On March 29, 2016 Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company"), a specialty biopharmaceutical company engaged in developing and commercializing novel treatments in oncology, endocrinology and women’s health, reported financial and operating results for the fourth quarter and year ended December 31, 2015 (Filing, Q4/Annual, AEterna Zentaris, 2015, MAR 29, 2016, View Source [SID:1234510133]).

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Commenting on fourth quarter accomplishments, David A. Dodd, Chairman, President and Chief Executive Officer of the Company, stated, "Our progress during the fourth quarter was truly astounding. As we began the quarter, we faced the prospect of massive dilution from the exercise of warrants that had very unfavorable terms and a capital structure that challenged our ongoing operations and our ability to raise further funding. We ended the quarter with a cleaned-up capital structure and a successful, significant capital raise on favorable terms. A tremendous amount of difficult work during the quarter made this successful turn-around possible. We now have the resources to complete the Phase 3 studies of both Zoptrex and Macrilen and to move the Company to an entirely new level, if our confidence in our product candidates is demonstrated with positive outcomes of the clinical programs. I would like to thank our team for their very hard and dedicated work during the quarter that achieved these critical accomplishments. I also want to thank our Board for their commitment and supportive efforts that enabled these successful achievements. We recognize that substantial progress remains to be achieved and we are committed to successfully building a profitable growth-oriented company, providing attractive financial returns to our shareholders, commercializing meaningful products that improve the lives of patients and enabling our employees to develop purposeful careers."

Commenting on the Company’s product-development progress, Mr. Dodd stated, "During the fourth quarter, we received very encouraging news regarding Zoptrex when, following a comprehensive review of the final interim efficacy and safety data, the DSMB recommended that we continue the ZoptEC Phase 3 clinical study to its conclusion. We expect to complete the ZoptEC trial in Q3 of 2016 and, if the results of the trial warrant doing so, to file the NDA for Zoptrex in the first half of 2017. More recently, we reported on the successful progress of the Zoptrex development program in China. We also initiated patient enrollment in our confirmatory Phase 3 clinical study of Macrilen, which we expect to be the first FDA-approved test for the evaluation of adult growth hormone deficiency. We expect the confirmatory Phase 3 clinical study of Macrilen to be concluded in Q3 of 2016, which would permit us to submit a NDA by mid-year 2017. If the study is successful in meeting its primary endpoint, we anticipate FDA approval of Macrilen by as early as year-end 2017."

Continuing with his commentary, Mr. Dodd stated, "Restructuring our financial team and closing our office in Quebec City was another very important and difficult accomplishment during the fourth quarter, which permitted us to further simplify our operations. We continue our search for a permanent finance staff and we are committed to taking the time necessary to find the appropriate expertise and experience that will contribute to our continued progress. I would like to note that we ended the year with a global headcount of approximately 48 active employees, compared to the almost 100 active employees we had when I joined the company in April of 2013. This restructuring, as well as the Resource Optimization Program implemented in 2014, has positioned us to achieve net research and development ("R&D") and general and administrative ("G&A") savings of approximately $2.5 million annually."

Concluding, Mr. Dodd addressed the Company’s commercial operations, stating, "Our co-promotions of EstroGel and Saizen continued to ramp up during the fourth quarter, although not at the pace we are seeking. During 2015, our selling efforts resulted in a consistent increase of EstroGel prescriptions within our territories. Specifically, we increased EstroGel market share of total prescriptions for non-patch transdermal estrogen products in our territories from 23.8% in Q1 to 26.9% in Q4. This resulted in a 17.4% increase in EstroGel total prescriptions within our territories over this same period, compared to a 0.5% decline by our competitors. However, this increase did not result in our receipt of meaningful commission revenue from our promotion of EstroGel. During the fourth quarter, we expanded our Saizen target list from the 450 endocrinologists we had during most of last year to 900 validated targets that we are now addressing. As a result, recent performance is producing attractive results, which we expect will result in meaningful commission revenue this year. During 2016, we expect to achieve more significant commission revenue for both of these products as we continue our focused selling efforts. One way to increase the productivity and income contribution resulting from our selling efforts is to expand our selling portfolio. During the fourth quarter, we added what we think will be a significant product, when we concluded a co-marketing agreement with Armune BioScience for APIFINY, the only cancer-specific, non-PSA blood test for the evaluation of the risk of prostate cancer. This product was launched by our sales force in mid-February. Early reports from our representatives are positive regarding the interest in targeted physicians adopting this product."

Fourth Quarter and Full Year 2015 Financial Highlights

R&D costs were $4.2 million and $17.2 million for the three-month period and the year ended December 31, 2015, respectively, compared to $6.3 million and $23.7 million for the same periods in 2014. The decrease for the three-month period and for the year ended December 31, 2015, as compared to the same period in 2014, is mainly attributable to the realization of cost savings in connection with our 2014 Resource Optimization Program, as well as to the weakening, in 2015, of the euro against the US dollar. The decrease for the year ended December 31, 2015 was partly offset by higher third-party costs, which increased slightly during the year ended December 31, 2015, as compared to the same period in 2014, mainly due to a higher comparative number of patients enrolled in the ZoptEC clinical trial, which is now fully enrolled. However, the quarter-over-quarter decrease in third-party costs is explained by the fact that the number of patients in treatment was lower in 2015 as compared to the same period in 2014.

G&A expenses were $4.0 million and $11.3 million for the three-month period and the year ended December 31, 2015, respectively, as compared to $2.6 million and $9.8 million for the same periods in 2014. The increase is mainly attributable to the recording of a provision related to the closure of our Quebec City office and the restructuring of our finance and accounting team in the fourth quarter of 2015, as well as to the recording of certain transaction costs associated with the completion of our March 2015 and December 2015 offerings of Common Shares and warrants.

Selling expenses were $1.8 million and $6.9 million for the three-month period and the year ended December 31, 2015, respectively, as compared to $2.0 million and $3.9 million for the same periods in 2014. The decrease in selling expenses for the three-month period ended December 31, 2015 is explained by the start-up costs related to the deployment of our contracted sales force in connection with the co-promotion activities, which were launched in late 2014. The increase in selling expenses for the year ended December 31, 2015 as compared to the same period in 2014, is attributable to the fact that 2014 was not a full year of sales activity. During the third quarter of 2015, we also expanded the size of our contracted sales force from 19 to 21 sales representatives in order to support our promotional efforts associated with Saizen. This sales force expense will also cover the recently initiated selling in support of APIFINY.

Net (loss) income for the three-month period and the year ended December 31, 2015 was ($10.0) million and ($50.1) million, or ($1.46) and ($18.14) per basic and diluted share, respectively, compared to $4.2 million and ($16.6) million, or $6.35 and ($28.06) per basic and diluted share for the same periods in 2014. The increase in our net loss from operations for the three-

month period and for the year ended December 31, 2015, as compared to the same period in 2014, is due to the higher comparative G&A and selling expenses and net finance costs, partly offset by lower comparative R&D costs.
Cash and cash equivalents were $41.5 million as at December 31, 2015, compared to $34.9 million as at December 31, 2014.