On November 4, 2021 Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZS) ("Aeterna" or the "Company"), a specialty biopharmaceutical company developing and commercializing a diversified portfolio of pharmaceutical and diagnostic products, reported its financial and operating results for the third quarter ended September 30, 2021 (Press release, AEterna Zentaris, NOV 4, 2021, View Source;id=215914&p=2209892&I=1206939-c7Z3G6f3m8 [SID1234594595]). The Company also provided an update on progress in its pre-clinical and clinical development programs.
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"Since January 2021, we have made a concerted effort to not only advance our clinical-stage program but to expand our development pipeline. We have delivered on that goal and are pleased with the progress made to date. The leadership and expertise we have established at Aeterna Zentaris, now coupled with a diversified portfolio of assets with the potential to address areas of significant medical need, has created an exciting time in the Company’s evolution and multiple potential avenues for value creation. We are diligently working to execute on the advancement of all our clinical and pre-clinical programs and are poised to continue building momentum and value in the near and long term," commented Dr. Klaus Paulini, Chief Executive Officer of Aeterna.
Recent Highlights:
Entered into an additional exclusive license with the Julius-Maximilians-University of Wuerzburg (the "University of Wuerzburg") for early pre-clinical development of AIM Biologics for the potential treatment of Parkinson’s disease.
Exercised its option under the agreement with the University of Wuerzburg to expand application of oral vaccine platform to second indication, chlamydia.
Pre-Clinical and Clinical Programs Update:
Diagnostics Development Pipeline
Macimorelin Diagnostic: Ghrelin agonist in development for diagnostic use in childhood-onset growth hormone deficiency ("CGHD")
Aeterna is currently conducting its pivotal Phase 3 safety and efficacy study AEZS-130-P02 (the "DETECT-trial") evaluating macimorelin for the diagnosis of CGHD. Children and adolescents from two to less than 18 years of age with suspected growth hormone deficiency are to be included. The study is expected to include approximately 100 subjects worldwide, with at least 40 subjects in pre-pubertal and 40 subjects in pubertal status. Macimorelin growth hormone stimulation test ("GHST") will be performed twice for repeatability data and two standard GHSTs will be used as controls: arginine (i.v.) and clonidine (p.o.). On April 22, 2021, the U.S. FDA Investigational New Drug Application associated with this clinical trial became active. The first clinical sites in the U.S. are open for patient recruitment. In the EU and rest of world countries, clinical trial approval procedures and site initiation activities are ongoing.
Next Steps
Conduct and complete the DETECT-trial.
Therapeutics and Vaccine Development Pipeline
AIM Biologicals: Targeted, highly specific autoimmunity modifying therapeutics for the potential treatment of neuromyelitis optica spectrum disorder ("NMOSD") and Parkinson’s disease (PD)
In January 2021, Aeterna entered into an exclusive patent license and research agreement with the University of Wuerzburg, Germany, for worldwide rights to develop, manufacture and commercialize AIM Biologicals for the potential treatment of NMOSD. Additionally, the Company has engaged Prof. Dr. Joerg Wischhusen of the University of Wuerzburg as well as neuro-immunologist Dr. Michael Levy (MGH/Boston) as consultants, who will provide scientific support and advice in the field of inflammatory CNS disorders, autoimmune diseases of the nervous system, and NMOSD.
In September 2021, the Company entered into an additional exclusive license with the University of Wuerzburg for early pre-clinical development for the potential treatment of Parkinson’s disease.
Next Steps – NMOSD
Conduct in-vitro and in-vivo assessments to select an AIM Biologicals-based development candidate.
Manufacturing process development for selected candidate.
Next Steps – Parkinson’s Disease
Design and produce antigen-specific AIM Biologics molecules for the potential treatment of Parkinson’s disease.
Conduct in-vitro and in-vivo assessments in relevant Parkinson’s disease models.
Macimorelin Therapeutic: Ghrelin agonist in development for the treatment of ALS (Lou Gehrig’s disease)
In January 2021, the Company entered into a material transfer agreement with the University of Queensland, Australia, to provide macimorelin for the conduct of pre-clinical and subsequent clinical studies evaluating macimorelin as a potential therapeutic for the treatment of ALS (Lou Gehrig’s disease). The University of Queensland researchers have filed for supportive grants and aim to conduct pre-clinical studies in multiple pre-clinical models to demonstrate the therapeutic reach of macimorelin on disease progression and disease-specific pathology. They also plan to conduct a subsequent investigator initiated clinical trial given positive pre-clinical results.
Macimorelin, a ghrelin agonist, is an orally active small molecule that stimulates the secretion of growth hormone from the pituitary gland. Acting via this mechanism, it is believed that macimorelin may slow the progression of certain neurodegenerative diseases like ALS.
Next Steps
Work with the University of Queensland to conduct proof-of-concept studies with macimorelin in disease-specific animal models.
Assess alternative formulations.
Formalize pre-clinical development plan.
Delayed Clearance Parathyroid Hormone ("DC-PTH") Fusion Polypeptides: Potential treatment for primary hypoparathyroidism
In March 2021, Aeterna entered into an exclusive patent and know-how license agreement and research agreement with The University of Sheffield, United Kingdom, for the intellectual property relating to DC-PTH fusion polypeptides with delayed clearance for all human uses. In consultation with The University of Sheffield, Aeterna has selected AEZS-150 as the lead candidate in its DC-PTH program. AEZS-150 is being developed with the goal of providing a potential new treatment option of primary hypoparathyroidism in adults.
Next Steps
Work with The University of Sheffield to conduct in depth characterization of development candidate (in-vitro and in-vivo).
Develop manufacturing process.
Formalized pre-clinical development of AEZS-150 in preparation for a potential IND filing for conducting the first in-human clinical study.
Vaccine Platform: Potential orally active, live-attenuated bacterial vaccine with application across multiple coronavirus types, including COVID-19 (SARS-CoV-2) and chlamydia
In February 2021, Aeterna entered into an exclusive option agreement with the University of Wuerzburg to evaluate a pre-clinical, potential COVID-19 vaccine developed at the University of Wuerzburg. In March 2021, the Company exercised its option and entered into a license agreement where the Company was granted an exclusive, world-wide, license to certain patent applications and know-how owned by the University of Wuerzburg to research and develop, manufacture, and sell a potential COVID-19 vaccine. The Company’s vaccine platform is currently undergoing pre-clinical studies for the prevention of coronavirus diseases, including COVID-19 (SARS-CoV-2) with the planned start of clinical development targeted for H1 2023.
In September 2021, the Company exercised its option under the agreement with the University of Wuerzburg on a then undisclosed field, now known to be chlamydia. Chlamydia trachomatis is a sexually transmitted bacterium infecting over 130 million subjects annually. Asymptomatic disease can spread to the reproductive tract eventually inducing infertility, miscarriage, or ectopic pregnancy, which is a life-threatening condition. Ocular infections can lead to inclusion conjunctivitis or trachoma, which is the primary source of visual impairment or infectious blindness.
Additionally, the Company has entered into a Research Agreement under which the Company has engaged the University of Wuerzburg on a fee-for-service basis to conduct supplementary research activities and pre-clinical development studies on the potential vaccines, the results of which will be included within the scope of the license agreements. Additionally, Prof. Dr. Thomas Rudel of the University of Wuerzburg was engaged by the Company in September 2021 as a scientific consultant to support development of the salmonella-based vaccine platform for the coronavirus and chlamydia vaccines.
Next Steps – Coronavirus Vaccine
Evaluate administration route, dose and immunization scheme.
In-vivo immunology experiments with antigen variant candidates in relevant mice models.
Conduct virus challenge experiments in immunized transgenic animals.
Start manufacturing process assessment / development.
Conduct pre-clinical safety and toxicology assessment.
Next Steps – Chlamydia Vaccine
Design and prepare candidate vaccine strains.
Evaluate administration route, dose and immunization scheme.
In-vivo immunology experiments with candidate strains in relevant mouse models.
Summary of Third Quarter 2021 Financial Results
All amounts in this press release are in U.S. dollars unless otherwise noted.
Financing and Warrant Exercises
During the period between January 1, 2021, and September 30, 2021, holders have exercised certain of our outstanding warrants to purchase 35,011,187 of the Company’s common shares for gross proceeds of approximately $20.0 million. On October 1, 2021, the Company received notice of exercise of 100,000 warrants at $0.45 per common share for the issuance of 100,000 common shares of the Company; such exercise was completed on October 4, 2021.
Cash and cash equivalents
The Company had $68.0 million in cash and cash equivalents at September 30, 2021 (June 30, 2021 – $69.9 million).
Results of operations for the three-month period ended September 30, 2021
For the three-month period ended September 30, 2021, the Company reported a consolidated net loss of $1.7 million, or $0.01 loss per common share (basic), as compared with a consolidated net loss of $1.1 million, or $0.02 loss per common share (basic) for the three-month period ended September 30, 2020. The $0.6 million increase in net loss is primarily from an increase in total operating expenses of $0.6 million and a decline in net finance income of $0.5 million, partially offset by an increase of $0.5 million in total revenue.
Revenues
Total revenue for the three-month period ended September 30, 2021, was $0.6 million as compared with $0.1 million for the same period in 2020, representing an increase of $0.5 million. 2021 revenue was comprised of $0.52 million in licensing revenue (2020 – $0.02 million), $0.06 million in supply chain revenue (2020 – $0.09 million) and $0.02 million in royalty income (2020 – $0.02 million).
Operating expenses
The Company’s total operating expenses for the three-month period ended September 30, 2021, were $2.4 million as compared with $1.9 million for the same period in 2020, representing an increase of $0.5 million. This increase arose primarily from a $0.4 million increase in research and development costs and an increase of $0.1 million in selling expenses. This increase in total operating expenses was primarily due to the impact of the initiation of research and development projects as announced in the first quarter of 2021.
Net finance income
Net finance income for the three-month period ended September 30, 2021, was $0.1 million as compared with net finance income of $0.6 million for the same period in 2020, representing a decrease in net finance income of $0.5 million. This was primarily due to the $0.8 million decrease in the change in fair value of the warrant liability and a $0.1 million decline in the gain from changes in foreign currency exchange rates partially offset by a $0.4 million reduction in other finance costs.
Consolidated Financial Statements and Management’s Discussion and Analysis
For reference, the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the third quarter of 2021, as well as the Company’s unaudited consolidated interim financial statements as of September 30, 2021, will be available on the Company’s website (www.zentaris.com) in the Investors section or at the Company’s profile at www.sedar.com and www.sec.gov.