Aeterna Zentaris(AEZS) - 2024 Q2 - Quarterly Report

Financial Performance - As of June 30, 2024, COSCIENS Biopharma Inc. reported total assets of $50,045,000, a significant increase from $23,745,000 as of December 31, 2023, representing a growth of 110.5%[2] - The company achieved revenues of $4,394,000 for the six months ended June 30, 2024, compared to $3,977,000 for the same period in 2023, reflecting a year-over-year increase of 10.5%[5] - The net loss for the six months ended June 30, 2024, was $2,823,000, compared to a net loss of $1,145,000 for the same period in 2023, indicating a deterioration in performance[5] - The company reported a comprehensive loss of $3,329,000 for the six months ended June 30, 2024, compared to a comprehensive loss of $599,000 for the same period in 2023[5] - Revenue for the three months ended June 30, 2024, was $2,337,000, compared to $1,392,000 for the same period in 2023, representing a 67.9% increase[40] - For the six months ended June 30, 2024, total revenue was $4,394,000, representing a 10.5% increase from $3,977,000 in the same period of 2023[75] - The gross margin for the Active ingredient segment was $820,000 for the three months ended June 30, 2024, compared to $797,000 in the same period of 2023, indicating a slight increase of 2.9%[74] - Gross margin for the six months ended June 30, 2024, was $1,723,000, a decrease of 13.2% compared to $1,985,000 in 2023[75] - The loss from operations for the six months ended June 30, 2024, was $5,579,000, compared to a loss of $1,482,000 in the same period of 2023[75] Assets and Liabilities - Cash and cash equivalents increased to $27,804,000 as of June 30, 2024, from $6,678,000 at the beginning of the year, marking a rise of 316.5%[2] - The company’s total liabilities rose to $23,818,000 as of June 30, 2024, up from $2,710,000 at the end of 2023, an increase of 775.3%[2] - The deferred revenue balance as of June 30, 2024, totaled $1,710,000, with $97,000 classified as current and $1,613,000 as non-current[43] - Trade accounts payable surged to $3,585,000 as of June 30, 2024, compared to $281,000 at the end of 2023, marking a significant increase[54] - Employee future benefit obligations decreased to $21,879,000 as of June 30, 2024, down from $22,136,000 at the beginning of the period[55] - The carrying amount of property and equipment as of June 30, 2024, was $21,692,000, reflecting an increase from $21,449,000 at the end of 2023[47] Acquisition and Market Presence - COSCIENS Biopharma Inc. completed the acquisition of Aeterna Zentaris Inc. on June 3, 2024, which is expected to enhance its product portfolio and market presence[12] - Ceapro acquired Aeterna Zentaris Inc. on June 3, 2024, with a total consideration of $13,262,000, including shares and warrants[30] - Aeterna contributed revenue of $3,000 and a net loss of $214,000 to Ceapro's results post-acquisition[37] - If the acquisition had occurred on January 1, 2024, estimated revenue would have been $4,399,000, with a consolidated net loss of $12,035,000 for the year[37] - The fair value of shares deemed issued to Aeterna shareholders was $8,485,000, based on a share price of $6.99[34] - Acquisition-related costs incurred by Ceapro amounted to $4,081,000, included in selling, general and administrative expenses[39] - The identifiable intangible assets from the acquisition consist of patents expiring between 2027 and 2041, valued using discounted cash flow models[37] - The transaction was accounted for as a reverse acquisition, with Ceapro as the accounting acquirer[32] Research and Development - Research and development expenses for the six months ended June 30, 2024, were $2,592,000, compared to $1,115,000 for the same period in 2023, reflecting an increase of 132.5%[5] Stock and Shareholder Information - The weighted average number of shares outstanding increased to 2,033,539 for the six months ended June 30, 2024, compared to 1,846,759 for the same period in 2023, indicating a dilution effect from the acquisition[5] - The balance of common shares increased to 3,061,560 as of June 30, 2024, from 1,847,593 as of December 31, 2023, reflecting a growth of 65.5%[59] - The company had 747,948 warrants outstanding as of June 30, 2024, with a weighted average exercise price of $13.32[11] - The total stock options balance increased to 80,878 as of June 30, 2024, from 74,371 at the beginning of the year, reflecting a growth of 8.5%[62] - The expected volatility for stock options was 65% as of June 30, 2024, indicating a stable outlook based on historical rates[60] Revenue Sources and Commitments - The company’s revenue is generated from supply and licensing agreements for finished goods, semi-finished goods, and active pharmaceutical ingredients[23] - The company has significant commitments under contracted supply agreements totaling $4,406,000, with $4,352,000 due within one year[76] - The company may have to pay up to $38,573,000 upon achieving certain sales volumes and regulatory milestones related to specific products[76] - The company has entered into license agreements requiring annual royalty payments of 2.0% on specific avenanthramides sales and up to 3.5% on PGX sales[77] - A purchase commitment of $678,000 remains for the construction of a PGX-100 pilot plant, expected to be completed in 2024[78]