Æterna Zentaris Agrees to Sell Cetrotide® Royalty Stream for
$52.5 Million to HEALTHCARE Royalty Partners
All amounts are in U.S. dollars
Quebec City, Canada, November 12, 2008 – Æterna Zentaris Inc. (NASDAQ: AEZS; TSX: AEZ), a global biopharmaceutical company focused on endocrine therapy and oncology, today announced that it has signed a definitive agreement to sell to HealthCare Royalty Partners, L.P. (“HC Royalty”) its rights to royalties on future sales of Cetrotide® covered by its license agreement with Merck Serono. The license agreement between Æterna Zentaris and Merck Serono was signed in 2000 and granted Merck Serono exclusive rights to market, distribute and sell Cetrotide® worldwide, with the exception of Japan, in the field of in vitro fertilization. On closing, Æterna Zentaris will receive $52.5 million from HC Royalty. In addition, contingent on 2010 net sales of Cetrotide® reaching a specified level, Æterna Zentaris would receive an additional payment of $2.5 million from HC Royalty.
Under the terms of the agreement, if cetrorelix, which is currently in Phase 3 clinical trials for the treatment of benign prostatic hyperplasia, is approved for sale by European regulatory authorities in an indication other than in vitro fertilization, Æterna Zentaris has agreed to make a one-time cash payment to HC Royalty in an amount ranging from $5 million up to a maximum of $15 million. The amount which would be due to HC Royalty will be higher the earlier the product receives European regulatory approval.
“We are very pleased with this transaction which is in line with our strategy of generating non-dilutive financing through non-core asset monetization,” said Juergen Engel, Ph.D., President and Chief Executive Officer of Æterna Zentaris. “We now expect to end the year 2008 with approximately $50 million in cash, providing us with the financial resources for the continued development of cetrorelix in BPH.”
“Our investment in Cetrotide® is consistent with our strategy to invest in unique commercial-stage products with strong marketing partners, and attractive risk reward profiles,” said Todd C. Davis, Co-Founder and Managing Director of HC Royalty. “There is a growing demand for fertility treatment products around the globe and we believe Cetrotide® is well positioned to expand its presence in the market.”
The transaction is expected to close within the next 15 business days.
RBC Capital Markets acted as exclusive financial advisor to Æterna Zentaris in connection with this transaction.
About Cetrotide® (cetrorelix)
Cetrotide® (cetrorelix) was the first luteinizing hormone-releasing hormone (LHRH) antagonist treatment approved for in vitro fertilization. It is administered to women to prevent premature ovulation in order to increase fertility success rate. Developed in cooperation with Medicine Nobel-Prize winner, Professor Andrew Schally of Veterans Affairs, Miami, Florida, it was launched in Europe in 1999 and in the United States in 2001. Cetrotide® is currently marketed worldwide by Merck Serono, except for Japan where it is marketed by Nippon Kayaku and Shionogi.
Cetrorelix is also currently in a Phase 3 program in benign prostatic hyperplasia involving 1,500 patients in North America and Europe. First results are expected in Q3 2009 with an NDA filing to follow in 2010 and potential launch in 2011.
About HealthCare Royalty Partners
HealthCare Royalty Partners is a global healthcare private equity firm with over $500 million in capital under management. The firm invests principally in commercial-stage biopharmaceutical and medical device companies and products, through the purchase of royalty or Synthetic Royalty(SM) interests, debt and equity. HC Royalty's investment team has over 100 years of healthcare related experience including principal investing, structured finance, healthcare industry senior management, Wall Street research and consulting, scientific and clinical experience. For more information, please visit www.healthcareroyalty.com.
About Æterna Zentaris Inc.
Æterna Zentaris Inc. is a global biopharmaceutical company focused on endocrine therapy and oncology, with proven expertise in drug discovery, development and commercialization.
News releases and additional information are available at www.aezsinc.com.
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