FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the second quarter of 2003
AETERNA ZENTARIS INC.
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(Formerly named AEterna Laboratories Inc.)
1405, boul. du Parc-Technologique
Quebec, Quebec
Canada, G1P 4P5
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F X
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
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DOCUMENTS INDEX
DOCUMENTS DESCRIPTION
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1. AEterna's Interim Report 2003 - Second Quarter (Q2)
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August 6, 2003
To Our Stockholders:
I am pleased to report to you that AEterna Laboratories is realizing substantial
financial benefit from our late 2002 acquisition of Zentaris, as Cetrotide(R)
and Impavido(R) helped drive an 18% gain in product sales during the second
quarter of 2003, compared with the second quarter of 2002. Including license
income and research contract fees related to marketed products and products in
development, total revenues increased by 66% during the quarter.
In addition, we were delighted with the recently announced positive Phase III
results for Impavido(R) to treat cutaneous leishmaniasis, a severe skin disease
prevalent in South America. Impavido(R) is currently sold in India to treat the
visceral form of leishmaniasis. As a result of our successful Phase III results,
we are preparing to file for regulatory approval in South America.
In addition to progress with our marketed products, the extension of our license
agreement to 2010 with Serono for Cetrotide(R) illustrates our ability to add
value from strategic alliances with world-class partners. As we move ahead to
the balance of 2003, we look forward to reporting results from our Phase III
clinical trial with Neovastat(R) for the treatment of renal cell carcinoma.
Neovastat(R) holds potential to be the first anti-angiogenic drug on the market
for the treatment of kidney cancer.
AEterna's cash and short-term investments of $49.2 million as of June 30, 2003
were further supplemented by net proceeds of $33.8 million from a bought deal
financing that closed in late July. Reflecting this financing, today our cash
position stands at approximately $83 million. We are comfortable that we have
the necessary capital to pursue our strategic objectives.
During the second quarter of 2003 and subsequent weeks, the Company's
accomplishments included the following:
o ATRIUM ACQUISITION - Atrium acquired 100% of all issued and outstanding
shares of the privately-owned French company Chimiray/Interchemical for
approximately E11.5 million ($18.4 million), payable by the
issuance of a long-term debt of E5 million ($8 million) and the
residual of E6.5 million ($10.4 million) in cash. Based in Paris,
Chimiray/Interchemical is focused mainly in the distribution of fine
chemicals and active ingredients. Net sales for the last twelve-month
period were approximately E35 million ($52 million), and the
company generated net earnings.
o POSITIVE PHASE III RESULTS FOR IMPAVIDO(R) IN CUTANEOUS LEISHMANIASIS -
Subsequent to the close of the quarter, we reported results of a Phase
III trial evaluating Impavido(R) for the treatment of cutaneous
leishmaniasis, a severe skin disease. The data showed that patients
taking Impavido(R) had a cure rate of 70%, which is 220% better than
for those in the placebo group. This favorable data enables Zentaris,
which develops the drug, to apply for marketing authorization in South
American countries where the cutaneous form of the disease is
predominant.
o NEW NEOVASTAT(R) DATA - In April, we disclosed new scientific data on
our lead antiangiogenic compound Neovastat(R), which reinforce the
drug's antiangiogenic properties. The data was obtained from two
studies conducted by Dr. Francois Berger, Coordinator of the
Neuroscience molecular team of the INSERM 318 unit in Grenoble, France.
Abstracts reflecting the results of these studies were to be presented
at the American Association for Cancer Research (AACR) meeting in
Toronto, which was cancelled due to Severe Acute Respiratory Syndrome
(SARS).
o NEOVASTAT(R) UPDATE AT ASCO - In June, Dr. Bernard Escudier, Head of
the Immunotherapy Unit at Institut Gustave-Roussy in Paris and lead
investigator in Europe for our Neovastat(R) Phase III trial in renal
cell carcinoma, gave a status report on the trial at the American
Society of Clinical Oncology (ASCO) Meeting in Chicago. Dr. Charles Lu
of the M.D. Anderson Cancer Center in Houston and lead investigator for
our Phase III trial in non-small cell lung cancer also gave a status
report on this trial. In his presentation, Dr. Escudier stated that
data from the kidney cancer study would be analyzed upon the death of
230 patients, or September 30, 2003, whichever was sooner. At the time
of his presentation, 218 patients had died.
o EXTENDED AGREEMENT WITH SERONO UNTIL 2010 FOR CETROTIDE(R) - In June,
we announced an extension of the existing license agreement between our
subsidiary Zentaris and Serono for worldwide marketing rights,
excluding Japan, for Cetrotide(R), a novel compound used for IN VITRO
fertilization. The amended agreement provides for Zentaris to receive a
signature fee, as well as fixed annual payments until 2010.
o AETERNA ANNUAL MEETING - In May, we held our annual meeting of
stockholders, where I presented the Company's strategy for growth and
our value creation objectives. At the meeting, Dr. Harmut Michel,
Director of the prestigious Max-Planck Institute for Biophysics in
Frankfurt, Germany and 1988 Nobel Prize laureate in chemistry, was
appointed to the Company's Scientific Advisory Board, and Dr. Eric
Dupont, AEterna's Chairman, announced the conversion of all of his
4,725,000 multiple voting shares into the same number of subordinate
voting shares. This conversion left the Company with a single class of
voting shares.
On behalf of my colleagues and our Board of Directors, I thank you for your
continued interest and support.
Sincerely,
/s/ GILLES GAGNON
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Gilles Gagnon, MSc, MBA
President and Chief Executive Officer
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following analysis explains the variations in the Company's results of
operations, financial condition and cash flow. It provides an update to the
discussion and analysis contained in our Annual Report of 2002. This discussion
and analysis should be read in conjunction with the information contained in
AEterna Laboratories Inc.'s interim consolidated financial statements and
related notes for the six-month periods ended June 30, 2003 and 2002. All
figures are in Canadian dollars.
CRITICAL ACCOUNTING POLICIES
Our critical accounting policies are disclosed in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section and the
annual consolidated financial statements contained in our 2002 Annual Report.
Our financial statements are prepared in accordance with the Canadian Generally
Accepted Accounting Principles (GAAP) and access to a summary of differences
between Canadian and US GAAP is possible by consulting note 20 of our annual
2002 financial statements.
RESULTS OF OPERATIONS
REVENUES
Revenues for the second quarter ended June 30, 2003 were $38.9 million compared
to $23.4 million for the same period last year. For the six-month period ended
June 30, 2003, the consolidated revenues were $79.7 million compared to $48.8
million in 2002. This increase for the quarter as well as for the first half of
the year comes mainly from the Biopharmaceutical segment with revenues totalling
$26.7 million, as of June 30, 2003. The balance of $4.2 million comes from the
Cosmetics & Nutrition (C&N) and the Distribution segments, representing an
increase of 8.6% compared to the first half of 2002 for these segments.
The acquisition of Frankfurt-based Zentaris, in December 2002, provided most of
the revenues in the Biopharmaceutical segment for this quarter as well as for
the six-month period. Revenues in this segment were generated by marketing of
Cetrotide(R) and Impavido(R), milestone payments, research and development
contract fees and the amortization of up-front payments.
OPERATING EXPENSES
The cost of sales during this quarter amounted to $20.4 million compared to
$17.8 million for the same quarter in 2002. For the six-month period ended June
30, 2003, the cost of sales has gone up from $37.5 million to $43.6 million.
These costs are in direct proportion to corresponding revenues and their
percentage does not vary significantly from last year's same quarter even if we
take into account sales generated by Cetrotide(R) and Impavido(R).
General, selling and administrative expenses amounted to $6.5 million during
this quarter compared to $4.3 million in 2002. Regarding the six-month period,
general, selling and
administrative expenses were $12 million compared to $8.2 million in 2002. This
increase is attributed to the Biopharmaceutical segment, for an amount of $2.7
million, as a result of the acquisition of Zentaris made last December. In
addition, the C&N and Distribution segments increased their selling expenses by
$1.0 million as a result of the increase in their sales force.
Research and Development (R&D) investments, net of R&D tax credits and grants,
amounted to $11 million during this quarter in comparison with $5.3 million last
year. As of June 30, 2003, R&D investments reached $21.9 million in comparison
to $10.5 million in 2002. This increase is attributed to the acquisition of
Zentaris, whereby the investment in R&D amounted to $5.7 million for this
quarter and $11.3 million for the six-month period. Therefore, the level of the
investment for Neovastat, our lead antiangiogenic compound in oncology, was
approximately the same as last year since the Phase III program is actively
ongoing for renal cell carcinoma and non-small cell lung cancer. The residual
amount of investment in R&D mainly relates to Cetrorelix, our lead compound in
endocrinology, and to our recently acquired Zentaris drug discovery unit,
including a 100,000 proprietary compound library.
Depreciation and amortization (D&A) for the last quarter amounted to $2 million
compared to $0.6 million in 2002. For the six-month period ended June 30, 2003,
D&A amounted to $4.5 million compared to $1 million for the same period last
year. This significant increase is mainly related to the additional amortization
on Zentaris technologies acquired in December 2002. The purchase price
allocation has been completed during the last quarter and an amount of $13.5
million was allocated to goodwill from identified intangible assets. We expect
that the amortization expense for 2003 will increase significantly over that of
the 2002 fiscal year due to the intangible additions incurred at the end of
2002.
Interest income has decreased from $0.8 million to $0.2 million for this quarter
compared to 2002. This decrease is primarily due to the cash used for the
Zentaris transaction as well as to the reduction in market yield available on
short-term investments. The interest and financial expenses mainly include the
financing cost on the convertible term loans, the balance of purchase price
settled in March 2003 and the promissory note of $43 million reimbursed last
January as interim financing related to Zentaris' acquisition.
A net foreign exchange loss of $1 million was recorded during the quarter ended
June 30, 2003 in comparison with a net loss of $0.3 million last year. This loss
is attributable to the effect of the strengthening Canadian dollar on our US
investment portfolio and working capital denominated in US dollar. We maintain
US dollar cash and cash equivalent and short-term investments to meet our
futures expenditures in US dollar.
The net loss for this quarter amounted to $4.6 million or $0.11 per share in
2003 compared to a net loss of $5.9 million or $0.15 per share for the same
quarter in 2002. For the six-month period ended June 30, 2003, the net loss was
$9.4 million or $0.23 per share compared to $11.6 million or $0.30 per share.
This reduction is the result of new income from Zentaris within our
biopharmaceutical segment.
LIQUIDITY AND CAPITAL RESOURCES
The financial position of the Company remains strong with $49.2 million in cash
and short-term investments as at June 30, 2003. On a pro-forma basis, taking
into account the issuance of 4.5 million subordinate voting shares at $7.90 per
share and a 5% underwriting fees from the bought deal closed on July 24, 2003,
we would have $83 million in cash and short-term investment. This financing will
be used to further develop our product pipeline, to pursue our growth strategy
based on strategic alliances and acquisition of new technologies and for general
corporate purposes.
During this quarter, an amount of $1.5 million was used for operating
activities. The cash flow used in investing activities amounted to $1 million
for the acquisition of an additional portion of Unipex Finance S.A. as well as
of long-lived assets. For the six-month period ended June 30, 2003, an amount of
$7.5 million was used in operational activities and $3.6 million was used for
the acquisition of a portion of Unipex Finance S.A. and long-lived assets.
RISK FACTORS
Economic and sector related risks are the same as those identified in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the Company's 2002 Annual Report.
/s/ DENNIS TURPIN
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Dennis Turpin, CA
Vice President and Chief Financial Officer
This report contains forward-looking statements, which are made pursuant to the
safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
which could cause the Company's actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties include, among
others, the availability of funds and resources to pursue R&D projects, the
successful and timely completion of clinical studies, the ability of the Company
to take advantage of the business opportunities in the pharmaceutical industry,
uncertainties related to the regulatory process and general changes in economic
conditions. Investors should consult the Company's ongoing quarterly and annual
filings with the Canadian and U.S. securities commissions for additional
information on risks and uncertainties relating to the forward-looking
statements. Investors are cautioned not to rely on these forward-looking
statements. The Company does not undertake to update these forward-looking
statements.
AETERNA LABORATORIES INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(expressed in thousands of Canadian dollars)
AS AT AS AT
JUNE 30, DECEMBER 31,
2003 2002
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(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 30,529 $ 12,494
Short-term investments 18,626 69,040
Accounts receivable 38,951 74,840
Inventory 15,222 16,335
Prepaid expenses and deferred charges 2,745 2,041
Future income tax assets 329 1,682
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106,402 176,432
PROPERTY, PLANT AND EQUIPMENT 20,643 21,688
DEFERRED CHARGES 1,268 1,047
INTANGIBLE ASSETS 65,678 90,300
GOODWILL 38,862 24,252
FUTURE INCOME TAX ASSETS 16,427 17,249
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$ 249,280 $ 330,968
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LIABILITIES
CURRENT LIABILITIES
Promissory note $ - $ 43,000
Accounts payable and accrued liabilities 37,877 42,557
Income taxes 3,658 3,783
Balance of purchase price - 39,690
Current portion of long-term debt 3,014 3,202
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44,549 132,232
DEFERRED REVENUES 13,051 12,438
CONVERTIBLE TERM LOANS 19,090 -
LONG-TERM DEBT 9,561 9,969
EMPLOYEE FUTURE BENEFITS 6,213 6,042
FUTURE INCOME TAX LIABILITIES 25,543 35,275
NON-CONTROLLING INTEREST 24,530 24,676
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142,537 220,632
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SHAREHOLDERS' EQUITY
SHARE CAPITAL 153,511 153,578
CONTRIBUTED SURPLUS 7,041 854
DEFICIT (54,269) (44,864)
CUMULATIVE TRANSLATION ADJUSTMENT 460 768
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106,743 110,336
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$ 249,280 $ 330,968
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AETERNA LABORATORIES INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002
(expressed in thousands of Canadian dollars, except share and per share data)
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
UNAUDITED 2003 2002 2003 2002
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REVENUES
Sales $ 27,632 $ 23,440 $ 57,610 $ 48,789
License income and research contract fees 11,243 - 22,078 -
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38,875 23,440 79,688 48,789
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OPERATING EXPENSES
Cost of sales 20,393 17,803 43,613 37,486
General, selling and administrative 6,505 4,258 11,974 8,172
R&D costs, net of tax credits and grants 10,994 5,253 21,880 10,534
Depreciation and amortization
Property, plant and equipment 862 497 1,722 829
Intangible assets 1,152 102 2,795 203
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39,906 27,913 81,984 57,224
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OPERATING LOSS (1,031) (4,473) (2,296) (8,435)
Interest income 226 813 1,163 1,283
Interest and financial expenses (1,295) (74) (2,088) (210)
Foreign exchange loss (971) (282) (1,358) (268)
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LOSS BEFORE THE FOLLOWING (3,071) (4,016) (4,579) (7,630)
INCOME TAX EXPENSE (658) (973) (3,159) (2,138)
NON-CONTROLLING INTEREST (842) (910) (1,667) (1,782)
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NET LOSS FOR THE PERIOD $ (4,571) $ (5,899) $ (9,405) $ (11,550)
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BASIC AND DILUTED NET LOSS PER SHARE $ (0.11) $ (0.15) $ (0.23) $ (0.30)
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 40,695,527 40,452,019 40,696,277 38,552,019
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INTERIM CONSOLIDATED STATEMENTS OF DEFICIT
FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002
(expressed in thousands of Canadian dollars, except share and per share data)
SIX MONTHS ENDED JUNE 30,
UNAUDITED 2003 2002
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BALANCE - BEGINNING OF PERIOD 44,864 19,083
Net loss for the period 9,405 11,550
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BALANCE - END OF PERIOD 54,269 30,633
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AETERNA LABORATORIES INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002
(expressed in thousands of Canadian dollars, except share and per share data)
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
UNAUDITED 2003 2002 2003 2002
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (4,571) $ (5,899) $ (9,405) $ (11,550)
Items not affecting cash and cash equivalents
Depreciation and amortization 2,014 599 4,517 1,032
Future income taxes (816) 470 1,053 1,174
Deferred charges 131 - 226 -
Deferred revenues 1,736 - 1,569 -
Accretion on convertible loans 415 - 415 -
Employee future benefits 88 - 182 17
Non-controlling interest 842 910 1,667 1,782
Stock-based compensation - 54 - 54
Change in non-cash operating working capital items
Accounts receivable 975 2,878 (3,569) (4,976)
Inventory 206 (655) 652 601
Prepaid expenses 653 (86) (711) (544)
Accounts payable and accrued liabilities (3,410) (2,983) (3,944) (175)
Income taxes 223 (72) (111) 200
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(1,514) (4,784) (7,459) (12,385)
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CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of promissory note - - (43,000) -
Convertible term loans (585) - 24,415 -
Payment of balance of purchase price - - (2,358) -
Repayment of long-term debt (29) - (59) (896)
Issuance of warrants - 747 - 747
Issuance of share capital, net of related expenses (15) 54,804 (66) 54,864
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(629) 55,551 (21,068) 54,715
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments (11,531) (51,563) (15,491) (53,968)
Proceeds from short-term investments 6,527 31,041 65,905 41,466
Business acquisition (note 2) (250) (1,316) (2,589) (1,316)
Purchase of a product line - (186) - (186)
Purchase of property, plant and equipment (500) (1,500) (750) (2,896)
Additions to intangible assets (213) (42) (265) (129)
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(5,967) (23,566) 46,810 (17,029)
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NET CHANGE IN CASH AND CASH EQUIVALENTS (8,110) 27,201 18,283 25,301
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (118) 423 (248) 300
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 38,757 9,971 12,494 11,994
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CASH AND CASH EQUIVALENTS - END OF PERIOD $ 30,529 $ 37,595 $ 30,529 $ 37,595
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ADDITIONAL INFORMATION
Interest paid $ 33 $ 50 $ 154 $ 103
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Income taxes paid $ 783 $ 47 $ 1,942 $ 249
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AETERNA LABORATORIES INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002
(expressed in thousands of Canadian dollars, except share and per share data)
UNAUDITED
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1 BASIS OF PRESENTATION
These unaudited interim financial statements as at June 30, 2003 and for the
periods ended June 30, 2003 and 2002, are unaudited. They have been prepared by
the Company in accordance with Canadian generally accepted accounting principles
(GAAP) for interim financial information. In the opinion of management, all
adjustments necessary to present fairly the financial position, results of
operations and cash flows for these periods have been included.
The accounting policies and methods of computation adopted in these financial
statements are the same as those used in the preparation of the Company's most
recent annual consolidated financial statements. All disclosures required for
annual financial statements have not been included in these financial
statements. These consolidated financial statements should be read in
conjunction with the Company's most recent annual consolidated financial
statements. These interim results of operations are not necessarily indicative
of the results for the full year.
2 BUSINESS ACQUISITION
Unipex Finance S.A.
On January 13, and May 27, 2003 , the subsidiary Atrium Biotechnologies Inc.
acquired 21,800 common shares of the outstanding capital stock of Unipex Finance
S.A., increasing its interest in the latter to 76.6% (70.28% in 2002) for a cash
consideration of $2,588,412. The excess of the purchase price over the net
identifiable assets on the date of acquisition is $2,007,009 and is recorded as
goodwill not deductible for income tax purposes.
Zentaris AG
The allocation of the purchase price, following the acquisition of Zentaris'
shares in December 2002 has been completed during this quarter. At the
acquisition date, Zentaris AG had two products developed that provided benefits
from the sale of these products. The developed technology and the in-process
research and development (R&D) were valued using a discounted cash flow approach
resulting in an allocated fair value of $64.8 M. The in-process R&D would
require further development. The goodwill related to this transaction was valued
at $13.5 M and, according to GAAP, it will be not amortized but tested annually
for impairment in relation to the fair value this reporting unit to which
goodwill applies.
3 COMPANY'S STOCK OPTION PLAN
The company has chosen not to use the fair value method to account for
stock-based compensation costs arising from awards to employees but discloses
the pro-forma information relating to net loss and loss per share as if the fair
value method of accounting had been used.
Three months ended Six months ended
June 30, 2003 June 30, 2003
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Net loss for the period $ (4,571) $ (9,405)
Pro-forma adjustment for stock-based compensation costs (503) (1,068)
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Pro-forma net loss for the period $ (5,074) $ (10,473)
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Basic and diluted net loss per share $ (0.11) $ (0.23)
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Pro-forma basic and diluted net loss per share $ (0.12) $ (0.26)
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AETERNA LABORATORIES INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002
(expressed in thousands of Canadian dollars, except share and per share data)
UNAUDITED
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The pro-forma amounts may not be representation of future disclosure as the
estimated fair value of stock options is amortized to expense over the vesting
period and additional options may be granted in future periods. Furthermore,
these pro-forma amounts include a compensation cost based on a weighted-average
grant date fair value of $2.28 and $2.13 per stock option options granted in the
three and six months ended June 30, 2003 respectively as calculated using the
Black-Scholes option pricing model with the following assumptions:
Three months ended Six months ended
June 30, 2003 June 30, 2003
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Annualized volatility 55% 57%
Risk-free interest rate 3.59% 3.98%
Expected life (years) 2.8 3.7
Dividend Nil Nil
4 CONVERTIBLE TERM LOANS
The company issued convertible term loans in the aggregate principal amount of
$25 million, bearing interest at an annual rate of 12%, payable annually or at
maturity at the option of the company. These term loans are secured by all
assets of the company with the exception of equipments and the shares of Atrium
Biotechnologie Inc. The term loans mature on March 31, 2006 and are convertible
at all time at the option of the holders in subordinate voting shares of the
company at a price of $ 5.05 per share. The equity component, which corresponds
to the option of the holders to convert term loans into shares of the company,
was valued at the date of the loans and is classified as contributed surplus.
5 SEGMENT INFORMATION
The company manages its business and evaluates performance based on three
operating segments, which are the biopharmaceutical segment, the cosmetics and
nutrition segment and the distribution segment. The accounting principles used
for these three segments are consistent with those used in the preparation of
these consolidated financial statements.
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- -----------------------------------------
2003 2002 2003 2002
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REVENUES
Biopharmaceutical $ 14,185 $ - $ 26,730 $ -
Cosmetics and nutrition 3,654 2,972 6,950 6,156
Distribution 21,063 20,540 46,262 42,705
Consolidated adjustments (27) (72) (254) (72)
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$ 38,875 $ 23,440 $ 79,688 $ 48,789
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NET EARNINGS (LOSS) FOR THE PERIOD
Biopharmaceutical $ (5,570) $ (6,956) $ (11,407) $ (13,748)
Cosmetics and nutrition 507 589 1,208 1,382
Distribution 446 460 847 789
Consolidated adjustments 46 8 (53) 27
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$ (4,571) $ (5,899) $ (9,405) $ (11,550)
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6. SUBSEQUENT EVENT
On July 24, 2003, pursuant to a bought deal, the company issued 4,500,000 common
shares at a price of $7.90 per share for gross proceed of $35,550,000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
AETERNA ZENTARIS INC.
DATE: AUGUST 13, 2004 By: /s/ MARIO PARADIS
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Mario Paradis
Senior Director, Finance and
Corporate Secretary