non-current liabilities
|
|
(397
|
)
|
|
(56
|
)
|
|
—
|
|
Net cash (used in) provided by operating activities of discontinued operations
|
|
(295
|
)
|
|
10,147
|
|
|
(5,134
|
)
|
7
|
Cash and cash equivalents
|
|
|
As at December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Cash on hand and balances with banks
|
|
10,803
|
|
|
27,877
|
|
Interest-bearing deposits with maturities of three months or less
|
|
24,128
|
|
|
15,325
|
|
|
|
34,931
|
|
|
43,202
|
|
8
|
Trade and other receivables
|
|
|
As at December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Trade accounts receivable
|
|
583
|
|
|
1,709
|
|
Value added tax
|
|
47
|
|
|
2
|
|
Other
|
|
237
|
|
|
242
|
|
|
|
867
|
|
|
1,953
|
|
9
|
Restricted cash equivalents
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
10
|
Property, plant and equipment
|
|
|
Cost
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2013
|
|
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
|
|
Additions
|
|
16
|
|
|
20
|
|
|
86
|
|
|
5
|
|
|
127
|
|
Disposals / Retirements
|
|
(1,212
|
)
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|
(1,394
|
)
|
Impact of foreign exchange rate changes
|
|
(1,046
|
)
|
|
(151
|
)
|
|
(222
|
)
|
|
(146
|
)
|
|
(1,565
|
)
|
At December 31, 2014
|
|
6,812
|
|
|
1,106
|
|
|
1,534
|
|
|
1,055
|
|
|
10,507
|
|
|
|
Accumulated depreciation
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At January 1, 2013
|
|
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
|
|
Disposals / Retirements
|
|
(1,212
|
)
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|
(1,394
|
)
|
Impairment loss**
|
|
206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
206
|
|
Recurring depreciation expense
|
|
282
|
|
|
17
|
|
|
21
|
|
|
51
|
|
|
371
|
|
Impact of foreign exchange rate changes
|
|
(979
|
)
|
|
(152
|
)
|
|
(212
|
)
|
|
(118
|
)
|
|
(1,461
|
)
|
At December 31, 2014
|
|
6,313
|
|
|
1,087
|
|
|
1,448
|
|
|
862
|
|
|
9,710
|
|
*
|
Related to equipment transferred to Merck Serono pursuant to the TSA (note 6 – Discontinued operations).
|
**
|
Related to R&D equipment impaired as a result of a restructuring (note 14 – Restructuring).
|
|
|
Carrying amount
|
|||||||||||||
|
|
Equipment
|
|
Furniture and fixtures
|
|
Computer equipment
|
|
Leasehold improvements
|
|
Total
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
At December 31, 2013
|
|
1,038
|
|
|
15
|
|
|
31
|
|
|
267
|
|
|
1,351
|
|
At December 31, 2014
|
|
499
|
|
|
19
|
|
|
86
|
|
|
193
|
|
|
797
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
11
|
Identifiable intangible assets
|
|
|
Year ended December 31, 2014
|
|
Year ended December 31, 2013
|
||||||||||||||
|
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
|
Cost
|
|
Accumulated amortization
|
|
Carrying value
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balances – Beginning of the year
|
|
39,890
|
|
|
(39,182
|
)
|
|
708
|
|
|
38,172
|
|
|
(37,044
|
)
|
|
1,128
|
|
Impairment loss*
|
|
—
|
|
|
(184
|
)
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Recurring amortization expense*
|
|
—
|
|
|
(117
|
)
|
|
(117
|
)
|
|
—
|
|
|
(454
|
)
|
|
(454
|
)
|
Impact of foreign exchange rate changes
|
|
(4,858
|
)
|
|
4,803
|
|
|
(55
|
)
|
|
1,718
|
|
|
(1,684
|
)
|
|
34
|
|
Balances – End of the year
|
|
35,032
|
|
|
(34,680
|
)
|
|
352
|
|
|
39,890
|
|
|
(39,182
|
)
|
|
708
|
|
12
|
Goodwill
|
|
|
Cost
|
|
Accumulated impairment loss
|
|
Carrying amount
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance as at January 1, 2013
|
|
9,466
|
|
|
—
|
|
|
9,466
|
|
Impact of foreign exchange rate changes
|
|
426
|
|
|
—
|
|
|
426
|
|
Balance as at December 31, 2013
|
|
9,892
|
|
|
—
|
|
|
9,892
|
|
Impact of foreign exchange rate changes
|
|
(1,205
|
)
|
|
—
|
|
|
(1,205
|
)
|
Balance as at December 31, 2014
|
|
8,687
|
|
|
—
|
|
|
8,687
|
|
13
|
Payables and accrued liabilities
|
|
|
As at December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Trade accounts payable
|
|
3,153
|
|
|
4,802
|
|
Accrued research and development costs
|
|
1,073
|
|
|
666
|
|
Salaries, employment taxes and benefits
|
|
560
|
|
|
402
|
|
Current portion of onerous contract provisions (note 16)
|
|
322
|
|
|
441
|
|
Other accrued liabilities
|
|
691
|
|
|
931
|
|
|
|
5,799
|
|
|
7,242
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
14
|
Restructuring
|
|
|
Year ended December 31,
|
|
|
|
2014
|
|
|
|
$
|
|
Balance – Beginning of the year
|
|
—
|
|
Provision recognized
|
|
2,489
|
|
Utilization of provision
|
|
(687
|
)
|
Impact of foreign exchange rate changes
|
|
(151
|
)
|
Balance – End of the year
|
|
1,651
|
|
Less: non-current portion
|
|
(146
|
)
|
|
|
1,505
|
|
15
|
Warrant liability
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance – Beginning of the year
|
|
18,010
|
|
|
6,176
|
|
|
9,204
|
|
Share purchase warrants issued during the year (note 17)
|
|
8,487
|
|
|
13,397
|
|
|
4,100
|
|
Share purchase warrants exercised during the year
|
|
—
|
|
|
—
|
|
|
(382
|
)
|
Change in fair value of share purchase warrants
|
|
(18,272
|
)
|
|
(1,563
|
)
|
|
(6,746
|
)
|
|
|
8,225
|
|
|
18,010
|
|
|
6,176
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
|
Number
|
|
Weighted average exercise price (US$)
|
||||||
Balance – Beginning of the year
|
|
20,107,410
|
|
|
2.34
|
|
|
4,407,410
|
|
|
5.14
|
|
|
1,511,179
|
|
|
8.62
|
|
Issued
|
|
8,800,000
|
|
|
1.25
|
|
*
|
15,700,000
|
|
|
1.55
|
|
|
2,970,000
|
|
|
3.45
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,383
|
)
|
|
8.24
|
|
Expired
|
|
(122,221
|
)
|
|
7.50
|
|
|
—
|
|
|
—
|
|
|
(21,386
|
)
|
|
9.00
|
|
Balance – End of the year
|
|
28,785,189
|
|
|
1.87
|
|
|
20,107,410
|
|
|
2.34
|
|
|
4,407,410
|
|
|
5.14
|
|
*
|
As adjusted (note 17 – Share capital)
|
|
|
Warrants outstanding and exercisable
|
||||
Exercise price
|
|
Number
|
|
Weighted average remaining contractual life (years)
|
||
1.20
|
|
1,605,000
|
|
|
3.90
|
|
1.25
|
|
20,295,000
|
|
|
3.96
|
|
1.85
|
|
2,600,000
|
|
|
3.58
|
|
3.45
|
|
2,970,000
|
|
|
2.80
|
|
8.24
|
|
530,424
|
|
|
0.47
|
|
9.00
|
|
740,737
|
|
|
0.80
|
|
10.29
|
|
44,028
|
|
|
0.46
|
|
|
|
28,785,189
|
|
|
3.65
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Number of equivalent shares
|
|
Market-value per share price ($)
|
|
Weighted average exercise price ($)
|
|
Risk-free annual interest rate (a)
|
|
Expected volatility
(b)
|
|
Expected life (years) (c)
|
|
Expected dividend yield
(d)
|
||||
April 2010
Investor Warrants |
|
740,737
|
|
|
0.60
|
|
|
9.00
|
|
|
0.25%
|
|
98.72%
|
|
0.80
|
|
|
0.00%
|
June 2010
Investor Warrants |
|
530,424
|
|
|
0.60
|
|
|
8.24
|
|
|
0.25%
|
|
125.73%
|
|
0.47
|
|
|
0.00%
|
June 2010
Compensation Warrants |
|
44,028
|
|
|
0.60
|
|
|
10.29
|
|
|
0.25%
|
|
127.70%
|
|
0.46
|
|
|
0.00%
|
October 2012
Investor Warrants
|
|
2,970,000
|
|
|
0.60
|
|
|
3.45
|
|
|
1.01%
|
|
106.74%
|
|
2.80
|
|
|
0.00%
|
July 2013
Warrants |
|
2,600,000
|
|
|
0.60
|
|
|
1.85
|
|
|
1.26%
|
|
98.57%
|
|
3.58
|
|
|
0.00%
|
November 2013
Warrants |
|
13,100,000
|
|
|
0.60
|
|
|
1.24
|
|
*
|
1.34%
|
|
95.78%
|
|
3.90
|
|
|
0.00%
|
January 2014
Investor Warrants
|
|
8,800,000
|
|
|
0.60
|
|
|
1.25
|
|
*
|
1.38%
|
|
94.51%
|
|
4.03
|
|
|
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.
|
16
|
Provisions and other non-current liabilities
|
|
|
As at December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Onerous contract provisions (detailed below)
|
|
1,014
|
|
|
1,291
|
|
Non-current portion of provision for restructuring costs (note 14)
|
|
146
|
|
|
—
|
|
Other
|
|
130
|
|
|
182
|
|
|
|
1,290
|
|
|
1,473
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Cetrotide
®
onerous contracts*
|
|
Onerous lease**
|
|
Total
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Balance at January 1, 2014
|
|
1,296
|
|
|
436
|
|
|
1,732
|
|
Additional provision recognized
|
|
223
|
|
|
—
|
|
|
223
|
|
Utilization of provision
|
|
(397
|
)
|
|
(102
|
)
|
|
(499
|
)
|
Unwinding of discount and effect of change in the discount rate
|
|
(124
|
)
|
|
4
|
|
|
(120
|
)
|
Balance at December 31, 2014
|
|
998
|
|
|
338
|
|
|
1,336
|
|
Less: current portion
|
|
(218
|
)
|
|
(104
|
)
|
|
(322
|
)
|
|
|
780
|
|
|
234
|
|
|
1,014
|
|
*
|
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 in the United States, net of estimated future sublease income. The estimate may vary as a result of changes in the utilization of the leased premises and of the sublease arrangement. The remaining term of the lease is three years as at December 31, 2014.
|
17
|
Share capital
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
US dollar-denominated options
|
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
|
Number
|
|
Weighted
average exercise price (US$) |
||||||
Balance – Beginning of the year
|
|
1,759,794
|
|
|
3.40
|
|
|
1,328,492
|
|
|
4.27
|
|
|
287,950
|
|
|
11.59
|
|
Granted
|
|
1,951,500
|
|
|
0.93
|
|
|
630,000
|
|
|
1.56
|
|
|
1,060,445
|
|
*
|
2.40
|
|
Forfeited
|
|
(314,263
|
)
|
|
4.55
|
|
|
(198,698
|
)
|
*
|
3.37
|
|
|
(19,903
|
)
|
|
10.44
|
|
Balance – End of the year
|
|
3,397,031
|
|
|
1.88
|
|
|
1,759,794
|
|
|
3.40
|
|
|
1,328,492
|
|
|
4.27
|
|
*
|
In addition to the stock options granted to employees, the Company granted during the year 2012, 125,000 stock options to a financial advisor and 66,666 stock options to an investor relations advisor. The 125,000 stock options were to vest upon the achievement of a certain strategic alliance transaction, which did not occur. Of the 66,666 stock options, 33,333 vested upon signature of the service agreement, and the remainder vested 90 days later. Both grants described herein were forfeited during the year 2013 upon termination of the service agreements.
|
|
|
Years ended December 31,
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Canadian dollar-denominated options
|
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
|
Number
|
|
Weighted
average exercise price (CAN$) |
||||||
Balance – Beginning of the year
|
|
652,779
|
|
|
12.91
|
|
|
727,875
|
|
|
12.71
|
|
|
1,031,328
|
|
|
14.99
|
|
Exercised*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,582
|
)
|
|
8.51
|
|
Forfeited
|
|
(81,679
|
)
|
|
7.50
|
|
|
(9,932
|
)
|
|
12.61
|
|
|
(57,437
|
)
|
|
15.07
|
|
Expired
|
|
(76,994
|
)
|
|
36.62
|
|
|
(65,164
|
)
|
|
10.77
|
|
|
(220,434
|
)
|
|
23.22
|
|
Balance – End of the year
|
|
494,106
|
|
|
10.11
|
|
|
652,779
|
|
|
12.91
|
|
|
727,875
|
|
|
12.71
|
|
*
|
The weighted average share price at time of exercise was CAN$11.25 for the year ended December 31, 2012.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
US$ options outstanding as at December 31, 2014
|
|||||||
Exercise price
(US$)
|
|
Number
|
|
Weighted average remaining
contractual life (years)
|
|
Weighted average exercise price
(US$)
|
|||
0.76
|
|
1,136,500
|
|
|
6.93
|
|
|
0.76
|
|
1.07 to 1.11
|
|
450,000
|
|
|
6.35
|
|
|
1.07
|
|
1.12 to 2.15
|
|
995,000
|
|
|
8.25
|
|
|
1.46
|
|
2.16 to 2.92
|
|
520,520
|
|
|
7.93
|
|
|
2.17
|
|
2.93 to 10.17
|
|
119,166
|
|
|
4.74
|
|
|
3.47
|
|
10.18 to 21.78
|
|
175,845
|
|
|
6.43
|
|
|
11.56
|
|
|
|
3,397,031
|
|
|
7.29
|
|
|
1.88
|
|
|
|
US$ options exercisable as at December 31, 2014
|
|||||||
Exercise price
(US$)
|
|
Number
|
|
Weighted average remaining
contractual life (years)
|
|
Weighted average exercise price
(US$)
|
|||
1.12 to 2.15
|
|
210,006
|
|
|
8.58
|
|
|
1.56
|
|
2.16 to 2.92
|
|
520,520
|
|
|
7.93
|
|
|
2.17
|
|
2.93 to 10.17
|
|
102,501
|
|
|
4.32
|
|
|
3.46
|
|
10.18 to 21.78
|
|
175,845
|
|
|
6.43
|
|
|
11.56
|
|
|
|
1,008,872
|
|
|
7.44
|
|
|
3.81
|
|
|
|
CAN$ options outstanding and exercisable as at December 31, 2014
|
|||||||
Exercise price
(CAN$)
|
|
Number
|
|
Weighted average remaining
contractual life
(years)
|
|
Weighted average exercise price
(CAN$)
|
|||
3.30 to 4.80
|
|
89,223
|
|
|
3.89
|
|
|
3.64
|
|
4.81 to 7.02
|
|
127,705
|
|
|
4.94
|
|
|
5.70
|
|
7.03 to 9.78
|
|
134,164
|
|
|
4.90
|
|
|
8.96
|
|
9.79 to 21.21
|
|
99,992
|
|
|
2.11
|
|
|
15.72
|
|
21.22 to 30.54
|
|
43,022
|
|
|
1.65
|
|
|
27.14
|
|
|
|
494,106
|
|
|
3.88
|
|
|
10.11
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
||
|
|
|
|
2014
|
|
2013
|
Expected dividend yield
|
|
(a)
|
|
0.0%
|
|
0.0%
|
Expected volatility
|
|
(b)
|
|
101.6%
|
|
98.1%
|
Risk-free annual interest rate
|
|
(c)
|
|
1.87%
|
|
1.46%
|
Expected life (years)
|
|
(d)
|
|
6.16
|
|
6.63
|
Weighted average share price
|
|
|
|
US$0.93
|
|
US$1.56
|
Weighted average exercise price
|
|
|
|
US$0.93
|
|
US$1.56
|
Weighted average grant date fair value
|
|
|
|
US$0.75
|
|
US$1.26
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Subcontractor fees
|
|
—
|
|
|
51
|
|
|
—
|
|
Raw material purchases
|
|
—
|
|
|
—
|
|
|
591
|
|
Cost of sales
|
|
—
|
|
|
51
|
|
|
591
|
|
Key management personnel compensation
(1)
|
|
|
|
|
|
|
|||
Salaries and short-term employee benefits
|
|
2,405
|
|
|
2,280
|
|
|
2,354
|
|
Termination benefits
|
|
439
|
|
|
1,438
|
|
|
—
|
|
Post-employment benefits
|
|
77
|
|
|
58
|
|
|
957
|
|
Share-based compensation costs
|
|
392
|
|
|
1,795
|
|
|
941
|
|
|
|
3,313
|
|
|
5,571
|
|
|
4,252
|
|
Other employees compensation:
|
|
|
|
|
|
|
|||
Salaries and short-term employee benefits
|
|
7,663
|
|
|
7,955
|
|
|
8,473
|
|
Termination benefits (note 14)
|
|
1,984
|
|
|
7
|
|
|
189
|
|
Post-employment benefits
|
|
832
|
|
|
626
|
|
|
75
|
|
Share-based compensation costs
|
|
105
|
|
|
572
|
|
|
514
|
|
|
|
10,584
|
|
|
9,160
|
|
|
9,251
|
|
Goods and services
(2)
|
|
19,016
|
|
|
15,954
|
|
|
14,663
|
|
Leasing costs, net of sublease receipts of $344,000 in 2014, $226,000 in 2013 and $226,000 in 2012
(3)
|
|
1,802
|
|
|
1,879
|
|
|
1,751
|
|
Refundable tax credits and grants
|
|
(131
|
)
|
|
(517
|
)
|
|
(868
|
)
|
Onerous contract expenses resulting from the Resource Optimization Program (note 14)
|
|
563
|
|
|
—
|
|
|
—
|
|
Share-based compensation costs related to collaborators
|
|
—
|
|
|
(148
|
)
|
|
342
|
|
Transaction costs related to share purchase warrants
|
|
666
|
|
|
1,165
|
|
|
370
|
|
Depreciation and amortization
|
|
488
|
|
|
949
|
|
|
1,050
|
|
Impairment losses
|
|
390
|
|
|
—
|
|
|
184
|
|
Operating foreign exchange losses (gains)
|
|
715
|
|
|
(413
|
)
|
|
203
|
|
|
|
23,509
|
|
|
18,869
|
|
|
17,695
|
|
|
|
37,406
|
|
|
33,651
|
|
|
31,789
|
|
(1)
|
Key management includes the Company's directors and members of the executive management team.
|
(2)
|
Goods and services include third-party R&D costs, laboratory supplies, professional fees, contracted sales force costs, marketing services, insurance and travel expenses.
|
(3)
|
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.
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
19
|
Employee future benefits
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
Pension benefit plans
Years ended December 31,
|
|
Other benefit plans
Years ended December 31,
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance – Beginning of year
|
|
14,646
|
|
|
16,062
|
|
|
11,769
|
|
|
762
|
|
|
1,169
|
|
|
1,111
|
|
Current service cost
|
|
176
|
|
|
219
|
|
|
139
|
|
|
24
|
|
|
57
|
|
|
134
|
|
Interest cost
|
|
476
|
|
|
421
|
|
|
491
|
|
|
25
|
|
|
31
|
|
|
46
|
|
Actuarial loss (gain) arising from changes in financial assumptions
|
|
1,833
|
|
|
(2,346
|
)
|
|
3,705
|
|
|
(96
|
)
|
|
(258
|
)
|
|
79
|
|
Benefits paid
|
|
(411
|
)
|
|
(357
|
)
|
|
(337
|
)
|
|
(210
|
)
|
|
(274
|
)
|
|
(219
|
)
|
Impact of foreign exchange rate changes
|
|
(2,101
|
)
|
|
647
|
|
|
295
|
|
|
(72
|
)
|
|
36
|
|
|
18
|
|
Balance – End of year
|
|
14,619
|
|
|
14,646
|
|
|
16,062
|
|
|
433
|
|
|
761
|
|
|
1,169
|
|
Amounts recognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In comprehensive (loss) income
|
|
(652
|
)
|
|
(640
|
)
|
|
(630
|
)
|
|
47
|
|
|
170
|
|
|
(259
|
)
|
In other comprehensive income(loss)
|
|
268
|
|
|
1,699
|
|
|
(4,000
|
)
|
|
72
|
|
|
(36
|
)
|
|
(18
|
)
|
|
|
Pension benefit plans
|
|
Other benefit plans
|
||||||||
|
|
Years ended December 31,
|
|
Years ended December 31,
|
||||||||
Actuarial assumptions
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
Discount rate
|
|
2.00
|
|
3.37
|
|
2.60
|
|
2.00
|
|
3.37
|
|
2.60
|
Pension benefits increase
|
|
1.80
|
|
2.00
|
|
2.00
|
|
1.80
|
|
2.00
|
|
2.00
|
Rate of compensation increase
|
|
2.00
|
|
2.75 to 3.75
|
|
2.75 to 3.75
|
|
2.00
|
|
2.75
|
|
2.75
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Retiring at the end of the reporting period:
|
|
|
|
|
|
|
|||
Male
|
|
19
|
|
|
19
|
|
|
19
|
|
Female
|
|
23
|
|
|
23
|
|
|
23
|
|
Retiring 20 years after the end of the reporting period:
|
|
|
|
|
|
|
|||
Male
|
|
22
|
|
|
22
|
|
|
22
|
|
Female
|
|
26
|
|
|
26
|
|
|
26
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
|
|
$
|
|
2015
|
|
495
|
|
2016
|
|
502
|
|
2017
|
|
512
|
|
2018
|
|
531
|
|
2019
|
|
553
|
|
Thereafter
|
|
19,867
|
|
|
|
22,460
|
|
20
|
Finance income and finance costs
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Finance income
|
|
|
|
|
|
|
|||
Change in fair value of warrant liability
|
|
18,272
|
|
|
1,563
|
|
|
6,746
|
|
Gains due to changes in foreign currency exchange rates
|
|
1,879
|
|
|
—
|
|
|
—
|
|
Interest income
|
|
168
|
|
|
185
|
|
|
228
|
|
|
|
20,319
|
|
|
1,748
|
|
|
6,974
|
|
Finance costs
|
|
|
|
|
|
|
|||
Losses due to changes in foreign currency exchange rates
|
|
—
|
|
|
(1,512
|
)
|
|
(382
|
)
|
|
|
20,319
|
|
|
236
|
|
|
6,592
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||
Trade and other receivables
|
|
(578
|
)
|
|
(3
|
)
|
|
2,526
|
|
Inventory
|
|
—
|
|
|
112
|
|
|
670
|
|
Prepaid expenses and other current assets
|
|
(2,453
|
)
|
|
(6,454
|
)
|
|
(4,154
|
)
|
Payables and accrued liabilities
|
|
1,732
|
|
|
(900
|
)
|
|
(2,447
|
)
|
Other non-current assets
|
|
(204
|
)
|
|
(124
|
)
|
|
(364
|
)
|
Deferred revenues
|
|
1,101
|
|
|
—
|
|
|
—
|
|
Provision for restructuring costs (note 14)
|
|
(687
|
)
|
|
—
|
|
|
—
|
|
Employee future benefits (note 19)
|
|
(621
|
)
|
|
(631
|
)
|
|
(556
|
)
|
Provisions and other non-current liabilities
|
|
(163
|
)
|
|
10
|
|
|
(49
|
)
|
|
|
(1,873
|
)
|
|
(7,990
|
)
|
|
(4,374
|
)
|
22
|
Income taxes
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Current tax expense
|
|
111
|
|
|
—
|
|
|
—
|
|
Deferred tax:
|
|
|
|
|
|
|
|||
Origination and reversal of temporary differences
|
|
10,246
|
|
|
(4,253
|
)
|
|
7,282
|
|
Adjustments in respect of prior years
|
|
5
|
|
|
418
|
|
|
44
|
|
Change in unrecognized tax assets
|
|
(10,251
|
)
|
|
3,835
|
|
|
(7,326
|
)
|
Income tax expense
|
|
111
|
|
|
—
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
Combined Canadian federal and provincial statutory income tax rate
|
|
26.9
|
%
|
|
26.9
|
%
|
|
26.9
|
%
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Income tax (expense) recovery based on combined statutory income tax rate
|
|
4,426
|
|
|
(1,833
|
)
|
|
5,494
|
|
Change in unrecognized tax assets
|
|
(10,251
|
)
|
|
3,835
|
|
|
(7,326
|
)
|
Permanent difference attributable to the use of local currency for tax reporting
|
|
145
|
|
|
(892
|
)
|
|
14
|
|
Permanent difference attributable to net change in fair value of warrant liability
|
|
4,408
|
|
|
(217
|
)
|
|
1,182
|
|
Share-based compensation costs
|
|
(133
|
)
|
|
(596
|
)
|
|
(421
|
)
|
Difference in statutory income tax rate of foreign subsidiaries
|
|
1,398
|
|
|
(809
|
)
|
|
997
|
|
Permanent difference attributable to unrealized foreign exchange gain/loss
|
|
18
|
|
|
131
|
|
|
(22
|
)
|
Foreign witholding tax
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
Adjustments in respect of prior years
|
|
5
|
|
|
418
|
|
|
44
|
|
Other
|
|
(16
|
)
|
|
(37
|
)
|
|
38
|
|
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
|
||
Non-current:
|
|
|
|
|
||
Operating losses carried forward
|
|
2,139
|
|
|
2,465
|
|
Intangible assets
|
|
7,918
|
|
|
10,080
|
|
|
|
10,057
|
|
|
12,545
|
|
Deferred tax liabilities
|
|
|
|
|
||
Current:
|
|
|
|
|
||
Deferred revenues
|
|
941
|
|
|
1,262
|
|
|
|
941
|
|
|
1,262
|
|
Non-current:
|
|
|
|
|
||
Property, plant and equipment
|
|
17
|
|
|
50
|
|
Deferred revenues
|
|
7,979
|
|
|
10,157
|
|
Warrant liability
|
|
1,116
|
|
|
1,076
|
|
Other
|
|
4
|
|
|
—
|
|
|
|
9,116
|
|
|
11,283
|
|
|
|
10,057
|
|
|
12,545
|
|
Deferred tax assets (liabilities), net
|
|
—
|
|
|
—
|
|
|
|
As at December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
$
|
|
$
|
||
Deferred tax assets
|
|
|
|
|
||
Current:
|
|
|
|
|
||
Onerous contract and other provisions
|
|
102
|
|
|
87
|
|
|
|
102
|
|
|
87
|
|
Non-current:
|
|
|
|
|
||
Operating losses carried forward
|
|
62,094
|
|
|
59,813
|
|
Research and development costs
|
|
10,987
|
|
|
11,988
|
|
Unused tax credits
|
|
9,517
|
|
|
10,386
|
|
Employee future benefits
|
|
2,455
|
|
|
2,135
|
|
Property, plant and equipment
|
|
1,175
|
|
|
1,260
|
|
Share issue expenses
|
|
817
|
|
|
712
|
|
Onerous contract provisions
|
|
198
|
|
|
435
|
|
Intangible assets
|
|
227
|
|
|
248
|
|
Other
|
|
296
|
|
|
—
|
|
|
|
87,766
|
|
|
86,977
|
|
Unrecognized deferred tax assets
|
|
87,868
|
|
|
87,064
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
23
|
Capital disclosures
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014
|
|
Loans and
receivables |
|
Financial
liabilities at FVTPL |
|
Other
financial liabilities |
|
Total
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents (note 7)
|
|
34,931
|
|
|
—
|
|
|
—
|
|
|
34,931
|
|
Trade and other receivables (note 8)
|
|
796
|
|
|
—
|
|
|
—
|
|
|
796
|
|
Restricted cash equivalents (note 9)
|
|
760
|
|
|
—
|
|
|
—
|
|
|
760
|
|
Payables and accrued liabilities (note 13)
|
|
—
|
|
|
—
|
|
|
(5,256
|
)
|
|
(5,256
|
)
|
Provision for restructuring costs (note 14)
|
|
—
|
|
|
—
|
|
|
(1,105
|
)
|
|
(1,105
|
)
|
Warrant liability (note 15)
|
|
—
|
|
|
(8,225
|
)
|
|
—
|
|
|
(8,225
|
)
|
Other non-current liabilities (note 16)
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
(130
|
)
|
|
|
36,487
|
|
|
(8,225
|
)
|
|
(6,491
|
)
|
|
21,771
|
|
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 9)
|
|
865
|
|
|
—
|
|
|
—
|
|
|
865
|
|
Payables and accrued liabilities (note 13)
|
|
—
|
|
|
—
|
|
|
(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
|
|
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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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
|
|
8,225
|
|
|
1,117
|
|
|
(1,147
|
)
|
Total impact on net loss – decrease / (increase)
|
|
|
|
1,117
|
|
|
(1,147
|
)
|
|
|
|
|
Balances denominated in US$
|
|||||
|
|
Carrying
amount |
|
-5%
|
|
+5%
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Cash and cash equivalents
|
|
25,184
|
|
|
1,259
|
|
|
(1,259
|
)
|
Warrant liability
|
|
8,225
|
|
|
(411
|
)
|
|
411
|
|
Total impact on net loss – decrease / (increase)
|
|
|
|
848
|
|
|
(848
|
)
|
25
|
Commitments and contingencies
|
|
|
Minimum lease payments
|
|
Minimum sublease receipts
|
||
|
|
$
|
|
$
|
||
Less than 1 year
|
|
1,678
|
|
|
(392
|
)
|
1 - 3 years
|
|
1,352
|
|
|
(493
|
)
|
4 - 5 years
|
|
325
|
|
|
(19
|
)
|
Total
|
|
3,355
|
|
|
(904
|
)
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
26
|
Net (loss) income per share
|
|
|
Years ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Net loss from continuing operations
|
|
(17,187
|
)
|
|
(27,240
|
)
|
|
(23,144
|
)
|
Net income from discontinued operations
|
|
623
|
|
|
34,055
|
|
|
2,732
|
|
Net (loss) income
|
|
(16,564
|
)
|
|
6,815
|
|
|
(20,412
|
)
|
Basic weighted average number of shares outstanding
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,775,073
|
|
Dilutive effect of stock options
|
|
—
|
|
|
—
|
|
|
31,614
|
|
Diluted weighted average number of shares outstanding
|
|
59,024,730
|
|
|
29,476,455
|
|
|
19,806,687
|
|
Items excluded from the calculation of diluted net (loss) income 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
|
|
2,324,175
|
|
|
2,115,453
|
|
|
1,183,388
|
|
Warrants (number of equivalent shares)
|
|
28,785,189
|
|
|
7,141,879
|
|
|
1,803,730
|
|
27
|
Segment information
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(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,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
$
|
|
$
|
|
$
|
|||
United States
|
|
6
|
|
|
33,640
|
|
|
5,158
|
|
Switzerland
|
|
956
|
|
|
34,081
|
|
|
24,406
|
|
Japan
|
|
61
|
|
|
6,586
|
|
|
4,062
|
|
Other
|
|
25
|
|
|
212
|
|
|
39
|
|
|
|
1,048
|
|
|
74,519
|
|
|
33,665
|
|
Amounts presented:
|
|
|
|
|
|
|
|||
Within discontinued operations
|
|
1,037
|
|
|
68,344
|
|
|
31,612
|
|
Within continuing operations
|
|
11
|
|
|
6,175
|
|
|
2,053
|
|
|
|
1,048
|
|
|
74,519
|
|
|
33,665
|
|
Aeterna Zentaris Inc.
|
Notes to Consolidated Financial Statements
|
As at December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012
|
(tabular amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)
|
28
|
Subsequent events
|
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 (incorporated by reference to Exhibit 4.1 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on March 21, 2014)
|
4.2
|
|
Employment Agreement dated November 1, 2013 between Jude Dinges and a subsidiary of the Registrant (incorporated by reference to Exhibit 4.4 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on March 21, 2014)
|
4.3
|
|
Employment Agreement dated April 15, 2013 between David A. Dodd and a subsidiary of the Registrant (incorporated by reference to Exhibit 4.5 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on March 21, 2014)
|
4.4
|
|
Service Contract dated January 1, 2014 between Richard Sachse, MD and Aeterna Zentaris GmbH, a subsidiary of the Registrant (incorporated by reference to Exhibit 4.8 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on March 21, 2014)
|
4.5
|
|
Employment agreement dated November 11, 2013 between Keith Santorelli and a subsidiary of the Registrant
|
4.6
|
|
Amendment #1 to employment agreement dated May 29, 2014 between a subsidiary of the Registrant and Keith Santorelli
|
4.7
|
|
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)
|
4.8
|
|
Termination of the Change of Control Program letter dated June 14, 2013 from the Registrant to Dennis Turpin (incorporated by reference to Exhibit 4.10 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on March 21, 2014)
|
4.9
|
|
Master Collaboration Agreement by and between Aeterna Zentaris GmbH, a subsidiary of the Registrant, and Sinopharm A-think Pharmaceuticals Co., Ltd, dated as of December 1, 2014 (incorporated by reference to Exhibit 99.2 of the Registrant's report on Form 6-K furnished to the Commission on December 11, 2014).
|
4.10
|
|
License Agreement by and between Aeterna Zentaris GmbH, a subsidiary of the Registrant, and Sinopharm A-think Pharmaceuticals Co., Ltd, dated as of December 1, 2014 (incorporated by reference to Exhibit 99.3 of the Registrant's report on Form 6-K furnished to the Commission on December 11, 2014).
|
4.11
|
|
Technology Transfer and Technical Assistance, Agreement by and between Aeterna Zentaris GmbH, a subsidiary of the Registrant, and Sinopharm A-think Pharmaceuticals Co., Ltd, dated as of December 1, 2014 (incorporated by reference to Exhibit 99.4 of the Registrant's report on Form 6-K furnished to the Commission on December 11, 2014).
|
8.1
|
|
Subsidiaires 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
|
|
Code of Business Conduct and Ethics for Members of the Board of Directors
|
11.3
|
|
Audit Committee Charter of the Registrant
|
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
|
BETWEEN:
|
|
AETERNA ZENTARIS, INC.,
a Corporation duly incorporated, having its head office at 100 Market Place, Suite 203, 25 Mountainview Blvd. Basking Ridge, NJ 07920
|
|
|
|
|
|
(hereinafter the
"Corporation"
)
|
|
|
|
AND:
|
|
Keith Santorelli, CPA,
domiciled at:
18 Mountain Avenue, Wakefield, MA 01880
|
|
|
|
|
|
(hereinafter the
"Executive"
)
|
1.1
|
The Corporation wishes to employ the Executive as its Vice President, Finance, starting on November 11, 2013 (the
"Commencement Date"
). The Executive is willing to be employed by the Corporation, on the terms and conditions set forth herein in this Employment Agreement (the
"Agreement"
). The Executive shall report to the Senior Vice President and Chief Financial Officer of the Corporation.
|
2.1
|
The Executive agrees to devote his full business time to the Corporation, to make every effort necessary to perform adequately the duties that are assigned to him and to act in the best interests of the Corporation at all times. The Executive shall refrain from any activity that could be prejudicial to the Corporation's interests. In performing his duties with the Corporation, the Executive shall act faithfully and honestly at all times.
|
2.2
|
The Executive shall carry out his duties primarily in Massachusetts (Greater Boston area); however, the Executive agrees to attend to business at other locations as required to meet the needs of the Corporation or to perform his duties.
|
2.3
|
The Executive agrees to comply with all the instructions, policies and/or rules that are established verbally or in writing by the Corporation.
|
2.4
|
The Executive shall be entitled to sit on a board of directors of another corporation, solely with the prior written authorization of the Board.
|
3.1
|
Salary
|
3.2
|
Bonus
|
3.3
|
Business Expenses
|
3.4
|
Stock Options
|
5.1
|
The Executive is eligible to participate in the Aeterna Zentaris, Inc. health and dental benefits plan and to receive other benefits routinely offered by the Corporation (i.e. 401k matching), beginning on the Commencement Date.
|
(a)
|
If 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)
|
If the Executive becomes physically or mentally disabled to such an extent as to make him unable to perform his duties normally and adequately for an aggregate of six (6) months during a period of twelve (12) consecutive months. In such a case, the Executive may continue to benefit under short-term and long-term disability insurance plans, subject to the terms of such plans, if any.
|
(c)
|
If the Executive breaches the terms of this Agreement.
|
(d)
|
If the Executive commits any fraud, theft, embezzlement or other criminal act of a similar nature.
|
(e)
|
If the Executive has committed serious misconduct or willful negligence in the performance of his duties.
|
(f)
|
If the Executive refuses or fails to follow reasonable directives of the Corporation.
|
(g)
|
If the Executive's demonstrates willful or reckless conduct causing material damage to the Corporation or the Corporation's business.
|
(h)
|
If the Executive misuses or abuses alcohol, drugs or controlled substances.
|
8.1
|
The Executive shall not compete with the Corporation, directly nor indirectly. He shall not participate in any capacity whatsoever in a business that would directly or indirectly compete with the Corporation, namely one involved in the development and commercialization of the specific endocrine therapies and oncology treatments which the Corporation is actively developing, including, without limitation, as an executive, director, officer, employer, principal, agent, fiduciary, administrator of another's property, associate, independent contractor,
|
8.1.1
|
As to the time period,
to the duration of the Executive's employment and for a period of one (1) year as of 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 during the two years preceding the termination date. For purposes of this clause, the Corporation is 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, pursuant to a distribution agreement (exclusive or non-exclusive) except if such distribution agreement ceased to have effect, prior to the termination date, with the Corporation's consent and provided that the Corporation did not actively search for other distributors for the territory covered by this Agreement; or if
|
(ii)
|
The Corporation 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.
|
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 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 Corporation 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 of the Corporation, directly or indirectly, not to permit the use of his name in order to solicit said clients or do anything whatsoever to induce or to lead any person to decide to put an end, in whole or in part, to his business relations with the Corporation.
|
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 has with its distributors, suppliers, representatives, agents and other parties with whom the Corporation deals.
|
8.5
|
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 solicit the personnel of the Corporation to leave their employment with the Corporation nor to hire the personnel of the Corporation for any enterprise in which the Executive has an interest.
|
8.6
|
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, while allowing the Executive to earn his living.
|
8.7
|
Nothing in this section shall operate to reduce nor to extinguish the obligations of the Executive arising at law or under this contract which survive at the termination of the contract in reason of their nature and, in particular, without limiting the foregoing, the Executive's duty of loyalty and obligation to act faithfully and honestly.
|
9.1
|
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 subsidiaries 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 that its disclosure or unauthorized use could be prejudicial to the Corporation and contrary to its interests.
|
9.2
|
The term "confidential information" includes among other things:
|
9.2.1
|
products, formulae, processes and composition of products, as well as raw materials and ingredients, of whatever kind, that are used in their manufacture;
|
9.2.2
|
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;
|
9.2.3
|
equipment, machinery, devices, tools, instruments and accessories;
|
9.2.4
|
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
|
9.2.5
|
research, experiments, inventions, discoveries, developments, improvements, ideas, industrial secrets and "know-how".
|
10.1
|
The Executive hereby assigns and agrees to assign to the Corporation all 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 connected with any matter relating or possibly relating to any business in which the Corporation or any of its subsidiaries or related or associated companies is involved unless specifically released from such obligation in writing by the Board.
|
10.2
|
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 may require with respect to any proceeding or litigation relating to the protection or defense of intellectual property rights belonging to the Corporation.
|
10.3
|
This section shall be binding on the Executive's heirs, assignees and legal representatives.
|
11.1
|
Any file, sketch, drawing, letter, report, memo or other document, any equipment, machinery, tool, instrument or other device, any diskette, recording tape, compact disc or software or any other property which comes into the Executive's 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 into his possession and whether or not it is an original or a copy, shall at all times remain the property of the Corporation and, upon the termination of the Executive's employment, shall be returned to the Corporation or its designated representative before the Executive leaves his place of work. The Executive may not keep a copy or give one to a third party.
|
12.1
|
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.
|
13.1
|
To be valid, any amendment to this Agreement must be confirmed in writing by the Corporation and by the Executive.
|
14.1
|
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.
|
15.1
|
For the purposes of the exercise of any rights flowing from this Agreement and the institution of legal proceedings, the parties elect domicile in the judicial district of Massachusetts.
|
16.1
|
This Agreement shall be binding on the successors, heirs, assignees and legal representatives of the parties.
|
17.1
|
This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts.
|
By:
|
|
DENNIS TURPIN
|
|
|
|
Senior Vice President and Chief Financial officer
|
|
|
|
|
|
|
|
Signed Name
|
|
|
|
|
|
|
|
Date:
|
11 Nov. 2013
|
|
|
|
|
and
|
|
|
|
|
|
KEITH SANTORELLI (EXECUTIVE)
|
|
|
|
|
|
|
|
Signed Name
|
|
|
|
|
|
|
|
Date:
|
11/11/2013
|
BETWEEN:
|
|
AETERNA ZENTARIS, INC.,
a Corporation duly incorporated, having an office at 100 Market Place, Suite 203, 25 Mountainview Blvd. Basking Ridge, NJ 07920
|
|
|
|
|
|
(hereinafter the
"Corporation"
)
|
|
|
|
AND:
|
|
KEITH SANTORELLI, CPA,
domiciled at
18 Mountain Avenue, Wakefield, MA 01880
|
|
|
|
|
|
(hereinafter the
"Executive"
)
|
1.1
|
Sections 6.3 and 6.4 of the Agreement are hereby deleted and replaced by the following:
|
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 more than 25% reduction of the Executive's Base Salary, as increased from time to time, provided such reduction is not warranted and due to either company performance or the Executive's failure to achieve performance standards or objectives as determined by the Senior Vice President and Chief Financial Officer in his sole and absolute discretion and judgment;
|
(b)
|
A material reduction (absent the Executive's consent) in the Executive's duties and responsibilities as the Corporation's Vice President, Finance.
|
6.4
|
Voluntary Termination.
In the event the Executive wishes to resign for any reason other than for Good Reason, the Executive shall give the Corporation at least sixty (60) days' prior written notice of such resignation. Any such notice properly given 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.
|
6.5
|
Termination by Separation of Service 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 (the "
Code"
), or the Executive resigns for Good Reason: (1) the 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; (2) the Corporation shall pay to the Executive in a lump sum (less applicable tax withholdings) an amount equal to (1) one times (1X) the sum of his then Base Salary and his then Annual Bonus, pro-rated as applicable; 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 shall be paid in US dollars by the Corporation no later than twenty (20) 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 Code, in which event, the payment shall be so delayed by six (6) months and one day.
|
By:
|
|
DENNIS TURPIN
|
|
|
Senior Vice President and Chief Financial officer
|
|
|
|
|
|
Signed Name
|
|
|
|
|
|
29-05-2014
|
|
|
Date
|
|
|
|
And:
|
|
KEITH SANTORELLI (EXECUTIVE)
|
|
|
|
|
|
Signed Name
|
|
|
|
|
|
29 May 2014
|
|
|
Date
|
|
|
|
|||
|
Aeterna Zentaris Inc.
(Canada)
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|||
Aeterna Zentaris GmbH
(Germany)
|
|
Aeterna Zentaris, Inc.
(Delaware)
|
|||
|
|
|
|||
|
|
|
|
||
|
100%
|
|
|
||
|
|
|
|||
Zentaris IVF GmbH
(Germany)
|
|
|
|
|
|
|
|
|
|
|
a.
|
Relationship of Corporation with Third Parties.
Directors may not receive a personal benefit from a person or a firm that is seeking to do business or to retain business with the Corporation. A director shall recuse him/herself from any Corporate Board decision involving another firm or company with which the director is affiliated.
|
b.
|
Compensation from Non-Corporate Sources.
Directors may not accept compensation in any form for services performed for the Corporation from any source other than the Corporation.
|
c.
|
Gifts.
Directors may not offer, give or receive gifts or other items of value from persons or entities who deal or seek to deal with the Corporation in those cases where any such gift has the purpose or effect of influencing (or could be perceived as influencing) the directors' actions as members of the Board, or where acceptance of the gifts could create the appearance of a conflict of interest.
|
d.
|
Personal Use of Corporate Assets.
Directors may not use corporate assets, labor or information for personal use unless approved by the Chair of the NGC or as part of a compensation or expense reimbursement program available to all directors.
|
a.
|
Personal Advantage from Corporate Opportunities.
Taking for themselves or companies with which they are affiliated opportunities that are discovered through the use of corporate property, corporate information or position as a director;
|
1
|
NASDAQ Rules of Fair Practice defines immediate family to include one's spouses, parents, brothers, sisters, children, relatives supported financially, father-in-law, mother-in-law, sister-in-law and brother-in-law.
|
b.
|
Use of Corporate Property.
Using the Corporation's property or information for personal gain; or
|
c.
|
Competing with the Corporation.
Competing with the Corporation for business opportunities. However, if the Corporation's disinterested directors determine that the Corporation will not pursue an opportunity that relates to the Corporation's business, a director may then do so.
|
a.
|
Encourages employees to speak with supervisors, managers and other appropriate personnel when in doubt about the best course of action in a particular situation;
|
b.
|
Encourages employees to report good faith belief of, or observed, ethical misconduct, violations of laws, rules, regulations or the Corporation's Code of Ethical Conduct to appropriate personnel or through the Corporation's external reporting structure; and
|
c.
|
Informs employees that the Corporation will not permit, and will protect employees from, retaliation for reporting concerns.
|
•
|
Perform activities within the scope of its charter.
|
•
|
Engage independent counsel and other advisers as it deems necessary to carry out its duties.
|
•
|
Set and pay the compensation for any advisors it employs.
|
•
|
Ensure the attendance of officers and/or other key employees having a finance or accounting function at meetings as appropriate.
|
•
|
Have unrestricted access to members of management, employees and relevant information.
|
•
|
Communicate directly with the internal and external auditors.
|
•
|
The Committee shall be formed of at least three members, each of which shall qualify as an independent director, as determined by the Board in accordance with applicable securities laws and standards of the stock exchanges on which the Corporation's securities are listed.
|
•
|
Each member shall provide a useful contribution to the Committee.
|
•
|
All members must be financially literate as defined in accordance with applicable securities laws and standards of the stock exchanges on which the Corporation's securities are listed.
|
•
|
In addition, for as long as the Corporation's securities are listed on the Nasdaq Stock Market, at least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication.
|
•
|
The chairperson of the Committee shall be appointed by the Board from time to time.
|
•
|
The term of the mandate of each member shall be one year.
|
•
|
The quorum requirement for any meeting shall be two members.
|
•
|
The secretary of the Committee shall be the secretary of the Corporation or any other individual appointed by the Board.
|
•
|
If deemed necessary, the Committee may invite other individuals.
|
•
|
External auditors shall be invited, if needed, to make presentations to the Committee.
|
•
|
The Committee shall meet at least four times a year. Special meetings may be held if needed. If deemed necessary, external auditors may invite members to attend any meeting.
|
•
|
The Committee will meet with the external auditors at least once a year without management presence.
|
•
|
The minutes of each meeting shall be recorded.
|
A.
|
Financial Information
|
i.
|
Review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on the financial statements.
|
ii.
|
Ask management and external auditors about significant risks and exposures and the plans to minimize such risks.
|
iii.
|
Review the unaudited interim financial statements, the audited annual financial statements in addition to any documents which accompany such financial statements, such as the report of the external auditors, and obtain an explanation from management of all material variances between comparative reporting periods, prior to filing or disclosure. Without restricting the generality of the foregoing, the Committee shall discuss with management and the external auditors to the extent required, any issues and disclosure requirements regarding (a) the use of "pro forma" or "adjusted" non-GAAP/non-IFRS information, (b) any off balance sheet arrangements, and (c) any going concern qualification. Determine whether they are complete and consistent with the information known to Committee members, and assess whether the financial statements reflect appropriate accounting principles and recommend their approval to the Board of Directors.
|
iv.
|
Review and recommend for approval by the Board, all public disclosure documents containing audited or unaudited financial information, including Management's Discussion and Analysis of financial condition and results of operations, all sections of the Annual Report on Form 20-F, quarterly reports and press releases concerning annual and interim financial results, and consider whether the information is adequate and consistent with members' knowledge about the Corporation and its operations and financial position.
|
v.
|
Be satisfied that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from the Corporation's financial statements, other than the public disclosure referred to in the two preceding paragraphs, and periodically assess the adequacy of those procedures.
|
vi.
|
Review the compliance of the President and Chief Executive Officer and of the Chief Financial Officer certification letter on the Corporation's controls and procedures disclosure of information and the attestation by management of the financial reports.
|
vii.
|
Pay particular attention to complex and/or unusual transactions such as restructuring charges and derivative disclosures.
|
viii.
|
Focus on judgmental areas such as those involving valuation of assets and liabilities including, for example, the accounting for and disclosure of: obsolete or slow-moving inventory; loan losses; warranty, product, and environmental liability; litigation reserves and other commitments and contingencies.
|
ix.
|
Meet with management and the external auditors to review the financial statements and the results of the audit.
|
x.
|
Consider management's handling of proposed audit adjustments identified by the external auditors.
|
xi.
|
Ensure that the external auditors communicate certain required matters to the Committee.
|
xii.
|
Be briefed on how management develops and summarizes quarterly financial information, the extent to which the external auditors review quarterly financial information, and whether that review is performed on a pre- or post-issuance basis.
|
xiii.
|
Meet with management and, if a pre-issuance review was completed, with the external auditors, either by telephone or in person, to review the interim financial statements and the results of the review.
|
xiv.
|
To gain insight into the fairness of the interim financial statements and disclosures, obtain explanations from management on whether.
|
•
|
Actual financial results for the quarter or interim period varied significantly from budgeted or projected results;
|
•
|
Changes in financial ratios and relationships in the interim financial statements are consistent with changes in the Corporation's operations and financing practices;
|
•
|
International Financial Reporting Standards (Generally accepted accounting principles) have been (consistently) applied;
|
•
|
There are any actual or proposed changes in accounting or financial reporting practices;
|
•
|
There are any significant or unusual events or transactions;
|
•
|
The Corporation's financial and operating controls are functioning effectively;
|
•
|
The Corporation has complied with the terms and conditions of loan agreements or security indentures; and
|
•
|
The interim financial statements contain adequate and appropriate disclosures.
|
xv.
|
Ensure that the external auditors communicate certain required matters to the Committee.
|
B.
|
External Audit
|
i.
|
Review the professional qualification of the auditors (including background and experience of partner and auditing personnel).
|
ii.
|
Consider and make any necessary determinations with respect to the independence of the external auditor and any potential conflicts of interest.
|
iii.
|
Review on an annual basis the performance of the external auditors and make recommendations to the Board for their compensation, their appointment, retention and termination of their appointment.
|
iv.
|
Perform a comprehensive review of the external auditors at least once every five years.
|
v.
|
Oversee the work of the external auditors, including the resolution of disagreements between management and the external auditors regarding financial reporting.
|
vi.
|
Require the external auditors to report directly to the Committee and make sure to receive periodic reports from the external auditors.
|
vii.
|
Review and approve the external auditors' scope and plan of the annual audit, as well as the approach for the current year in light of the Corporation's present circumstances and changes in regulatory and other requirements.
|
viii.
|
Annually, or more frequently as may be required, consult with the external auditors, without the presence of management, as to internal controls, the fullness and accuracy of the financial statements, any significant difficulties encountered during the course of the audit or access to required information, the quality of financial personnel, the level of co-operation received from management any unresolved material differences of opinion or disputes.
|
ix.
|
Discuss with the external auditor the appropriateness of the accounting policies applied in the Corporation's financial reports and whether they are considered as aggressive, balanced or conservative.
|
x.
|
Approve all audit engagement fees and terms as well as reviewing policies for the provision of non-audit services by the external auditors and, when required, the framework for pre-approval of such services.
|
xi.
|
Pre-approve all audit, audit-related and non-audit services to be provided to the Corporation or any of its subsidiaries, by the external auditors (and its affiliates), in accordance with applicable securities laws (or delegate such pre-approval if and to the extent permitted by law), and consider the potential impact of such services on the independence of the external auditors,
provided
that the external auditors may not be retained by the Corporation to perform specifically listed categories of non-audit services as set forth by the SEC.
|
xii.
|
Review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Corporation.
|
xiii.
|
Review post-audit or management letters, containing recommendations of the external auditors and management's response, including the evaluation by the external auditors of the adequacy and effectiveness of management's internal control systems and procedures for financial reporting, and management's responses to any identified weaknesses.
|
xiv.
|
Review any other material written communication provided by the external auditors to the Corporation's management and submitted to the Committee.
|
C.
|
Internal Control
|
i.
|
Evaluate whether management is setting the appropriate tone at the top by communicating the importance of internal controls and ensuring that all individuals possess an understanding of their roles and responsibilities.
|
ii.
|
Understand the controls and processes implemented by management to ensure that the financial statements derive from the underlying financial systems, comply with relevant standards and requirements, and are subject to appropriate management review.
|
iii.
|
Discuss with the external auditors and management, the adequacy and effectiveness in the design and operation of the disclosure controls and internal controls of the Corporation and make recommendations for the improvement of such controls or particular areas where new or more detailed controls or procedures are desirable.
|
iv.
|
Satisfy itself as to the adequacy of the Corporation's review procedures regarding disclosure of other financial information.
|
v.
|
Gain an understanding of the current areas of financial risk and how these are being handled by the management.
|
vi.
|
Focus on the extent to which management reviews computer systems and applications, the security of such systems and applications, and the contingency plan for processing financial information in the event of a systems breakdown.
|
vii.
|
Gain an understanding of whether internal control recommendations made by external auditors have been implemented by management.
|
viii.
|
Ensure that the external auditors keep the Committee informed about fraud, illegal acts, deficiencies in internal control, and any other matter deemed appropriate.
|
ix.
|
Monitor and supervise procedures for (1) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, and (2) for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
|
D.
|
Corporate governance
|
i.
|
Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation and follow-up (including disciplinary action) on any fraudulent acts or accounting irregularities.
|
ii.
|
Periodically obtain updates from management, general counsel, and tax director regarding compliance.
|
iii.
|
Be satisfied that all regulatory compliance matters have been considered in the preparation of the financial statements.
|
iv.
|
Review the findings of any examinations by regulatory agencies.
|
v.
|
Ensure that a Code of Ethical Conduct is formalized in writing and that all employees are aware of it.
|
vi.
|
Review periodically, in consultation with the Nominating, Governance and Compensation Committee and the Board of Directors, the content of the Code of Ethical Conduct and make sure employees are informed of amendments.
|
vii.
|
Evaluate whether management is setting the appropriate tone at the top by communicating the importance of the Code of Ethical Conduct and the guidelines for acceptable business practices.
|
viii.
|
Review the program for monitoring compliance with the Code of Ethical Conduct.
|
ix.
|
Periodically obtain updates from management and general counsel regarding compliance.
|
E.
|
Other Responsibilities
|
i.
|
Meet with the external auditors and management in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately.
|
ii.
|
Ensure that significant findings and recommendations made by the external auditors are received and discussed on a timely basis.
|
iii.
|
Review, with the Corporation's counsel, any legal matters that could have a significant impact on the Corporation's financial statements.
|
iv.
|
Review the policies and procedures in effect for considering officers' expenses and perquisites.
|
v.
|
If necessary, institute special investigations and, if appropriate, hire special counsel or experts to assist.
|
vi.
|
Perform other oversight functions as requested by the full Board.
|
vii.
|
Regularly update the Board of Directors about Committee activities and make appropriate recommendations.
|
viii.
|
Ensure the Board is aware of matters that may significantly impact on the financial condition or affairs of the business.
|
ix.
|
Prepare any reports required by law or standards of the stock exchanges on which the Corporation's securities are listed or requested by the Board, for example a report on the Committee's activities and duties to be included in the section on corporate governance in the Annual Report on Form 20-F.
|
x.
|
Prepare and review with the Board, in the manner the Committee deems appropriate, an annual performance evaluation of the Committee and its members, comparing its performance with the requirements of this charter.
|
xi.
|
Review and update the Committee charter annually.
|
xii.
|
Discuss any changes required to be made to this charter with the Board and ensure the charter and any such changes are approved by the Board.
|
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
|
|
David A. Dodd
|
|
Chairman, 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)
|
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/ Dennis Turpin
|
|
Dennis Turpin
|
|
Senior Vice President and Chief Financial Officer
|
|
(principal financial officer)
|
/s/ David A. Dodd
|
|
David A. Dodd
|
|
Chairman, President and Chief Executive Officer
|
/s/ Dennis Turpin
|
|
Dennis Turpin
|
|
Senior Vice President and Chief Financial Officer
|