6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2021

Commission File Number: 001-38064

Aeterna Zentaris Inc.

(Translation of registrant’s name into English)

c/o Norton Rose Fulbright Canada, LLP, 222 Bay Street, Suite 3000, PO Box 53, Toronto ON M5K 1E7

(Address of principal executive office)

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 ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Exhibits 99.1 and 99.2, included with this report on Form 6-K are hereby incorporated by reference into the Registrant’s Registration Statements on Forms F-3 (File No. 333-232935 and No. 333-254680), Form F-3 MEF (File No. 333-253178)* and Forms S-8 (File Nos. 333-224737, 333-210561, 333-200834) and shall be deemed to be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

DOCUMENTS INDEX

Exhibit	Description
99.1	Aeterna Zentaris’ Condensed Interim Consolidated Financial Statements – Third Quarter 2021 (Q3)
99.2	Aeterna Zentaris’ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Third Quarter 2021 (Q3)
99.3	Certification of the Chief Executive Officer pursuant to National Instrument 52-109
99.4	Certification of the Principal Financial Officer pursuant to National Instrument 52-109
101	INS XBRL
101.	SCH XBRL
101.	CAL XBRL
101.	DEF XBRL
101.	LAB XBRL
101.	PRE XBRL

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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: November 4, 2021	By:	/s/ Klaus Paulini
		Klaus Paulini
		President and Chief Executive Officer

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EX-99.2

Exhibit 99.2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

This Management’s Discussion and Analysis (“MD&A”) provides a review of the results of operations, financial condition and cash flows of Aeterna Zentaris Inc. for the three- and nine- months ended September 30, 2021. In this MD&A, “Aeterna Zentaris”, the “Company”, “we”, “us” and “our” mean Aeterna Zentaris Inc. and its subsidiaries. This discussion should be read in conjunction with the information contained in the Company’s unaudited condensed consolidated financial statements and the accompanying notes thereto as at September 30, 2021 and for the three- and nine-months ended September 30, 2021 and 2020 and the audited consolidated financial statements and MD&A for the years ended December 31, 2020 and 2019. The unaudited condensed interim consolidated financial statements as at September 30, 2021 and for the three- and nine-months ended September 30, 2021 and 2020 were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The Company’s common shares are listed on both The Nasdaq Capital Market (“Nasdaq”) and on the Toronto Stock Exchange under the symbol “AEZS”.

All amounts in this MD&A are presented in United States (“U.S.”) dollars, except as otherwise noted.

This MD&A was approved by the Company’s Board of Directors on November 4, 2021. This MD&A is dated November 4, 2021.

Company Overview

Aeterna Zentaris is a specialty biopharmaceutical company commercializing and developing therapeutics and diagnostic tests. The Company’s lead product, Macrilen™ (macimorelin), is the first and only U.S. Food and Drug Administration and European Commission approved oral test indicated for the diagnosis of patients with adult growth hormone deficiency (“AGHD”). Macimorelin is currently marketed in the U.S. under the tradename Macrilen™ through the license agreement and the amended license agreement (collectively the “Novo Amended License Agreement”) with Novo Nordisk Healthcare AG (“Novo Nordisk” or “Novo”) under which Aeterna Zentaris receives royalties on net sales. According to a commercialization and supply agreement, MegaPharm Ltd. is seeking regulatory approval and plans to subsequently commercialize macimorelin in Israel and the Palestinian Authority. Additionally, upon receipt of pricing and reimbursement approvals, Aeterna Zentaris expects that macimorelin will be marketed in Europe and the United Kingdom through a recently established license agreement with Consilient Health Ltd. (“Consilient Health”) under which Aeterna Zentaris will receive regulatory milestone payments related to agreed-upon pricing and reimbursement parameters; net sales milestone payments; and royalties, ranging from 10%-20% of net sales, subject to reduction in certain cases, or sublicense income recorded by Consilient Health. The Company is also leveraging the clinical success and compelling safety profile of macimorelin to develop it for the diagnosis of childhood-onset growth hormone deficiency (“CGHD”), an area of significant unmet need. The Company is actively pursuing business development opportunities for the commercialization of macimorelin in Asia and the rest of the world.

Aeterna Zentaris intends to balance risks and secure growth opportunities by re-establishing a diversified, yet focused, development pipeline to which the Company can best leverage its expertise and experience. The Company is focused on opportunistically utilizing its network with universities in Europe and the U.S. which provides, what the Company believes will be, vital access to innovative development candidates in different indications, with a focus on rare or orphan indications and potential for pediatric use. To date, we have signed agreements to establish this growing pipeline across a number of indications, including neuromyelitis optica spectrum disorder (NMOSD) and Parkinson’s disease (PD), primary hypoparathyroidism and amyotrophic lateral sclerosis (ALS, Lou Gehrig’s disease). Additionally, the Company is developing oral prophylactic bacterial vaccines against each of SARS-CoV-2, the virus that causes COVID-19, and chlamydia.

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About Forward-Looking Statements

This document contains statements that may constitute forward-looking statements within the meaning of U.S. and Canadian securities legislation and regulations and such statements are made pursuant to the safe-harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to statements preceded by, followed by, or that include the words “will,” “expects,” “believes,” “intends,” “would,” “could,” “may,” “anticipates,” and similar terms that relate to future events, performance, or our results. Forward-looking statements involve known and unknown risks and uncertainties, including those discussed in this MD&A and in our Annual Report on Form 40-F and annual information form, under the caption “Risk Factors” filed with the relevant Canadian securities regulatory authorities and with the U.S. Securities and Exchange Commission (“SEC”). Forward-looking statements in this MD&A include, but are not limited to, those relating to: Aeterna’s expectation with respect to the DETECT trial (as defined below) (including the ability to enroll subjects in the U.S. or elsewhere, and expectations that the DETECT trial will be suitable to support a claim (regulatory approval) for potential stand-alone testing with macimorelin), Aeterna’s expectations with respect to the marketing of macimorelin in Europe and the United Kingdom and with respect to the approvals and commercialization of macimorelin in Israel and the Palestinian Authority, the aims and details of the pre-clinical and potential clinical studies involving the use of macimorelin as potential treatment of ALS (Lou Gehrig’s disease) being conducted by The University of Queensland in Australia (“Queensland University”), the potential of the vaccine platform technology licensed from the Julius Maximilians University of Wuerzburg (the “University of Wuerzburg”) (and any vaccine candidates using that technology) to be effective as a vaccine against COVID-19 (SARS-CoV-2) or any other coronavirus disease or to offer an alternative to other approved vaccines against COVID-19 or to be effective as a vaccine against chlamydia, the ability to obtain approval to commence any clinical trial or the timeline to develop any potential vaccine and the characteristics of any potential vaccine, plans regarding the delayed clearance PTH (as defined below) fusion polypeptides licensed from The University of Sheffield and the AEZS-150 candidate and the related potential IND filing, plans regarding AIM-Biologicals (as defined below) in-licensed from the University of Wuerzburg in Germany and the potential to treat NMOSD (as defined below) and Parkinson’s Disease (“PD”), and Aeterna’s intentions with respect to growth opportunities and its business focus, including with respect to its cash position and development pipeline (including the ability to accelerate its development pipeline).

Forward-looking statements involve known and unknown risks and uncertainties, and other factors which may cause the actual results, performance or achievements stated herein to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such risks and uncertainties include, among others: the completion of the DETECT trial may be delayed, we may be unable to enroll the expected number of subjects in the DETECT trial and the result of the DETECT trial may not support receipt of regulatory approval in CGHD, that the University of Wuerzburg’s vaccine platform technology (and any vaccine candidates using that technology) has never been tested in humans and so further pre-clinical or clinical studies of that technology and any vaccine developed using that technology may not be effective as a vaccine against COVID-19 (SARS-CoV-2) or any other coronavirus disease or against chlamydia, that such technology or vaccines may not receive the necessary approvals to be studied in human clinical trials, that the timeline to develop a vaccine may be longer than expected, that such technology or vaccines may not be capable of being used orally, may not have the same characteristics (including storage temperatures) as vaccines previously approved using the Salmonella Typhi Ty21a carrier strain, any such vaccine developed using the University of Wuerzburg’s technology may not be efficacious against resistant viral mutants or may not be competitive with vaccines developed by third parties against COVID-19, the risk that the pre-clinical research licensed from our partners, including that done with the University of Wuerzburg for autoimmunity modifying biologicals for the potential treatment of NMOSD or PD, does not lead to clinical trials in humans, our ability to raise capital and obtain financing to continue our currently planned operations, our ability to continue to list our common shares on the Nasdaq, results from ongoing or planned pre-clinical studies of macimorelin by Queensland University or for our other products under development may not be successful or may not support advancing the product to human clinical trials, our ability to raise capital and obtain financing to continue our currently planned operations, our dependence on the success of Macrilen™ (macimorelin) and related out-licensing arrangements and the continued availability of funds and resources to successfully commercialize the product, including our heavy reliance on the success of the Novo Amended License Agreement, the global instability due to the global pandemic of COVID-19, and its unknown potential effect on our planned operations, including studies, our ability to enter into out-licensing, development, manufacturing, marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect, our reliance on third parties for the manufacturing and commercialization of Macrilen™ (macimorelin), potential disputes with third parties, leading to delays in or termination of the manufacturing, development, out-licensing or commercialization of our product candidates, or resulting in significant litigation or arbitration, uncertainties related to the regulatory process, unforeseen global instability, including the instability due to the global pandemic of the novel coronavirus, our ability to efficiently commercialize or out-license Macrilen™ (macimorelin), our reliance on the success of the pediatric clinical trial in the European Union (“E.U.”) and the U.S. for Macrilen™ (macimorelin), the degree of market acceptance of Macrilen™ (macimorelin), our ability to obtain necessary approvals from the relevant regulatory authorities to enable us to use the desired brand names for our product, our ability to successfully negotiate pricing and reimbursement in key markets in the E.U. for macimorelin, any evaluation of potential strategic alternatives to maximize potential future growth and shareholder value may not result in any such alternative being pursued, and even if pursued, may not result in the anticipated benefits, our ability to take advantage of business opportunities in the pharmaceutical industry, our ability to protect our intellectual property, and the potential of liability arising from shareholder lawsuits and general changes in economic conditions. Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties, including those risks discussed in our Annual Report on Form 40-F and annual information form, under the caption “Risk Factors”. Given these uncertainties and risk factors, readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, unless required to do so by a governmental authority or applicable law.

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About Material Information

This MD&A includes information that we believe to be material to investors after considering all circumstances. We consider information and disclosures to be material if they result in, or would reasonably be expected to result in, a significant change in the market price or value of our securities, or where it is likely that a reasonable investor would consider the information and disclosures to be important in making an investment decision.

We are a reporting issuer under the securities legislation of all of the provinces of Canada, and our securities are registered with the SEC. We are therefore required to file or furnish continuous disclosure information, such as interim and annual financial statements, management’s discussion and analysis, proxy or information circulars, annual reports on Form 40-F, material change reports and press releases with the appropriate securities regulatory authorities. Additional information about the Company and copies of these documents may be obtained free of charge upon request from our Corporate Secretary or on the Internet at the following addresses: www.zentaris.com, www.sedar.com and www.sec.gov.

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Diagnostic Commercial and Development Pipeline

Macimorelin Commercialization Program

On December 7, 2020, the Company entered into exclusive licensing and supply agreements with Consilient Health for the commercialization in the European Union and the United Kingdom of macimorelin in any diagnostic application. As per the agreements’ terms, the Company received a cash payment of €1 million in January 2021. This cash payment has been recognized in the consolidated statement of financial position as long-term deferred revenue as it will be recognized over the supply of the licensed product that is expected to start in the first quarter of 2022. Effective April 19, 2021 the Company received the European Medicines Agency’s approval to amend the marketing authorization to allow Consilient Health to market macimorelin in the EU and effective May 14, 2021, the Company received similar approvals in the United Kingdom. Negotiations on regional licensing or commercialization of macimorelin in the rest of the world are ongoing.

Macimorelin Clinical Program

As previously disclosed, Aeterna Zentaris, in collaboration with Novo Nordisk, is currently developing the expanded use of macimorelin for the diagnosis of CGHD, an area of significant unmet need. In late 2020, Aeterna Zentaris entered into the start-up phase for the clinical safety and efficacy study, AEZS-130-P02 (the “DETECT” trial), evaluating macimorelin for the diagnosis of CGHD. The DETECT trial is an open-label, single dose, multicenter and multinational pivotal study evaluating safety and efficacy of macimorelin for the diagnosis of CGHD. Children and adolescents from two to less than 18 years of age with suspected GHD 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, see: https://clinicaltrials.gov/ct2/show/NCT04786873. On May 13, 2021, we announced the opening of the first clinical site in the U.S. Clinical trial approval procedures in the E.U. and the rest of the world as well as site initiation activities are ongoing.

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Therapeutic and Vaccine Development Pipeline

 

Key Developments

AIM Biologicals

On January 28, 2021, the Company announced that it had licensed the exclusive worldwide rights to develop, manufacture and commercialize targeted, highly specific, autoimmunity modifying proteins (“AIM-Biologicals”), currently in early preclinical development, for the potential treatment of neuromyelitis optica spectrum disorder (“NMOSD”) from the University of Wuerzburg and made a payment of $0.1 million (€100,000) to the University of Wuerzburg. On June 7, 2021, we engaged neuroimmunologist, Michael Levy, MD, PhD, Research Director of the Division of Neuroimmunology & Neuroinfectious Disease at Massachusetts General Hospital as a scientific consultant to support the development of the Company’s AIM Biologicals for the potential treatment of NMOSD. Dr. Levy will provide scientific support and advice to Aeterna Zentaris in the field of inflammatory central nervous system disorders, autoimmune diseases of the nervous system, and NMOSD. In 2021, we expect to conduct in-vitro and in-vivo assessments to select an AIM Biologicals-based development candidate and developing the manufacturing process for the selected candidate.

In September 2021, the Company entered into an additional exclusive license with the University of Wuerzburg for early preclinical development for the potential treatment of Parkinson’s Disease and agreed to a payment of $0.1 million (€100,000) to the University of Wuerzburg. PD is a neurodegenerative movement disorder affecting over 7 million people worldwide and there is growing evidence suggesting that PD could be considered an autoimmune disease. For its next steps, the Company expects to design and produce antigen-specific AIM Biologics molecules for the potential treatment of PD and to conduct in-vitro and in-vivo assessments in relevant PD models.

Macimorelin Pre-clinical Program

On January 13, 2021, we entered into a material transfer agreement with Queensland University to provide macimorelin for the conduct of preclinical and clinical studies evaluating macimorelin as a therapeutic for the treatment of amyotrophic lateral sclerosis (“ALS” and commonly known as Lou Gehrig’s disease). Queensland University researchers have filed funding applications to dedicated organizations in Australia to finance parts of the abbreviated preclinical development program and to conduct a subsequent investigator-initiated clinical trial to evaluate the safety, tolerability and efficacy of macimorelin as a potential new treatment option for ALS patients. The Company expects to continue work with Queensland University to conduct proof-of-concept studies with macimorelin in disease specific animal models, assess alternative formulations and formalize a preclinical development plan. Our next steps include working with Queensland University to conduct proof-of-concept studies with macimorelin in disease-specific animal models, assess alternative formulations and formalize our pre-clinical development plan.

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AEZS- 150 (Delayed clearance parathyroid hormone)

On March 11, 2021, the Company announced that it had received an exclusive license from The University of Sheffield, United Kingdom, for the intellectual property relating to parathyroid hormone (“PTH”) fusion polypeptides covering the field of human use which will initially be studied by Aeterna Zentaris for the potential therapeutic treatment of primary hypoparathyroidism and agreed to a payment of $0.1 million (£100,000) to the University of Sheffield. Under the terms of the exclusive patent and know-how license agreement entered into with The University of Sheffield, Aeterna Zentaris obtained worldwide rights to develop, manufacture and commercialize PTH fusion polypeptides covered by the licensed patents for all human uses for an up-front cash payment and milestone payments to be paid upon the achievement of certain development, regulatory and sales milestones, as well as low single digit royalty payments on net sales of those products and certain fees payable in connection with sublicensing. Aeterna Zentaris is responsible for the further development, manufacturing, approval and commercialization of the licensed products. Aeterna Zentaris has also engaged The University of Sheffield under a research contract to conduct certain research activities to be funded by Aeterna Zentaris, the results of which will be included within the scope of the license granted to Aeterna Zentaris. On May 6, 2021, Aeterna Zentaris selected AEZS-150 as the lead candidate in the Company’s delayed clearance parathyroid hormone fusion polypeptides (DC-PTH) program. The Company expects to work with The University of Sheffield to conduct in depth characterization of the development candidate (in-vitro and in-vivo), develop the manufacturing process and formalize the preclinical development of AEZS-150 in preparation for a potential IND filing for conducting the first in human clinical study.

Oral Coronavirus Vaccine

On February 2, 2021, the Company announced that it had entered into an exclusive option agreement (the “Option Agreement”) to evaluate a preclinical potential COVID-19 vaccine developed at the University of Wuerzburg and made a payment of $0.1 million (€110,000) to the University of Wuerzburg. The vaccine technology developed at the University of Wuerzburg uses a typhoid fever vaccine as a carrier strain and has the potential to be an orally active COVID-19 (SARS-CoV-2) live-attenuated bacterial vaccine. Under the Option Agreement entered into with the University of Wuerzburg, we have the right to negotiate an exclusive worldwide license to develop this technology for the prevention of coronavirus diseases, including COVID-19. We believe that, if it is determined that there is sufficient data to advance into human clinical trials, the development program for this particular COVID-19 vaccine is expected to be abbreviated because extensive clinical safety data is already available for the underlying vaccine strain, Salmonella Typhi Ty21a.

On March 14, 2021, the Company exercised the option under the Option Agreement and entered into a License Agreement with the University of Wuerzburg (the “Wuerzburg License Agreement”). Pursuant to the terms of the Wuerzburg License Agreement, the Company has been granted an exclusive, world-wide, license to certain patents and know-how owned by the University of Wuerzburg to research and develop, manufacture, and sell a potential COVID-19 vaccine using the University of Wuerzburg’s bacterial vaccine platform technology (the “Licensed Rights”). The Company paid an up-front payment under the Wuerzburg License Agreement of $0.2 million (€140,000) and has agreed to make certain milestones payments to be paid upon the achievement of certain development, and regulatory and sales milestones as well as a percentage of any sub-licensing revenue received by the Company and royalty payments on net sales of the licensed vaccine products (including by the Company or its sub-licensees). The Wuerzburg License Agreement will expire upon the latter of (i) the existence of a valid patent claim of a Licensed Right or (ii) 10 years after the first commercial sale of a product that was developed, manufactured, marketed, and sold using a least one Licensed Right. The Wuerzburg License Agreement may be terminated by the Company by providing six months’ notice to the University of Wuerzburg. Pursuant to the Wuerzburg License Agreement, the University of Wuerzburg also granted the Company an exclusive option for the exclusive use of the Licensed Rights in a then undisclosed field, the Oral Chlamydia Vaccine, as discussed below. 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 preclinical development studies on the potential vaccine. Our next steps include evaluating the administration route, dose and immunization scheme, conducting in-vivo immunology experiments with antigen variant candidates in relevant mice models, conducting virus challenge experiments in immunized transgenic animals , start the manufacturing process assessment and development, and conducting pre-clinical safety and toxicology assessments.

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Chlamydia Vaccine

In September 2021, the Company exercised its option on a then undisclosed field, and paid an up-front payment under the Wuerzburg License Agreement of $0.1 million (€100,000) and has agreed to make certain further payments as discussed above. 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 preclinical development studies on the potential chlamydia vaccine. Our next steps include the design and preparation of candidate vaccine strains, the evaluation of the administration route, dose and immunization scheme, and the conduct of in-vivo immunology experiments with candidate strains in relevant mouse models.

Financing activities

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 our common shares for gross proceeds of approximately $20.0 million (such exercises, the “Warrant Exercises”). 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.

On February 19, 2021, the Company closed a public offering of 20,509,746 common shares at a price to the public of $1.45 per common share, for gross proceeds of $29.7 million, before deducting underwriting discounts, commissions and offering expenses payable by the Company, in the amount of $2.8 million. Aeterna also granted the underwriter, which was also the placement agent, a 30-day overallotment option (the “Underwriter Option”) to purchase up to 3,076,461 additional common shares at the public offering price, less underwriting discounts and commissions, and 1,435,682 placement agent warrants with an exercise price of $1.8125 and expiring on February 17, 2026. The net cash proceeds to the Company from the offering totaled $26.9 million. On February 22, 2021, the underwriter exercised the Underwriter Option in full and received 3,076,461 common shares for gross proceeds to the Company of $4.5 million. In connection with the public offering and the exercise of the Underwriter Option, the Company paid commissions and other expenses of $0.4 million and issued 215,352 placement agent warrants priced at $1.8125 and expiring on February 17, 2026. Collectively, this financing is referred to as the “February 2021 Financing”.

The Company previously disclosed that it would use the gross proceeds from the February 2021 Financing for general corporate purposes, including, among other purposes, the investigation of further therapeutic uses of Macrilen™ (macimorelin), the expansion of pipeline development activities, the further expansion of commercialization of macimorelin in available territories and the potential funding of a pediatric clinical trial in the E.U. and U.S. for macimorelin.

Nasdaq Letters

On July 28, 2021, we received a letter from the Listing Qualifications Staff of the Nasdaq, notifying us that for the last 30 consecutive business days prior to the date of the letter, the closing bid price of our common shares was below $1.00 per share and, therefore, we did not meet the requirement for continued listing on Nasdaq as required by Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were granted a grace period of 180 calendar days, through January 24, 2022. Nasdaq’s notice has no immediate effect on the listing of our common shares on the Nasdaq and does not otherwise impact our listing on the TSX. We are considering the options available to us to evidence compliance with the Bid Price Rule prior to the expiration of the grace period. There is no assurance that we will regain compliance with the Bid Price Rule in the future, and therefore there can be no assurance that our common shares will remain listed on Nasdaq.

Changes in personnel and advisors

On May 3, 2021, the Company announced the addition of Michael Teifel, Ph.D. as Senior Vice President, Non-Clinical Development and Chief Scientific Officer to drive forward our pre-clinical research initiatives. Alongside Prof. Dr. Joerg Wischhusen (Wuerzburg University) in May 2021, in June 2021, Dr. Michael Levy, MD, PhD was engaged by the Company as a scientific consultant to support the development of the AIM Biologicals in NMOSD. Dr. Thomas Rudel (Wuerzburg University) was engaged by the Company in September 2021 as a scientific consultant to support development of the salmonella-based vaccine platform for coronavirus and chlamydia vaccines.

Extension of German building lease

Effective August 25, 2021, the Company and its landlord mutually agreed to a one year extension to its existing building lease agreement for its German subsidiary, continuing such terms until March 31, 2023.

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Securities class action lawsuit

On March 9, 2020, the Company settled the previously disclosed class-action lawsuit against it pending in the U.S. District Court for the District of New Jersey. This settlement was approved by the U.S. District Court for the District of New Jersey on June 3, 2021. The settlement payment was funded entirely by the Company’s insurers. As no appeals were filed within the 30-day appeal period, this matter is fully and finally settled.

Exposure to epidemic or pandemic outbreak

As of November 4, 2021, coronavirus or COVID-19, a contagious disease that was characterized by the World Health Organization as a pandemic in early 2020, continues to affect the global community. To date, the Company has not experienced significant business disruption from COVID-19. Given this rapidly evolving situation, the duration, scope and impact on our business operations, clinical studies and financial results cannot at this time be fully determined or quantified. Aeterna Zentaris has developed protocols and procedures should they be required to deal with any potential epidemics and pandemics and has implemented these protocols and procedures to address the current COVID-19 pandemic. Despite appropriate steps being taken to mitigate such risks, there can be no assurance that existing policies and procedures will ensure that the Company’s operations will not be adversely affected. The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets of many regions and countries. There can be no assurance that a disruption in financial markets, regional economies and the world economy would not negatively affect Aeterna Zentaris’ access to capital or its financial performance.

Uncertain factors, including the duration of the outbreak, the severity of the disease and the actions to contain or treat its impact, could impair our operations including, among other things, employee mobility and productivity, availability of our facilities, conduct of our clinical trials and the availability and the productivity of third-party product and service suppliers. Please see the Risk Factor entitled “The economic effects of a pandemic, epidemic or outbreak of an infectious disease could adversely affect our operations or the market price of our common shares” in our Annual Report on Form 40-F for the year ended December 31, 2020.

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Condensed Interim Consolidated Statements of Comprehensive Loss Data

(in thousands, except share and per share data)

	Three months ended						Nine months ended
	September 30						September 30
	2021			2020			2021			2020
	$			$			$			$
Revenues
Royalty income		20			23			47			47
Product sales		—			—			—			1,016
Supply chain		55			87			139			168
Licensing revenue		527			18			1,601			55
Total revenues		602			128			1,787			1,286
Operating expenses
Cost of sales		31			33			72			907
Research and development expenses		801			372			1,902			880
General and administrative expenses		1,228			1,180			4,137			3,445
Selling expenses		360			283			924			730
Gain on modification of building lease		—			—			—			(219	)
Total operating expenses		2,420			1,868			7,035			5,743
Loss from operations		(1,818	)		(1,740	)		(5,248	)		(4,457	)
Gain (loss) due to changes in foreign currency exchange rates		124			211			(42	)		237
Change in fair value of warrant liability		—			816			—			1,147
Other finance costs		(4	)		(423	)		(21	)		(734	)
Net finance income (costs)		120			604			(63	)		650
Loss before income taxes		(1,698	)		(1,136	)		(5,311	)		(3,807	)
Income tax recovery		—			—			129			—
Net loss		(1,698	)		(1,136	)		(5,182	)		(3,807	)
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments		39			(483	)		460			(482	)
Items that will not be reclassified to profit or loss:
Actuarial gain (loss) on defined benefit plans		219			(635	)		133			(665	)
Comprehensive loss		(1,440	)		(2,554	)		(4,589	)		(4,954	)
Net loss per share [basic and diluted]		(0.01	)		(0.02	)		(0.05	)		(0.11	)
Weighted average number of shares outstanding:
Basic		121,297,007			56,211,486			112,743,285			33,832,136
Diluted		121,297,007			56,211,486			112,743,285			33,832,136

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Condensed Interim Consolidated Statements of Financial Position Data

(in thousands)	As at September 30, 2021		As at December 31, 2020
	$		$
Cash and cash equivalents		68,002		24,271
Trade and other receivables and other current assets		4,341		3,594
Inventory		57		21
Restricted cash equivalents		342		338
Property, plant and equipment		40		22
Right of use assets		185		157
Other non-current assets		9,075		8,874
Total assets		82,042		37,277
Payables and accrued liabilities and income taxes payable		2,486		2,594
Current portion of provisions		81		92
Current portion of deferred revenues		2,075		2,193
Lease liabilities		200		184
Non-financial non-current liabilities (1)		17,274		19,003
Total liabilities		22,116		24,066
Shareholders’ equity		59,926		13,211
Total liabilities and shareholders’ equity		82,042		37,277

(1) Comprised mainly of employee future benefits, provisions and non-current portion of deferred revenues.

(10)

Critical Accounting Policies, Estimates and Judgments

The preparation of condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of the Company’s assets, liabilities, revenues, expenses and related disclosures. Judgments, estimates and assumptions are based on historical experience, expectations, current trends and other factors that management believes to be relevant at the time at which the Company’s condensed interim consolidated financial statements are prepared.

Management reviews, on a regular basis, the Company’s accounting policies, assumptions, estimates and judgments in order to ensure that the consolidated financial statements are presented fairly and in accordance with IFRS applicable to interim financial statements. Any changes in the judgments or assumptions applied to account for the Novo Amended License Agreement could result in a significant impact on the Company’s revenue and deferred revenue. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Critical accounting estimates and assumptions, as well as critical judgments used in applying accounting policies in the preparation of the Company’s condensed interim consolidated financial statements, were the same as those applied to the Company’s annual consolidated financial statements as of December 31, 2020 and 2019 and for the years then ended except for the following:

Intangible assets

Separately acquired intangible assets are recognized at the price paid in cash, less amortization and impairments. All intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable, or, at a minimum, annually. The recoverable amount is determined as the higher of value in use or fair value less costs to sell using a discounted cash flow calculation, where the products’ expected cash flows are risk-adjusted over their estimated remaining useful economic life. Any impairment losses are recognized immediately in the consolidated statements of comprehensive (loss) income. Intangible assets relating to products which fail during development (or for which development ceases for other reasons) are also tested for impairment and are written down to their recoverable amount (which is usually nil). If, subsequent to an impairment loss being recognized, development restarts or other facts and circumstances change indicating that the impairment is less or no longer exists, the value of the asset is re-estimated and its carrying value is increased to the recoverable amount, but not exceeding the original value, by recognizing an impairment reversal in the consolidated statements of comprehensive (loss) income. Amortization of such intangible assets begins once such assets are ready for their intended use.

Contingent payments

The Company accounts for contingent variable payments for separately acquired intangible assets with the cost accumulation approach. Contingent consideration is not considered on initial recognition of the asset but is added to the cost of the asset initially recorded, when incurred.

Recent accounting pronouncements issued but not yet effective

The recent accounting pronouncements issued but not yet effective included in note 4 to the Company’s annual audited consolidated financial statements as at December 31, 2020 and 2019 and for the years then ended are unchanged.

Financial Risk Factors and Other Instruments

The nature and extent of our exposure to risks arising from financial instruments, including credit risk, liquidity risk and market risk and how we manage those risks are described in note 25 to the Company’s annual audited consolidated financial statements as at December 31, 2020 and 2019 and for the years then ended. There were no significant changes in the nine months of 2021 as compared with the December 31, 2020 disclosure.

(11)

Results of operations for the three-month period ended September 30, 2021

For the three-month period ended September 30, 2021, we 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 revenues.

Revenues

Our 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. The 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). The licensing revenue was earned from the recognition of a portion of the deferred €5 million payment from Novo Nordisk received with the amendment to the Novo License agreement in the fourth quarter of 2020.

Operating expenses

Our total operating expenses for the three-month period ended September 30, 2021 was $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 is due to the impact of the initiation of research and development projects as announced in the first quarter of 2021, and a one-time market study incurred in the quarter.

Net finance income

Our 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 is 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 During the prior year’s third quarter, the Company registered the common shares underlying the warrants which allowed the Company to reclassify certain warrants from liability to shareholders’ equity in the condensed interim consolidated statements of financial position. As such the change in fair value of such warrants liabilities was classified as a finance cost in the consolidated statements of loss and comprehensive loss in 2020.

Results of operations for the nine-month period ended September 30, 2021

For the nine-month period ended September 30, 2021, we reported a consolidated net loss of $5.2 million, or $0.05 loss per common share (basic), as compared with a consolidated net loss of $3.8 million, or $0.11 loss per common share (basic) for the nine-month period ended September 30, 2020. The $1.4 million increase in net loss is primarily from an increase in total operating expenses of $1.3 million and an increase of $0.7 million in net finance costs, partially offset by an increase of $0.5 million in revenue and a $0.1 million in income tax recovery.

Revenues

Our total revenue for the nine-month period ended September 30, 2021 increased by $0.5 million to $1.8 million as compared with $1.3 million during the same period in 2020. The 2021 revenue was comprised of $1.6 million in licensing revenue (2020 - $0.06 million), $0.1 million in supply chain revenue (2020 - $0.2 million), $0.05 million in royalty income (2020 - $0.05 million) and $nil in product sales (2020 - $1.0 million). The main driver of revenue in the first nine months of 2021 was the licensing revenue earned primarily from the recognition of a portion of the deferred €5 million payment from Novo Nordisk received with the amendment to the Novo License agreement in the fourth quarter of 2020 while product sales to Novo Nordisk drove the revenue earned in the first nine months of 2020.

(12)

Operating expenses

Our total operating expenses for the nine-month period ended September 30, 2021 was $7.0 million as compared with $5.7 million for the same period in 2020, representing an increase of $1.3 million. This increase arose primarily from a $1.0 million increase in research and development costs and $0.7 million increase in general and administrative expenses and $0.2 million increase in selling expenses and a $0.2 million in one-time gain on modification of a lease that was incurred in 2020 only, offset by a decrease of $0.8 million in cost of sales, as there have been no product sales in 2021. This increase in total operating expenses is due to the initiation of research and development projects as announced in the first quarter of 2021, and higher public company costs incurred holding our annual shareholders meeting in May 2021, subsequent to our issuance of common shares in the February 2021 financing and the 2021 warrant exercises, in addition to higher professional fees.

Net finance (costs) income

Our net finance (costs) for the nine-month period ended September 30, 2021 was ($0.1) million as compared with net finance income of $0.7 million for the same period in 2020, representing a decrease in net finance income of $0.8 million. This is primarily due to the $1.1 million decrease in the change in fair value of the warrant liability a $0.3 million decline in the gain from changes in foreign currency exchange rates partially offset by a $0.7 million improvement in other finance costs. During the prior year, the Company registered the common shares underlying certain warrants which allowed the Company to reclassify such warrants from liability to shareholders’ equity in the condensed interim consolidated statements of financial position. As such the change in fair value of such warrants liabilities was classified as a finance cost in the consolidated statements of loss and comprehensive loss in 2020; there was no such change in fair value in 2021.

Selected quarterly financial data

	Three months ended
(in thousands, except for per share data)	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
							$			$
Revenues		602			599			586			2,366
Net loss		(1,698	)		(2,039	)		(1,445	)		(1,311	)
Net loss per share [basic and diluted]*		(0.01	)		(0.02	)		(0.02	)		(0.02	)

	Three months ended
(in thousands, except for per share data)	September 30, 2020			June 30, 2020			March 31, 2020		December 31, 2019
							$		$
Revenues		128			68			1,090		18
Net (loss) income		(1,136	)		(3,450	)		779		(1,006	)
Net (loss) income per share [basic and diluted]*		(0.02	)		(0.15	)		0.04		(0.05	)

* Net loss per share is based on the weighted average number of shares outstanding during each reporting period, which may differ on a quarter-to-quarter basis. As such, the sum of the quarterly net loss per share amounts may not equal full-year net loss per share.

Historical quarterly results of operations and net (loss) income cannot be taken as reflective of recurring revenue or expenditure patterns of predictable trends, largely given the non-recurring nature of certain components of our historical revenues, the impact of costs associated with launching a number of significant preclinical research and development programs in 2021, and of foreign exchange gains and losses. In addition, we cannot predict what the revenues from royalties will be earned from the Novo Amended License Agreement.

(13)

Use of cash and cash equivalents

We began 2021 with $24.3 million in cash and cash equivalents. During the nine-month period ended September 30, 2021, our operating activities consumed $6.4 million, our financing activities provided $50.9 million and our investing activities used $0.7 million. As at September 30, 2021 we had $68.0 million of cash and cash equivalents.

Liquidity and capital reserves

Our operations and capital expenditures have generally been financed from operating activities, public equity offerings, registered direct offerings and issuances under various “at-the-market” offering programs. A portion of the Company’s cash is held in AEZS Germany, which is the counter-party to various license and distribution agreements for the Company’s only approved product and to research and development agreements. The majority of the funds are held by the Canadian parent company and are transferred to AEZS Germany when needed.

	Nine months ended September 30,
(in thousands)	2021			2020
Cash and cash equivalents - Beginning of period		24,271			7,838
Cash used in operating activities		(6,168	)		(6,647	)
Cash flows provided by financing activities		50,926			20,485
Cash flows (used in) provided by investing activities		(534	)		56
Effect of exchange rate changes on cash and cash equivalents		(493	)		14
Cash and cash equivalents - End of period		68,002			21,746

Operating Activities

Cash used by operating activities totaled $6.2 million for the nine months ended September 30, 2021, as compared to $6.6 million in the same period in 2020. This $0.4 million improvement in operating activities is attributed primarily to the net change in operating assets which included the receipt of the cash payment of €1 million in January 2021 from Consilient Health and recognized as deferred revenue and increases in accrued research and development costs, offset by installment payments of income taxes.

Financing Activities

Cash provided by financing activities totaled $50.9 million for the nine months ended September 30, 2021, as compared with cash provided by financing activities of $20.5 million in the same period in 2020. On February 21, 2021, the Company completed the February 2021 Financing with net cash proceeds of $31.0 million and, throughout the first nine months of 2021, the Warrant Exercises contributed cash of approximately $20.0 million. In 2020, the Company completed the February 2020 Financing with net proceeds of $3.9 million, the July 2020 financing with net proceeds of $10.6 million and the August 2020 Financing with net proceeds of $6.3 million.

(14)

Investing Activities

Cash used by investing activities totaled $0.5 million for the nine months ended September 30, 2021, as compared to cash provided by investing activities of $0.06 in the same period in 2020. During the first nine months of 2021, the Company executed various agreements including in-licensing and similar arrangements with development partners reflecting the purchase of separately acquired intangible assets.

Capital stock

As at November 4, 2021, we had 121,397,007 common shares issued and outstanding, as well as 506,400 stock options, 423,000 deferred share units and 11,441,213 warrants outstanding. Each stock option, deferred share unit and warrant is exercisable for one common share.

During the first nine months of 2021, holders have exercised certain of our outstanding warrants, as follows:

	Number Exercised		Exercise Price		Cash Receipts
September 2019 Investor warrants		2,000,000	$	1.65	$	3,300,000
February 2020 Investor warrants		1,739,130	$	1.20	$	2,086,956
July 2020 Investor warrants		20,945,555	$	0.45	$	9,425,500
July 2020 Placement Agent warrants		1,866,667	$	0.5625	$	1,050,000
August 2020 Investor warrants		7,589,883	$	0.47	$	3,567,245
August 2020 Placement Agent warrants		869,952	$	0.7040625	$	612,501
		35,011,187			$	20,042,202

Adequacy of financial resources

Since inception, the Company has incurred significant expenses in its efforts to develop and co-promote products. Our current business focus is to: investigate further therapeutic uses of Macrilen™ (macimorelin), expand pipeline development activities, further expand the commercialization of macimorelin in available territories and potentially fund the pediatric clinical trial in the E.U. and U.S. for macimorelin if such trials exceed €9 million. Consequently, the Company has incurred operating losses and negative cash flow from operations historically and in each of the last several years except for the year ended December 31, 2018 when the Company earned revenue from the sale of a license for the adult indication of Macrilen™ (macimorelin) in the U.S. and Canada. The Company expects to incur significant expenses and operating losses for the foreseeable future as it advances its product candidates through preclinical and clinical development, seeks regulatory approval and pursues commercialization of any approved product candidates. We expect that our research and development costs will increase in connection with our planned research and development activities. As at September 30, 2021, the Company had an accumulated deficit of $327.7 million. The Company also had a net loss of $5.2 million for the nine months ended September 30, 2021, and negative cash flow from operations of $6.2 million. We believe that our existing cash on hand will be sufficient to fund our anticipated operating and capital expenditure requirements through 2023. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.

In 2020, the COVID-19 pandemic began causing significant financial market declines and social dislocation. To date, the Company has not experienced significant business disruption from COVID-19. The situation is dynamic with various cities and countries around the world responding in different ways to address the outbreak. The spread of COVID-19 may impact our operations, including the potential interruption of our clinical trial activities and our supply chain, or that of our licensee. For example, the COVID-19 outbreak may delay enrollment in our clinical trial due to prioritization of hospital resources toward the outbreak, and some patients may be unwilling to be enrolled in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates. The pandemic may also impact the ability of our suppliers to deliver components or raw materials on a timely basis or at all. In addition, hospitals may reduce staffing and reduce or postpone certain treatments in response to the spread of an infectious disease. Sales activities for Macrilen™ in the US by Novo Nordisk may be impacted due to significant delays of diagnostic activities on AGHD in the U.S.

(15)

Contractual obligations and commitments as at September 30, 2021

(in thousands)	Service and manufacturing		R&D contracts		TOTAL
	$		$		$
Less than 1 year		900		2,273		3,173
1 - 3 years		600		1,514		2,114
4 - 5 years		—		125		125
More than 5 years		—		—		—
Total		1,500		3,912		5,412

During 2021, the Company executed various agreements including in-licensing and similar arrangements with development partners with $0.6 million in additions of separately acquired intangible assets recognized in the condensed interim consolidated statements of financial position. Such agreements may require the Company to make payments on achievement of stages of development, launch or revenue milestones, although the Company generally has the right to terminate these agreements at no penalty. The Company recognizes research and development milestones as an intangible asset once it is committed to the payment, which is generally when the Company reaches a set point in the development cycle.

Based on the closing exchange rates at September 30, 2021, the Company expects to pay $3.9 million, including $3.7 million [EUR 3.2 million], and $0.2 million [GBP 0.2 million], in R&D contracts and up to $9.1 million, including $7.6 million [EUR 6.5 million] and $1.5 million [GBP 1.2 million], in R&D milestone payments and up to $33.7 million, including $32.0 million [EUR 27.6 million] and $1.7 million [GBP 1.3 million], in revenue related milestone payments. The table below contains all potential R&D and revenue-related milestone payments that the Company may be required to make under such agreements:

(in thousands)	Future potential R&D milestone payments		Future potential revenue milestone payments		TOTAL
	$		$		$
Less than 1 year		29		—		29
1 - 3 years		—		—		—
4 - 5 years		1,063		—		1,063
More than 5 years		8,025		33,695		41,720
Total		9,117		33,695		42,812

The table excludes any payments already capitalized in the condensed interim consolidated statements of financial position. The future payments that are disclosed represent contract payments and are not discounted and are not risk-adjusted. The development of any pharmaceutical product candidates is a complex and risky process that may fail at any stage in the development process due to a number of factors. The timing of the payments is based on the Company’s current best estimate of achievement of the relevant milestone.

Contingencies

In the normal course of operations, the Company may become involved in various claims and legal proceedings related to, for example, contract terminations and employee-related and other matters.

(16)

Securities class action lawsuit

On March 9, 2020, the Company settled the previously disclosed class-action lawsuit against it pending in the U.S. District Court for the District of New Jersey. This settlement was approved by the U.S. District Court for the District of New Jersey on June 3, 2021. The settlement payment was funded entirely by the Company’s insurers. As no appeals were filed within the 30-day appeal period, this matter is fully and finally settled.

Related Party Transactions and Off-Balance Sheet Arrangements

Other than employment agreements and indemnification agreements with our management, there are no related party transactions.

As at September 30, 2021, we did not have any interests in special purpose entities or any other off-balance sheet arrangements.

Risk Factors and Uncertainties

An investment in our securities involves a high degree of risk. In addition to the other information included in this MD&A and in the related consolidated financial statements, investors are urged to carefully consider the risks described under the caption “Risk Factors” in our most recent Annual Report on Form 40-F and annual information form for the year ended December 31, 2020 for a discussion of the various risks that may materially affect our business. The risks and uncertainties not presently known to us or that we currently deem immaterial may also materially harm our business, operating results and financial condition and could result in a complete loss of your investment.

Our most recent Annual Report on Form 40-F and annual information form were filed with the relevant Canadian and U.S. securities’ regulatory authorities at www.sedar.com and with the SEC at www.sec.gov. Investors are urged to consult the risk factors in these documents.

Disclosure Controls and Procedures and Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) and disclosure controls and procedures (“DC&P”). ICFR is a framework designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Management has used the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in order to assess the effectiveness of the Company’s ICFR. DC&P form a broader framework designed to provide reasonable assurance the information required to be disclosed by Aeterna in its annual and interim filings and other reports filed under securities legislation is recorded, processed, summarized and reported within the time frame specified in securities legislation and includes controls and procedures designed to ensure that information required to be disclosed by the Company in its annual and interim filings and other reports submitted under securities legislation is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Together, the ICFR and DC&P frameworks provide internal control over financial reporting and disclosure. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed in our annual and interim filings and other reports filed under securities legislation, is accumulated and communicated in a timely fashion. Due to their inherent limitations, Aeterna acknowledges that, no matter how well designed, ICFR and DC&P can provide only reasonable assurance of achieving the desired control objectives and as such may not prevent or detect all misstatements. Further, the effectiveness of ICFR is subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may change. There have been no significant changes to our disclosure controls nor to our internal controls over financial reporting for the three-month period ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, the reliability of financial reporting.

(17)

EX-99.4

Exhibit 99.4

Form 52-109F2

Certification of interim filings

Full certificate

I, Leslie Auld, Chief Financial Officer of Aeterna Zentaris Inc., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Aeterna Zentaris Inc. (the “issuer”) for the interim period ended September 30, 2021.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings (c. V-1.1, r. 27), for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

A. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

I.	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
II.	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

B. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2 N/A

5.3 N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2021 and ended on September 30, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 4, 2021

/s/ Leslie Auld

Leslie Auld

Chief Financial Officer

XML

Cover	9 Months Ended
	Sep. 30, 2021
Cover [Abstract]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2021
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--12-31
Entity File Number	001-38064
Entity Registrant Name	Aeterna Zentaris Inc.
Entity Central Index Key	0001113423

XML

Condensed Interim Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 68,002	$ 24,271
Trade and other receivables (note 5)	910	1,681
Inventory	57	21
Prepaid expenses and other current assets (note 6)	3,431	1,913
Total current assets	72,400	27,886
Restricted cash equivalents	342	338
Right of use assets	185	157
Property, plant and equipment	40	22
Identifiable intangible assets	642	59
Other assets	107
Goodwill	8,326	8,815
Total Assets	82,042	37,277
Current liabilities
Payables and accrued liabilities (note 7)	2,113	2,199
Current portion of provisions (note 8)	81	92
Income taxes	373	395
Current portion of deferred revenues	2,075	2,193
Current portion of lease liabilities	135	135
Total current liabilities	4,777	5,014
Deferred revenues	2,791	3,289
Lease liabilities	65	49
Employee future benefits (note 9)	14,215	15,435
Provisions (note 8)	268	279
Total liabilities	22,116	24,066
SHAREHOLDERS’ EQUITY
Share capital (note 10)	293,347	235,008
Warrants (note 10)	5,103	12,402
Other capital (note 10)	89,769	89,505
Deficit	(327,708)	(322,659)
Accumulated other comprehensive loss (“AOCI”)	(585)	(1,045)
Total shareholders’ equity	59,926	13,211
Total liabilities and shareholders’ equity	$ 82,042	$ 37,277

XML

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Issued capital [member]	Warrants [Member]	Other equity interest [member]	Retained earnings [member]	Accumulated Other Comprehensive Income [Member]	Total
Balance - January 1, 2020 at Dec. 31, 2019	$ 224,528		$ 89,806	$ (316,891)	$ 94	$ (2,463)
Balance, shares at Dec. 31, 2019	19,994,510,000
IfrsStatementLineItems [Line Items]
Net loss				(3,807)		(3,807)
Foreign currency translation adjustments					(482)	(482)
Actuarial loss on defined benefit plans				(665)		(665)
Comprehensive loss				(4,472)	(482)	(4,954)
Reclassification of warrants upon registration		7,377				7,377
Issuance of common shares and warrants, net of transaction costs	$ 10,480	5,025	(362)			15,143
Issuance of common shares and warrants, net of transaction costs, shares	42,684,103
Share-based compensation costs			45			45
Balance – September 30, 2020 at Sep. 30, 2020	$ 235,008	12,402	89,489	(321,363)	(388)	15,148
Balance, shares at Sep. 30, 2020	62,678,613
Balance - January 1, 2020 at Dec. 31, 2020	$ 235,008	12,402	89,505	(322,659)	(1,045)	13,211
Balance, shares at Dec. 31, 2020	62,678,613
IfrsStatementLineItems [Line Items]
Net loss				(5,182)		(5,182)
Foreign currency translation adjustments					460	460
Actuarial loss on defined benefit plans				133		133
Comprehensive loss				(5,049)	460	(4,589)
Issuance of common shares and warrants, net of transaction costs	$ 29,081	1,897				30,978
Issuance of common shares and warrants, net of transaction costs, shares	23,586,207
Exercise of warrants (note 10)	$ 29,770	(9,728)				20,042
Exercise of warrants (note 10), shares	35,011,187
Transfer of warrant issuance costs upon 2021 exercise of warrants (note 10)	$ (532)	532
Exercise of deferred share units (note 10)	$ 20		(28)			(8)
Exercise of deferred share units (note 10), shares	21,000
Share-based compensation costs			292			292
Balance – September 30, 2020 at Sep. 30, 2021	$ 293,347	$ 5,103	$ 89,769	$ (327,708)	$ (585)	$ 59,926
Balance, shares at Sep. 30, 2021	121,297,007

XML

Condensed Interim Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues (note 4)
Royalty income	$ 20	$ 23	$ 47	$ 47
Product sales				1,016
Supply chain	55	87	139	168
Licensing revenue	527	18	1,601	55
Total revenues	602	128	1,787	1,286
Operating expenses
Cost of sales	31	33	72	907
Research and development expenses	801	372	1,902	880
General and administrative expenses	1,228	1,180	4,137	3,445
Selling expenses	360	283	924	730
Gain on modification of building lease				(219)
Total operating expenses (note 11)	2,420	1,868	7,035	5,743
Loss from operations	(1,818)	(1,740)	(5,248)	(4,457)
Gain (loss) due to changes in foreign currency exchange rates	124	211	(42)	237
Change in fair value of warrant liability		816		1,147
Other finance costs	(4)	(423)	(21)	(734)
Net finance income (costs)	120	604	(63)	650
Loss before income taxes	(1,698)	(1,136)	(5,311)	(3,807)
Income tax recovery			129
Net loss	(1,698)	(1,136)	(5,182)	(3,807)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments	39	(483)	460	(482)
Items that will not be reclassified to profit or loss:
Actuarial gain (loss) on defined benefit plans (note 9)	219	(635)	133	(665)
Comprehensive loss	$ (1,440)	$ (2,254)	$ (4,589)	$ (4,954)
Net loss per share [basic and diluted]	$ (0.01)	$ (0.02)	$ (0.05)	$ (0.11)
Weighted average number of shares outstanding (note 14):
Basic	121,297,007	56,211,486	112,743,285	33,832,136
Diluted	121,297,007	56,211,486	112,743,285	33,832,136

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Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net loss for the period	$ (1,698)	$ (1,136)	$ (5,182)	$ (3,807)
Items not affecting cash and cash equivalents:
Change in fair value of warrant liability		(816)		(1,147)
Transaction costs of warrants issued and expensed as finance cost		422		732
Change in provision (note 8)	19	(11)	39	(359)
Depreciation and amortization	33	42	105	188
Gain on modification of building lease				(219)
Share-based compensation costs	19	68	292	45
Employee future benefits (note 9)	50	58	149	157
Amortization of deferred revenues	(527)	(18)	(1,601)	(55)
Foreign exchange on items denominated in foreign currencies	(111)	(263)	101	(295)
Gain on disposal of property, plant and equipment			(1)	(2)
Other non-cash items	66	2	(19)	9
Interest accretion on lease liabilities	2	(2)	5	(17)
Payment of income taxes	(426)		(2,067)	(1,448)
Other asset	(25)		(107)
Changes in operating assets and liabilities (note 12)	1,110	(139)	2,118	(429)
Net cash used in operating activities	(1,488)	(1,793)	(6,168)	(6,647)
Cash flows from financing activities
Issuance of common shares (note 10)			34,200
Issuance of common shares and warrants (note 10)		19,000		23,500
Transaction costs (note 10)		(2,158)	(3,221)	(2,767)
Proceeds from exercise of warrants (note 10)			20,042
Payments on lease liabilities	(31)	(49)	(95)	(248)
Net cash provided by (used in) financing activities	(31)	16,793	50,926	20,485
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment			1	6
Purchase of intangible assets			(490)
Purchase of property and equipment	(5)		(25)
Change in restricted cash equivalents	(20)		(20)	50
Net cash (used in) provided by investing activities	(25)		(534)	56
Effect of exchange rate changes on cash and cash equivalents	(322)	3	(493)	14
Net change in cash and cash equivalents	(1,866)	15,003	43,731	13,908
Cash and cash equivalents – Beginning of period	69,868	6,743	24,271	7,838
Cash and cash equivalents – End of period	$ 68,002	$ 21,746	$ 68,002	$ 21,746

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Business overview

9 Months Ended

Sep. 30, 2021

Business overview

1. Business overview

Summary of business

Aeterna Zentaris (the “Company” or “Aeterna”) is a specialty biopharmaceutical company commercializing and developing therapeutics and diagnostic tests. The Company’s lead product, Macrilen™ (macimorelin), is the first and only U.S. Food and Drug Administration (“FDA”) and European Commission approved oral test indicated for the diagnosis of patients with adult growth hormone deficiency (“AGHD”). Macimorelin is currently marketed in the U.S. under the tradename Macrilen™ through the license agreement and the amended license agreement (collectively the “Novo Amended License Agreement”) with Novo Nordisk Health Care AG (“Novo Nordisk” or “Novo”) where Aeterna Zentaris receives royalties on net sales. Macimorelin will be marketed in Europe and the United Kingdom through a license agreement with Consilient Health Ltd. (“Consilient Health”) and Aeterna Zentaris will receive royalties on net sales and other potential payments. The Company is conducting the Phase 3 study (“DETECT” trial) for macimorelin in the U.S. and Europe for the diagnosis of childhood-onset growth hormone deficiency (“CGHD”) in collaboration with Novo Nordisk. Novo Nordisk is paying 100% of costs up to €9,000 (approximately $10,700) and includes reimbursement of Aeterna’s budgeted internal labor costs and any additional external jointly approved DETECT trial costs incurred over €9,000 (approximately $10,700) will be shared equally between Novo Nordisk and Aeterna. The Company is actively pursuing business development opportunities for the commercialization of macimorelin in Asia and the rest of the world.

In addition, the Company is pursuing innovative development candidates in different indications with a focus on rare or orphan indications and potential for pediatric use.

COVID-19 impact

In 2020, the COVID-19 pandemic began causing significant financial market declines and social dislocation and, to date, the Company has not experienced significant business disruption from COVID-19. The situation is dynamic with various cities and countries around the world are responding in different ways to address the outbreak. The spread of COVID-19 may impact the Company’s operations, including the potential interruption of our clinical trial activities and the Company’s supply chain, or that of the Company’s licensee. For example, the COVID-19 outbreak may delay enrollment in the Company’s clinical trials due to prioritization of hospital resources toward the outbreak, and some patients may be unwilling to be enrolled in the Company’s trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay the Company’s ability to conduct clinical trials or release clinical trial results and could delay the Company’s ability to obtain regulatory approval and commercialize the Company’s product candidates. The pandemic may also impact the ability of the Company’s suppliers to deliver components or raw materials on a timely basis or at all. In addition, hospitals may reduce staffing and reduce or postpone certain treatments in response to the spread of an infectious disease. The Company’s licensee may be impacted due to significant delays of diagnostic activities in the U.S. Management will continue to monitor and assess the impact of the pandemic on its judgments, estimates, accounting policies and amounts recognized in these consolidated financial statements. As at September 30, 2021, the Company assessed the possible impacts of COVID-19 on its financial results. The Company has considered any impairment indicators on its financial assets, property, plant and equipment, intangible assets, and goodwill and considered no changes from the carrying amount were required in the reporting period.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

Basis of presentation

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2020. The accounting policies in these condensed interim consolidated financial statements are consistent with those presented in the Company’s annual consolidated financial statements.

These unaudited condensed interim consolidated financial statements were approved by the Board of Directors (the “Board”) on November 4, 2021.

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Critical accounting estimates and judgements

9 Months Ended

Sep. 30, 2021

Critical accounting estimates and judgements

2. Critical accounting estimates and judgements

The preparation of condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of the Company’s assets, liabilities, revenues, expenses and related disclosures. Judgments, estimates and assumptions are based on historical experience, expectations, current trends and other factors that management believes to be relevant at the time at which the Company’s condensed interim consolidated financial statements are prepared.

Management reviews, on a regular basis, the Company’s accounting policies, assumptions, estimates and judgments in order to ensure that the condensed interim consolidated financial statements are presented fairly and in accordance with IFRS applicable to interim financial statements. Any changes in the judgments or assumptions applied to account for the Novo Amended License Agreement could result in a significant impact on the Company’s revenue and deferred revenue. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Critical accounting estimates and assumptions, as well as critical judgments used in applying accounting policies in the preparation of the Company’s condensed interim consolidated financial statements, were the same as those applied to the Company’s annual consolidated financial statements as of December 31, 2020 and 2019 and for the years then ended except for the following:

Intangible assets

Separately acquired intangible assets are recognized at the price paid in cash, less amortization and impairments. All intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable, or, at a minimum, annually. The recoverable amount is determined as the higher of value in use or fair value less costs to sell using a discounted cash flow calculation, where the products’ expected cash flows are risk-adjusted over their estimated remaining useful economic life. Any impairment losses are recognized immediately in the consolidated statements of comprehensive (loss) income. Intangible assets relating to products which fail during development (or for which development ceases for other reasons) are also tested for impairment and are written down to their recoverable amount (which is usually nil). If, subsequent to an impairment loss being recognized, development restarts or other facts and circumstances change indicating that the impairment is less or no longer exists, the value of the asset is re-estimated and its carrying value is increased to the recoverable amount, but not exceeding the original value, by recognizing an impairment reversal in the consolidated statements of comprehensive (loss) income. Amortization of such intangible assets begins once such assets are ready for their intended use.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

Contingent payments

The Company accounts for contingent variable payments for separately acquired intangible assets with the cost accumulation approach. Contingent consideration is not considered on initial recognition of the asset but is added to the cost of the asset initially recorded, when incurred.

Measurement uncertainty:

The significant spread of COVID-19 within the U.S., Canada, Germany and elsewhere has resulted in a widespread health crisis and has had adverse effects on local, national and global economies generally, the markets the Company serves, its operations and the market price of its common shares.

Uncertain factors, including the duration of the outbreak, the severity of the disease and the actions to contain or treat its impact, could cause interruptions in the Company’s operations and supply chain, which could impact the Company’s ability to accurately measure the net realizable value of inventory and fair value of trade and other receivables.

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Recent accounting pronouncements issued but not yet effective

9 Months Ended

Sep. 30, 2021

Recent accounting pronouncements issued but not yet effective

3. Recent accounting pronouncements issued but not yet effective

The recent accounting pronouncements issued but not yet effective included in note 4 to the Company’s annual audited consolidated financial statements as at December 31, 2020 are unchanged.

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License, supply and distribution arrangements

9 Months Ended

Sep. 30, 2021

License, supply and distribution arrangements

4. License, supply and distribution arrangements

(a) License Agreement for U.S. and Canada

Royalty income earned under the agreement with Novo Nordisk agreement for the three-month period ended September 30, 2021 was $20 (2020 - $23) and during the three-month period ended September 30, 2021, the Company invoiced Novo Nordisk $577 for the DETECT trial costs (2020 - $14), which is recorded as a reduction in research and development expenses. Royalty income earned under the agreement with Novo Nordisk agreement for the nine-month period ended September 30, 2021 was $47 (2020 - $47) and during the nine-month period ended September 30, 2021, the Company invoiced Novo Nordisk $3,901 for the DETECT trial costs (2020 - $324), which is recorded as a reduction in research and development expenses.

For the three-month period ended September 30, 2021, the Company invoiced $44 for supply chain activities with $44 recognized as revenues (2020 - $68 and $69) in the condensed interim consolidated statements of comprehensive loss. For the nine-month period ended September 30, 2021, the Company invoiced $139 for supply chain activities with $139 recognized as revenues (2020 - $153 and $150) in the condensed interim consolidated statements of comprehensive loss.

(b) License agreement for the European Union and the United Kingdom

On December 7, 2020, the Company entered into an exclusive licensing and supply agreements with Consilient Health Ltd. (“CH” or “Consilient Health”) for the commercialization in the European Union and the United Kingdom of macimorelin in any diagnostic application. As per the agreement terms, the Company received a cash payment of €1 million ($1,207) in January 2021. This cash payment has been recognized in the consolidated statement of financial position as long-term deferred revenue as it will be recognized over the supply of the licensed product that is expected to start in 2023.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

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Trade and other receivables

9 Months Ended

Sep. 30, 2021

Trade and other receivables

5. Trade and other receivables

	September 30, 2021		December 31, 2020
	$		$
Trade accounts receivable (net of expected credit losses of $55 (December 31, 2020 - $55))		459		1,190
Value added tax and income tax receivable		428		468
Other		23		23
		910		1,681

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Prepaid expenses and other current assets

9 Months Ended

Sep. 30, 2021

Prepaid expenses and other current assets

6. Prepaid expenses and other current assets

	September 30, 2021		December 31, 2020
	$		$
Prepaid insurance		433		1,021
Prepaid income taxes		2,942		873
Other		56		19
		3,431		1,913

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Payables and accrued liabilities

9 Months Ended

Sep. 30, 2021

Payables and accrued liabilities

7. Payables and accrued liabilities

	September 30, 2021		December 31, 2020
	$		$
Trade accounts payable		672		1,187
Salaries, employment taxes and benefits		102		474
Accrued audit fees		144		144
Accrued research and development costs		843		23
Other accrued liabilities		352		371
		2,113		2,199

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

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Provisions

9 Months Ended

Sep. 30, 2021

Provisions

8. Provisions

The changes in the Company’s provisions for onerous contracts can be summarized as follows:

	Cetrotide(R) onerous contracts
	$
Balance – January 1, 2021		371
Utilization of provisions		(42	)
Change in provisions		39
Impact of foreign exchange rate changes		(19	)
Balance – September 30, 2021		349
Less current portion		81
Non-current portion		268

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Employee future benefits

9 Months Ended

Sep. 30, 2021

Employee future benefits

9. Employee future benefits

The Company sponsors pension plans in Germany (The Aeterna Zentaris GmbH Pension Plan). The change in the Company’s accrued benefit obligations is summarized as follows:

	Nine months ended September 30, 2021									Year ended December 31, 2020
	Pension benefit plans			Other benefit plans			Total			Total
	$			$			$			$
Balances – Beginning of the period		15,341			94			15,435			13,788
Current service cost		46			3			49			54
Interest cost		67			—			67			163
Actuarial (gain) loss arising from changes in financial assumptions		(133	)		—			(133	)		651
Benefits paid		(342	)		(2	)		(344	)		(532	)
Impact of foreign exchange rate changes		(854	)		(5	)		(859	)		1,311
Balances – End of the period		14,125			90			14,215			15,435
Amounts recognized:
In net loss		113			3			116			(218	)
In other comprehensive loss		(987	)		(5	)		(992	)		(1,961	)

The calculation of the pension benefit obligation is sensitive to the discount rate assumption. Discount rates were 0.6% at December 31, 2020 and 1.1% at September 30, 2021

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

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Share capital, warrants and other capital

9 Months Ended

Sep. 30, 2021

Share capital, warrants and other capital

10. Share capital, warrants and other capital

The Company has an unlimited number of authorized common shares (being voting and participating shares) with no par value, as well as an unlimited number of preferred, first and second ranking shares, issuable in series, with rights and privileges specific to each class, with no par value.

2021

During the second quarter of 2021, a director who was no longer on the Company’s Board redeemed his DSUs in full whereby 21,000 common shares were issued.

On February 19, 2021, the Company closed a public offering of 20,509,746 common shares at a price to the public of $1.45 per common share, for gross proceeds of $29,739, before deducting underwriting discounts, commissions and offering expenses payable by the Company, in the amount of $2,837. Aeterna also granted the underwriter, which was also the Placement agent, a 30-day over-allotment option (the “Underwriter Option”) to purchase up to 3,076,461 additional common shares at the public offering price, less underwriting discounts and commissions, and 1,435,682 Placement agent warrants with an exercise price of $1.8125 and expiring on February 17, 2026. The net cash proceeds to the Company from the offering totaled $26,902. On February 22, 2021, the underwriter exercised the Underwriter Option in full and received 3,076,461 common shares for gross proceeds to the Company of $4,461. In connection with the public offering and the exercise of the Underwriter Option, the Company paid commissions and other expenses of $384 and issued 215,352 Placement agent warrants priced at $1.8125 and expiring on February 17, 2026. The net proceeds from the Underwriter Option was $4,077. Collectively, this financing is referred to as the “February 2021 Financing”. The gross proceeds of $34,200 was recorded to share capital with cash transaction costs of $3,221 and the fair value of the Placement agent warrants of $1,897 included as share issuance costs and as warrants in shareholders’ equity.

The table presented below shows the inputs and assumptions applied to the Black-Scholes option pricing model in order to determine the fair value of these Placement agent warrants:

	Number of equivalent shares		Market value per share price		Weighted average exercise price		Risk- free annual interest rate			Expected volatility			Expected life (years)		Expected dividend yield
			($)		($)		(i)			(ii)			(iii)		(iv)
February 2021 Placement agent warrants – public offering		1,435,682		1.48		1.8125		0.58734	%		119.18	%		4.99		0.00	%
February 2021 Placement agent warrants – Underwriter Option		215,352		1.48		1.8125		0.58544	%		119.57	%		4.98		0.00	%

(i) Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the warrants.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

(ii)	Based on the historical volatility of the Company’s stock price over the most recent period consistent with the expected life of the warrants.
(iii)	Based upon time to expiry from the issuance date.
(iv)	The Company has not paid dividends and it does not intend to pay dividends in the foreseeable future.

During the nine-month period ended September 30, 2021, holders exercised warrants as follows:

	Number Exercised		Exercise Price		Cash Receipts
September 2019 Investor warrants		2,000,000	$	1.65	$	3,300,000
February 2020 Investor warrants		1,739,130	$	1.20	$	2,086,956
July 2020 Investor warrants		20,945,555	$	0.45	$	9,425,500
July 2020 Placement Agent warrants		1,866,667	$	0.5625	$	1,050,000
August 2020 Investor warrants		7,589,883	$	0.47	$	3,567,245
August 2020 Placement Agent warrants		869,952	$	0.7040625	$	612,501
		35,011,187			$	20,042,202

2020

On February 21, 2020, the Company closed a registered direct offering for 3,478,261 common shares, at a purchase price of $1.29 per share, priced at-the-market. Additionally, 2,608,696 investor warrants were issued at an exercise price of $1.20 per common share and 243,478 broker warrants were issued at an exercise price of $1.62 per common share. The net cash proceeds to the Company from the offering totaled $3,900. The gross proceeds of $4,500 was allocated as $2,325 to warrant liability based on the ascribed fair value and the remaining gross proceeds of $2,175 were allocated to share capital. The transaction costs of $600 were allocated between share capital and warrants based on their relative fair values. The fair value of the share capital was recorded within equity net of the allocated transaction costs and the transaction costs of $310 allocated to the warrant liability were recorded as expense in the consolidated statements of comprehensive loss.

On July 7, 2020, the Company closed a public offering of 26,666,666 units at a price of $0.45 per unit, for net cash proceeds to the Company of $10,596. Each unit contained one common share (or common share equivalent in lieu thereof) and one investor share purchase warrant to purchase one common share. In total, 26,666,666 common shares, 26,666,666 investor share purchase warrants at an exercise price of $0.45 per share expiring July 7, 2025 and 1,866,667 placement agent warrants with an exercise price of $0.5625 per share, expiring July 1, 2025 were issued. As these warrants were registered and can be settled for a fixed number of the Company’s underlying common shares, the warrants meet the requirements of the fixed-for-fixed rule and have been classified as equity.

Because the warrants were classified as equity, the gross proceeds of $12,000 was allocated as $6,308 to share capital and $5,691 to share purchase warrants based on their relative fair values. The transaction costs of $1,420 were reduced from share capital and share purchase warrants and charged to share issuance costs and classified as equity. The values ascribed to the share capital and share purchase warrants were recorded within equity, net of the allocated transaction costs.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

On August 5, 2020, the Company closed a securities purchase agreement with several institutional investors in the United States providing for the sale and issuance of 12,427,876 common shares at a purchase price of $0.56325 per common share in a registered direct offering priced at-the-market under Nasdaq rules. The offering resulted in gross proceeds of approximately $7,000. Concurrently, the Company issued to the purchasers unregistered warrants to purchase up to an aggregate of 9,320,907 common shares. The warrants are exercisable for a period of five and one-half years, exercisable immediately following the issuance date and have an exercise price of $0.47 per common share. In addition, the Company issued unregistered warrants to the placement agent to purchase up to an aggregate of 869,952 common shares, with an exercise price of $0.7040625 per share and an expiration date of August 3, 2025.

Warrants

				Weighted average exercise price
	Number			(US$)		$
Balance – January 1, 2020		—			—		—
Warrant liability reclassified to equity		16,368,033			0.8556		7,377
Warrants issued as equity, net (July 2020)		28,533,333			0.4574		5,025
Balance – December 31, 2020		44,901,366			0.6025		12,402
Warrants granted		1,651,034			1.8125		1,897
Warrants exercised		(35,011,187	)		0.5725		(9,728	)
Allocation of transaction costs to share capital		—			—		532 533
Balance – September 30, 2021		11,541,213			0.8668		5,103

During the second quarter of 2021, due to the 2021 exercise of certain of the July 2020 issued Investor and Placement Agent warrants, the Company transferred to share capital $532 of the total $666 transaction costs which were recognized in Warrants in 2020.

Other capital

	Nine months ended September 30, 2021
	US$ Stock options		Weighted average exercise price		DSUs
	(Number)		(US$)		(Number)
Balance – January 1, 2021		506,400		1.44		173,000
Granted		—		—		280,000
Exercised)		—		—		(30,000	)
Balance – September 30, 2021		506,400		1.44		423,000

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

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Operating expenses

9 Months Ended

Sep. 30, 2021

Operating expenses

11. Operating expenses

The nature of the Company’s operating expenses from operations include the following:

	Nine months ended September 30,
	2021		2020
	$		$
Key management personnel:
Salaries and short-term employee benefits		968		834
Consultant fees		125		137
Share-based compensation costs		278		143
Post-employment benefits including defined contribution plan benefits of $23 in 2021 and $15 in 2020		38		41
		1,409		1,155
Other employees:
Salaries and short-term employee benefits		734		837
Post-employment benefits including defined contribution plan benefits of $13 in 2021 and $16 in 2020		114		141
Share-based compensation costs		14		(98	)
		862		880
Cost of inventory used and services provided		72		907
Professional fees		2,053		1,380
Consulting fees		397		419
Insurance		661		645
Third-party research and development		838		175
Travel		57		51
Marketing services		212		32
Laboratory supplies		96		24
Other goods and services		115		72
Leasing costs		92		104
Gain on modification of building lease		—		(219	)
Depreciation and amortization		105		178
Operating foreign exchange losses (gains)		66		(60	)
		7,035		5,743

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

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Supplemental disclosure of cash flow information

9 Months Ended

Sep. 30, 2021

Supplemental disclosure of cash flow information

12. Supplemental disclosure of cash flow information

	Three months ended						Nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
	$			$			$			$
Changes in operating assets and liabilities:
Trade and other receivables		563			(27	)		666			(183	)
Inventory		—			4			(39	)		832
Prepaid expenses and other current assets		233			754			548			853
Payables and accrued liabilities		298			(770	)		(17	)		(1,221	)
Taxes payable		—			—			(129	)		—
Deferred revenues		84			23			1,314			(372	)
Employee future benefits		(68	)		(123	)		(225	)		(338	)
		1,110			(139	)		2,118			(429	)

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Segment information

9 Months Ended

Sep. 30, 2021

Segment information

13. Segment information

The Company operates in a single operating segment, being the biopharmaceutical segment.

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Net loss per share

9 Months Ended

Sep. 30, 2021

Net loss per share

14. Net loss per share

The following table sets forth pertinent data relating to the computation of basic and diluted net loss per share attributable to common shareholders.

	Three months ended						Nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
	$			$			$			$
Net loss		(1,698	)		(1,136	)		(5,182	)		(3,807	)
Basic weighted average number of shares outstanding		121,297,007			56,211,486			112,743,285			33,832,136
Net loss income per share (basic)		(0.01	)		(0.02	)		(0.05	)		(0.11	)
Dilutive effect of stock options and DSUs		—			—			—			—
Dilutive effect of warrants		—			—			—			—
Diluted weighted average number of shares outstanding		121,297,007			56,211,486			112,743,285			33,832,136
Net loss per share (diluted)		(0.01	)		(0.02	)		(0.05	)		(0.11	)
Items excluded from the calculation of diluted net loss per share because the exercise price was greater than the average market price of the common shares or due to their anti-dilutive effect
Stock options and DSUs		929,400			499,410			929,400			499,410
Warrants		11,541,213			47,232,366			11,541,213			47,232,366

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

Net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the relevant period. Diluted weighted average number of shares reflects the dilutive effect of equity instruments, such as any “in the money” stock options and warrants. In periods with reported net losses, all stock options and warrants are deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal, and thus “in the money” stock options and warrants have not been included in the computation of net loss per share because to do so would be anti-dilutive.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies

15. Commitments and Contingencies

	Service and manufacturing		R&D contracts		TOTAL
	$		$		$
Less than 1 year		900		2,273		3,173
1 - 3 years		600		1,514		2,114
4 - 5 years		—		125		125
More than 5 years		—		—		—
Total		1,500		3,912		5,412

During 2021, the Company has executed various agreements including in-licensing and similar arrangements with development partners. Such agreements may require the Company to make payments on achievement of stages of development, launch or revenue milestones, although the Company generally has the right to terminate these agreements at no penalty. The Company recognizes research and development milestones as an intangible asset once it is committed to the payment, which is generally when the Company reaches a set point in the development cycle.

Based on the closing exchange rates, the Company expects to pay $3,912, including $3,699 [EUR 3,189], and $213 [GBP 158], in R&D contracts and up to $9,117, including $7,569 [EUR 6,525] and $1,548 [GBP 1,150], in R&D milestone payments and up to $33,695, including $32,013 [EUR 27,600] and $1,682 [GBP 1,250], in revenue related milestone payments. The table below contains all potential R&D and revenue-related milestone payments that the Company may be required to make under such agreements:

	Future potential R&D milestone payments		Future potential revenue milestone payments		TOTAL
	$		$		$
Less than 1 year		29		—		29
1 - 3 years		—		—		—
4 - 5 years		1,063		—		1,063
More than 5 years		8,025		33,695		41,720
Total		9,117		33,695		42,812

The table excludes any payments already capitalized in the condensed interim consolidated statements of financial position. The future payments that are disclosed represent contract payments and are not discounted and are not risk-adjusted. The development of any pharmaceutical product candidates is a complex and risky process that may fail at any stage in the development process due to a number of factors. The timing of the payments is based on the Company’s current best estimate of achievement of the relevant milestone.

Contingencies

In the normal course of operations, the Company may become involved in various claims and legal proceedings related to, for example, contract terminations and employee-related and other matters.

On March 9, 2020, the Company settled the previously disclosed class-action lawsuit against it pending in the U.S. District Court for the District of New Jersey. This settlement was approved by the U.S. District Court for the District of New Jersey on June 3, 2021. The settlement payment was funded entirely by the Company’s insurers. As no appeals were filed within the 30-day appeal period, this matter is fully and finally settled.

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Subsequent event

9 Months Ended

Sep. 30, 2021

Subsequent event

16. Subsequent event

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.

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Trade and other receivables (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Trade and Other Receivables

	September 30, 2021		December 31, 2020
	$		$
Trade accounts receivable (net of expected credit losses of $55 (December 31, 2020 - $55))		459		1,190
Value added tax and income tax receivable		428		468
Other		23		23
		910		1,681

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Prepaid expenses and other current assets (Tables)

9 Months Ended

Sep. 30, 2021

Prepaid Expenses and Other Current Assets

	September 30, 2021		December 31, 2020
	$		$
Prepaid insurance		433		1,021
Prepaid income taxes		2,942		873
Other		56		19
		3,431		1,913

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Payables and accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Payables and Accrued Liabilities

	September 30, 2021		December 31, 2020
	$		$
Trade accounts payable		672		1,187
Salaries, employment taxes and benefits		102		474
Accrued audit fees		144		144
Accrued research and development costs		843		23
Other accrued liabilities		352		371
		2,113		2,199

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Provisions (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Changes in Provisions for Onerous Contracts

	Cetrotide(R) onerous contracts
	$
Balance – January 1, 2021		371
Utilization of provisions		(42	)
Change in provisions		39
Impact of foreign exchange rate changes		(19	)
Balance – September 30, 2021		349
Less current portion		81
Non-current portion		268

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Employee future benefits (Tables)

9 Months Ended

Sep. 30, 2021

Disclosure of Net Defined Benefit Liability (Asset)

	Nine months ended September 30, 2021									Year ended December 31, 2020
	Pension benefit plans			Other benefit plans			Total			Total
	$			$			$			$
Balances – Beginning of the period		15,341			94			15,435			13,788
Current service cost		46			3			49			54
Interest cost		67			—			67			163
Actuarial (gain) loss arising from changes in financial assumptions		(133	)		—			(133	)		651
Benefits paid		(342	)		(2	)		(344	)		(532	)
Impact of foreign exchange rate changes		(854	)		(5	)		(859	)		1,311
Balances – End of the period		14,125			90			14,215			15,435
Amounts recognized:
In net loss		113			3			116			(218	)
In other comprehensive loss		(987	)		(5	)		(992	)		(1,961	)

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Share capital, warrants and other capital (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Fair Value of Warrants Assumptions

	Number of equivalent shares		Market value per share price		Weighted average exercise price		Risk- free annual interest rate			Expected volatility			Expected life (years)		Expected dividend yield
			($)		($)		(i)			(ii)			(iii)		(iv)
February 2021 Placement agent warrants – public offering		1,435,682		1.48		1.8125		0.58734	%		119.18	%		4.99		0.00	%
February 2021 Placement agent warrants – Underwriter Option		215,352		1.48		1.8125		0.58544	%		119.57	%		4.98		0.00	%

(i) Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the warrants.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2021 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(amounts in thousands of US dollars, except share/option/warrant and per share/option/warrant data and as otherwise noted)

(Unaudited)

(ii)	Based on the historical volatility of the Company’s stock price over the most recent period consistent with the expected life of the warrants.
(iii)	Based upon time to expiry from the issuance date.
(iv)	The Company has not paid dividends and it does not intend to pay dividends in the foreseeable future.

Summary of Warrants Exercise Transactions

	Number Exercised		Exercise Price		Cash Receipts
September 2019 Investor warrants		2,000,000	$	1.65	$	3,300,000
February 2020 Investor warrants		1,739,130	$	1.20	$	2,086,956
July 2020 Investor warrants		20,945,555	$	0.45	$	9,425,500
July 2020 Placement Agent warrants		1,866,667	$	0.5625	$	1,050,000
August 2020 Investor warrants		7,589,883	$	0.47	$	3,567,245
August 2020 Placement Agent warrants		869,952	$	0.7040625	$	612,501
		35,011,187			$	20,042,202

Schedule of Warrants Activity Reclassified into Equity

				Weighted average exercise price
	Number			(US$)		$
Balance – January 1, 2020		—			—		—
Warrant liability reclassified to equity		16,368,033			0.8556		7,377
Warrants issued as equity, net (July 2020)		28,533,333			0.4574		5,025
Balance – December 31, 2020		44,901,366			0.6025		12,402
Warrants granted		1,651,034			1.8125		1,897
Warrants exercised		(35,011,187	)		0.5725		(9,728	)
Allocation of transaction costs to share capital		—			—		532 533
Balance – September 30, 2021		11,541,213			0.8668		5,103

Disclosure of Change in Stock Options Issued

	Nine months ended September 30, 2021
	US$ Stock options		Weighted average exercise price		DSUs
	(Number)		(US$)		(Number)
Balance – January 1, 2021		506,400		1.44		173,000
Granted		—		—		280,000
Exercised)		—		—		(30,000	)
Balance – September 30, 2021		506,400		1.44		423,000

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Operating expenses (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Operating Expenses

	Nine months ended September 30,
	2021		2020
	$		$
Key management personnel:
Salaries and short-term employee benefits		968		834
Consultant fees		125		137
Share-based compensation costs		278		143
Post-employment benefits including defined contribution plan benefits of $23 in 2021 and $15 in 2020		38		41
		1,409		1,155
Other employees:
Salaries and short-term employee benefits		734		837
Post-employment benefits including defined contribution plan benefits of $13 in 2021 and $16 in 2020		114		141
Share-based compensation costs		14		(98	)
		862		880
Cost of inventory used and services provided		72		907
Professional fees		2,053		1,380
Consulting fees		397		419
Insurance		661		645
Third-party research and development		838		175
Travel		57		51
Marketing services		212		32
Laboratory supplies		96		24
Other goods and services		115		72
Leasing costs		92		104
Gain on modification of building lease		—		(219	)
Depreciation and amortization		105		178
Operating foreign exchange losses (gains)		66		(60	)
		7,035		5,743

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Supplemental disclosure of cash flow information (Tables)

9 Months Ended

Sep. 30, 2021

Disclosure of Changes in Operating Assets and Liabilities

	Three months ended						Nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
	$			$			$			$
Changes in operating assets and liabilities:
Trade and other receivables		563			(27	)		666			(183	)
Inventory		—			4			(39	)		832
Prepaid expenses and other current assets		233			754			548			853
Payables and accrued liabilities		298			(770	)		(17	)		(1,221	)
Taxes payable		—			—			(129	)		—
Deferred revenues		84			23			1,314			(372	)
Employee future benefits		(68	)		(123	)		(225	)		(338	)
		1,110			(139	)		2,118			(429	)

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Net loss per share (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Pertinent Data Relating to Computation of Basic and Diluted Net (Loss) Income Per Share

	Three months ended						Nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
	$			$			$			$
Net loss		(1,698	)		(1,136	)		(5,182	)		(3,807	)
Basic weighted average number of shares outstanding		121,297,007			56,211,486			112,743,285			33,832,136
Net loss income per share (basic)		(0.01	)		(0.02	)		(0.05	)		(0.11	)
Dilutive effect of stock options and DSUs		—			—			—			—
Dilutive effect of warrants		—			—			—			—
Diluted weighted average number of shares outstanding		121,297,007			56,211,486			112,743,285			33,832,136
Net loss per share (diluted)		(0.01	)		(0.02	)		(0.05	)		(0.11	)
Items excluded from the calculation of diluted net loss per share because the exercise price was greater than the average market price of the common shares or due to their anti-dilutive effect
Stock options and DSUs		929,400			499,410			929,400			499,410
Warrants		11,541,213			47,232,366			11,541,213			47,232,366

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Expected Future Minimum Lease Payments

	Service and manufacturing		R&D contracts		TOTAL
	$		$		$
Less than 1 year		900		2,273		3,173
1 - 3 years		600		1,514		2,114
4 - 5 years		—		125		125
More than 5 years		—		—		—
Total		1,500		3,912		5,412

Schedule of R&D and Revenue Related Milestone Payments

	Future potential R&D milestone payments		Future potential revenue milestone payments		TOTAL
	$		$		$
Less than 1 year		29		—		29
1 - 3 years		—		—		—
4 - 5 years		1,063		—		1,063
More than 5 years		8,025		33,695		41,720
Total		9,117		33,695		42,812

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Business overview (Details Narrative) - Novo Nordisk A/S [Member] € in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 EUR (€)
IfrsStatementLineItems [Line Items]
Percentage of clinical trial costs reimbursement	100.00%	100.00%
Clinical trial costs | $	$ 10,700
Additional clinical trial costs | $	$ 10,700
Euro [Member]
IfrsStatementLineItems [Line Items]
Clinical trial costs | €		€ 9,000
Additional clinical trial costs | €		€ 9,000

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License, supply and distribution arrangements (Details Narrative) $ in Thousands, € in Millions	1 Months Ended		3 Months Ended		9 Months Ended
	Jan. 31, 2021 USD ($)	Jan. 31, 2021 EUR (€)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)
IfrsStatementLineItems [Line Items]
Royalty income			$ 20	$ 23	$ 47	$ 47
Supply chain			55	87	139	168
Revenue			602	128	1,787	1,286
License Agreement [Member]
IfrsStatementLineItems [Line Items]
Royalty income			20	23	47	47
Supply chain			44	68
Revenue			44	69	139
Cash payment	$ 1,207
License Agreement [Member] | Euro [Member]
IfrsStatementLineItems [Line Items]
Cash payment | €		€ 1
License Agreement [Member] | Novo Nordisk A/S [Member]
IfrsStatementLineItems [Line Items]
Licensee costs			$ 577	$ 14	3,901	324
Supply chain						153
Revenue					$ 139	$ 150

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Schedule of Trade and Other Receivables (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Trade accounts receivable (net of expected credit losses of $55 (December 31, 2020 - $55))	$ 459	$ 1,190
Value added tax and income tax receivable	428	468
Other	23	23
Trade and other receivables	$ 910	$ 1,681

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Schedule of Trade and Other Receivables (Details) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Trade accounts receivable, expected credit losses	$ 55	$ 55

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Prepaid insurance	$ 433	$ 1,021
Prepaid income taxes	2,942	873
Other	56	19
Prepaid expenses and other current assets	$ 3,431	$ 1,913

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Schedule of Payables and Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Trade accounts payable	$ 672	$ 1,187
Salaries, employment taxes and benefits	102	474
Accrued audit fees	144	144
Accrued research and development costs	843	23
Other accrued liabilities	352	371
Payables and accrued liabilities	$ 2,113	$ 2,199

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Schedule of Changes in Provisions for Onerous Contracts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
IfrsStatementLineItems [Line Items]
Less current portion	$ 81	$ 92
Cetrotide(R) Onerous Contracts [Member]
IfrsStatementLineItems [Line Items]
Beginning balance	371
Utilization of provisions	(42)
Change in the provisions	39
Impact of foreign exchange rate changes	(19)
Ending balance	349
Less current portion	81
Non-current portion	$ 268

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Disclosure of Net Defined Benefit Liability (Asset) (Details) - Unfunded Plan1 [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
IfrsStatementLineItems [Line Items]
Balances - Beginning of the period	$ 15,435	$ 13,788
Current service cost	49	54
Interest cost	67	163
Actuarial (gain) loss arising from changes in financial assumptions	(133)	651
Benefits paid	(344)	(532)
Impact of foreign exchange rate changes	(859)	1,311
Balances - End of the period	14,215	15,435
Amounts recognized: In net loss	116	(218)
Amounts recognized: In other comprehensive loss	(992)	(1,961)
Pension defined benefit plans [member]
IfrsStatementLineItems [Line Items]
Balances - Beginning of the period	15,341
Current service cost	46
Interest cost	67
Actuarial (gain) loss arising from changes in financial assumptions	(133)
Benefits paid	(342)
Impact of foreign exchange rate changes	(854)
Balances - End of the period	14,125	15,341
Amounts recognized: In net loss	113
Amounts recognized: In other comprehensive loss	(987)
Other Benefit Plans [Member]
IfrsStatementLineItems [Line Items]
Balances - Beginning of the period	94
Current service cost	3
Interest cost
Actuarial (gain) loss arising from changes in financial assumptions
Benefits paid	(2)
Impact of foreign exchange rate changes	(5)
Balances - End of the period	90	$ 94
Amounts recognized: In net loss	3
Amounts recognized: In other comprehensive loss	$ (5)

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Employee future benefits (Details Narrative)	Sep. 30, 2021	Dec. 31, 2020
Pension defined benefit plans [member]
IfrsStatementLineItems [Line Items]
Actuarial assumption of discount rates	1.10%	0.60%

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Share capital, warrants and other capital (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended		6 Months Ended	9 Months Ended
	Feb. 22, 2021	Feb. 19, 2021	Aug. 05, 2020	Jul. 07, 2020	Feb. 21, 2020	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares								21,000
Transaction costs							$ 2,158	$ 532	$ 3,221	$ 2,767
Share capital								$ 666
Share issue related cost				$ 1,420					$ 533
Registered Direct Offering [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares					3,478,261
Share price					$ 1.29
Proceeds from issuing common shares					$ 4,500
Placement Agent Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares	215,352			1,866,667
Proceeds from issuing common shares	$ 4,461
Placement agent fees and other offering expenses	$ 384
Option to purchase common stock	3,076,461	3,076,461
Warrants exercise price	$ 1.8125			$ 0.5625
Warrant liability	$ 1,897
Warrants expiry date				Jul. 01, 2025
Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares					243,478
Proceeds from issuing common shares					$ 2,325
Warrants exercise price					$ 1.62
Transaction costs					$ 600
Warrants [Member] | Registered Direct Offering [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares					2,608,696
Proceeds from issuing common shares					$ 3,900
Warrants exercise price					$ 1.20
Warrant liability					$ 310
Share Capital [Member]
IfrsStatementLineItems [Line Items]
Proceeds from issuing common shares					2,175
Transaction costs					$ 600
Share capital				$ 6,308
Investor Share Purchase Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares				26,666,666
Warrants exercise price				$ 0.45
Warrants expiry date				Jul. 07, 2025
Share Purchase Warrants [Member]
IfrsStatementLineItems [Line Items]
Proceeds from exercise of warrants				$ 5,691
Ordinary shares [member]
IfrsStatementLineItems [Line Items]
Proceeds from issuing common shares			$ 7,000
Option to purchase common stock			12,427,876
Common stock purchase price			$ 0.56325
Unregistered Warrants [Member]
IfrsStatementLineItems [Line Items]
Option to purchase common stock			869,952
Warrants exercise price			$ 0.47
Warrants expiry date			Aug. 03, 2025
Common stock purchase price			$ 0.7040625
Warrant purchase			9,320,907
Public Offering [Member]
IfrsStatementLineItems [Line Items]
Number of common shares issued, shares		20,509,746		26,666,666
Share price		$ 1.45		$ 0.45
Proceeds from issuing common shares		$ 29,739		$ 10,596
Placement agent fees and other offering expenses		$ 2,837
Placement agent warrants		1,435,682
Public Offering [Member] | Warrants [Member]
IfrsStatementLineItems [Line Items]
Proceeds from issuing common shares		$ 26,902
Warrants exercise price		$ 1.8125
Underwriter Offering [Member]
IfrsStatementLineItems [Line Items]
Proceeds from issuing common shares	4,077
Underwriter Offering [Member] | Share Capital [Member]
IfrsStatementLineItems [Line Items]
Proceeds from issuing common shares	34,200			$ 12,000
Transaction costs	$ 3,221

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Schedule of Fair Value of Warrants Assumptions (Details)	9 Months Ended
	Sep. 30, 2021 $ / shares shares
February 2021 Placement agent Warrants - Public Offering [Member]
IfrsStatementLineItems [Line Items]
Number of equivalent shares | shares	1,435,682
Weighted average share price, share options granted	$ 1.48
Exercise price, share options granted	$ 1.8125
Risk-free annual interest rate	0.58734%	[1]
Expected volatility	119.18%	[2]
Expected life (years)	4 years 11 months 26 days	[3]
Expected dividend yield	0.00%	[4]
February 2021 Placement agent Warrants - Underwriter Option [Member]
IfrsStatementLineItems [Line Items]
Number of equivalent shares | shares	215,352
Weighted average share price, share options granted	$ 1.48
Exercise price, share options granted	$ 1.8125
Risk-free annual interest rate	0.58544%	[1]
Expected volatility	119.57%	[2]
Expected life (years)	4 years 11 months 23 days	[3]
Expected dividend yield	0.00%	[4]

[1] Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the warrants.

[2] Based on the historical volatility of the Company’s stock price over the most recent period consistent with the expected life of the warrants.

[3] Based upon time to expiry from the issuance date.

[4] The Company has not paid dividends and it does not intend to pay dividends in the foreseeable future.

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Summary of Warrants Exercise Transactions (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) shares $ / shares
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	35,011,187
Proceeds from exercise of options | $	$ 20,042,202
September 2019 Investor Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	2,000,000
Exercise Price | $ / shares	$ 1.65
Proceeds from exercise of options | $	$ 3,300,000
February 2020 Investor Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	1,739,130
Exercise Price | $ / shares	$ 1.20
Proceeds from exercise of options | $	$ 2,086,956
July 2020 Investor Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	20,945,555
Exercise Price | $ / shares	$ 0.45
Proceeds from exercise of options | $	$ 9,425,500
July 2020 Placement Agent Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	1,866,667
Exercise Price | $ / shares	$ 0.5625
Proceeds from exercise of options | $	$ 1,050,000
August 2020 Investor Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	7,589,883
Exercise Price | $ / shares	$ 0.47
Proceeds from exercise of options | $	$ 3,567,245
August 2020 Placement Agent Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of share options exercised in share-based payment arrangement | shares	869,952
Exercise Price | $ / shares	$ 0.7040625
Proceeds from exercise of options | $	$ 612,501

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Schedule of Warrants Activity Reclassified into Equity (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended	12 Months Ended
	Jul. 07, 2020	Sep. 30, 2021	Dec. 31, 2020
Warrants Outstanding, End of year		44,901,366
Weighted Average Exercise Price, End of year		$ 0.6025
Warrants Outstanding, End of year, value		$ 12,402
Warrant liability reclassified to equity			16,368,033
Weighted Average Exercise Price, Warrant liability reclassified to equity			$ 0.8556
Warrant liability reclassified to equity, value			$ 7,377
Warrants issued as equity (July 2020)			28,533,333
Weighted Average Exercise Price, Warrants issued as equity (July 2020)			$ 0.4574
Warrants issued as equity (July 2020), value			$ 5,025
Warrants granted		1,651,034
Weighted Average Exercise Price, Warrants granted		$ 1.8125
Warrants granted, value		$ 1,897
Warrants exercised		(35,011,187)
Weighted Average Exercise Price, Warrants exercised		$ 0.5725
Warrants exercised, value		$ (9,728)
Allocation of transaction costs to share capital, value	$ 1,420	$ 533
Warrants Outstanding, End of year		11,541,213	44,901,366
Weighted Average Exercise Price, End of year		$ 0.8668	$ 0.6025
Warrants Outstanding, End of year, value		$ 5,103	$ 12,402

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Disclosure of Change in Stock Options Issued (Details)	9 Months Ended
	Sep. 30, 2021 shares $ / shares
IfrsStatementLineItems [Line Items]
Exercised, Number (in shares)	35,011,187
Exercised, Number (in shares)	(35,011,187)
Employee Stock Option, USD [Member]
IfrsStatementLineItems [Line Items]
Balance - Beginning of year, Number (in shares)	506,400
Balance - Beginning of year, Weighted average exercise price (in US and CAN dollars per share) | $ / shares	$ 1.44
Granted, Number (in shares)
Granted, Weighted average exercise price (in US and CAN dollars per share) | $ / shares
Exercised, Number (in shares)
Exercised, Weighted average exercise price (in US and CAN dollars per share) | $ / shares
Exercised, Number (in shares)
Balance - End of year, Number (in shares)	506,400
Balance - End of year, Weighted average exercise price (in US and CAN dollars per share) | $ / shares	$ 1.44
Deferred Stock Units DSU's [Member]
IfrsStatementLineItems [Line Items]
Balance - Beginning of year, Number (in shares)	173,000
Granted, Number (in shares)	280,000
Exercised, Number (in shares)	30,000
Exercised, Number (in shares)	(30,000)
Balance - End of year, Number (in shares)	423,000

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Schedule of Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Salaries and short-term employee benefits			$ 968	$ 834
Consultant fees			125	137
Share-based compensation costs			278	143
Post-employment benefits including defined contribution plan benefits of $23 in 2021 and $15 in 2020			38	41
Key management personnel compensation			1,409	1,155
Salaries and short-term employee benefits			734	837
Post-employment benefits including defined contribution plan benefits of $13 in 2021 and $16 in 2020			114	141
Share-based compensation costs			14	(98)
Other employees compensation			862	880
Cost of inventory used and services provided	$ 31	$ 33	72	907
Professional fees			2,053	1,380
Consulting fees			397	419
Insurance			661	645
Third-party research and development			838	175
Travel			57	51
Marketing services			212	32
Laboratory supplies			96	24
Other goods and services			115	72
Leasing costs			92	104
Gain on modification of building lease				(219)
Depreciation and amortization			105	178
Operating foreign exchange losses (gains)			66	(60)
Total operating expenses (note 11)	$ 2,420	$ 1,868	$ 7,035	$ 5,743

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Schedule of Operating Expenses (Details) (Parenthetical) - Other Benefit Plans [Member] - Unfunded Plan1 [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Key management personnel of entity or parent [member]
IfrsStatementLineItems [Line Items]
Post-employment benefits, including defined contribution plan benefits	$ 23	$ 15
Other Employees Compensation [Member]
IfrsStatementLineItems [Line Items]
Post-employment benefits, including defined contribution plan benefits	$ 13	$ 16

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Disclosure of Changes in Operating Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Trade and other receivables	$ 563	$ (27)	$ 666	$ (183)
Inventory		4	(39)	832
Prepaid expenses and other current assets	233	754	548	853
Payables and accrued liabilities	298	(770)	(17)	(1,221)
Taxes payable			(129)
Deferred revenues	84	23	1,314	(372)
Employee future benefits	(68)	(123)	(225)	(338)
Changes in operating assets and liabilities	$ 1,110	$ (139)	$ 2,118	$ (429)

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Segment information (Details Narrative)	9 Months Ended
	Sep. 30, 2021 Segment
Disclosure of operating segments [abstract]
Number of operating segments	1

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Summary of Pertinent Data Relating to Computation of Basic and Diluted Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net loss	$ (1,698)	$ (1,136)	$ (5,182)	$ (3,807)
Basic weighted average number of shares outstanding	121,297,007	56,211,486	112,743,285	33,832,136
Net loss income per share (basic)	$ (0.01)	$ (0.02)	$ (0.05)	$ (0.11)
Dilutive effect of stock options and DSUs
Dilutive effect of warrants
Diluted weighted average number of shares outstanding	121,297,007	56,211,486	112,743,285	33,832,136
Net loss per share (diluted)	$ (0.01)	$ (0.02)	$ (0.05)	$ (0.11)
Stock options and DSUs	929,400	499,410	929,400	499,410
Warrants	11,541,213	47,232,366	11,541,213	47,232,366

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Schedule of Expected Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2021 USD ($)
IfrsStatementLineItems [Line Items]
Total	$ 5,412
Services and Manufacturing [Member]
IfrsStatementLineItems [Line Items]
Total	1,500
R & D Contract [Member]
IfrsStatementLineItems [Line Items]
Total	3,912
Less Than 1 Year [Member]
IfrsStatementLineItems [Line Items]
Total	3,173
Less Than 1 Year [Member] | Services and Manufacturing [Member]
IfrsStatementLineItems [Line Items]
Total	900
Less Than 1 Year [Member] | R & D Contract [Member]
IfrsStatementLineItems [Line Items]
Total	2,273
1 - 3 Years [Member]
IfrsStatementLineItems [Line Items]
Total	2,114
1 - 3 Years [Member] | Services and Manufacturing [Member]
IfrsStatementLineItems [Line Items]
Total	600
1 - 3 Years [Member] | R & D Contract [Member]
IfrsStatementLineItems [Line Items]
Total	1,514
4 - 5 Years [Member]
IfrsStatementLineItems [Line Items]
Total	125
4 - 5 Years [Member] | Services and Manufacturing [Member]
IfrsStatementLineItems [Line Items]
Total
4 - 5 Years [Member] | R & D Contract [Member]
IfrsStatementLineItems [Line Items]
Total	125
More than 5 Years [Member]
IfrsStatementLineItems [Line Items]
Total
More than 5 Years [Member] | Services and Manufacturing [Member]
IfrsStatementLineItems [Line Items]
Total
More than 5 Years [Member] | R & D Contract [Member]
IfrsStatementLineItems [Line Items]
Total

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Schedule of R&D and Revenue Related Milestone Payments (Details) $ in Thousands	Sep. 30, 2021 USD ($)
IfrsStatementLineItems [Line Items]
Total	$ 42,812
R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	9,117
Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	33,695
Less Than 1 Year [Member]
IfrsStatementLineItems [Line Items]
Total	29
Less Than 1 Year [Member] | R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	29
Less Than 1 Year [Member] | Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Total
1 - 3 Years [Member]
IfrsStatementLineItems [Line Items]
Total
1 - 3 Years [Member] | R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Total
1 - 3 Years [Member] | Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Total
4 - 5 Years [Member]
IfrsStatementLineItems [Line Items]
Total	1,063
4 - 5 Years [Member] | R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	1,063
4 - 5 Years [Member] | Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Total
More than 5 Years [Member]
IfrsStatementLineItems [Line Items]
Total	41,720
More than 5 Years [Member] | R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	8,025
More than 5 Years [Member] | Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Total	$ 33,695

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Commitments and Contingencies (Details Narrative) € in Thousands, £ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 EUR (€)	Sep. 30, 2021 GBP (£)
R&D Contracts [Member]
IfrsStatementLineItems [Line Items]
Potential Milestone Payments Description	Based on the closing exchange rates, the Company expects to pay $3,912, including $3,699 [EUR 3,189], and $213 [GBP 158], in R&D contracts and up to $9,117, including $7,569 [EUR 6,525] and $1,548 [GBP 1,150], in R&D milestone payments and up to $33,695, including $32,013 [EUR 27,600] and $1,682 [GBP 1,250], in revenue related milestone payments.	Based on the closing exchange rates, the Company expects to pay $3,912, including $3,699 [EUR 3,189], and $213 [GBP 158], in R&D contracts and up to $9,117, including $7,569 [EUR 6,525] and $1,548 [GBP 1,150], in R&D milestone payments and up to $33,695, including $32,013 [EUR 27,600] and $1,682 [GBP 1,250], in revenue related milestone payments.	Based on the closing exchange rates, the Company expects to pay $3,912, including $3,699 [EUR 3,189], and $213 [GBP 158], in R&D contracts and up to $9,117, including $7,569 [EUR 6,525] and $1,548 [GBP 1,150], in R&D milestone payments and up to $33,695, including $32,013 [EUR 27,600] and $1,682 [GBP 1,250], in revenue related milestone payments.
Potential milestone payments	$ 3,912		£ 158
R&D Contracts [Member] | Euro [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments		€ 3,189
R&D Milestone Payments [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments | $	9,117
R&D Milestone Payments [Member] | Euro [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments		6,525
R&D Milestone Payments [Member] | GBP [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments | £			1,150
Revenue Related Mile Stone Payments [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments | $	$ 33,695
Revenue Related Mile Stone Payments [Member] | Euro [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments		€ 27,600
Revenue Related Mile Stone Payments [Member] | GBP [Member]
IfrsStatementLineItems [Line Items]
Potential milestone payments | £			£ 1,250

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Subsequent event (Details Narrative) - $ / shares	Oct. 04, 2021	Jun. 30, 2021
IfrsStatementLineItems [Line Items]
Number of shares issued		21,000
Events Occurring After Reporting Date [Member]
IfrsStatementLineItems [Line Items]
Number of warranrts exercised	100,000
Warrants exercise price	$ 0.45
Number of shares issued	100,000