¨ | Registration Statement Pursuant to Section 12(b) or 12(g) of The Securities Exchange Act of 1934 |
ý | Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
¨ | Shell Company Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Shares | NASDAQ Capital Market Toronto Stock Exchange |
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Item 19. |
Item 1. | Identity of Directors, Senior Management and Advisers |
A. | Directors and senior management |
B. | Advisers |
C. | Auditors |
Item 2. | Offer Statistics and Expected Timetable |
A. | Offer statistics |
B. | Method and expected timetable |
Item 3. | Key Information |
A. | Selected financial data |
December 31, | ||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Revenues | ||||||||||||||
License fees | 24,325 | 458 | 497 | 248 | 11 | |||||||||
Product sales | 2,167 | — | — | — | — | |||||||||
Royalty income | 184 | — | — | — | — | |||||||||
Sales commission and other | 205 | 465 | 414 | 297 | — | |||||||||
26,881 | 923 | 911 | 545 | 11 | ||||||||||
Cost of sales | 2,104 | — | — | — | — | |||||||||
Research and development costs | 2,932 | 10,704 | 16,495 | 17,234 | 23,716 | |||||||||
General and administrative expenses | 8,894 | 8,198 | 7,147 | 11,308 | 9,840 | |||||||||
Selling expenses | 3,109 | 5,095 | 6,745 | 6,887 | 3,850 | |||||||||
17,039 | 23,997 | 30,387 | 35,429 | 37,406 | ||||||||||
Income (loss) from operations | 9,842 | (23,074 | ) | (29,476 | ) | (34,884 | ) | (37,395 | ) | |||||
Settlements | (1,400 | ) | — | — | — | — | ||||||||
Gain (loss) due to changes in foreign currency exchange rates | 656 | 502 | (70 | ) | (1,767 | ) | 1,879 | |||||||
Change in fair value of warrant liability | 263 | 2,222 | 4,437 | (10,956 | ) | 18,272 | ||||||||
Warrant exercise inducement fee | — | — | — | (2,926 | ) | — | ||||||||
Other finance income | 278 | 75 | 150 | 305 | 168 | |||||||||
Net finance income (costs) | 1,197 | 2,799 | 4,517 | (15,344 | ) | 20,319 | ||||||||
Income (loss) before income taxes | 9,639 | (20,275 | ) | (24,959 | ) | (50,228 | ) | (17,076 | ) | |||||
Income tax recovery (expense) | (5,452 | ) | 3,479 | — | — | (111 | ) | |||||||
Net income (loss) from operations | 4,187 | (16,796 | ) | (24,959 | ) | (50,228 | ) | (17,187 | ) | |||||
Net income from discontinued operations | — | — | — | 85 | 623 | |||||||||
Net (loss) income | 4,187 | (16,796 | ) | (24,959 | ) | (50,143 | ) | (16,564 | ) | |||||
Other comprehensive income (loss): | ||||||||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||||||
Foreign currency translation adjustments | (260 | ) | (1,430 | ) | 569 | 1,509 | (1,158 | ) | ||||||
Items that will not be reclassified to profit or loss: | ||||||||||||||
Actuarial gain (loss) on defined benefit plans | 193 | 694 | (1,479 | ) | 844 | (1,833 | ) | |||||||
Comprehensive (loss) income | 4,120 | (17,532 | ) | (25,869 | ) | (47,790 | ) | (19,555 | ) | |||||
Basic Net income (loss) per share from continuing operations(1) | 0.25 | (1.12 | ) | (2.41 | ) | (18.17 | ) | (29.12 | ) | |||||
Diluted Net income (loss) per share from continuing operations(1) | 0.24 | (1.12 | ) | (2.41 | ) | (18.17 | ) | (29.12 | ) | |||||
Net income per share (basic and diluted) from discontinued operations1 | — | — | — | 0.03 | 1.06 | |||||||||
Net (loss) income per share (basic)1 | 0.25 | (1.12 | ) | (2.41 | ) | (18.14 | ) | (28.06 | ) | |||||
Net (loss) income per share (diluted)1 | 0.24 | (1.12 | ) | (2.41 | ) | (18.14 | ) | (28.06 | ) | |||||
Weighted average number of shares outstanding: | ||||||||||||||
Basic | 16,440,760 | 14,958,704 | 10,348,879 | 2,763,603 | 590,247 | |||||||||
Diluted | 17,034,812 | 14,958,704 | 10,348,879 | 2,763,603 | 590,247 |
1 | Adjusted to reflect the November 17, 2015 100-to-1 Share Consolidation |
As at December 31, | |||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||
$ | $ | $ | $ | $ | |||||||||||
Cash and cash equivalents | 14,512 | 7,780 | 21,999 | 41,450 | 34,931 | ||||||||||
Restricted cash equivalents | 418 | 381 | 496 | 255 | 760 | ||||||||||
Total assets | 25,011 | 22,195 | 31,659 | 51,498 | 47,435 | ||||||||||
Warrant liability (current and non-current portion) | 3,634 | 3,897 | 6,854 | 10,891 | 8,225 | ||||||||||
Share capital | 222,335 | 222,335 | 213,980 | 204,596 | 150,544 | ||||||||||
Shareholders' (deficiency) equity | 1,907 | (2,783 | ) | 6,212 | 21,615 | 14,484 |
B. | Capitalization and indebtedness |
C. | Reasons for the offer and use of proceeds |
D. | Risk factors |
• | receipt of approvals from foreign regulatory authorities; |
• | successfully contracting with qualified third-party suppliers to manufacture Macrilen™ (macimorelin); |
• | developing appropriate distribution and marketing infrastructure and arrangements for our product; |
• | launching and growing commercial sales of the product; |
• | out-licensing Macrilen™ (macimorelin) to third parties; and |
• | acceptance of the product in the medical community, among patients and with third party payers. |
• | the timing and willingness of any current or future collaborators to invest the resources necessary to commercialize Macrilen™ (macimorelin); |
• | not obtaining necessary regulatory approvals from the U.S. Food and Drug Administration ("FDA"), European Medicines Agency ("EMA") and other agencies that may delay or prevent us from obtaining approval of a pediatric indication for Macrilen™ (macimorelin), which may affect the price of our securities; |
• | the timing of regulatory submissions and approvals; |
• | the nature and timing of licensing fee revenues; |
• | the outcome of litigation, including the securities class action litigation pending against us that is described elsewhere in this Annual Report on Form 20-F; |
• | foreign currency fluctuations; |
• | the timing of the achievement and the receipt of milestone payments from current or future licensing partners; and |
• | failure to enter into new or the expiration or termination of current agreements with suppliers who manufacture Macrilen™ (macimorelin). |
• | meet the requirements of these authorities from multiple countries and jurisdictions and their related statutes, regulations, and guidances; |
• | meet the requirements for informed consent; |
• | meet the requirements for institutional review boards; and |
• | meet the requirements for good clinical practices |
• | in certain circumstances, third parties may assign their rights and obligations under these agreements to other third parties without our consent or approval; |
• | the third parties may cease to conduct business for financial or other reasons; |
• | we may not be able to renew such agreements; |
• | the third parties may not properly maintain or defend certain intellectual property rights that may be important to the commercialization of Macrilen™ (macimorelin); |
• | the third parties may encounter conflicts of interest, changes in business strategy or other issues which could adversely affect their willingness or ability to fulfill their obligations to us (for example, pharmaceutical companies historically have re-evaluated their priorities following mergers and consolidations, which have been common in this industry); |
• | delays in, or failures to achieve, scale-up to commercial quantities, or changes to current raw material suppliers or product manufacturers (whether the change is attributable to us or the supplier or manufacturer) could delay clinical studies, regulatory submissions and commercialization of Macrilen™ (macimorelin); and |
• | disputes may arise between us and the third parties that could result in the delay or termination of the manufacturing or commercialization of Macrilen™ (macimorelin), resulting in litigation or arbitration that could be time-consuming and expensive, or causing the third parties to act in their own self-interest and not in our interest or those of our shareholders. |
i. | In addition, the third parties can terminate our agreements with them for a number of reasons based on the terms of the individual agreements that we have entered into with them. If one or more of these agreements were to be terminated, we would be required to devote additional resources to manufacturing and commercializing Macrilen™ (macimorelin), which would likely cause a drop in the price of our Common Shares. |
• | the duration of changes to and results of our clinical trials for any future products going forward; |
• | unexpected delays or developments in seeking regulatory approvals; |
• | the time and cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; |
• | unexpected developments encountered in implementing our business development and commercialization strategies; |
• | the potential addition of commercialized products to our portfolio; |
• | the outcome of current and future litigation, including the securities class action litigation pending against us that is described elsewhere in this Annual Report on Form 20-F; and |
• | further arrangements, if any, with collaborators. |
• | demonstration of clinical efficacy and safety; |
• | the prevalence and severity of any adverse side effects; |
• | limitations or warnings contained in the product's approved labeling; |
• | availability of alternative treatments for the indications we target; |
• | the advantages and disadvantages of Macrilen™ (macimorelin) relative to current or alternative treatments; |
• | the availability of acceptable pricing and adequate third-party reimbursement; and |
• | the effectiveness of marketing and distribution methods for Macrilen™ (macimorelin). |
• | developments regarding current or future third-party suppliers and licensee(s); |
• | clinical and regulatory developments regarding Macrilen™ (macimorelin); |
• | delays in our anticipated clinical development or commercialization timelines; |
• | announcements by us regarding technological, regulatory or other matters; |
• | arrivals or departures of key personnel; |
• | governmental or regulatory action affecting our product candidates and our competitors' products in the U.S., Canada and other countries; |
• | developments or disputes concerning patent or proprietary rights; |
• | actual or anticipated fluctuations in our revenues or expenses; |
• | general market conditions and fluctuations for the emerging growth and biopharmaceutical market sectors; and |
• | economic conditions in the U.S. or abroad. |
• | 16,440,760 Common Shares issued and outstanding; |
• | no issued and outstanding Preferred Shares; |
• | 115,844 Common Shares issuable upon exercise of warrants that we previously issued in March 2015, which had a weighted average exercise price as of December 31, 2018 of $1.07 per Common Share, 2,331,000 Common Shares issuable upon exercise of warrants that we previously issued in December 2015, which had a weighted average exercise price as of December 31, 2018 of $7.10 per Common Share, and 945,000 Common Shares issuable upon exercise of warrants that we previously issued in November 2016, which had a weighted average exercise price as of December 31, 2018 of $4.70 per Common Share; |
• | 888,816 Common Shares that underlie outstanding stock options and deferred share units granted under our Plans, having a weighted average exercise price of $3.66 per Common Share; |
• | 869 Common Shares that underlie outstanding stock options and deferred share units granted under our Plans, having a weighted average exercise price of C$743.56 per Common Share; and |
• | 246,619 additional Common Shares available for future grants under our Stock Option Plan, and 737,942 additional Common Shares available for future grants under our Long Term Incentive Plan. The maximum number of Common Shares issuable under the Plans may equal 11.4% of the issued and outstanding Common Shares at any given time. |
• | responding to proxy contests and other actions by activist shareholders may be costly and time‑consuming, and may disrupt our operations and divert the attention of management and our employees; |
• | perceived uncertainties as to the potential outcome of any proxy contest may result in our inability to consummate potential acquisitions, collaborations or in‑licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and |
• | if individuals that have a specific agenda different from that of our management or other members of our Board of Directors are elected to our board as a result of any proxy contest, such an election may adversely affect our ability to effectively and timely implement our strategic plan and to create value for our shareholders. |
Item 4. | Information on the Company |
A. | History and development of the Company |
B. | Business overview |
• | Measurement of blood levels of Insulin Growth Factor ("IGF")-1, which is typically used as the first test when GHD is suspected. However, this test is not used to definitively diagnose GHD because many growth hormone deficient patients show normal IGF-1 levels. |
• | The Insulin Tolerance Test ("ITT"), which has historically been considered the gold standard for the evaluation of AGHD because of its high sensitivity and specificity. However, the ITT is inconvenient to both patients and physicians, administered intravenously (IV), and contra-indicated in certain patients, such as patients with coronary heart disease or seizure disorder, because it requires the patient to experience hypoglycemia to obtain an accurate result. Some physicians will not induce full hypoglycemia, intentionally compromising accuracy to increase safety and comfort for the patient. Furthermore, administration of the ITT includes additional costs associated with the patient being closely monitored by a physician for the two- to four-hour duration of the test and the test must be administered in a setting where emergency equipment is available and where the patient may be quickly hospitalized. The ITT is not used for patients with co-morbidities, such as cardiovascular disease, seizure disorder or a history of brain cancer or for patients who are elderly and frail, due to safety concerns. |
• | The Glucagon Stimulation Test ("GST") is considered relatively safe by endocrinologists. The mechanism of action for this test is unclear. Also, this test takes up to three to four hours. It produces side effects in up to one-third of the patients with the most common being nausea during and after the test. This test is administered intramuscularly (IM). |
• | The GHRH + ARG test (growth hormone releasing hormone-arginine stimulation) which is an easier test to perform in an office setting and has a good safety profile but is considered to be costly to administer compared to the ITT and the GST. GHRH + ARG is approved in the EU and has been proposed to be the best alternative to ITT, but GHRH is no longer available in the United States. This test is administered intravenously (IV). |
• | it is safer and more convenient than the ITT because it does not require the patient to become hypoglycemic; |
• | Macrilen™ (macimorelin) is administered orally, while the ITT requires an intravenous injection of insulin; |
• | Macrilen™ (macimorelin) is a more robust test than the ITT leading to evaluable test results; |
• | Macrilen™ (macimorelin) results are highly reproducible; |
• | the evaluation of AGHD using Macrilen™ (macimorelin) is less time-consuming and labor-intensive than the ITT; and |
• | the evaluation can be conducted in the physician's office rather than in a hospital-like setting. |
• | We out-licensed the development compound macimorelin acetate to Ardana Bioscience in 2004. Ardana Bioscience subsequently initiated the clinical development program of macimorelin acetate as an orally active compound intended to be used in the diagnosis of AGHD, however in 2008 Ardana Bioscience filed for bankruptcy so we terminated the license and regained rights to the compound. On October 19th, 2009, we announced that we would continue the macimorelin clinical development program for use in evaluating the AGHD and assumed the sponsorship of the Investigational New Drug Application (IND). On December 20, 2010, we announced we had reached agreement with the FDA on a Special Protocol Assessment ("SPA") for Macrilen™ (macimorelin), enabling us to complete the ongoing registration study required to gain approval for use in evaluating AGHD. On July 26, 2011, we announced the completion of the Phase 3 study of Macrilen™ (macimorelin) as a first oral product for use in evaluating AGHD and the decision to meet with the FDA for the future filing of an NDA for the registration of Macrilen™ (macimorelin) in the United States. On June 26, 2012, we announced that the final results from a Phase 3 trial for Macrilen™ (macimorelin) showed that the drug is safe and effective in evaluating AGHD. In November 2013, we filed an NDA for Macrilen™ (macimorelin) for the evaluation of AGHD by evaluating the pituitary gland secretion of growth hormone in response to an oral dose of the product. The FDA accepted the NDA for substantive review in January 2014. On November 6, 2014, the FDA informed us, by issuing a Complete Response Letter ("CRL"), that it had determined that our NDA could not be approved in its then present form. The CRL stated that the planned analysis of our pivotal trial did not meet its stated primary efficacy objective as agreed to in the SPA. The CRL further mentioned issues related to the lack of complete and verifiable source data for determining whether patients were accurately diagnosed with AGHD. The FDA concluded that, "in light of the failed primary analysis and data deficiencies noted, the clinical trial does not by itself support the indication." To address the deficiencies identified above, the CRL stated that we needed to demonstrate the efficacy of Macrilen™ (macimorelin) as a diagnostic test for GHD in a new, confirmatory clinical study. The CRL also stated that a serious event of electrocardiogram QT interval prolongation occurred for which attribution to drug could not be excluded. Therefore, a dedicated thorough QT study to evaluate the effect of macimorelin on the QT interval would be necessary for FDA clearance and approval. |
• | Following receipt of the CRL, we assembled a panel of experts in the field of growth-hormone deficiency, including experts in the field from both the United States and the EU. The panel met on January 8, 2015, during which we discussed our conclusions from the CRL, as well as the potential design of a new pivotal study. The panel advised us to continue to seek approval for Macrilen™ (macimorelin) because of their confidence in its efficacy and because there currently is no FDA-approved diagnostic test for AGHD. In parallel, we collected information on timelines and costs for such a study. |
• | During an end-of-review meeting with the FDA on March 6, 2015, we agreed with the FDA on the general design of the confirmatory Phase 3 study of Macrilen™ (macimorelin) for the evaluation of AGHD, as well as evaluation criteria. We agreed with the FDA that the confirmatory study will be conducted as a two-way crossover with the ITT as the benchmark comparator. |
• | On April 13, 2015, we announced plans to conduct a new, confirmatory Phase 3 clinical study to demonstrate the efficacy of Macrilen™ (macimorelin) for the evaluation of AGHD, as well as a dedicated thorough QT study to evaluate the effect of Macrilen™ (macimorelin) on myocardial repolarization. The confirmatory Phase 3 clinical study of Macrilen™ (macimorelin), entitled "Confirmatory validation of oral macimorelin as a growth hormone (GH) stimulation test (ST) for the diagnosis of AGHD in comparison with the insulin tolerance test (ITT)", was designed as a two-way crossover study with the ITT as the benchmark comparator and involved 31 sites in the United States and Europe. The study population was planned to include at least 110 subjects (at least 55 ITT-positive and 55 ITT-negative) with a medical history documenting risk factors for AGHD, and was planned to include a spectrum of subjects from those with a low risk of having AGHD to those with a high risk of having the condition. |
• | On May 26, 2015, we announced that we had received written scientific advice from the EMA regarding the further development plan, including the study design, for the new confirmatory Phase 3 clinical study of Macrilen™ (macimorelin) for use in evaluating AGHD. As a result of the advice, we believe that the confirmatory Phase 3 study that was agreed with the FDA meets the EMA's study-design expectations as well, allowing for U.S. and European approval, if the study is successful. |
• | On November 19, 2015, we announced the enrollment of the first patient in the confirmatory Phase 3 clinical study of Macrilen™ (macimorelin). |
• | On October 26, 2016, we announced completion of patient recruitment for the confirmatory Phase 3 clinical trial of Macrilen™ (macimorelin) as a growth hormone stimulation test for the evaluation of AGHD. In addition, we completed the dedicated QT study as requested by the FDA in the CRL to evaluate the effect of Macrilen™ (macimorelin) on the QT interval. |
• | On January 4, 2017, we announced that, based on an analysis of top-line data, the confirmatory Phase 3 clinical trial of Macrilen™ (macimorelin) failed to achieve one of its co-primary endpoints. Under the study protocol, the evaluation of AGHD with Macrilen™ (macimorelin) would be considered successful, if the lower bound of the two-sided 95% confidence interval for the primary efficacy variables was 75% or higher for "percent negative agreement" with the ITT, and 70% or higher for the "percent positive agreement" with the ITT. While the estimated percent negative agreement met the success criteria, the estimated percent positive agreement did not reach the criteria for a successful outcome. Therefore, the results did not meet the pre-defined equivalence criteria which required success for both the percent negative agreement and the percent positive agreement. |
• | On February 13, 2017, we announced that, after reviewing the raw data on which the top-line data were based, we had concluded that Macrilen™ (macimorelin) had demonstrated performance supportive of achieving FDA registration and that we intended to pursue registration. The announcement set forth the facts on which our conclusion was based. The Company met with the FDA at the end of March 2017 to discuss this position. |
• | On March 7, 2017, we announced that the Pediatric Committee ("PDCO") EMA agreed to the Company's Pediatric Investigation Plan ("PIP") for Macrilen™ (macimorelin) and agreed that the Company may defer conducting the PIP until after it files a Marketing Authorization Application ("MAA") seeking marketing authorization for the use of Macrilen™ (macimorelin) for the evaluation of AGHD. |
• | On July 18, 2017, we were provided a PDUFA date of December 30, 2017 by the FDA. |
• | On November 27, 2017, the EMA accepted our MMA submission for Macrilen™ (macimorelin). |
• | On December 20, 2017, the FDA approved the market authorization for Macrilen™ (macimorelin), to be used in the diagnosis of patients with adult growth hormone deficiency (AGHD). |
• | On January 16, 2018, the Company, through AEZS Germany, entered into the License and Assignment Agreement to carry out development, manufacturing, registration, regulatory and supply chain services for the commercialization of Macrilen™ (macimorelin) in the U.S. and Canada as further described below. |
• | In the August 2018, Volume 103, Issue 8 edition of The Journal of Clinical Endocrinology and Metabolism, the pivotal Phase 3 data from the macimorelin confirmatory trial was published by Jose M. Garcia, MD, PhD, et al., titled ‘Macimorelin as a Diagnostic Test for Adult GH Deficiency’. |
• | On November 19, 2018, we announced the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending a marketing authorization for macimorelin. |
• | On January 16, 2019, the Company announced that the EMA has granted marketing authorization for macimorelin. |
• | U.S. patent 6,861,409 covers macimorelin and U.S. patent 7,297,681 covers other related growth hormone secretagogue compounds, each also covering pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. U.S. patent 6,861,409 and U.S. patent 7,297,681 both expire in August 2022. |
• | European patent 1 289 951 covers macimorelin and European patent 1 344 773 covers other related growth hormone secretagogue compounds, pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. EP patent 1 289 951 and EP patent 1 344 773 both expire in June 2021. |
• | Japanese patent 3 522 265 covers macimorelin and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This patent expires in June 2021. |
• | Canadian patent 2,407,659 covers macimorelin and pharmaceutical compositions comprising the compounds as well as their medical use for elevating the plasma level of growth hormone. This patent expires in June 2021. |
• | U.S. patent 8,192,719 covers a method of assessing pituitary-related growth hormone deficiency in a human or animal subject comprising an oral administration of the compound macimorelin and determination of the level of growth hormone in the sample and assessing whether the level of growth hormone in the sample is indicative of growth hormone deficiency. This patent expires in October 2027. |
• | European patent 1 984 744 covers a method of assessing pituitary-related growth hormone deficiency by oral administration of macimorelin. This patent expires in February 2027. |
• | Japanese patent 4 852 728 covers a method of assessing pituitary-related growth hormone deficiency by oral administration of macimorelin. This patent expires in February 2027. |
• | U.S. provisional patent applications Serial No. 62/607,866 was filed on December 19, 2017 and Serial No. 62/609,059 was filed on December 21, 2017. Both are identical and are directed to a method of assessing growth hormone deficiency comprising oral administration of a macimorelin containing composition and collecting one or two post-administration samples. |
• | A non-provisional U.S. application was filed on May 30, 2018 drawing the priority of both provisional applications. The US-PTO issued a Notice of Allowance on January 09, 2019. If granted, a patent would presumably expire December 19, 2037. |
• | A PCT application was filed December 18, 2018 drawing the priority of both provisional U.S. applications. In addition to the method of assessing growth hormone deficiency comprising oral administration of a macimorelin containing composition and collecting one or two post-administration samples, the PCT application also covers a similar method of assessing growth hormone deficiency using 3 post-administration samples. |
C. | Organizational structure |
D. | Property, plants and equipment |
Location | Use of space | Square Footage | Type of interest | ||||
315 Sigma Drive, Summerville SC 29486 | Occupied for management, administration, commercial operations and business development | 300 | Leasehold | ||||
Weismüllerstr. 50 D-60314 Frankfurt-am-Main, Germany | Occupied for management, R&D, business development and administration | 36,168 | Leasehold |
Item 4A | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
A. | Operating Results |
Three months ended December 31, | Years ended December 31, | ||||||||||||||
(in thousands, except share and per share data) | 2018 | 2017 | 2018 | 2017 | 2016 | ||||||||||
$ | $ | $ | $ | $ | |||||||||||
Revenues | |||||||||||||||
License fees | (332 | ) | 119 | 24,325 | 458 | 497 | |||||||||
Product sales | 1,446 | — | 2,167 | — | — | ||||||||||
Royalty income | 184 | — | 184 | — | — | ||||||||||
Sales commission and other | 94 | 59 | 205 | 465 | 414 | ||||||||||
1,392 | 178 | 26,881 | 923 | 911 | |||||||||||
Cost of sales | 1,413 | — | 2,104 | — | — | ||||||||||
Gross income | (21 | ) | 178 | 24,777 | 923 | 911 | |||||||||
Operating expenses | |||||||||||||||
Research and development costs | 767 | 526 | 2,932 | 10,704 | 16,495 | ||||||||||
General and administrative expenses | 1,665 | 2,778 | 8,894 | 8,198 | 7,147 | ||||||||||
Selling expenses | 588 | 452 | 3,109 | 5,095 | 6,745 | ||||||||||
3,020 | 3,756 | 14,935 | 23,997 | 30,387 | |||||||||||
Income (loss) from operations | (3,041 | ) | (3,578 | ) | 9,842 | (23,074 | ) | (29,476 | ) | ||||||
Settlements | (1,400 | ) | — | (1,400 | ) | — | — | ||||||||
Gain (loss) due to changes in foreign currency exchange rates | 64 | 72 | 656 | 502 | (70 | ) | |||||||||
Change in fair value of warrant liability | (1,489 | ) | (478 | ) | 263 | 2,222 | 4,437 | ||||||||
Other finance income | 104 | 21 | 278 | 75 | 150 | ||||||||||
Net finance income (costs) | (1,321 | ) | (385 | ) | 1,197 | 2,799 | 4,517 | ||||||||
Income (loss) before income taxes | (5,762 | ) | (3,963 | ) | 9,639 | (20,275 | ) | (24,959 | ) | ||||||
Income tax recovery (expense) | 636 | 3,479 | (5,452 | ) | 3,479 | — | |||||||||
Net income (loss) | (5,126 | ) | (484 | ) | 4,187 | (16,796 | ) | (24,959 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||
Items that may be reclassified subsequently to profit or loss: | |||||||||||||||
Foreign currency translation adjustments | (13 | ) | (238 | ) | (260 | ) | (1,430 | ) | 569 | ||||||
Items that will not be reclassified to profit or loss: | |||||||||||||||
Actuarial gain (loss) on defined benefit plans | (418 | ) | 59 | 193 | 694 | (1,479 | ) | ||||||||
Comprehensive income (loss) | (5,557 | ) | (663 | ) | 4,120 | (17,532 | ) | (25,869 | ) | ||||||
Basic Net income (loss) per share | (0.31 | ) | (0.03 | ) | 0.25 | (1.12 | ) | (2.41 | ) | ||||||
Diluted Net income (loss) per share | (0.31 | ) | (0.03 | ) | 0.24 | (1.12 | ) | (2.41 | ) |
(in thousands, except for per share data) | Three months ended | |||||||||||
December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||
$ | $ | $ | $ | |||||||||
Revenues | 1,392 | 663 | 168 | 24,658 | ||||||||
Net income (loss) | (5,126 | ) | (2,509 | ) | (2,602 | ) | 14,424 | |||||
Net income (loss) per share [basic] | (0.31 | ) | (0.15 | ) | (0.16 | ) | 0.88 | |||||
Net income (loss) per share [diluted] | (0.31 | ) | (0.15 | ) | (0.16 | ) | 0.87 |
(in thousands, except for per share data) | Three months ended | |||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||
$ | $ | $ | $ | |||||||||
Revenues | 178 | 241 | 243 | 261 | ||||||||
Net loss | (484 | ) | (9,631 | ) | (2,550 | ) | (4,131 | ) | ||||
Net loss per share [basic and diluted] | (0.03 | ) | (0.61 | ) | (0.18 | ) | (0.31 | ) |
December 31, | ||||||
(in thousands) | 2018 | 2017 | ||||
$ | $ | |||||
Cash and cash equivalents | 14,512 | 7,780 | ||||
Trade and other receivables and other current assets | 1,504 | 1,047 | ||||
Restricted cash equivalents | 418 | 381 | ||||
Inventory | 240 | 554 | ||||
Property, plant and equipment | 65 | 101 | ||||
Deferred tax assets | — | 3,479 | ||||
Other non-current assets | 8,272 | 8,853 | ||||
Total assets | 25,011 | 22,195 | ||||
Payables and accrued liabilities and income taxes payable | 4,635 | 2,814 | ||||
Current portion of provision for restructuring and other costs | 887 | 2,469 | ||||
Current portion of deferred revenues | 74 | 486 | ||||
Warrant liability | 3,634 | 3,897 | ||||
Non-financial non-current liabilities (1) | 13,874 | 15,312 | ||||
Total liabilities | 23,104 | 24,978 | ||||
Shareholders' equity (deficiency) | 1,907 | (2,783 | ) | |||
Total liabilities and shareholders' equity | 25,011 | 22,195 |
1. | Comprised mainly of employee future benefits, provisions for restructuring and other costs and non-current portion of deferred revenues. |
B. | Liquidity, Cash Flows and Capital Resources |
(in thousands) | Three months ended December 31, | Years ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | 2016 | |||||||||||
$ | $ | $ | $ | $ | |||||||||||
Cash and cash equivalents - Beginning of period | 16,800 | 12,173 | 7,780 | 21,999 | 41,450 | ||||||||||
Cash flows from operating activities: | |||||||||||||||
Net cash used in operating activities | (2,679 | ) | (4,527 | ) | 6,825 | (22,913 | ) | (29,010 | ) | ||||||
(2,679 | ) | (4,527 | ) | 6,825 | (22,913 | ) | (29,010 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Net proceeds from issuance of common shares | — | — | — | 7,788 | 9,924 | ||||||||||
Proceeds from warrants exercised (note 19) | — | — | — | 242 | — | ||||||||||
— | — | — | 8,030 | 9,924 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net cash provided by (used in) investing activities | 4 | 140 | (35 | ) | 307 | (314 | ) | ||||||||
4 | 140 | (35 | ) | 307 | (314 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 387 | (6 | ) | (58 | ) | 357 | (51 | ) | |||||||
Cash and cash equivalents - End of period | 14,512 | 7,780 | 14,512 | 7,780 | 21,999 |
C. | Research and development, patents and licenses, etc. |
D. | Trend Information |
E. | Off-Balance Sheet Arrangements |
F. | Tabular disclosure of contractual obligations |
(in thousands) | Minimum lease payments | Minimum sublease receipts | Service and manufacturing | ||||||
$ | $ | $ | |||||||
Less than 1 year | 408 | (117 | ) | 2,180 | |||||
1 - 3 years | 533 | (24 | ) | — | |||||
4 - 5 years | 60 | — | — | ||||||
More than 5 years | 5 | — | — | ||||||
Total | 1,006 | (141 | ) | 2,180 |
(in thousands) | Euros | ||
Less than 1 year | 453 | ||
1 – 3 years | 921 | ||
4 – 5 years | 944 | ||
More than 5 years | 13,658 | ||
Total | 15,976 |
Item 6. | Directors, Senior Management and Employees |
A. | Directors and senior management |
Name and Place of Residence | Position with Aeterna Zentaris | |
Ammer, Nicola | Chief Medical Officer, Vice President Clinical Development | |
Frankfurt, Germany | ||
Auld, Leslie | Senior Vice President, Chief Financial Officer | |
Ontario, Canada | ||
Egbert, Carolyn | Chair of the Board of Directors | |
Texas, United States | ||
Ernst, Juergen | Director | |
North Rhine-Westphalia, Germany | ||
Garrison, Brian | Senior Vice President, Global Commercial Operations | |
Pennsylvania, United States | ||
Grau, Günther | Vice President, Finance | |
Frankfurt, Germany | ||
Guenther, Eckhard | Vice President, Alliance Management | |
Hessen, Germany | ||
Limoges, Gérard | Director | |
Quebec, Canada | ||
Norton, Brent | Director | |
Ontario, Canada | ||
Pollack, Jonathan | Director | |
Ontario, Canada | ||
Smith Hoke, Robin | Director | |
Ohio, United States | ||
Teifel, Michael | Vice President, Non-Clinical Sciences | |
Hessen, Germany | ||
Ward, Michael | President and Chief Executive Officer | |
Illinois, United States | ||
B. | Compensation |
Type of Compensation | Annual Retainer for the year 2018 | Monthly Retainer for January 2018 | |
Chair of the Board Retainer | 80,000 | - | |
Board Member Retainer | 40,000 | - | |
Audit Committee Chair Retainer | 20,000 | - | |
Audit Committee Member Retainer | 5,000 | - | |
NGCC Chair Retainer | 15,000 | - | |
NGCC Member Retainer | 3,000 | - | |
SRC Chair Retainer | - | 7,500 | |
SRC Member Retainer | - | 7,500 |
Option-based Awards | Share-based Awards | |||||||||||||||||||||||
Name | Issuance Date | Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Value of Unexercised In-the-money Options(1) | Issuance Date | Number of Shares or Units of Shares that have Not Vested | Market or Payout Value of Share-based Awards that have Not Vested(2) | ||||||||||||||||
(mm-dd-yyyy) | (#) | ($) | (mm-dd-yyyy) | ($) | (mm-dd-yyyy) | (#) | ($) | |||||||||||||||||
Cardiff, Michael | 05-10-2016 | 20,000 | 3.48 | 05-09-2023 | — | — | — | — | ||||||||||||||||
12-06-2016 | 7,850 | 3.45 | 12-06-2023 | — | — | — | — | |||||||||||||||||
08-15-2017 | 60,000 | 2.05 | 08-15-2024 | 53,400 | — | — | — | |||||||||||||||||
— | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | |||||||||||||||||
Egbert, Carolyn | 05-10-2016 | 10,000 | 3.48 | 05-09-2023 | — | — | — | — | ||||||||||||||||
12-06-2016 | 7,850 | 3.45 | 12-06-2023 | — | — | — | — | |||||||||||||||||
08-15-2017 | 60,000 | 2.05 | 08-15-2024 | 53,400 | — | — | — | |||||||||||||||||
— | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | |||||||||||||||||
Ernst, Juergen | 05-10-2016 | 10,000 | 3.48 | 05-09-2023 | — | — | — | — | ||||||||||||||||
12-06-2016 | 7,850 | 3.45 | 12-06-2023 | — | — | — | — | |||||||||||||||||
08-15-2017 | 60,000 | 2.05 | 08-15-2024 | 53,400 | — | — | — | |||||||||||||||||
— | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | |||||||||||||||||
Smith Hoke, Robin | — | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | ||||||||||||||||
Limoges, Gérard | 05-10-2016 | 10,000 | 3.48 | 05-09-2023 | — | — | — | — | ||||||||||||||||
12-06-2016 | 7,850 | 3.45 | 12-06-2023 | — | — | — | — | |||||||||||||||||
08-15-2017 | 60,000 | 2.05 | 08-15-2024 | 53,400 | — | — | — | |||||||||||||||||
— | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | |||||||||||||||||
Norton, Brent | — | — | — | — | — | 05-08-2018 | 23,000 | 67,620 | ||||||||||||||||
Pollack, Jonathan | — | — | — | — | — | 05-08-2018 | 23,000 | 67,620 |
(1) | Value of unexercised in-the-money options" at financial year-end is calculated based on the difference between the closing prices of the Common Shares on the NASDAQ on the last trading day of the fiscal year (December 31, 2018) of $2.94 and the exercise price of the options, multiplied by the number of unexercised options. |
(2) | The Company used the closing price of its Common Shares on the NASDAQ as at the last trading day of the fiscal year (December 31, 2018) of $2.94 |
Name | Fees earned(1) | Share-based Awards(2) | Option-based Awards | Non-Equity Incentive Plan Compensation | Pension Value | All Other Compensation | Total | |||||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||
Cardiff, Michael | 53,555 | 41,170 | — | — | — | — | 94,725 | |||||||
Egbert, Carolyn(3) | 177,500 | 41,170 | — | — | — | — | 218,670 | |||||||
Ernst, Juergen | 51,065 | 41,170 | — | — | — | — | 92,235 | |||||||
Smith Hoke, Robin | 27,879 | 41,170 | — | — | — | — | 69,049 | |||||||
Limoges, Gérard | 67,500 | 41,170 | — | — | — | — | 108,670 | |||||||
Norton, Brent | 29,176 | 41,170 | — | — | — | — | 70,346 | |||||||
Pollack, Jonathan | 29,176 | 41,170 | — | — | — | — | 70,346 |
(1) | In respect of our financial year ended December 31, 2018, we paid an aggregate amount of $450,577 to all of our Outside Directors for services rendered in their capacity as directors, excluding reimbursement of out-of-pocket expenses and the value of share-based awards and option-based awards granted in 2018. |
(2) | Amounts shown represent the value of the DSUs on the grant date ($1.79). The value of one DSU on the grant date is the closing price of one Common Share on the NASDAQ on the last trading day preceding the date of grant. |
• | Mr. Michael V. Ward, who currently serves as President and Chief Executive Officer as an employee; |
• | Mr. James Clavijo, who served as Chief Financial Officer as an employee from March 5, 2018 to September 24, 2018; |
• | Ms. Leslie Auld, who currently serves as Senior Vice President, Chief Financial Officer as an independent contractor from September 24, 2018; and |
• | Dr. Richard Sachse, who served as Senior Vice President and Chief Scientific and Chief Medical Officer until June 14, 2018, Mr. Brian Garrison, who currently serves as Senior Vice President, Global Commercial Operations, and Eckhard Guenther, who currently serves as Vice President, Alliance Management, who were our three most highly compensated executive officers (other than our Chief Executive Officer and our current and former Chief Financial Officer) during 2018. |
• | providing the opportunity for an executive to earn compensation that is competitive with the compensation received by executives serving in the same or measurably similar positions within comparable companies; |
• | providing the opportunity for executives to participate in equity-based incentive compensation plans; |
• | aligning executive compensation with our corporate objectives; and |
• | attracting and retaining highly qualified individuals in key positions. |
Goal | Result | |
Commercialization of Macrilen™ (macimorelin) in Europe and ROW | Assuming EMA approval, develop strategy and implementation plan for commercialization through the out-licensing of Macrilen™ (macimorelin) for Europe and ROW | The Board developed and approved a strategy to out-license macimorelin for the ROW, but the Corporation did not secure acceptable ROW agreements in 2018. The Corporation subsequently (in 2019) engaged Torreya to assist in identifying and executing upon such opportunities. |
Successfully execute the board-approved strategy and implementation plan. | Not completed. The Board approved a strategy and implementation plan to pursue commercialization opportunities for macimorelin for the ROW and to implement non-macimorelin related opportunities. The Corporation explored several potential opportunities, but none resulted in a transaction that was acceptable to the Corporation. | |
Deploy all effective resources to ensure timely EMA approval of Macrilen™ (macimorelin). | Completed. EMA approval of macimorelin was obtained in January 2019 based on the work of the Corporation during 2018. | |
Commercialization of Macrilen™ (macimorelin) in United States and Canada | Provide effective support to Strongbridge in its commercialization efforts to ensure Macrilen™ (macimorelin) is timely marketed in 2018. | Not completed. The Corporation provided support, but efforts were slowed due to Strongbridge’s sale of its license rights to Novo Nordisk A/S in December 2018. |
Ensure effective clinical studies are in place to obtain approval of pediatric indication of Macrilen™ (macimorelin). | In progress. The Corporation is collaborating with Novo Nordisk (and previously with Strongbridge) and is providing appropriate activities with respect to the ongoing clinical studies that are required to obtain approval for the pediatric indication of Macrilen™. | |
Improve operations | Manage costs and control expenses to maximize cash conservation. | In progress. The Corporation is focused on cost-savings and cash conservation. To this end, the Corporation reduced operating costs in both Germany and the United States in 2018. This continues to be an important objective in 2019. |
Provide cash forecast by month on a 24-month projection. | The Corporation remains focused on aligning essential personnel, both in Germany and the United States, with the Corporation’s strategy and improving cost-effectiveness. In 2018, this included the termination of employment of certain employees. | |
Ensure effective and efficient use of resources and personnel. | The Corporation remains focused on aligning essential personnel, both in Germany and the United States, with the Corporation’s strategy and improving cost-effectiveness. In 2018, this included the termination of employment of certain employees. | |
Ensure that performance milestones for key managers align with and support CEO milestones. | Completed. |
• | any amendment to Section 3.2 of the Stock Option Plan (which sets forth the limit on the number of options that may be granted to insiders) that would have the effect of permitting, without having to obtain shareholder approval on a "disinterested vote" at a duly convened shareholders' meeting, the grant of any option(s) under the Stock Option Plan otherwise prohibited by Section 3.2; |
• | any amendment to the number of securities issuable under the Stock Option Plan (except for certain permitted adjustments, such as in the case of stock splits, consolidations or reclassifications); |
• | any amendment that would permit any option granted under the Stock Option Plan to be transferable or assignable other than by will or in accordance with the applicable laws of estates and succession; |
• | the addition of a cashless exercise feature, payable in cash or securities, which does not provide for a full deduction of the number of underlying securities from the Stock Option Plan reserve; |
• | the addition of a deferred or restricted share unit component or any other provision that results in employees receiving securities while no cash consideration is received by us; |
• | with respect to any Participant, whether or not such Participant is an "insider" and except in respect of certain permitted adjustments, such as in the case of stock splits, consolidations or reclassifications: |
• | any reduction in the exercise price of any option after the option has been granted, or |
• | any cancellation of an option and the re-grant of that option under different terms, or |
• | any extension to the term of an option beyond its Outside Expiry Date to a Participant who is an "insider" (except for extensions made in the context of a "blackout period"); |
• | any amendment to the method of determining the exercise price of an option granted pursuant to the Stock Option Plan; |
• | the addition of any form of financial assistance or any amendment to a financial assistance provision which is more favorable to employees; and |
• | any amendment to the foregoing amending provisions requiring Board, shareholder and regulatory approvals. |
• | amendments of a "housekeeping" or clerical nature or to clarify the provisions of the Stock Option Plan; |
• | amendments regarding any vesting period of an option; |
• | amendments regarding the extension of an option beyond an Early Expiry Date in respect of any Participant, or the extension of an option beyond the Outside Expiry Date in respect of any Participant who is a "non-insider"; |
• | adjustments to the number of issuable Common Shares underlying, or the exercise price of, outstanding options resulting from a split or a consolidation of the Common Shares, a reclassification, the payment of a stock dividend, the payment of a special cash or non-cash distribution to our shareholders on a pro rata basis provided such distribution is approved by our shareholders in accordance with applicable law, a recapitalization, a reorganization or any other event which necessitates an equitable adjustment to the outstanding options in proportion with corresponding adjustments made to all outstanding Common Shares; |
• | discontinuing or terminating the Stock Option Plan; and |
• | any other amendment which does not require shareholder approval under the terms of the Stock Option Plan. |
Option-based Awards | Share-based Awards | ||||||||||||||||
Name | Issuance Date | Number of Securities Underlying Unexercised Options(1) | Option Exercise Price | Option Expiration Date | Value of Unexercised In-the-money Options(2) | Issuance Date | Number of Shares or Units of shares that have Not Vested | Market or Payout Value of Share-based Awards that have Not Vested | |||||||||
(mm-dd-yyyy) | (#) | ($) | (mm-dd-yyyy) | ($) | (#) | ($) | |||||||||||
Auld, Leslie | — | — | — | — | — | — | — | — | |||||||||
Clavijo, James(3) | — | — | — | — | — | — | — | — | |||||||||
Garrison, Brian | 11/17/2015 | 500 | 116.00 | 11/17/2022 | — | — | — | — | |||||||||
12/21/2015 | 3,000 | 4.58 | 12/21/2022 | — | — | — | — | ||||||||||
12/06/2016 | 2,500 | 3.45 | 12/06/2023 | — | — | — | — | ||||||||||
Guenther, Eckhard | 12/21/2015 | 5,000 | 4.58 | 12/21/2022 | — | — | — | — | |||||||||
11/08/2016 | 398 | 3.50 | 11/08/2023 | — | — | — | — | ||||||||||
12/06/2016 | 10,000 | 3.45 | 12/06/2023 | — | — | — | — | ||||||||||
Sachse, Richard(4) | — | — | — | — | — | — | — | — | |||||||||
Ward, Michael V. | 08/15/2017 | 150,000 | 2.05 | 08/15/2024 | 133,500 | — | — | — | |||||||||
04/02/2018 | 50,000 | 1.46 | 04/02/2025 | 74,000 | — | — | — | ||||||||||
06/22/2018 | 100,000 | 2.11 | 06/22/2025 | 83,000 | — | — | — |
(1) | The number of securities underlying unexercised options represents all awards outstanding at December 31, 2018. |
(2) | "Value of unexercised in-the-money options" at financial year-end is calculated based on the difference between the closing price of the Common Shares on the NASDAQ on the last trading day of the fiscal year (December 31, 2018) of $2.94 and the exercise price of the options, multiplied by the number of unexercised options. |
(3) | Mr. Clavijo ceased to be Chief Financial Officer on September 24, 2018. All outstanding stock options held by Mr. Clavijo were cancelled effective as of his termination date in accordance with the provisions of the Stock Option Plan. |
(4) | Dr. Sachse's employment was terminated effective June 14, 2018. All outstanding stock options held by Dr. Sachse were cancelled in accordance with the provisions of the Stock Option Plan. |
Name | Option-based awards — Value vested during the year(1) | Share-based awards — Value vested during the year | Non-equity incentive plan compensation — Value earned during the year | |||
($) | ($) | ($) | ||||
Auld, Leslie | — | — | — | |||
Clavijo, James | — | — | — | |||
Garrison, Brian | 3,074 | — | 35,000 | |||
Guenther, Eckhard | 12,299 | — | — | |||
Sachse, Richard | — | — | 120,000 | |||
Ward, Michael V. | — | — | 35,000 |
(1) | Represents the aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between the closing price of the Common Shares on the NASDAQ and the exercise price on such vesting date. |
Non-equity incentive plan compensation | |||||||||||||||||||||||
Name and principal position | Years | Salary | Share based awards | Option based awards (1) | Annual incentive plan | Long-term incentive plans | Pension Value | All other compensation | Total compensation | ||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
Ward, Michael V. President and Chief Executive Officer | 2018 | 325,000 | — | 227,241 | 35,000 | — | — | — | 587,241 | ||||||||||||||
2017 | 121,461 | — | 242,495 | — | — | — | — | 363,956 | |||||||||||||||
2016 | — | — | — | — | — | — | — | — | |||||||||||||||
Clavijo, James(2) Former Chief Financial Officer | 2018 | 190,574 | — | 130,240 | — | — | — | 137,500 | 458,314 | ||||||||||||||
2017 | — | — | — | — | — | — | — | — | |||||||||||||||
2016 | — | — | — | — | — | — | — | — | |||||||||||||||
Auld, Leslie Senior Vice President, Chief Financial Officer | 2018 | 62,385 | — | — | — | — | — | — | 62,385 | ||||||||||||||
2017 | — | — | — | — | — | — | — | — | |||||||||||||||
2016 | — | — | — | — | — | — | — | — | |||||||||||||||
Sachse, Richard(4) Former Senior Vice President, Chief Scientific Officer and Chief Medical Officer | 2018 | 403,297 | — | — | — | — | — | — | 403,297 | ||||||||||||||
2017 | 222,000 | — | — | 120,000 | — | 37,067 | — | 379,067 | |||||||||||||||
2016 | 222,000 | — | 257,000 | 55,500 | — | 37,067 | — | 571,567 | |||||||||||||||
Garrison, Brian Senior Vice President, Global Commercial Operations | 2018 | 235,015 | — | 3,550 | 35,000 | — | — | — | 273,565 | ||||||||||||||
2017 | — | — | — | — | — | — | — | — | |||||||||||||||
2016 | — | — | — | — | — | — | — | — | |||||||||||||||
Guenther, Eckhard Vice President, Alliance Management | 2018 | 191,242 | — | — | 13,154 | — | 3,298 | — | 207,694 | ||||||||||||||
2017 | 155,318 | — | — | — | — | 2,970 | — | 158,288 | |||||||||||||||
2016 | 152,510 | — | 27,797 | — | — | 2,851 | — | 183,158 |
(1) | The value of option-based awards represents the closing price of the Common Shares on the NASDAQ on the last trading day preceding the date of grant multiplied by the Black-Scholes factor as at such date and the number of stock options granted on such date. The following table sets forth the value of the option-based awards and the corresponding Black-Scholes factor: |
Date of Grant | Value of Grant | Black-Scholes Factor |
November 9, 2016 | $3.50 | 80.35% |
December 6, 2016 | $3.45 | 80.57% |
December 16, 2016 | $3.80 | 80.68% |
August 15, 2017 | $2.05 | 78.86% |
April 2, 2018 | $1.46 | 77.57% |
June 22, 2018 | $2.11 | 80.86% |
(2) | Mr. Clavijo received a severance payment of $137,500 following the date that he ceased to be the Chief Financial Officer on September 24, 2018. All outstanding stock options held by Mr. Clavijo were cancelled in accordance with the provisions of the Stock Option Plan. |
(3) | We maintained a reinsured benevolent fund (Rückgedeckte Unterstützungskasse), which is a type of private defined contribution pension plan, for Dr. Sachse. We contributed to a private pension provider an amount equal to 2.4% of Dr. Sachse’s salary, up to a monthly salary limit of €6,050, plus an additional contribution of 18% of the amount of Dr. Sachse’s salary that exceeds the monthly limit. Dr. Sachse also contributed a percentage of his salary to the plan. We are liable to Dr. Sachse for the pension benefits that have been promised, if the private pension provider does not, or cannot, pay the promised pension payments. We obtained reinsurance against the insolvency or liquidation of the private pension provider. The table below sets forth additional information |
Accumulated value at start of year | Compensatory | Accumulated value at year end |
$133,639 | $12,258 | $145,897 |
C. | Board practices |
D. | Employees |
E. | Share ownership |
Name | No. of Common Shares owned or held | Percent(1) | No. of stock options held(2) | No. of currently exercisable options | |||||||
Auld, Leslie | — | — | — | — | |||||||
Cardiff, Michael(3) | — | — | 87,850 | 87,850 | |||||||
Clavijo, James(4) | — | — | — | — | |||||||
Egbert, Carolyn | 1,920 | * | 77,850 | 5,951 | |||||||
Ernst, Juergen | 1,348 | * | 77,850 | 5,951 | |||||||
Garrison, Brian | — | — | 6,000 | — | |||||||
Guenther, Eckhard | — | — | 15,398 | 6,801 | |||||||
Hoke Smith, Robin | — | — | — | — | |||||||
Limoges, Gérard | 1,200 | * | 77,850 | 5,951 | |||||||
Norton, Brent | — | * | — | — | |||||||
Pollack, Jonathan | — | * | — | — | |||||||
Sachse, Richard(5) | — | — | — | — | |||||||
Teifel, Michael | — | — | 30,350 | 13,451 | |||||||
Ward, Michael V. | — | — | — | — | |||||||
Total | 4,468 | * | 373,148 | 125,955 |
* | Less than 1% |
(1) | Based on 16,440,760 Common Shares outstanding as at December 31, 2018. |
(2) | For information regarding option expiration dates and exercise price refer to the tables included under the caption "Outstanding Option-Based Awards and Share-Based Awards". |
(3) | Mr. Cardiff resigned from the Board for personal reasons in March 2019. At such time, the Board amended the Stock Option Plan to accelerate vesting of Mr. Cardiff’s stock options. His stock options will remain exercisable until the seventh business day following the end of the current blackout period, following which time any unexercised options of Mr. Cardiff will be forfeited and cancelled. |
(4) | Mr. Clavijo ceased to be the Company's Chief Financial Officer on September 24, 2018. All outstanding stock options held by Mr. Clavijo were cancelled effective as of his termination date in accordance with the provisions of the Stock Option Plan. |
(5) | Dr. Sachse employment was terminated effective June 14, 2018. All outstanding stock options held by Dr. Sachse were cancelled in accordance with the provisions of the Stock Option Plan. |
Item 7. | Major Shareholders and Related Party Transactions |
A. | Major shareholders |
Beneficial Owner | No. of Common Shares | Percentage |
J. Goldman & Co., L.P. J. Goldman Capital Management, Inc. Jay G. Goldman1 | 997,494 | 6.067201% |
1 Based solely on a Schedule 13G, dated February 11, 2019, filed by J. Goldman & Co., L.P. (“JGC”), J. Goldman Capital Management, Inc. (“JGCM”) and Jay G. Goldman (“JGG”) with the SEC. As indicated in that statement, JGC, JGCM, and JGG possess shared voting and dispositive power with respect to all of such Common Shares, all of which are beneficially owned by J. Goldman Master Fund, L.P. |
B. | Related party transactions |
C. | Interests of experts and counsel |
Item 8. | Financial Information |
A. | Consolidated statements and other financial information |
B. | Significant changes |
Item 9. | The Offer and Listing |
A. | Offer and listing details |
NASDAQ (US$) | TSX (CAN$) | |||||||
High | Low | High | Low | |||||
2018 | 3.87 | 1.19 | 5.10 | 1.53 | ||||
2017 | 3.65 | 0.84 | 4.81 | 1.13 | ||||
2019 | ||||||||
First quarter 1 | 4.27 | 3.03 | 5.70 | 4.12 | ||||
2018 | ||||||||
Fourth quarter | 3.87 | 1.30 | 5.10 | 1.69 | ||||
Third quarter | 2.03 | 1.60 | 2.69 | 2.10 | ||||
Second quarter | 2.62 | 1.19 | 3.34 | 1.53 | ||||
First quarter | 2.41 | 1.46 | 3.01 | 1.89 | ||||
2017 | ||||||||
Fourth quarter | 2.70 | 1.87 | 3.48 | 2.38 | ||||
Third quarter | 2.87 | 0.98 | 3.57 | 1.28 | ||||
Second quarter | 3.35 | 0.84 | 4.50 | 1.13 | ||||
First quarter | 3.65 | 2.45 | 4.81 | 3.24 | ||||
B. | Plan of distribution |
C. | Markets |
D. | Selling shareholders |
E. | Dilution |
F. | Expenses of the issue |
Item 10. | Additional Information |
A. | Share capital |
B. | Memorandum and articles of association |
• | relates primarily to his or her remuneration as our director, officer, employee or agent or as a director, officer, employee or agent of an affiliate of us; |
• | is for indemnity or insurance for director's liability as permitted by the CBCA; or |
• | is with our affiliate. |
• | borrow money upon our credit; |
• | issue, reissue, sell or pledge our debt obligations; |
• | give a guarantee on our behalf to secure performance of an obligation of any person; and |
• | mortgage, hypothecate, pledge or otherwise create a security interest in all or any of our property, owned or subsequently acquired, to secure any of our obligations. |
• | the provisions in which future shareholder approval is required to ratify the continued existence of the Rights Plan will be revised to specify that such events will occur at every third annual meeting of the shareholders subsequent to the annual meeting of shareholders whereby the Rights Plan is initially approved, as well as the addition of certain provisions in respect of the effective date of the plan to give effect to the fact that the Rights Plan is in effect a continuation of the Existing Rights Plan; |
• | the definition of “Acquiring Person” will exclude Convertible Security Acquisitions (as defined below); |
• | the definition of “Beneficial Owner”, “Beneficial Ownership” and “Beneficially Own” will: |
• | exclude securities that may be acquired pursuant to any agreement related to an amalgamation, merger, arrangement, business combination or other similar transaction (statutory or otherwise, but for greater certainty not including a Take-over Bid) that is conditional upon shareholder approval prior to such Person acquiring such securities; and |
• | include securities which are subject to a lock-up or similar agreement to tender or deposit them into any Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other person acting jointly or in concert with such Person, other than Permitted Lock-up Agreements; |
• | “Convertible Security Acquisitions” will be defined to mean an acquisition of Voting Shares by a Person upon the purchase, exercise, conversion or exchange of Convertible Securities, where such Convertible Securities are acquired or received by such Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition; |
• | “Market Price” will be defined to mean the average of the daily closing price per security on the 20 consecutive trading days (i.e. days on which the TSX or another stock exchange or national securities quotation system on which the Common Shares are traded (including for greater certainty, each of the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq Capital Market) is open for the transaction of business, subject to certain exceptions), through and including the trading day immediately preceding such date of determination, subject to certain exceptions; |
• | the definition of “Permitted Lock-Up Agreement” will be added (as described below); and |
• | certain other amendments of a non-substantive, “housekeeping” nature have been made to provide for greater clarity and consistency. |
1. | the first date (the "Stock Acquisition Date") of a public announcement of facts indicating that a person has become an Acquiring Person; and |
2. | the date of the commencement of, or first public announcement of the intention of any person (other than us or any of our subsidiaries) to commence a take-over bid or a share exchange bid for more than 20% of our outstanding Common Shares other than a Permitted Bid or a Competing Permitted Bid (as defined below), so long as such take-over bid continues to satisfy the requirements of a Permitted Bid or a Competing Permitted Bid, as the case may be. |
1. | the take-over bid must be made by means of a take-over bid circular; |
2. | the take-over bid must be made to all holders of Common Shares wherever resident, on identical terms and conditions, other than the bidder; |
3. | the take-over bid must not permit Common Shares tendered pursuant to the bid to be taken up or paid for: |
a) | prior to the close of business on a date that is not less than 105 days following the date of the relevant take-over bid or such shorter minimum period that a take-over bid (that is not exempt from any of the requirements of Division 5 (Bid Mechanics of NI 62-104)) must remain open for deposits of securities thereunder, in the applicable circumstances at such time, pursuant to NI 62-104; |
b) | then only if at the close of business on the date Common Shares (and/or "Convertible Securities", as defined in the Rights Plan) are first taken up or paid for under such take-over bid, outstanding Common Shares and Convertible Securities held by shareholders other than any other Acquiring Person, the bidder, the bidder’s affiliates or associates, persons acting jointly or in concert with the bidder and any employee benefit plan, deferred profit-sharing plan, stock participation plan or trust for the benefit of our employees or the employees |
4. | the take-over bid must allow Common Shares and/or Convertible Securities to be deposited or tendered pursuant to such take-over bid, unless such take-over bid is withdrawn, at any time prior to the close of business on the date Common Shares and/or Convertible Securities are first taken up or paid for under the take-over bid; |
5. | the take-over bid must allow Common Shares and/or Convertible Securities to be withdrawn until taken up and paid for; and |
6. | in the event the requirement set forth in clause 3.b) above is satisfied, the bidder must make a public announcement of that fact and the take-over bid must remain open for deposits and tenders of Common Shares for not less than ten days from the date of such public announcement. |
• | the acquisition of our Common Shares by a person in the ordinary course of that person's business as a trader or dealer in securities; |
• | the acquisition or control of us in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the Investment Act, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act; and |
• | the acquisition or control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of us, through the ownership of our voting interests, remains unchanged. |
C. | Material contracts |
• | $4,000,000 on achieving $25,000,000 annual net sales, |
• | $10,000,000 on achieving $50,000,000 annual net sales, |
• | $20,000,000 on achieving $100,000,000 annual net sales, |
• | $40,000,000 on achieving $200,000,000 annual net sales, and |
• | $100,000,000 on achieving $500,000,000 annual net sales. |
• | a "Change of Control" shall be deemed to have occurred in any of the following circumstances: (i) subject to certain exceptions, upon the acquisition by a person (or one or more persons who are affiliates of one another or who are acting jointly or in concert) of a beneficial interest in our securities representing in any circumstance 50% or more of the voting rights attaching to our then outstanding securities; (ii) upon a sale or other disposition of all or substantially all of our assets; (iii) upon a plan of liquidation or dissolution of us; or (iv) if, for any reason, including our amalgamation, merger or consolidation with or into another company, the individuals who, during the term of the change of control agreement, constituted the Board (and any new directors whose appointment by the Board or whose nomination for election by our shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors during the term of the change of control agreement or whose appointment or nomination for election was previously so approved) cease to constitute a majority of the members of the Board; |
• | termination of employment for "Cause" includes (but is not limited to) (i) if the Executive commits any fraud, theft, embezzlement or other criminal act of a similar nature, or (ii) if the Executive commits an act of serious misconduct or willful or gross negligence in the performance of his duties. |
Name | Termination Provisions Value ($)(1) (2) |
Auld, Leslie | 0 |
Garrison, Brian | 0 |
Guenther, Eckhard | 94,800 |
Ward, Michael V. | 487,500 |
(1) | The termination values assume that the triggering event took place on the last business day of our financial year-end (December 31, 2018). |
(2) | Value of earned/unused vacation, if applicable, and amounts owing for expense reimbursement are not included as they are not considered as “incremental” payments made in connection with termination of employment. |
D. | Exchange controls |
• | dealers in stocks, securities or currencies; |
• | securities traders that use a mark-to-market accounting method; |
• | banks and financial institutions; |
• | insurance companies; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | tax-exempt organizations; |
• | retirement plans, individual plans, individual retirement accounts and tax-deferred accounts; |
• | partnerships or other pass-through entities for U.S. federal income tax purposes and their partners or members; |
• | persons holding Common Shares as part of a hedging or conversion transaction straddle or other integrated or risk reduction transaction; |
• | persons who or that are, or may become, subject to the expatriation provisions of the Code; |
• | persons whose functional currency is not the U.S. dollar; and |
• | direct, indirect or constructive owners of 10% or more of the total combined voting power of all classes of our voting stock or 10% or more of the total value of shares of all classes of our stock. |
• | an individual citizen or resident of the United States; |
• | a corporation or other entity classified as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust, if (a) a court within the United States is able to exercise primary supervision over the administration of such trust and one or more "U.S. persons" (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (b) a valid election is in effect to be treated as a U.S. person for U.S. federal income tax purposes. |
F. | Dividends and paying agents |
G. | Statement by experts |
H. | Documents on display |
I. | Subsidiary information |
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
• | The Company's loans and receivables are comprised of cash and cash equivalents, trade and other receivables and restricted cash equivalents. |
• | Financial liabilities at FVTPL are currently comprised of the Company's warrant liability. |
• | Other financial liabilities include payables, accrued liabilities, and provision for restructuring costs. |
(in thousands) | Carrying amount | -30% | +30% | ||||||
$ | $ | $ | |||||||
Warrant liability | 3,634 | 1,792 | (1,504 | ) | |||||
Total impact on net income – (decrease) / increase | 1,792 | (1,504 | ) |
Item 12. | Description of Securities Other than Equity Securities |
A. | Debt securities |
B. | Warrants and rights |
C. | Other securities |
D. | American depositary shares |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
(a) | Audit Fees |
(b) | Audit-related Fees |
(c) | Tax Fees |
(d) | All Other Fees |
(e) | Audit Committee Pre-Approval Policies and Procedures |
(f) | Work performed by Full-time, Permanent Employees of Principal Accountant |
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. | Change in Registrant's Certifying Accountant |
Item 16G. | Corporate Governance |
Item 16H. | Mine Safety Disclosure |
Item 17 | Financial Statements |
Item 18. | Financial Statements |
Aeterna Zentaris Inc. |
Consolidated Statements of Financial Position |
(in thousands of US dollars) |
December 31, 2018 | December 31, 2017 | |||||
$ | $ | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents (note 7) | 14,512 | 7,780 | ||||
Trade and other receivables (note 8) | 294 | 221 | ||||
Inventory (note 9) | 240 | 554 | ||||
Prepaid expenses and other current assets (note 10) | 1,210 | 826 | ||||
Total current assets | 16,256 | 9,381 | ||||
Restricted cash equivalents (note 11) | 418 | 381 | ||||
Property, plant and equipment (note 12) | 65 | 101 | ||||
Deferred tax assets (note 20) | — | 3,479 | ||||
Identifiable intangible assets (note 13) | 62 | 90 | ||||
Other non-current assets | — | 150 | ||||
Goodwill (note 14) | 8,210 | 8,613 | ||||
Total Assets | 25,011 | 22,195 | ||||
LIABILITIES | ||||||
Current liabilities | ||||||
Payables and accrued liabilities (note 15) | 2,966 | 2,814 | ||||
Provision for restructuring and other costs (note 16) | 887 | 2,469 | ||||
Income taxes (note 22) | 1,669 | — | ||||
Current portion of deferred revenues (note 6) | 74 | 486 | ||||
Total current liabilities | 5,596 | 5,769 | ||||
Deferred revenues (note 6) | 258 | 55 | ||||
Warrant liability (note 17) | 3,634 | 3,897 | ||||
Employee future benefits (note 18) | 13,205 | 14,229 | ||||
Non-current portion of provision for restructuring and other costs (note 16) | 411 | 1,028 | ||||
Total liabilities | 23,104 | 24,978 | ||||
SHAREHOLDERS' EQUITY (DEFICIENCY) | ||||||
Share capital (note 19) | 222,335 | 222,335 | ||||
Other capital (note 19) | 89,342 | 88,772 | ||||
Deficit | (309,781 | ) | (314,161 | ) | ||
Accumulated other comprehensive income | 11 | 271 | ||||
Total shareholders' equity (deficiency) | 1,907 | (2,783 | ) | |||
Total liabilities and shareholders' equity | 25,011 | 22,195 |
/s/ Carolyn Egbert | /s/ Gérard Limoges | |
Carolyn Egbert Chair of the Board | Gérard Limoges Director |
Aeterna Zentaris Inc. |
Consolidated Statements of Changes in Shareholders' (Deficiency) Equity |
For the years ended December 31, 2018, 2017 and 2016 |
(in thousands of US dollars, except share data) |
Common shares (number of) 1 | Share capital | Other capital | Deficit | Accumulated other comprehensive income | Total | |||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||
Balance - January 1, 2018 | 16,440,760 | 222,335 | 88,772 | (314,161 | ) | 271 | (2,783 | ) | ||||||||||
Net income | — | — | — | 4,187 | — | 4,187 | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (260 | ) | (260 | ) | ||||||||||
Actuarial gain on defined benefit plans (note 18) | — | — | — | 193 | — | 193 | ||||||||||||
Comprehensive loss | — | — | — | 4,380 | (260 | ) | 4,120 | |||||||||||
Share-based compensation costs | — | — | 570 | — | — | 570 | ||||||||||||
Balance - December 31, 2018 | 16,440,760 | 222,335 | 89,342 | (309,781 | ) | 11 | 1,907 |
1 | Issued and paid in full. |
Common shares (number of) 1 | Share capital | Pre-funded warrants | Other capital | Deficit | Accumulated other comprehensive income (loss) | Total | |||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||||||
Balance - January 1, 2017 | 12,917,995 | 213,980 | — | 88,590 | (298,059 | ) | 1,701 | 6,212 | |||||||||||||
Net loss | — | — | — | — | (16,796 | ) | — | (16,796 | ) | ||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | (1,430 | ) | (1,430 | ) | ||||||||||||
Actuarial gain on defined benefit plans (note 18) | — | — | — | — | 694 | — | 694 | ||||||||||||||
Comprehensive loss | — | — | — | — | (16,102 | ) | (1,430 | ) | (17,532 | ) | |||||||||||
Share issuances pursuant to the exercise of pre-funded warrants (note 19) | 301,343 | 977 | — | — | — | — | 977 | ||||||||||||||
Share issuances in connection with "at-the-market" drawdowns (note 19) | 3,221,422 | 7,378 | — | — | — | — | 7,378 | ||||||||||||||
Share-based compensation costs | — | — | 182 | — | — | 182 | |||||||||||||||
Balance - December 31, 2017 | 16,440,760 | 222,335 | — | 88,772 | (314,161 | ) | 271 | (2,783 | ) |
1 | Issued and paid in full. |
Aeterna Zentaris Inc. |
Consolidated Statements of Changes in Shareholders' (Deficiency) Equity |
For the years ended December 31, 2018, 2017 and 2016 |
(in thousands of US dollars, except share data) |
Common shares (number of)1 | Share capital | Pre-funded warrants | Other capital | Deficit | Accumulated other comprehensive income (loss) | Total | ||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||
Balance - January 1, 2016 | 9,928,697 | 204,596 | — | 87,508 | (271,621 | ) | 1,132 | 21,615 | ||||||||||||
Net loss | — | — | — | — | (24,959 | ) | — | (24,959 | ) | |||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | 569 | 569 | |||||||||||||
Actuarial loss on defined benefit plan (note 18) | — | — | — | — | (1,479 | ) | — | (1,479 | ) | |||||||||||
Comprehensive loss | — | — | — | — | (26,438 | ) | 569 | (25,869 | ) | |||||||||||
Share issuances in connection with a public offering (note 19) | 1,150,000 | 3,377 | — | — | — | — | 3,377 | |||||||||||||
Pre-funded warrant issuances in connection with a public offering (note 19) | — | — | 2,789 | — | — | — | 2,789 | |||||||||||||
Share issuances pursuant to the exercise of pre-funded warrants (note 19) | 950,000 | 2,789 | (2,789 | ) | — | — | — | — | ||||||||||||
Share issuances in connection with "at-the-market" drawdowns (note 19) | 889,298 | 3,218 | — | — | — | — | 3,218 | |||||||||||||
Share-based compensation costs | 1,082 | — | — | 1,082 | ||||||||||||||||
Balance - December 31, 2016 | 12,917,995 | 213,980 | — | 88,590 | (298,059 | ) | 1,701 | 6,212 |
Aeterna Zentaris Inc. |
Consolidated Statements of Comprehensive Income (Loss) |
For the years ended December 31, 2018, 2017 and 2016 |
(in thousands of US dollars, except share and per share data) |
Years Ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Revenues | |||||||||
License fees (note 6) | 24,325 | 458 | 497 | ||||||
Product sales (note 6) | 2,167 | — | — | ||||||
Royalty income (note 6) | 184 | — | — | ||||||
Sales commission and other | 205 | 465 | 414 | ||||||
Total revenues | 26,881 | 923 | 911 | ||||||
Cost of sales | 2,104 | — | — | ||||||
Gross income | 24,777 | 923 | 911 | ||||||
Operating expenses (note 20) | |||||||||
Research and development costs | 2,932 | 10,704 | 16,495 | ||||||
General and administrative expenses | 8,894 | 8,198 | 7,147 | ||||||
Selling expenses | 3,109 | 5,095 | 6,745 | ||||||
Total operating expenses | 14,935 | 23,997 | 30,387 | ||||||
Income (loss) from operations | 9,842 | (23,074 | ) | (29,476 | ) | ||||
Settlements (note 27) | (1,400 | ) | — | — | |||||
Gain (loss) due to changes in foreign currency exchange rates | 656 | 502 | (70 | ) | |||||
Change in fair value of warrant liability (note 17) | 263 | 2,222 | 4,437 | ||||||
Other finance income | 278 | 75 | 150 | ||||||
Net finance income (costs) | 1,197 | 2,799 | 4,517 | ||||||
Income (loss) before income taxes | 9,639 | (20,275 | ) | (24,959 | ) | ||||
Income tax (expense) recovery (note 22) | (5,452 | ) | 3,479 | — | |||||
Net income (loss) | 4,187 | (16,796 | ) | (24,959 | ) | ||||
Other comprehensive income (loss): | |||||||||
Items that may be reclassified subsequently to profit or loss: | |||||||||
Foreign currency translation adjustments | (260 | ) | (1,430 | ) | 569 | ||||
Items that will not be reclassified to profit or loss: | |||||||||
Actuarial gain (loss) on defined benefit plans | 193 | 694 | (1,479 | ) | |||||
Comprehensive income (loss) | 4,120 | (17,532 | ) | (25,869 | ) | ||||
Net income (loss) per share (basic) (note 26) | 0.25 | (1.12 | ) | (2.41 | ) | ||||
Net income (loss) per share (diluted) (note 26) | 0.24 | (1.12 | ) | (2.41 | ) | ||||
Weighted average number of shares outstanding (note 26) | |||||||||
Basic | 16,440,760 | 14,958,704 | 10,348,879 | ||||||
Diluted | 17,034,812 | 14,958,704 | 10,348,879 |
Aeterna Zentaris Inc. |
Consolidated Statements of Cash Flows |
For the years ended December 31, 2018, 2017 and 2016 |
(in thousands of US dollars) |
Years ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
$ | $ | $ | ||||||
Cash flows from operating activities | ||||||||
Net income (loss) for the year | 4,187 | (16,796 | ) | (24,959 | ) | |||
Items not affecting cash and cash equivalents: | ||||||||
Change in fair value of warrant liability (note 17) | (263 | ) | (2,222 | ) | (4,437 | ) | ||
Provision for restructuring and other costs (note 16) | (136 | ) | 3,083 | (8 | ) | |||
Recapture of inventory previously written off | — | (643 | ) | — | ||||
Depreciation, amortization and impairment (notes 12 and 13) | 58 | 94 | 280 | |||||
Deferred income taxes (note 22) | 3,479 | (3,479 | ) | — | ||||
Share-based compensation costs | 570 | 182 | 1,082 | |||||
Employee future benefits (note 18) | 316 | 246 | 382 | |||||
Amortization of deferred revenues (note 6) | (609 | ) | (458 | ) | (345 | ) | ||
Foreign exchange (gain) loss on items denominated in foreign currencies | (652 | ) | (553 | ) | 87 | |||
Gain on disposal of property, plant and equipment | (9 | ) | (136 | ) | (1 | ) | ||
Other non-cash items | 35 | (19 | ) | (83 | ) | |||
Transaction cost allocated to warrants issued (note 19) | — | — | 56 | |||||
Changes in operating assets and liabilities (note 21) | (151 | ) | (2,212 | ) | (1,064 | ) | ||
Net cash provided by/(used in) operating activities | 6,825 | (22,913 | ) | (29,010 | ) | |||
Cash flows from financing activities | ||||||||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | — | 7,788 | 9,924 | |||||
Proceeds from warrants exercised (note 19) | — | 242 | — | |||||
Net cash provided by financing activities | — | 8,030 | 9,924 | |||||
Cash flows from investing activities | ||||||||
Purchase of property, plant and equipment (note 12) | (9 | ) | (4 | ) | (66 | ) | ||
Proceeds for disposals of property, plant and equipment (note 12) | 24 | 161 | 2 | |||||
Change in restricted cash equivalents | (50 | ) | 150 | (250 | ) | |||
Net cash provided by (used in) investing activities | (35 | ) | 307 | (314 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (58 | ) | 357 | (51 | ) | |||
Net change in cash and cash equivalents | 6,732 | (14,219 | ) | (19,451 | ) | |||
Cash and cash equivalents – beginning of year (note 6) | 7,780 | 21,999 | 41,450 | |||||
Cash and cash equivalents – end of year (note 6) | 14,512 | 7,780 | 21,999 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Methods | Annual rates and period | |||
Equipment | Declining balance and straight-line | 20% | ||
Furniture and fixtures | Declining balance and straight-line | 10% and 20% | ||
Computer equipment | Straight-line | 25% and 331/3% | ||
Leasehold improvements | Straight-line | Remaining lease term |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Cash on hand and balances with banks | 3,501 | 7,099 | ||||
Interest-bearing deposits with maturities of three months or less | 11,011 | 681 | ||||
14,512 | 7,780 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Trade accounts receivable (net of allowance for doubtful accounts of $55 (2017 - $5)) | 142 | 20 | ||||
Value added tax | 49 | 186 | ||||
Other receivables | 103 | 15 | ||||
294 | 221 |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Finished goods | — | 554 | ||||
Work in process | 240 | — | ||||
240 | 554 |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Prepaid insurance | 832 | 410 | ||||
Prepaid inventory | 175 | 87 | ||||
Other | 203 | 329 | ||||
1,210 | 826 | |||||
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Cost | |||||||||||||||
Equipment | Furniture and fixtures | Computer equipment | Leasehold improvements | Total | |||||||||||
$ | $ | $ | $ | $ | |||||||||||
At January 1, 2017 | 3,919 | 19 | 737 | 37 | 4,712 | ||||||||||
Additions | 2 | — | 2 | — | 4 | ||||||||||
Disposals / Retirements | (2,160 | ) | — | (43 | ) | — | (2,203 | ) | |||||||
Impact of foreign exchange rate changes | 507 | — | 94 | 5 | 606 | ||||||||||
At December 31, 2017 | 2,268 | 19 | 790 | 42 | 3,119 | ||||||||||
Additions | 1 | — | 8 | — | 9 | ||||||||||
Disposals / Retirements | (758 | ) | — | (137 | ) | — | (895 | ) | |||||||
Reclassifications | 11 | (11 | ) | — | — | — | |||||||||
Impact of foreign exchange rate changes | (64 | ) | (1 | ) | (24 | ) | (2 | ) | (91 | ) | |||||
At December 31, 2018 | 1,458 | 7 | 637 | 40 | 2,142 |
Accumulated depreciation | ||||||||||||||
Equipment | Furniture and fixtures | Computer equipment | Leasehold improvements | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
At January 1, 2017 | 3,799 | 2 | 692 | 15 | 4,508 | |||||||||
Disposals / Retirements | (2,135 | ) | — | (43 | ) | — | (2,178 | ) | ||||||
Depreciation expense | 50 | 2 | 30 | 18 | 100 | |||||||||
Impact of foreign exchange rate changes | 496 | — | 90 | 2 | 588 | |||||||||
At December 31, 2017 | 2,210 | 4 | 769 | 35 | 3,018 | |||||||||
Disposals / Retirements | (752 | ) | — | (137 | ) | — | (889 | ) | ||||||
Depreciation expense | 19 | 1 | 14 | 1 | 35 | |||||||||
Impact of foreign exchange rate changes | (63 | ) | — | (22 | ) | (2 | ) | (87 | ) | |||||
At December 31, 2018 | 1,414 | 5 | 624 | 34 | 2,077 |
Carrying amount | ||||||||||||||
Equipment | Furniture and fixtures | Computer equipment | Leasehold improvements | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
At December 31, 2017 | 58 | 15 | 21 | 7 | 101 | |||||||||
At December 31, 2018 | 44 | 2 | 13 | 6 | 65 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Year ended December 31, 2018 | Year ended December 31, 2017 | |||||||||||||||||
Cost | Accumulated amortization | Carrying value | Cost | Accumulated amortization | Carrying value | |||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||
Balances – Beginning of the year | 34,246 | (34,156 | ) | 90 | 30,032 | (29,962 | ) | 70 | ||||||||||
Additions | — | — | — | — | — | — | ||||||||||||
Impairment (loss) reversal* | — | — | — | — | 44 | 44 | ||||||||||||
Recurring amortization expense* | — | (23 | ) | (23 | ) | — | (38 | ) | (38 | ) | ||||||||
Impact of foreign exchange rate changes | (1,603 | ) | 1,598 | (5 | ) | 4,214 | (4,200 | ) | 14 | |||||||||
Balances – End of the year | 32,643 | (32,581 | ) | 62 | 34,246 | (34,156 | ) | 90 |
Cost | Accumulated impairment loss | Carrying amount | |||||||
$ | $ | $ | |||||||
At January 1, 2017 | 7,553 | — | 7,553 | ||||||
Impact of foreign exchange rate changes | 1,060 | — | 1,060 | ||||||
At December 31, 2017 | 8,613 | — | 8,613 | ||||||
Impact of foreign exchange rate changes | (403 | ) | — | (403 | ) | ||||
At December 31, 2018 | 8,210 | — | 8,210 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Trade accounts payable | 1,282 | 1,222 | ||||
Accrued research and development costs | 26 | 127 | ||||
Salaries, employment taxes and benefits | 183 | 390 | ||||
Financing of insurance premiums (a) | 738 | — | ||||
Other accrued liabilities | 737 | 1,075 | ||||
2,966 | 2,814 |
(a) | Represents financing of the Company's 2019 insurance premiums, carrying interest at 6.5% and repayable in eight equal monthly installments commencing January 31, 2019. |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Other provision | Cetrotide(R) onerous contracts | 2017 German Restructuring: onerous lease | 2017 German Restructuring: severance | Total | |||||||||||
$ | $ | $ | $ | ||||||||||||
January 1, 2017 | 158 | 574 | — | — | 732 | ||||||||||
Provision recognized | — | — | 1,113 | 2,002 | 3,115 | ||||||||||
Utilization of provision | (152 | ) | (145 | ) | (19 | ) | (138 | ) | (454 | ) | |||||
Change in the provision | — | (20 | ) | 10 | (41 | ) | (51 | ) | |||||||
Unwinding of discount and impact of foreign exchange rate changes | 3 | 64 | 104 | (16 | ) | 155 | |||||||||
December 31, 2017 | 9 | 473 | 1,208 | 1,807 | 3,497 | ||||||||||
Provision recognized | — | 317 | — | — | 317 | ||||||||||
Utilization of provision | (9 | ) | (222 | ) | (467 | ) | (1,202 | ) | (1,900 | ) | |||||
Change in the provision | — | — | (21 | ) | (432 | ) | (453 | ) | |||||||
Unwinding of discount and impact of foreign exchange rate changes | — | (21 | ) | (57 | ) | (85 | ) | (163 | ) | ||||||
December 31, 2018 | — | 547 | 663 | 88 | 1,298 | ||||||||||
Less: current portion | — | (136 | ) | (663 | ) | (88 | ) | (887 | ) | ||||||
Non-current portion | — | 411 | — | — | 411 |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Balance – Beginning of the year | 3,897 | 6,854 | 10,891 | ||||||
Share purchase warrants issued during the year (note 19) | — | — | 400 | ||||||
Share purchase warrants exercised during the year | — | (735 | ) | — | |||||
Change in fair value of share purchase warrants | (263 | ) | (2,222 | ) | (4,437 | ) | |||
Balance - End of the year | 3,634 | 3,897 | 6,854 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Years ended December 31, | ||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||
Number | Weighted average exercise price ($) | Number | Weighted average exercise price ($) | Number | Weighted average exercise price ($) | |||||||||||||
Balance – Beginning of the year | 3,417,840 | 7.59 | 3,779,245 | 9.66 | 2,842,309 | 11.30 | ||||||||||||
Issued (note 19) | — | — | — | — | 945,000 | 4.70 | ||||||||||||
Exercised | — | — | (331,730 | ) | * | 1.07 | — | — | ||||||||||
Expired (note 19) | (25,996 | ) | 185.00 | (29,675 | ) | 345.00 | (8,064 | ) | 4.23 | |||||||||
Balance – End of the year | 3,391,844 | 6.23 | 3,417,840 | 7.59 | 3,779,245 | 9.66 |
Exercise price ($) | Number | Weighted average remaining contractual life (years) | |||
1.07 | 115,844 | 1.19 | |||
4.70 | 945,000 | 1.34 | |||
7.10 | 2,331,000 | 1.96 | |||
3,391,844 | 1.76 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
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 | |||||||||||||
($) | ($) | (a) | (b) | (c) | (d) | ||||||||||||||
March 2015 Series A Warrants (e) | 115,844 | 2.94 | 1.07 | 2.58 | % | 81.81 | % | 1.19 | 0.00 | % | |||||||||
December 2015 Warrants | 2,331,000 | 2.94 | 7.10 | 2.47 | % | 122.00 | % | 1.96 | 0.00 | % | |||||||||
November 2016 Warrants (f) | 945,000 | 2.94 | 4.70 | 2.56 | % | 78.95 | % | 1.34 | 0.00 | % |
(a) | Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the warrants. |
(b) | Based on the historical volatility of the Company's stock price over the most recent period consistent with the expected life of the warrants, as well as on future expectations. |
(c) | Based upon time to expiry from the reporting period date. |
(d) | The Company has not paid dividends and it does not intend to pay dividends in the foreseeable future. |
(e) | For the March 2015 Series A Warrants, the inputs and assumptions applied to the Black-Scholes option pricing model have been further adjusted to take into consideration the value attributed to certain anti-dilution provisions. Specifically, the weighted average exercise price is subject to adjustment (see note 19 - Share and other capital). |
(f) | For the November 2016 Warrants, the Company reduced the fair value of these warrants to take into consideration the fair value of the $10 call option, which was also calculated using the Black-Scholes pricing model. (see note 19 - Share and other capital). |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Pension benefit plans Years ended December 31, | Other benefit plans Years ended December 31, | |||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||
Balances – Beginning of the year | 14,145 | 13,197 | 12,375 | 84 | 217 | 281 | ||||||||||||
Current service cost | 66 | 107 | 87 | 6 | 14 | 13 | ||||||||||||
Interest cost | 224 | 237 | 282 | 1 | 3 | — | ||||||||||||
Actuarial (gain) loss arising from changes in financial assumptions | (193 | ) | (694 | ) | 1,479 | 19 | (115 | ) | — | |||||||||
Benefits paid | (492 | ) | (485 | ) | (399 | ) | (2 | ) | (66 | ) | (60 | ) | ||||||
Impact of foreign exchange rate changes | (650 | ) | 1,783 | (627 | ) | (3 | ) | 31 | (17 | ) | ||||||||
Balances – End of the year | 13,100 | 14,145 | 13,197 | 105 | 84 | 217 | ||||||||||||
Amounts recognized: | ||||||||||||||||||
In net loss | (290 | ) | (344 | ) | (369 | ) | (26 | ) | 98 | (13 | ) | |||||||
In other comprehensive income (loss) | 843 | (1,089 | ) | (852 | ) | 3 | (31 | ) | 17 |
Pension benefit plans | Other benefit plans | |||||||||||
Years ended December 31, | Years ended December 31, | |||||||||||
Actuarial assumptions | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||
% | % | % | % | % | % | |||||||
Discount rate | 1.90 | 1.70 | 1.60 | 1.90 | 1.70 | 1.60 | ||||||
Pension benefits increase | 1.80 | 1.80 | 1.80 | 1.80 | 1.80 | 1.80 | ||||||
Rate of compensation increase | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 |
2018 | 2017 | 2016 | ||||
Retiring at the end of the reporting period: | ||||||
Male | 20 | 20 | 20 | |||
Female | 24 | 24 | 24 | |||
Retiring 20 years after the end of the reporting period: | ||||||
Male | 28 | 22 | 22 | |||
Female | 31 | 26 | 26 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
$ | |||
2019 | 453 | ||
2020 | 458 | ||
2021 | 463 | ||
2022 | 468 | ||
2023 | 476 | ||
Thereafter | 13,658 | ||
15,976 |
Assumption | Increase | Decrease | ||
Change interest rate by 0.25% | (467 | ) | 498 | |
Change salary rate by 0.25% | 19 | (17 | ) | |
Change pension by 0.25% | 372 | (355 | ) | |
Change mortality by 1 year | 464 | (463 | ) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Years ended December 31, | ||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||
US dollar-denominated options | Number | Weighted average exercise price (US$) | Number | Weighted average exercise price (US$) | Number | Weighted average exercise price (US$) | ||||||||||||
Balance – Beginning of the year | 712,415 | 4.66 | 966,539 | 7.23 | 272,874 | 25.88 | ||||||||||||
Granted | 426,000 | 1.74 | 390,000 | 2.05 | 713,573 | 3.47 | ||||||||||||
Forfeited | (249,599 | ) | 3.23 | (643,271 | ) | 6.02 | (10,034 | ) | 99.22 | |||||||||
Cancelled | — | — | — | — | (9,874 | ) | 157.11 | |||||||||||
Expired | — | — | (853 | ) | 704.88 | — | — | |||||||||||
Balance – End of period | 888,816 | 3.66 | 712,415 | 4.66 | 966,539 | 7.23 |
Years ended December 31, | ||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||
Canadian dollar-denominated stock options | Number | Weighted average exercise price (CAN$) | Number | Weighted average exercise price (CAN$) | Number | Weighted average exercise price (CAN$) | ||||||||||||
Balance – Beginning of the year | 1,503 | 605.84 | 1,858 | 820.27 | 3,787 | 845.46 | ||||||||||||
Forfeited | (104 | ) | 668.65 | — | — | (1,028 | ) | 967.63 | ||||||||||
Cancelled | — | — | — | — | (901 | ) | 758 | |||||||||||
Expired | (530 | ) | 367.70 | (355 | ) | 1,728.15 | — | — | ||||||||||
Balance – End of the year | 869 | 743.56 | 1,503 | 605.84 | 1,858 | 820.27 |
Total US$ share-based awards as at December 31, 2018 | |||||||||
Exercise price (US$) | Number | Weighted average remaining contractual life (years) | Weighted average exercise price (US$) | ||||||
1.46 to 1.79 | 211,000 | 8.62 | 1.71 | ||||||
1.80 to 2.11 | 490,000 | 6.41 | 2.06 | ||||||
2.12 to 3.50 | 157,148 | 4.75 | 3.46 | ||||||
3.51 to 4.58 | 26,000 | 3.97 | 4.58 | ||||||
4.59 to 1,044.00 | 4,668 | 2.77 | 260.87 | ||||||
888,816 | 6.55 | 3.66 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Total exercisable US$ share-based awards as at December 31, 2018 | |||||||||
Exercise price (US$) | Number | Weighted average remaining contractual life (years) | Weighted average exercise price (US$) | ||||||
1.46 to 1.79 | 161,000 | 9.35 | 1.79 | ||||||
1.80 to 2.11 | 130,000 | 5.62 | 2.05 | ||||||
2.12 to 3.50 | 104,774 | 4.75 | 3.46 | ||||||
3.51 to 4.58 | 26,000 | 3.97 | 4.58 | ||||||
4.59 to 1,044.00 | 4,668 | 2.77 | 260.87 | ||||||
426,442 | 6.68 | 5.29 |
CAN$ options outstanding and exercisable as at December 31, 2018 | |||||||||
Exercise price (CAN$) | Number | Weighted average remaining contractual life (years) | Weighted average exercise price (CAN$) | ||||||
570.00 to 741.00 | 428 | 0.94 | 570.00 | ||||||
741.01 to 912.00 | 441 | 1.87 | 912.00 | ||||||
869 | 1.41 | 743.56 |
Years ended December 31, | ||||||
2018 | 2017 | |||||
Expected dividend yield | (a) | 0.00 | % | 0.00 | % | |
Expected volatility | (b) | 129.23 | % | 137.60 | % | |
Risk-free annual interest rate | (c) | 2.51 | % | 1.53 | % | |
Expected life (years) | (d) | 3.60 | 3.26 | |||
Weighted average share price | $1.74 | $2.05 | ||||
Weighted average exercise price | $1.74 | $2.05 | ||||
Weighted average grant date fair value | $1.39 | $1.62 |
(a) | The Company has not paid dividends and it does not intend to pay dividends in the foreseeable future. |
(b) | Based on the historical volatility of the Company's stock price over the most recent period consistent with the expected life of the stock options, as well as on future expectations. |
(c) | Based on United States Treasury Government Bond interest rates with a term that is consistent with the expected life of the stock options. |
(d) | Based upon historical data related to the exercise of stock options, on post-vesting employment terminations and on future expectations related to exercise behavior. |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Key management personnel compensation(1) | |||||||||
Salaries and short-term employee benefits | 2,388 | 2,081 | 2,430 | ||||||
Consultants fees | 62 | — | — | ||||||
Termination benefits | 356 | — | — | ||||||
Post-employment benefits | 147 | 59 | 78 | ||||||
Share-based compensation costs | 462 | 87 | 1,051 | ||||||
3,415 | 2,227 | 3,559 | |||||||
Other employees compensation: | |||||||||
Salaries and short-term employee benefits | 1,325 | 3,584 | 3,574 | ||||||
Termination benefits (note 16) | — | 1,806 | — | ||||||
Post-employment benefits | 275 | 441 | 500 | ||||||
Share-based compensation costs | 108 | 95 | 31 | ||||||
1,708 | 5,926 | 4,105 | |||||||
Professional fees | 6,421 | 7,153 | 7,157 | ||||||
Insurance | 1,303 | 949 | 870 | ||||||
Third-party R&D | 498 | 3,758 | 11,796 | ||||||
Contracted sales force | 256 | 22 | 14 | ||||||
Travel | 256 | 831 | 1,185 | ||||||
Marketing services | 176 | 698 | 5 | ||||||
Laboratory supplies | 139 | 2 | 30 | ||||||
Other goods and services | 342 | 162 | 160 | ||||||
Leasing costs, net of sublease receipts of $121 in 2018, $359 in 2017 and $345 in 2016(2) | 344 | 2,247 | 1,131 | ||||||
Transaction costs related to share purchase warrants | — | — | 56 | ||||||
Depreciation and amortization | 60 | 138 | 195 | ||||||
Impairment (reversal) losses | — | (44 | ) | 85 | |||||
Operating foreign exchange (gains) losses | 17 | (72 | ) | 39 | |||||
9,812 | 15,844 | 22,723 | |||||||
14,935 | 23,997 | 30,387 |
(1) | Key management includes the Company's executive management team and directors. |
(2) | Leasing costs also include changes in the onerous lease provision (note 16 - provisions for restructuring and other costs), other than attributable to the unwinding of the discount. |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Changes in operating assets and liabilities: | |||||||||
Trade and other receivables | (95 | ) | 158 | 228 | |||||
Inventory | 314 | — | — | ||||||
Prepaid expenses and other current assets | 448 | (343 | ) | (45 | ) | ||||
Other non-current assets | 150 | 39 | (233 | ) | |||||
Payables and accrued liabilities | (586 | ) | (1,080 | ) | (199 | ) | |||
Taxes payable | 1,669 | — | — | ||||||
Deferred revenues | 400 | — | 555 | ||||||
Provision for restructuring and other costs (note 16) | (1,957 | ) | (435 | ) | (911 | ) | |||
Employee future benefits (note 18) | (494 | ) | (551 | ) | (459 | ) | |||
(151 | ) | (2,212 | ) | (1,064 | ) |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Current tax (expense) recovery | — | — | — | ||||||
Deferred tax: | |||||||||
Origination and reversal of temporary differences | (4,003 | ) | 6,395 | 9,199 | |||||
Adjustments in respect of prior years | 742 | (149 | ) | 36 | |||||
Change in unrecognized tax assets | (2,191 | ) | (2,767 | ) | (9,235 | ) | |||
Income tax (expense) recovery | (5,452 | ) | 3,479 | — |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
Combined Canadian federal and provincial statutory income tax rate | 26.7 | % | 26.8 | % | 26.9 | % |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Income tax (expense) recovery based on combined statutory income tax rate | (2,574 | ) | 5,434 | 6,714 | |||||
Change in unrecognized tax assets | (1,963 | ) | (2,701 | ) | (9,235 | ) | |||
Change in unrecognized tax assets related to OCI | (188 | ) | (228 | ) | 436 | ||||
Share issuance costs | (40 | ) | 164 | 224 | |||||
Permanent difference attributable to the use of local currency for tax reporting | 792 | (71 | ) | (30 | ) | ||||
Change in enacted rates used | (58 | ) | (358 | ) | (16 | ) | |||
Permanent difference attributable to net change in fair value of warrant liability | 70 | 595 | 1,194 | ||||||
Share-based compensation costs | (152 | ) | (49 | ) | (291 | ) | |||
Difference in statutory income tax rate of foreign subsidiaries | (917 | ) | 768 | 972 | |||||
Adjustments in respect of prior years | (372 | ) | (149 | ) | 36 | ||||
Other | (50 | ) | 74 | (4 | ) | ||||
(5,452 | ) | 3,479 | — |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Germany | 16,297 | (13,950 | ) | (19,179 | ) | ||||
Canada | (5,504 | ) | (5,592 | ) | (5,659 | ) | |||
United States | (1,154 | ) | (733 | ) | (121 | ) | |||
9,639 | (20,275 | ) | (24,959 | ) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Deferred tax assets | ||||||
Current: | ||||||
Operating losses carried forward | — | 3,479 | ||||
Non-current: | ||||||
Operating losses carried forward | 764 | 696 | ||||
Intangible assets | 3,646 | 4,812 | ||||
4,410 | 8,987 | |||||
Deferred tax liabilities | ||||||
Current: | ||||||
Deferred revenues | 38 | — | ||||
Restricted cash | 153 | — | ||||
Payables and accrued liabilities | 95 | — | ||||
286 | — | |||||
Non-current: | ||||||
Property, plant and equipment | 3 | 5 | ||||
Deferred revenues | 4,074 | 5,316 | ||||
Other | 47 | 187 | ||||
4,124 | 5,508 | |||||
4,410 | 5,508 | |||||
Deferred tax assets (liabilities), net | — | 3,479 |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Deferred tax assets | ||||||
Current: | ||||||
Deferred revenues and other provisions | 649 | 584 | ||||
649 | 584 | |||||
Non-current: | ||||||
Deferred revenues | — | — | ||||
Operating losses carried forward | 81,731 | 82,421 | ||||
SR&ED Pool | 9,148 | 9,167 | ||||
Unused tax credits | 5,894 | 8,019 | ||||
Employee future benefits | 2,048 | 2,296 | ||||
Property, plant and equipment | 448 | 407 | ||||
Share issuance expenses | 467 | 841 | ||||
Other | 241 | 335 | ||||
99,977 | 103,486 | |||||
Unrecognized deferred tax assets | 100,626 | 104,070 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Canada | ||||||
Federal | Provincial | |||||
$ | $ | |||||
2028 | 7,880 | 6,494 | ||||
2029 | 4,791 | 4,773 | ||||
2030 | 4,104 | 4,089 | ||||
2031 | 1,753 | 1,737 | ||||
2032 | 4,250 | 4,250 | ||||
2033 | 3,721 | 3,721 | ||||
2034 | 4,153 | 4,153 | ||||
2035 | 10,418 | 10,452 | ||||
2036 | 10,592 | 10,592 | ||||
2037 | 7,343 | 7,343 | ||||
2038 | 6,557 | 6,557 | ||||
65,562 | 64,161 |
United States | |||
$ | |||
2028 | 369 | ||
2029 | 178 | ||
2034 | 151 | ||
2035 | 447 | ||
2036 | 195 | ||
2037 | 709 | ||
2038 | 1,273 | ||
3,322 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, 2018 | Financial assets at amortized cost | Financial liabilities at FVTPL | Financial liabilities at amortized cost | Total | |||||||
$ | $ | $ | $ | ||||||||
Cash and cash equivalents (note 7) | 14,512 | — | — | 14,512 | |||||||
Trade and other receivables (note 8) | 245 | — | — | 245 | |||||||
Restricted cash equivalents (note 11) | 418 | — | — | 418 | |||||||
Payables and accrued liabilities (note 15) | — | — | (2,940 | ) | (2,940 | ) | |||||
Provision for restructuring and other costs (note 16) | — | — | (1,298 | ) | (1,298 | ) | |||||
Warrant liability (note 17) | — | (3,634 | ) | — | (3,634 | ) | |||||
15,175 | (3,634 | ) | (4,238 | ) | 7,303 |
December 31, 2017 | Financial assets at amortized cost | Financial liabilities at FVTPL | Financial liabilities at amortized cost | Total | ||||||||
$ | $ | $ | $ | |||||||||
Cash and cash equivalents (note 7) | 7,780 | — | — | 7,780 | ||||||||
Trade and other receivables (note 8) | 35 | — | — | 35 | ||||||||
Restricted cash equivalents (note 11) | 381 | — | — | 381 | ||||||||
Payables and accrued liabilities (note 15) | — | — | (2,687 | ) | (2,687 | ) | ||||||
Provision for restructuring and other costs (note 16) | — | — | (3,497 | ) | (3,497 | ) | ||||||
Warrant liability (note 17) | — | (3,897 | ) | — | (3,897 | ) | ||||||
8,196 | (3,897 | ) | (6,184 | ) | (1,885 | ) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Carrying amount | -30% | +30% | |||||||
$ | $ | $ | |||||||
Warrant liability | 3,634 | 1,792 | (1,504 | ) | |||||
Total impact on net income – (decrease) / increase | 1,792 | (1,504 | ) |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Ireland | 24,910 | — | — | ||||||
United States | 1,416 | 452 | 410 | ||||||
China | 275 | 262 | 249 | ||||||
Singapore | — | — | 101 | ||||||
British Virgin Islands | 280 | 206 | 100 | ||||||
Other | — | 3 | 51 | ||||||
26,881 | 923 | 911 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
December 31, | ||||||
2018 | 2017 | |||||
$ | $ | |||||
Germany | 8,599 | 12,552 | ||||
United States | 153 | 102 | ||||
Canada | 3 | 160 | ||||
8,755 | 12,814 |
* | Non-current assets include property, plant and equipment, identifiable intangible assets and goodwill. |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Company 1 | 26,127 | — | — | ||||||
Company 2 | — | — | 20 | ||||||
Company 3 | 275 | 262 | 249 | ||||||
Company 4 | — | 323 | 222 | ||||||
Company 5 | — | 129 | 167 | ||||||
Company 6 | — | — | 101 | ||||||
Company 7 | 280 | 206 | 100 |
Years ended December 31, | |||||||||
2018 | 2017 | 2016 | |||||||
$ | $ | $ | |||||||
Net income (loss) | 4,187 | (16,796 | ) | (24,959 | ) | ||||
Basic weighted average number of shares outstanding | 16,440,760 | 14,958,704 | 10,348,879 | ||||||
Diluted weighted average number of shares outstanding | 17,034,812 | 14,958,704 | 10,348,879 | ||||||
Items excluded from the calculation of diluted net income (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 | 889,685 | 713,918 | 968,397 | ||||||
Share purchase warrants | 3,391,844 | 3,417,840 | 3,779,245 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Minimum lease payments | Minimum sublease receipts | Service and manufacturing | Total | |||||||||
$ | $ | $ | $ | |||||||||
Less than 1 year | 408 | (117 | ) | 2,180 | 2,471 | |||||||
1 - 3 years | 533 | (24 | ) | — | 509 | |||||||
4 - 5 years | 60 | — | — | 60 | ||||||||
More than 5 years | 5 | — | — | 5 | ||||||||
Total | 1,006 | (141 | ) | 2,180 | 3,045 |
Aeterna Zentaris Inc. |
Notes to Consolidated Financial Statements |
As at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 |
(tabular amounts in thousands of US dollars, except share/option/warrant/DSU and per share/option/warrant/DSU data and as otherwise noted) |
Item 19. | Exhibits |
1.1 | ||
1.2 | ||
1.3 | ||
1.4 | ||
2.1 | ||
2.2 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
4.8 | ||
4.9 | ||
4.10 | ||
4.11 | ||
4.12 | ||
4.13 | ||
8.1 | ||
11.1 | ||
11.2 | ||
11.3 | ||
12.1 | ||
12.2 | ||
13.1 | ||
13.2 | ||
15.1 |
AETERNA ZENTARIS INC. |
/s/ Michael V. Ward |
Michael V. Ward |
President and Chief Executive Officer |
A. | The Board of Directors of the Corporation, in the exercise of its fiduciary duties to the Corporation, has determined that it is advisable to implement a shareholder rights plan to ensure, to the extent possible, that all shareholders of the Corporation are treated fairly in connection with any take-over offer or other acquisition of control of the Corporation; |
B. | The Board of Directors of the Corporation approved a shareholder rights plan of the Corporation on March 29, 2016, which was approved, ratified and confirmed by the shareholders at the annual and special meeting of shareholders of the Corporation on May 10, 2016 (the “Original Agreement”). |
C. | On March 26, 2019, the Board of Directors approved certain amendments to update and restate the Original Agreement in its entirety to be on the terms and conditions and in the form of this agreement to take effect immediately upon receipt of approval of the shareholders at the annual and special meeting of shareholders which was held on [May 8], 2019; |
D. | The Board of Directors had previously: |
(a) | authorized and declared a distribution of one right (a “Right”) in respect of each Share outstanding at the Record Time; |
(b) | authorized the issuance of one Right in respect of each Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time; and |
(c) | authorized the issuance of Rights Certificates to holders of Rights pursuant to the terms and subject to the conditions set forth herein. |
A. | Each Right entitles the holder thereof, after the Separation Time, to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth herein. |
B. | The Corporation desires to confirm the appointment of Computershare Trust Company of Canada as the Rights Agent to act on behalf of the Corporation, and the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred to herein. |
Section 1.1 | Certain Definitions |
(a) | “Acquiring Person” shall mean any Person who is at any time after the Effective Date the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided, however, that the term “Acquiring Person” shall not include: |
(i) | the Corporation or any corporation controlled by the Corporation; |
(ii) | any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of one or any combination of: |
(A) | a Voting Share Reduction; |
(B) | a Permitted Bid Acquisition; |
(C) | an Exempt Acquisition; |
(D) | a Pro Rata Acquisition; or |
(E) | a Convertible Security Acquisition; |
(iii) | an underwriter or member of a banking or selling group acting in such capacity that becomes the Beneficial Owner of 20% or more of the Voting Shares in connection with a distribution of securities pursuant to a prospectus or by way of private placement; or |
(iv) | a Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or more of the outstanding Voting Shares determined as of the Record Time, provided, however, that this exemption shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time, (A) cease to own 20 percent or more of the outstanding Voting Shares, or (B) become the Beneficial Owner of additional Voting Shares that increases its Beneficial Ownership of Voting Shares by more than one percent of the number of Voting Shares outstanding as at the Record Time, other than through one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition; or |
(v) | for a period of 10 calendar days after the Disqualification Date (as defined below), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Section 1.1(e)(vi) solely because such Person is making or has announced a current intention to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person. For the purposes of this definition, “Disqualification Date” means the first date of a public announcement of facts indicating that any Person is making, or has announced a current intention to make a Take-over Bid. |
(b) | “Affiliate” shall mean, when used to indicate a relationship with a specified body corporate, a Person that directly or indirectly through one or more intermediaries controls, or is a body corporate controlled by, or under common control with, such specified body corporate. |
(c) | “Agreement” means this agreement as may be amended, modified or supplemented from time to time. |
(d) | “Associate” shall mean, when used to indicate a relationship with a specified Person, (i) a spouse of that Person, (ii) any Person of the same or opposite sex with whom that Person is living in a conjugal relationship outside marriage, (iii) any relative of that Person if that relative has the same residence as that Person or (iv) any relative of such spouse or other Person referred to in the immediately preceding clauses (i), (ii) or (iii) above, if that relative has the same residence as the specified Person. |
(e) | A Person shall be deemed the “Beneficial Owner” of, and to have “Beneficial Ownership” of, and to “Beneficially Own”: |
(i) | any securities of which such Person or any of such Person’s Affiliates or Associates is owner at law or in equity; |
(ii) | any securities which the Person or any of such Person’s Affiliates or Associates has the right or obligation to acquire within 60 days (where such right is exercisable within a period of 60 days whether or not upon the occurrence of a contingency or the making of a payment) pursuant to any Convertible Security, agreement, arrangement, pledge or understanding, whether or not in writing (other than (A) customary agreements with and between underwriters and/or banking group and/or selling group members with respect to a distribution of securities (B) pledges of securities in the ordinary course of the pledgee’s business) or (C) agreements pursuant to an amalgamation, merger, arrangement, business combination or other similar transaction (statutory or otherwise, but for greater certainty not including a Take-over Bid) that are conditional upon the approval of the shareholders of the Corporation to be obtained prior to such Person acquiring such securities; |
(iii) | any securities which are subject to a lock-up or similar agreement to tender or deposit them into any Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other person acting jointly or in concert with such Person; and |
(iv) | any securities that are Beneficially Owned within the meaning of clause (i), (ii) or (iii) of this Section 1.1(e) by any other Person with whom such Person is acting jointly or in concert; |
(v) | such security has been agreed to be deposited or tendered pursuant to a Permitted Lock-up Agreement or is otherwise deposited or tendered pursuant to any Take-over Bid made by such Person, made by any of such Person’s Affiliates or Associates or made by any other Person acting jointly or in concert with such Person, but only until such time as such deposited or tendered security has been taken up or paid for, whichever shall occur first; or |
(vi) | such Person, for greater certainty holding such security in the ordinary course of such Person’s business, holds such security, provided that: |
(A) | the ordinary business of that Person (a "Fund Manager") includes the management of pension or mutual or investment funds for others (which others, for greater certainty, may include or be limited to one or more employee benefit plans or pension plans) and such security is held by the Fund Manager in the ordinary course of such business in the performance of such Fund Manager’s duties for the account of any other Person (a "Client") including non-discretionary accounts held on behalf of a Client by a broker or dealer registered under applicable laws; or |
(B) | such Person (the "Trust Company") is licensed to carry on the business of a trust company under applicable law and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each, an "Estate Account") or in relation to other accounts (each, an "Other Account") and holds such security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts; or |
(C) | such Person (the "Statutory Body") is an independent Person established by statute for purposes that include, and the ordinary business or activity of such Person includes, the management of investment funds for employee benefit plans, pension plans, insurance plans of various public bodies and the Statutory Body holds such security for the purposes of its activities as such; or |
(D) | such Person (the "Plan Administrator") is the administrator or the trustee of one or more pension funds or plans registered under the laws of Canada or any province thereof or the United States or any state thereof (each, a "Plan"), or is a Plan; |
(E) | such Person (the “Crown Agent”) is acting as an agent of the Crown for purposes that include, and the ordinary business or activity of such Person includes, the management of public assets and such security is held by the Crown Agent in the ordinary course of the management of such public assets; or |
(F) | such Person is a Plan and such security is held by the Plan in the ordinary course of such Plan’s activities; |
(vii) | such Person is a Client of the same Fund Manager as another Person on whose account the Fund Manager holds such security, or because such Person is an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security, or because such Person is a Plan with the same Plan Administrator as another Plan on whose account the Plan Administrator holds such security; |
(viii) | such Person is a Client of a Fund Manager and such security is owned at law or in equity by the Fund Manager, or because such Person is an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company, or because such Person is a Plan and such security is owned at law or in equity by the Plan Administrator; or |
(ix) | such Person is the registered holder of securities as a result of carrying on the business of, or acting as, a nominee of a securities depository. |
(f) | “Board of Directors” shall mean the board of directors of the Corporation or any duly constituted and empowered committee thereof. |
(g) | “Business Day” shall mean any day, other than a Saturday or Sunday or a day on which banking institutions in Montreal, Quebec are authorized or obligated by law to close. |
(h) | “Canada Business Corporations Act” shall mean the Canada Business Corporations Act (Canada), R.S.C. 1985, c. C-44, as amended and the regulations thereunder, as from time to time in effect. |
(i) | “Canadian Dollar Equivalent” of any amount which is expressed in United States dollars shall mean on any date the Canadian dollar equivalent of such amount determined by reference to the U.S. - Canadian Exchange Rate in effect on such date. |
(j) | “Close of Business” on any date means the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the office of the transfer agent for the Shares in the City of Montreal, Quebec (or, after the Separation Time, the office of the Rights Agent in the City of Montreal, Quebec) is closed to the public; provided, however, that for the purposes of the definition of “Competing Permitted Bid” and the definition of “Permitted Bid”, “Close of Business” on any date means 11:59 p.m. (local time, at the place of deposit) on such date (or, if such date is not a Business Day, 11:59 p.m. (local time, at the place of deposit) on the next succeeding Business Day). |
(k) | “Competing Permitted Bid” means a Take-over Bid that is made by means of a Take-over Bid circular and which also complies with the following additional provisions: |
(i) | is made after a Permitted Bid or another Competing Permitted Bid (each such Permitted Bid or Competing Permitted Bid being in this definition, the “Prior Bid”) has been made and prior to the expiry, termination or withdrawal of that Prior Bid; |
(ii) | satisfies all the components of the definition of a Permitted Bid provided that it is not required to satisfy the requirement set forth in Clause (ff)(ii)(A) thereof; and |
(iii) | contains, and the take-up and payment for securities deposited or tendered thereunder are subject to, an irrevocable and unqualified condition that no Voting Shares and/or Convertible Securities shall be taken up or paid for pursuant to the Take-over Bid prior to the Close of Business on the last day of the minimum initial deposit period that such Take-over Bid must remain open for deposits of securities thereunder pursuant to NI 62-104 after the date of the Take-over Bid constituting the Competing Permitted Bid, |
(l) | “controlled”: a Person is “controlled” by another Person or two or more Persons acting jointly or in concert if and only if: |
(i) | in the case of a body corporate, securities entitled to vote in the election of directors of such body corporate carrying more than 50% of the votes for the election of the directors are held, directly or indirectly, by or for the benefit of the other Person or Persons and the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such body corporate; or |
(ii) | in the case of a Person which is not a body corporate, more than 50% of the voting interests of such entity are held, directly or indirectly, by or for the benefit of the other Person or Persons; |
(m) | “Convertible Security” means, at any time, any securities issued by the Corporation from time to time (other than the Rights) carrying any exercise, conversion or exchange right to which the holder thereof may acquire Voting Shares or other securities which are convertible into or exercisable or exchangeable for Voting Shares (whether such right is exercisable immediately or exercisable after a specified period and whether or not on condition or the happening of any contingency). |
(n) | “Convertible Security Acquisition” means the acquisition of Voting Shares by a Person upon the purchase, exercise, conversion or exchange of Convertible Securities acquired or received by such Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition. |
(o) | “Co-Rights Agents” shall have the meaning ascribed thereto in Subsection 4.1a). |
(p) | “Disposition Date” shall have the meaning ascribed thereto in Subsection 5.1b). |
(q) | “Effective Date” shall mean 5:01 p.m. on March 29, 2016. |
(r) | “Election to Exercise” shall have the meaning ascribed thereto in Subsection 2.2d). |
(s) | “Exempt Acquisition” means a share acquisition (i) in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to Subsection 5.1b), 5.1d) or 5.1e) or (ii) pursuant to an amalgamation, merger or other statutory procedure requiring shareholder approval. |
(t) | “Exercise Price” shall mean, as of any date from and after the Separation Time, the price at which a holder of a Right may purchase the securities issuable upon exercise of one whole Right which, subject to adjustment in accordance with the terms hereof, shall be an aggregate dollar amount equal to the Market Price per Share (determined as at the Separation Time) multiplied by five (5). |
(u) | “Expiration Time” shall mean the earlier of: (i) the Termination Time; and (ii) the Close of Business on the date on which a Reconfirmation Meeting occurs and at which this Agreement is not reconfirmed or presented for reconfirmation as contemplated in Section 5.20. |
(v) | “Fiduciary” shall mean, when acting in that capacity, a trust company registered under the trust company legislation of Canada or any province thereof, a trust company organized under the laws of any state of the United States of America, a portfolio manager registered under the securities legislation of one or more provinces of Canada or an investment adviser registered under the United States Investment Advisers Act of 1940 or any other securities legislation of the United States of America or any state of the United States of America. |
(w) | “Flip-in Event” shall mean a transaction or event in or pursuant to which any Person becomes an Acquiring Person. |
(x) | “holder” shall have the meaning ascribed thereto in Section 2.8. |
(y) | “Independent Shareholders” shall mean holders of outstanding Voting Shares, other than (i) any Acquiring Person or Offeror other than a Person who is deemed not to Beneficially Own such Voting Shares by reason of Section 1.1(e)(vi) hereof; (ii) any Person acting jointly or in concert with any Acquiring Person or Offeror; (iii) any Associate or Affiliate of any Acquiring Person or Offeror; and (iv) any employee benefit plan, stock purchase plan, deferred profit sharing plan and any similar plan or trust for the benefit of employees of the Corporation or a corporation controlled by the Corporation, unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or withheld from voting or direct whether the Voting Shares are to be deposited or tendered to a Take-over Bid. |
(z) | "Market Price" per security of any securities on any date of determination shall mean the VWAP of such securities for the twenty (20) consecutive Trading Days through and including the Trading Day immediately preceding such date of determination, provided, however, that (i) if on any such date the securities are not traded on any exchange or in the over-the-counter market, the Market Price per share of such securities on such date shall mean the fair market value per security of the securities on such date as determined by a nationally or internationally recognized investment dealer or investment banker selected by the Board of Directors, and (ii) if the Market Price so determined is expressed in United States dollars, such amount shall be converted to the Canadian Dollar Equivalent. |
(aa) | "NI 62-104" means National Instrument 62-104 – Take-Over Bids and Issuer Bids. |
(bb) | “Nominee” shall have the meaning ascribed thereto in Subsection 2.2c). |
(cc) | “Offer to Acquire” shall include: |
(i) | an offer to purchase or a solicitation of an offer to sell Voting Shares, or a public announcement of an intention to make such an offer or solicitation; and |
(ii) | an acceptance of an offer to sell Voting Shares, whether or not such offer to sell has been solicited; |
(dd) | “Offeror” shall mean a Person who has announced a current intention to make, or who is making, a Take-over Bid. |
(ee) | “Offeror’s Securities” shall mean the Voting Shares Beneficially Owned on the date of a Take-over Bid by an Offeror. |
(ff) | “Permitted Bid” means a Take-over Bid that is made by means of a take-over bid circular and that also complies with the following additional provisions: |
(i) | the Take-over Bid shall be made to all holders of Voting Shares of record (other than the Offeror); and |
(ii) | the Take-over Bid contains, and the take-up and payment for securities tendered or deposited thereunder are subject to, an irrevocable and unqualified condition that no securities shall be taken up or paid for pursuant to the Take-over Bid: |
(A) | prior to the close of business on the date which is not less than one hundred and five (105) days following the date of the Take-over Bid or such shorter minimum period as determined in accordance with section 2.28.2 or section 2.28.3 of NI 62-104 for which a Take-over Bid (that is not exempt from any of the requirements of division 5 (Bid Mechanics) of NI 62-104) must remain open for deposit of securities thereunder; and |
(B) | unless, at the close of business on such date in (A), more than 50% of the then outstanding Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to the Take-over Bid and have not been withdrawn; |
(iii) | the Take-over Bid contains an irrevocable and unqualified provision that securities may be deposited pursuant to such Take-over Bid at any time during the period of time described in Section 1.1(ff)(ii)(A) above and during any extension of such Take-over Bid and any securities deposited pursuant to the Take-over Bid may be withdrawn until taken up and paid for; and |
(iv) | the Take-over Bid contains an irrevocable and unqualified provision that if the requirement set forth in Section 1.1(ff)(ii)(B) is satisfied and such securities are taken up by the Offeror, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for not less than 10 days from the date of such public announcement; |
(gg) | “Permitted Bid Acquisition” means an acquisition of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid. |
(hh) | “Permitted Lock-up Agreement” means an agreement (the "Lock-up Agreement") between an Offeror or any Affiliate or Associate of an Offeror and one or more holders of Voting Shares (each such holder herein referred to as a “Locked-up Person”) who are not Affiliates or Associates of the Offeror and who are not, other than by virtue of entering into such agreement, acting jointly or in concert with the Offeror, the terms of which are publicly disclosed and a copy of which is made available to the public (including the Corporation) not later than the date of the Lock-up Bid (as hereinafter defined) or, if the Lock-up Bid has been made prior to the date of the Lock-up Agreement, not later than the Business Day following the date the Lock-up Agreement was entered into, pursuant to which each Locked-up Person agrees to deposit or tender the Voting Shares and/or Convertible Securities held by such holder to a Take-over Bid (the “Lock-up Bid”) made by the Offeror or any Affiliates or Associates of the Offeror or any other Person acting jointly or in concert with the Offeror provided that: |
(i) | the Lock-up Agreement permits the Locked-up Person to withdraw its Voting Shares and/or Convertible Securities from the Lock-up Agreement and the Lock-up Bid in order to deposit or tender the Voting Shares and/or Convertible Securities to another Take-over Bid or to support another transaction prior to the Voting Shares and/or Convertible Securities being taken up and paid for under the Lock-up Bid: |
(A) | at a price or value per Voting Share or Convertible Security that exceeds the price or value per Voting Share or Convertible Security offered under the Lock-up Bid; or |
(B) | for a number of Voting Shares or Convertible Securities that exceeds by as much as or more than a number specified in the Lock-up Agreement (the “Specified Number”) the number of Voting Shares or Convertible Securities that the Offeror has offered to purchase under the Lock-up Bid at a price or value per Voting Share or Convertible Security that is not less than the price or value per Voting Share or Convertible Security offered under the Lock-up Bid, provided that the Specified Number is not greater than 7% of the number of Voting Shares or Convertible Securities offered to be purchased under the Lock-up Bid; or |
(C) | at such price or value that exceeds by as much as or more than an amount specified in the Lock-up Agreement (the “Specified Amount”) the offering price for each Voting Share or Convertible Security contained in or proposed to be contained in the Lock-up Bid, provided that the Specified Amount is not greater than 7% of the offering price contained in or proposed to be contained in the Lock-up Bid; |
(ii) | no “break-up” fees, “topping” fees, penalties, expenses or other amounts that exceed in aggregate the greater of: |
(A) | 2½% of the price or value of the aggregate consideration payable under the Lock-up Bid to a Locked-up Person; and |
(B) | 50% of the amount by which the price or value of the consideration received by a Locked-up Person under another Take-over Bid or transaction exceeds the price or value of the consideration that the Locked-up Person would have received under the Lock-up Bid; |
(ii) | “Person” shall include any individual, firm, limited partnership, limited liability company or partnership, association, trust, trustee, executor, administrator, legal or personal representative, government, governmental body, entity or authority, group, body corporate, or other incorporated or unincorporated organization or association, syndicate, joint venture or any other entity, whether or not having legal personality, and any of the foregoing in any derivative, representative or fiduciary capacity and pronouns have a similar extended meaning. |
(jj) | “Privacy Laws” shall have the meaning ascribed thereto in Section 4.6. |
(kk) | “Pro Rata Acquisition” means an acquisition by a Person of Voting Shares pursuant to (i) any dividend reinvestment plan, share purchase plan or other plan of the Corporation made available to all holders of Voting Shares (other than holders resident in any jurisdiction where participation in such plan is restricted or impractical as a result of applicable law); (ii) a stock dividend, a stock split or other event pursuant to which such Person becomes the Beneficial Owner of Voting Shares on the same pro rata basis as all other holders of Voting Shares of the same class or series; (iii) the acquisition or exercise of rights to purchase Voting Shares distributed to all holders of Voting Shares (other than holders resident in any jurisdiction where such distribution or exercise is restricted or impractical as a result of applicable law) by the Corporation pursuant to a rights offering (but only if such rights are acquired directly from the Corporation); or (iv) a distribution of Voting Shares or Convertible Securities in respect thereof offered pursuant to a prospectus or by way of a private placement by the Corporation or a conversion or exchange of any such Convertible Security, provided that, in the cases of (iii) and (iv) above, such Person does not thereby acquire a greater percentage of Voting Shares or Convertible Securities so offered than the Person’s percentage of Voting Shares Beneficially Owned immediately prior to such acquisition. |
(ll) | “Reconfirmation Meeting” shall have the meaning ascribed thereto in Section 5.20. |
(mm) | “Record Time” means 5:01 p.m. on March 29, 2016, being the Effective Date. |
(nn) | “Redemption Price” shall have the meaning attributed thereto in Subsection 5.1a). |
(oo) | “Regular Cash Dividend” means cash dividends paid on the Shares in any fiscal year of the Corporation to the extent that such cash dividends do not exceed in the aggregate in any fiscal year the greatest of: |
(i) | 100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for its immediately preceding fiscal year; and |
(ii) | 200% of the aggregate amount of cash dividends declared payable by the Corporation on its Shares in its immediately preceding fiscal year; and |
(iii) | 300% of the arithmetic mean of the aggregate amounts of cash dividends declared payable by the Corporation on its Shares in its three immediately preceding fiscal years. |
(pp) | “Right” shall mean the rights described herein to purchase securities pursuant to the terms and subject to the conditions set forth herein. |
(qq) | “Rights Certificate” shall mean the certificates representing the Rights after the Separation Time which shall be substantially in the form attached hereto as Exhibit A. |
(rr) | “Rights Register” and “Rights Registrar” shall have the respective meanings ascribed thereto in Subsection 2.6a). |
(ss) | “Securities Act” shall mean the Securities Act, R.S.Q., c. V-1.1, as amended and the regulations, rules and policy statements made thereunder, as from time to time in effect. |
(tt) | “Separation Time” means the Close of Business on the eighth Trading Day after the earlier of: |
(i) | the Stock Acquisition Date; and |
(ii) | the date of the commencement of, or first public announcement or disclosure of the intent of any Person (other than the Corporation or any corporation controlled by the Corporation) to commence, a Take-over Bid (other than a Permitted Bid, so long as such Take-over Bid continues to satisfy the requirements of a Permitted Bid); |
(uu) | “Shares” means the common shares in the share capital of the Corporation, as such shares may be subdivided, consolidated, reclassified or otherwise changed from time to time. |
(vv) | “Stock Acquisition Date” shall mean the first date of public announcement or disclosure by the Corporation or an Acquiring Person of facts indicating that a Person has become an Acquiring Person (which, for the purposes of this definition, shall include, without limitation, an early warning report filed pursuant to National Instrument 62-103 – The Early Warning System and Related Take-over Bid and Insider Reporting Issues (adopted in Québec as Regulation 62-103 respecting the Early Warning System and Related Take-Over Bid and Insider Reporting Issues) or Section 13(d) of the U.S. Exchange Act disclosing such information). |
(ww) | “Take-over Bid” means an Offer to Acquire Voting Shares of any class, or Convertible Securities with respect thereto, where the Voting Shares subject to the Offer to Acquire, together with the Voting Shares into or for which the securities subject to the Offer to Acquire are convertible or exchangeable and the Offeror’s Securities constitute in the aggregate 20% or more of the outstanding Voting Shares at the date of the Offer to Acquire. |
(xx) | “Termination Time” means the time at which the right to exercise Rights shall terminate pursuant to Section 5.1 hereof. |
(yy) | “Trading Day” when used with respect to any securities, means the day on which the principal Canadian or United States securities exchange (as determined by the Board of Directors acting in good faith) on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian or United States securities exchange, a Business Day. |
(zz) | “TSX” means the Toronto Stock Exchange. |
([[) | “U.S. - Canadian Exchange Rate” on any date shall mean: |
(i) | if on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; and |
(ii) | in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars which is calculated in the manner which shall be determined by the Board of Directors from time to time acting in good faith. |
(aaa) | “U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder as from time to time in effect. |
(bbb) | “Voting Share Reduction” means an acquisition or redemption by the Corporation or any corporation controlled by the Corporation of Voting Shares which, by reducing the number of Voting Shares outstanding, increases the percentage of Voting Shares Beneficially Owned by any Person to 20% or more of the Voting Shares then outstanding. |
(ccc) | “Voting Shares” means the Shares and any other securities the holders of which are entitled to vote generally on the election of directors of the Corporation, and “voting shares”, when used with reference to any Person other than the Corporation, means common shares of such other Person and any other securities the holders of which are entitled to vote generally on the election of the directors of such other Person. |
(ddd) | “VWAP” means, with respect to any class of securities, the volume weighted average trading price of the securities, calculated by dividing the aggregate sale price by the total volume of the securities traded on the TSX for the relevant period, as adjusted, as the case may be, by the TSX (provided that, if at the date of determination such securities are listed or admitted to trading on more than one stock exchange or national securities quotation system (including, for greater certainty, each of the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq Capital Market), such volume shall be determined based on the stock exchange or quotation system on which such securities are then listed or admitted to trading on which the largest number of such securities were traded during the most recently completed calendar year or, if a calendar year has not been completed prior to the date of determination, during such shorter period as the Board of Directors acting in good faith determines to be appropriate, and provided in each case that the TSX shall have approved and accepted the use of the prices of the securities in question on such other stock exchange or national securities quotation system for purposes of such determination) or, if for any reason any of the sale prices used in determining the VWAP is not available on such date or the securities are not listed or admitted to trading on a stock exchange or a national securities quotation system on such date, the last sale price, or in case no sale takes place on such date, the average of the high bid and low asked prices for each of such securities in the over-the-counter market; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused any of the sale prices used to determine the VWAP for any Trading Day not to be fully comparable with the sale prices on the Trading Day immediately preceding such date of determination, each such sale price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof (as determined by the Board of Directors acting in good faith) in order to make it fully comparable with the sale price on the Trading Day immediately preceding such date of determination. |
Section 1.2 | Currency |
Section 1.3 | Number and Gender |
Section 1.4 | Sections and Headings |
Section 1.5 | Statutory References |
Section 1.6 | Determination of Percentage Ownership |
Section 1.7 | Acting Jointly or in Concert |
Section 2.1 | Legend on Share Certificates |
(a) | Certificates representing the Shares, including without limitation Shares issued upon the conversion of Convertible Securities, issued after the Record Time but prior to the Close of Business on the earlier of the Separation Time and the Expiration Time shall also evidence one Right for each Share represented thereby and shall have impressed on, printed on, written on or otherwise affixed to them the following legend: |
(b) | Certificates representing Shares that have been issued prior to, and remain outstanding at, the Record Time, shall evidence one Right for each Share evidenced thereby until the earlier of the Separation Time and the Expiration Time notwithstanding the absence of the legend required by Subsection 2.1a). |
Section 2.2 | Initial Exercise Price; Exercise of Rights; Detachment of Rights |
(a) | Right to entitle holder to purchase one Share prior to adjustment. Subject to adjustment as herein set forth, including without limitation as set forth in Article 3, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Share for the Exercise Price (which Exercise Price and number of Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by the Corporation or any of its subsidiaries shall be void. |
(b) | Rights not exercisable until Separation Time. Until the Separation Time, (i) the Rights shall not be exercisable and no Right may be exercised and (ii) for administrative purposes, each Right will be evidenced by the certificate for the associated Shares registered in the name of the holder thereof (which certificate shall be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Shares. |
(c) | Delivery of Rights Certificate and disclosure statement. From and after the Separation Time and prior to the Expiration Time, the Rights may be exercised, and the registration and transfer of the Rights shall be separate from and independent of Shares. Promptly following the Separation Time, the Corporation will prepare or cause to be prepared and the Rights Agent will mail to each holder of record of Shares as of the Separation Time and, in respect of each Convertible Security converted into Shares after the Separation Time and prior to the Expiration Time, promptly after such conversion, the Corporation will prepare or cause to be prepared and the Rights Agent will mail to the holder so converting (other than in each case an Acquiring Person or any other Person whose Rights are or become void pursuant to the provisions of Section 3.1(b) hereof and, in respect of any Rights Beneficially Owned by such Acquiring Person or other Person whose Rights are or become void pursuant to the provisions of Section 3.1(b) hereof, which are not held of record by such Acquiring Person or other Person, the holder of record of such rights (a “Nominee”)) at such holder’s address as shown by the records of the Corporation (the Corporation hereby agreeing to furnish copies of such record to the Rights Agent for this purpose): |
(i) | a Rights Certificate in substantially the form of Exhibit A hereto appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or judicial or administrative order, or with any article, requirement or regulation of any stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage; and |
(ii) | a disclosure statement prepared by the Corporation describing the Rights; |
(d) | Exercise of Rights. Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its principal office in Montreal, Quebec, or any other office of the Rights Agent designated for that purpose from time to time by the Corporation: |
(i) | the Rights Certificate evidencing such Rights; |
(ii) | an election to exercise (an “Election to Exercise”) substantially in the form attached to the Rights Certificate duly completed and executed in a manner acceptable to the Rights Agent; and |
(iii) | payment by certified cheque, banker’s draft or money order payable to the order of the Rights Agent, or by wire transfer to an account designated by the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Shares in a name other than that of the holder of the Rights being exercised. |
(e) | Duties of Rights Agent upon receipt of Election to Exercise. Upon receipt of a Rights Certificate, which is accompanied by an appropriately completed and duly executed Election to Exercise (which does not or is not deemed to indicate that such Right is null and void as provided by Subsection 3.1b)) and payment as set forth in Subsection 2.2d), the Rights Agent (unless otherwise instructed by the Corporation) will thereupon promptly: |
(i) | requisition from the transfer agent of the Shares certificates representing the number of Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent to comply with all such requisitions); |
(ii) | after receipt of such share certificates, deliver such certificates to, or to the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder; |
(iii) | when appropriate, requisition from the Corporation the amount of cash, if any, to be paid in lieu of issuing fractional Shares; |
(iv) | when appropriate, after receipt of such cash, deliver such cash to, or to the order of, the registered holder of the Rights Certificate; and |
(v) | tender to the Corporation all payments received on exercise of the Rights. |
(f) | Partial Exercise of Rights. If the holder of any Rights shall exercise less than all of the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns. |
(g) | Duties of the Corporation. The Corporation covenants and agrees that it will: |
(i) | take all such action as may be necessary and within its power to ensure that all Shares delivered upon the exercise of Rights shall, at the time of delivery of the certificates for such Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable; |
(ii) | take all such action as may reasonably be considered to be necessary and within its power to comply with any applicable requirements of the Canada Business Corporations Act, the Securities Act, the U.S. Exchange Act, the United States Securities Act of 1933, as amended, and applicable comparable legislation of each of the provinces and territories of Canada and states of the United States of America, or the rules and regulations thereunder or any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights, the Rights Certificates and the issuance of any Shares upon exercise of the Rights; |
(iii) | use reasonable efforts to cause all Shares issued upon exercise of the Rights to be listed on the stock exchanges on which the Shares are listed at that time; |
(iv) | cause to be reserved and kept available out of its authorized and unissued Shares, the number of Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; |
(v) | pay when due and payable, if applicable, any and all federal, provincial, state and municipal taxes (not in the nature of income, capital gains or withholding taxes) and charges which may be payable in respect of the original issuance or delivery of the Rights Certificates or certificates for Shares issued upon the exercise of Rights, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer of Rights or the issuance or delivery of certificates for Shares issued upon the exercise of Rights, in a name other than that of the holder of the Rights being transferred or exercised; and |
(vi) | after the Separation Time, except as permitted by Section 5.1 or Section 5.4, not take (or permit any corporation it controls to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. |
Section 2.3 | Adjustments to Exercise Price; Number of Rights |
(a) | The Exercise Price, the number and kind of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3 and in Article 3. |
(b) | Adjustment to Exercise Price upon changes to share capital. In the event that the Corporation shall at any time after the Record Time and prior to the Expiration Time: |
(i) | declare or pay a dividend on the Shares payable in Voting Shares or Convertible Securities in respect thereof other than in the ordinary course of business or pursuant to any dividend reinvestment plan or program; |
(ii) | subdivide or change the then outstanding Shares into a greater number of Shares; |
(iii) | consolidate, combine or change the then outstanding Shares into a smaller number of Shares; or |
(iv) | issue any Voting Shares (or Convertible Securities in respect thereof) in respect of, in lieu of, or in exchange for existing Shares, whether in a reclassification, amalgamation, statutory arrangement, consolidation or otherwise; |
(A) | If the Exercise Price and number of Rights outstanding are to be adjusted: |
i. | the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of Shares (or other securities of the Corporation) that a holder of one Share immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result thereof; and |
ii. | each Right held prior to such adjustment will become that number of Rights equal to that number that is equal to the number of Shares (or other securities of the Corporation) that a holder of one Share immediately prior to such dividend, subdivision, change, consolidation or issuance would hold immediately thereafter as a result thereof, and the adjusted number of Rights will be deemed to be allocated among the Shares with respect to which the original Rights were associated (if they remain outstanding) and the securities of the Corporation issued in respect of such dividend, subdivision, change, consolidation or issuance, so that each such Share (or other security of the Corporation) will have exactly one Right associated with it. |
(B) | If the securities purchasable upon exercise of Rights are to be adjusted, the securities purchasable upon exercise of each Right after such adjustment will be the securities that a holder of the securities purchasable upon exercise of one Right immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result thereof. |
(c) | Adjustments pursuant to Subsection 2.3b) shall be made successively, whenever an event referred to in Subsection 2.3b) occurs. |
(d) | If an event occurs which would require an adjustment under both this Section 2.3 and Section 3.1 hereof, the adjustment provided for in this Section 2.3 shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 3.1 hereof. |
(e) | If, after the Record Time and prior to the Expiration Time, the Corporation shall issue any shares of its capital other than Shares in a transaction of a type described in Section 2.3(b)(i) or Section 2.3(b)(iv), such shares shall be treated herein as nearly equivalent to Shares as may be practicable and appropriate under the circumstances, and the Corporation and the Rights Agent hereby agree to amend this Agreement in accordance with Section 5.4 in order to effect such treatment. In the event the Corporation shall at any time after the Record Time and prior to the Expiration Time issue any Shares otherwise than in a transaction referred to in Subsection 2.3b), each such Share so issued shall automatically have one new Right associated with it, which Right shall be evidenced by the certificate representing such Shares. |
(f) | Adjustment to Exercise Price upon issue of rights, options and warrants. In the event the Corporation shall, at any time after the Record Time and prior to the Expiration Time, fix a record date for the making of a distribution to all holders of Shares of Convertible Securities entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Shares (or other Convertible Securities in respect of Shares) at a price per Share (or, in the case of such other Convertible Security, having a conversion, exchange or exercise price per share (including the price required to be paid to purchase such other Convertible Security)) less than 90% of the Market Price per Share on such record date, the Exercise Price in effect after such record date will equal the Exercise Price in effect immediately prior to such record date multiplied by a fraction; |
(i) | of which the numerator shall be the number of Shares outstanding on such record date plus the number of Shares which the aggregate offering price of the total number of Shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the Convertible Securities so to be offered (including the price required to be paid to purchase such Convertible Securities)) would purchase at such Market Price per Share; and |
(ii) | of which the denominator shall be the number of Shares outstanding on such record date plus the number of additional Shares to be offered for subscription or purchase (or into which the Convertible Securities so to be offered are initially convertible, exchangeable or exercisable). |
(g) | Adjustment to Exercise Price upon Corporate Distributions. In the event the Corporation shall, at any time after the Record Time and prior to the Expiration Time, fix a record date for the making of a distribution to all holders of Shares of (i) evidences of indebtedness or assets (other than a Regular Cash Dividend or a dividend paid in Shares, but including any dividend payable in securities other than Shares), (ii) Convertible Securities entitling them to subscribe for or purchase Voting Shares (or Convertible Securities in respect of Voting Shares), at a price per Voting Share (or, in the case of a Convertible Security in respect of Voting Shares, having a conversion, exchange or exercise price per share (including the price required to be paid to purchase such Convertible Security)) less than 90% of the Market Price per Share on such record date (excluding Convertible Securities referred to in Subsection 2.3f)) or (iii) other securities of the Corporation, the Exercise Price in effect after such record date shall be equal to the Exercise Price in effect immediately prior to such record date less the fair market value (as determined in good faith by the Board of Directors) of the portion of the assets, evidences of indebtedness, Convertible Securities or other securities so to be distributed applicable to each of the securities purchasable upon exercise of one Right. Such adjustment shall be made successively whenever such a record date is fixed. |
(h) | Each adjustment made pursuant to Section 2.3 shall be made as of |
(i) | the payment or effective date for the applicable dividend, subdivision, change, consolidation or issuance, in the case of an adjustment made pursuant to Subsection 2.3b) above; and |
(ii) | the record date for the applicable dividend or distribution, in the case of an adjustment made pursuant to Subsections 2.3f) or 2.3g) above, subject to readjustment to reverse the same if such distribution shall not be made. |
(i) | Corporation may provide for alternate means of adjustment. In the event the Corporation shall, at any time after the Record Time and prior to the Expiration Time, issue any shares (other than Shares), or Convertible Securities to subscribe for or purchase any such shares, or Convertible Securities in respect of any such shares, in a transaction referred to in any of clauses 2.3b)i) to (iv), Subsection 2.3f) or Subsection 2.3g) above, if the Board of Directors acting in good faith determines that the adjustments contemplated by Subsections 2.3b), 2.3f) and 2.3g) above in connection with such transaction would not appropriately protect the interests of the holders of Rights, the Board of Directors may from time to time acting in good faith determine what other adjustments, if any, to the Exercise Price, number of Rights or securities purchasable upon exercise of Rights would be appropriate in the circumstances, if any, and such other adjustments (if any) shall be made upon the Board of Directors providing written certification thereof to the Rights Agent pursuant to Subsection 2.3q) and no adjustments contemplated by Subsections 2.3b), 2.3f) or 2.3g) shall be made notwithstanding the terms thereof. The Corporation and the Rights Agent shall amend this Agreement to provide for any such other adjustments contemplated by this Subsection 2.3i), subject to the prior approval of the TSX (if the Shares are then listed on the TSX), and of the shareholders of the Corporation or the holders of Rights obtained in accordance with Section 5.4. |
(j) | De minimis threshold for adjustment to Exercise Price. Notwithstanding anything herein to the contrary, no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such Exercise Price; provided, however, that any adjustments which by reason of this Subsection 2.3j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All adjustments to the Exercise Price made pursuant to this Section 2.3 shall be calculated to the nearest cent. |
(k) | Rights to evidence right to purchase Shares at adjusted Exercise Price. Each Right originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Shares purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. |
(l) | Adjustment to number of Shares purchasable upon adjustment to Exercise Price. Unless the Corporation shall have exercised its election as provided in Subsection 2.3m) to adjust the number of Rights in lieu of any adjustment in the number of Shares purchasable upon the exercise of a Right, upon each adjustment of the Exercise Price as a result of the calculations made in Subsections 2.3f) and 2.3g), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Shares obtained by: |
(i) | multiplying (A) the number of Shares covered by a Right immediately prior to such adjustment, by (B) the Exercise Price in effect immediately prior to such adjustment; and |
(ii) | dividing the product so obtained by the Exercise Price in effect immediately after such adjustment. |
(m) | Election to adjust number of Rights upon adjustment to Exercise Price. The Corporation may elect on or after the date of any adjustment of the Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number of Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of Shares for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become the number of Rights obtained by dividing the relevant Exercise Price in effect immediately prior to adjustment of the relevant Exercise Price by the relevant Exercise Price in effect immediately after adjustment of the relevant Exercise Price. The Corporation shall make a public announcement of its election to adjust the number of Rights pursuant to this Subsection 2.3m), indicating the record date for the adjustment; and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the relevant Exercise Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least 10 calendar days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Subsection 2.3m), the Corporation shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date, Rights Certificates evidencing, subject to Section 5.5, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Corporation, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and may bear, at the option of the Corporation, the relevant adjusted Exercise Price and shall be registered in the names of holders of record of Rights Certificates on the record date specified in the public announcement. |
(n) | Corporation may in certain cases defer issues of securities. In any case in which this Section 2.3 shall require that an adjustment in an Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date of the number of Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the relevant Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional Shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment. |
(o) | Corporation has discretion to reduce Exercise Price for tax reasons. Notwithstanding anything in this Section 2.3 to the contrary, the Corporation shall be entitled to make such adjustments in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in its good faith judgment the Board of Directors shall determine to be advisable in order that any (i) subdivision or consolidation of the Shares, (ii) issuance wholly for cash of any Shares at less than the applicable Market Price, (iii) issuance wholly for cash of any Shares or securities that by their terms are exchangeable for or convertible into or give a right to acquire Shares, (iv) stock dividends, or (v) issuance of Convertible Securities referred to in this Section 2.3, hereafter made by the Corporation to holders of its Shares, shall not be taxable to such shareholders, subject to the prior approval of the TSX (if the Shares are then listed on the TSX). |
(p) | Rights Certificates may contain Exercise Price before adjustment. Irrespective of any adjustment or change in the securities purchasable upon exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to represent the securities so purchasable which were represented in the initial Rights Certificates issued hereunder. |
(q) | Adjustment to Rights exercisable into shares other than Shares. If, as a result of an adjustment made pursuant to Section 3.1, the holder of any Right thereafter exercised shall become entitled to receive any securities other than Shares, thereafter the number of such other securities so receivable upon exercise of any Right and the applicable Exercise Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as may be practicable to the provisions with respect to the Shares contained in the foregoing Sections of this Section 2.3 and the provisions of this Agreement with respect to the Shares shall apply on like terms to any such other securities. |
(r) | Notice in Respect of Adjustments. Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon the exercise of Rights is made pursuant to this Section 2.3, the Corporation shall: |
(i) | promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment; and |
(ii) | promptly file with the Rights Agent and with each transfer agent for the Shares a copy of such certificate and mail a brief summary thereof to each holder of Rights who requests a copy. |
Section 2.4 | Date on Which Exercise is Effective |
Section 2.5 | Execution, Authentication, Delivery and Dating of Rights Certificates |
(a) | The Rights Certificates shall be executed on behalf of the Corporation by any two officers of the Corporation. The signature of any of these officers on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersignature and delivery of such Rights Certificates. |
(b) | Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent of such Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature and a statement describing the Rights, and the Rights Agent shall countersign manually (or by facsimile signature in a manner satisfactory to the Corporation) and deliver such Rights Certificates and statement to the holders of the Rights pursuant to Section 2.2 hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid. |
(c) | Each Rights Certificate shall be dated the date of countersignature thereof. |
Section 2.6 | Registration, Transfer and Exchange |
(a) | Following the Separation Time, the Corporation shall cause to be kept a register (the “Rights Register”) in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed “Rights Registrar” for the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts such appointment. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times. |
(b) | After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of Subsections 2.6d) and 3.1b) below, the Corporation will execute, and the Rights Agent will countersign, register and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered. |
(c) | All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange. |
(d) | Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the registered holder thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this Section 2.6, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) in connection therewith. |
(e) | The Corporation shall not be required to register the transfer or exchange of any Rights after the Rights have been terminated pursuant to the provisions of this Agreement. |
Section 2.7 | Mutilated, Lost, Stolen and Destroyed Rights Certificates |
(a) | If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered. |
(b) | If there shall be delivered to the Corporation and the Rights Agent prior to the Expiration Time: (i) evidence to their reasonable satisfaction of the ownership, destruction, loss or theft of any Rights Certificate; and (ii) such security or indemnity as may be reasonably required by them to save each of them and any of their agents harmless, then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and, upon the Corporation’s request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen. |
(c) | As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) connected therewith. |
(d) | Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence a contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Rights duly issued hereunder. |
Section 2.8 | Persons Deemed Owners |
Section 2.9 | Delivery and Cancellation of Certificates |
Section 2.10 | Agreement of Rights Holders |
(a) | to be bound by and subject to the provisions of this Agreement, as amended or supplemented from time to time in accordance with the terms hereof, in respect of all Rights held; |
(b) | that, prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the associated share certificate representing such Right; |
(c) | that, after the Separation Time, the Rights Certificate will be transferable only on the Rights Register as provided herein; |
(d) | that prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated share certificate representing the Shares) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated share certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary; |
(e) | that such holder of Rights has waived its right to receive any fractional Rights or any fractional Shares or other securities upon exercise of a Right; |
(f) | that, subject to the provisions of Section 5.4, without the approval of any holder of Rights or Voting Shares and upon the sole authority of the Board of Directors acting in good faith, this Agreement may be supplemented or amended from time to time as provided herein; and |
(g) | that notwithstanding anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation. |
Section 3.1 | Flip-in Event |
(a) | Subject to Sections 3.1b) and 5.1, in the event that prior to the Expiration Time a Flip-in Event occurs, each Right shall thereafter constitute, effective at the close of business on the eighth Trading Day after the Stock Acquisition Date, the right to purchase from the Corporation, upon exercise thereof in accordance with the terms hereof, that number of Shares as have an aggregate Market Price on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such Right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in the event that, after such date of consummation or occurrence, an event of a type analogous to any of the events described in Section 2.3 shall have occurred with respect to such Shares). |
(b) | Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially Owned on or after the earlier of the Separation Time and the Stock Acquisition Date, or which may thereafter be Beneficially Owned, by: |
(i) | an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate of such other Person); or |
(ii) | a transferee of Rights, direct or indirect, from an Acquiring Person (or from any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate thereof) where such a transferee becomes a transferee concurrently with or subsequent to the Acquiring Person becoming such in a transfer that the Board of Directors, acting in good faith, has determined is part of a plan, arrangement or scheme of an Acquiring Person (or of any Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate of an Acquiring Person), that has the purpose or effect of avoiding clause 3.1b)i); |
(c) | Any Rights Certificate that represents Rights Beneficially Owned by a Person described in either of clauses 3.1b)i) or 3.1b)ii) or transferred to any Nominee of any such Person, and any Rights Certificate issued upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain or will be deemed to contain the following legend: |
(d) | After the Separation Time, the Corporation shall do all such acts and things necessary and within its power to ensure compliance with the provisions of this Section 3.1 including, without limitation, all such acts and things as may be required to satisfy the requirements of the Canada Business Corporations Act, the Securities Act and the securities laws or comparable legislation in each of the provinces of Canada and in any other jurisdiction where the Corporation is subject to such laws and the rules of the stock exchanges or quotation systems where the Shares are listed or quoted at such time in respect of the issue of Shares upon the exercise of Rights in accordance with this Agreement. |
(e) | In the event that there shall not be sufficient Shares authorized for issuance to permit the exercise in full of the Rights in accordance with this Section 3.1, the Corporation shall take such actions as may be reasonably necessary to authorize additional Shares for issuance upon the exercise of the Rights. |
Section 3.2 | Fiduciary Duties of the Board of Directors of the Corporation |
Section 4.1 | General |
(a) | The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the holders of the Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint such co-rights agents (“Co-Rights Agents”) as it may deem necessary or desirable subject to the prior written approval of the Rights Agent. In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the Corporation may determine with the written approval of the Rights Agent. The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and other disbursements reasonably incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder, including the reasonable fees and disbursements of counsel and other experts consulted by the Rights Agent pursuant to Subsection 4.3a). The Corporation also agrees to indemnify the Rights Agent, its officers, directors, employees and agents for, and to hold it harmless against any loss, liability, cost, claim, action, damage, suit or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement including its reasonable legal costs and expenses, which right to indemnification will survive the termination of this Agreement or the removal or resignation of the Rights Agent. |
(b) | The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Shares, Rights Certificate, certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. |
(c) | The Corporation shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent and, at any time upon request, shall provide to the Rights Agent an incumbency certificate certifying the then current officers of the Corporation. |
Section 4.2 | Merger, Amalgamation, Consolidation or Change of Name of Rights Agent |
(a) | Any corporation into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with which it may be consolidated, or any corporation resulting from any merger, amalgamation or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any corporation succeeding to the shareholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any document or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement. |
(b) | In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. |
Section 4.3 | Duties of Rights Agent |
(a) | The Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Corporation) or such other experts that the Rights Agent considers necessary to carry out its duties under this Agreement and the opinion of such counsel or other expert will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion; the Rights Agent may also, with the approval of the Corporation (such approval not to be unreasonably withheld), consult with such other experts (at the expense of the Corporation) as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert. |
(b) | Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by a person believed by the Rights Agent to be a senior officer of the Corporation and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. |
(c) | The Rights agent will be liable hereunder only for its own fault, negligence, gross negligence, bad faith or wilful misconduct. |
(d) | The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for Shares, or the Rights Certificates (except its countersignature thereof) or be required to verify the same, and all such statements and recitals are and will be deemed to have been made by the Corporation only. |
(e) | The Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any share certificate, or Rights Certificate (except its countersignature thereon) nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Subsection 3.1b) hereof or any adjustment required under the provisions of Section 2.3) hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment or any written notice from the Corporation or any holder that a Person has become an Acquiring Person); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Shares to be issued pursuant to this Agreement or any Rights or as to any Shares, when issued, being duly and validly authorized, issued and delivered as fully paid and non-assessable. |
(f) | The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. |
(g) | The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person designated in writing by the Corporation, and to apply to such individuals for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such individual. It is understood that instructions to the Rights Agent shall, except where circumstances make it impractical or the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions shall be confirmed in writing as soon as reasonably practicable after the giving of such instructions. |
(h) | Subject to applicable law, the Rights Agent and any shareholder or director, officer or employee of the Rights Agent may buy, sell or deal in Shares, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity. |
(i) | The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment of such attorneys and agents. |
Section 4.4 | Change of Rights Agent |
Section 4.5 | Compliance with Anti-Money Laundering Legislation |
Section 4.6 | Privacy Legislation |
Section 4.7 | Liability |
Section 5.1 | Redemption, Waiver and Termination |
(a) | Subject to the prior consent of the holders of the Voting Shares or the Rights obtained as set forth herein, the Board of Directors acting in good faith may, at any time prior to a Flip-in Event as to which the application of Section 3.1 has not been waived pursuant to this Section 5.1, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right (appropriately adjusted in a manner analogous to the applicable adjustments provided for in Section 2.3 in the event that an event of the type analogous to any of the events described in Section 2.3 shall have occurred) (such redemption price being herein referred to as the “Redemption Price”). |
(b) | The Board of Directors shall waive the application of Section 3.1 in respect of the occurrence of any Flip-in Event if the Board of Directors has determined, following the Stock Acquisition Date and prior to the Separation Time, that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person under this Agreement and, in the event that such a waiver is granted by the Board of Directors, such Stock Acquisition Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection 5.1b) may only be given on the condition that such Person, within 10 days after the foregoing determination by the Board of Directors or such later date as the Board of Directors may determine (the “Disposition Date”), has reduced its Beneficial Ownership of Voting Shares such that the Person is no longer an Acquiring Person. If the Person remains an Acquiring Person at the Close of Business on the Disposition Date, the Disposition Date shall be deemed to be the date of occurrence of a further Stock Acquisition Date and Section 3.1 shall apply thereto. |
(c) | In the event that a Person acquires Voting Shares pursuant to a Permitted Bid or an Exempt Acquisition referred to in Subsection 5.1d), then the Board of Directors of the Corporation shall, immediately upon the consummation of such acquisition and without further formality, be deemed to have elected to redeem the Rights at the Redemption Price. |
(d) | The Board of Directors acting in good faith may, prior to the occurrence of the relevant Flip-in Event, upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 to a Flip-in Event that may occur by reason of a Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares, provided that if the Board of Directors waives the application of Section 3.1 in respect of a Take-over Bid pursuant to this Subsection 5.1d), the Board of Directors shall also be deemed to have waived the application of Section 3.1 in respect of any other Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares prior to the expiry of any Take-over Bid (as the same may be extended from time to time) in respect of which a waiver is, or is deemed to have been, granted under this Subsection 5.1d). |
(e) | The Board of Directors acting in good faith may, with the prior consent of the holders of Voting Shares obtained as set forth herein, prior to the occurrence of the relevant Flip-in Event, upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 to a Flip-in Event that may occur by reason of an acquisition of Voting Shares other than pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares and other than in the circumstances set out in Subsection 5.1b). In the event that the Board of Directors proposes such a waiver, the Board of Directors shall extend the Separation Time to a time and date subsequent to and not more than 10 Business Days following the meeting of shareholders held to approve such waiver. |
(f) | Where a Take-over Bid that is not a Permitted Bid is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price without the consent of the holders of the Voting Shares or the Rights and reissue Rights under this Agreement to holders of record of Voting Shares immediately following such redemption. Upon the Rights being redeemed and reissued pursuant to this Subsection 5.1f), all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Shares at the Separation Time had not been mailed to each such holder, and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred and the Corporation shall be deemed to have issued replacement Rights to the holders of its then outstanding Shares. |
(g) | If the Board of Directors is deemed under Subsection 5.1c) to have elected or elects under Subsection 5.1a) to redeem the Rights, the right to exercise the Rights will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. |
(h) | Within 10 days after the Board of Directors is deemed under Subsection 5.1c) to have elected or elects under Subsection 5.1a) or (f) to redeem the Rights, the Corporation shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to each such holder at his last address as it appears upon the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the transfer agent for the Voting Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. |
(i) | If a redemption of Rights pursuant to Subsection 5.1a) or a waiver of a Flip-in Event pursuant to Subsection 5.1e) is proposed at any time prior to the Separation Time, such redemption or waiver shall be submitted for approval to the holders of Voting Shares. Such approval shall be deemed to have been given if the redemption or waiver is approved by the affirmative vote of a majority of the votes cast by Independent Shareholders represented in person or by proxy at a meeting of such holders duly held in accordance with applicable laws and the Corporation’s by-laws. |
(j) | If a redemption of Rights pursuant to Subsection 5.1a) or a waiver of a Flip-in Event pursuant to Subsection 5.1e) is proposed at any time after the Separation Time, such redemption or waiver shall be submitted for approval to the holders of Rights. Such approval shall be deemed to have been given if the redemption or waiver is approved by holders of Rights as set forth in Subsection 5.4d). |
Section 5.2 | Expiration |
Section 5.3 | Issuance of New Rights Certificates |
Section 5.4 | Supplements and Amendments |
(a) | Subject to Subsections 5.4b) and (c) and this Subsection 5.4a), the Corporation may from time to time amend, vary or delete any of the provisions of this Agreement and the Rights; provided, however, that no amendment, variation or deletion made on or after the date of the 2022 meeting of shareholders at which the resolution referred to in Section 5.20 is to be considered shall be made without the prior consent of the holders of the Rights, given as provided in Subsection 5.4b) below, except that amendments, variations or deletions made for any of the following purposes shall not require such prior approval but shall be subject to subsequent ratification in accordance with Subsection 5.4b): |
(i) | in order to make such changes as are necessary in order to maintain the validity of this Agreement and the Rights as a result of any change in any applicable legislation, regulations or rules; or |
(ii) | in order to make such changes as are necessary in order to cure any clerical or typographical error. |
(b) | Any amendment, variation or deletion to or from this Agreement made by the Board of Directors pursuant to Subsection 5.4a) shall: |
(i) | if made prior to the Separation Time, be submitted to the shareholders of the Corporation at the next meeting of shareholders and the shareholders may, by resolution passed by a majority of the votes cast by Independent Shareholders who vote in respect of such amendment, variation or deletion, confirm or reject such amendment or supplement; or |
(ii) | if made after the Separation Time, be submitted to the holders of Rights at a meeting to be held on a date not later than the date of the next meeting of shareholders of the Corporation and the holders of Rights may, by resolution passed by a majority of the votes cast by the holders of Rights which have not or are not deemed to have become void pursuant to Subsection 3.1b) who vote in respect of such amendment, variation or deletion, confirm or reject such amendment or supplement. |
(c) | For greater certainty and notwithstanding anything herein contained, (i) no amendment, variation or deletion to the provisions of Article 4 shall be made except with the concurrence of the Rights Agent thereto, and (ii) neither the exercise by the Board of Directors of any power or discretion conferred on it hereunder nor the making by the Board of Directors of any determination or the granting of any waiver it is permitted to make or give hereunder shall constitute an amendment, variation or deletion of the provisions of this Agreement or the Rights, for purposes of this Section 5.4 or otherwise. |
(d) | The approval, confirmation or consent of the holders of Rights with respect to any matter arising hereunder shall be deemed to have been given if the action requiring such approval, confirmation or consent is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof. For the purposes hereof, each outstanding Right (other than Rights which are void pursuant to the provisions hereof or which, prior to the Separation Time, are held otherwise than by Independent Shareholders) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Corporation’s by- laws and the Canada Business Corporations Act with respect to meetings of shareholders of the Corporation. |
(e) | The Corporation shall be required to provide the Rights Agent with notice in writing of any such amendment, variation or deletion to this Agreement as referred to in this Section 5.4 within 5 days of effecting such amendment, variation or deletion. |
(f) | Any supplement or amendment to this Agreement pursuant to Subsections 5.4b) through (e) shall be subject to the receipt of any requisite approval or consent from any governmental or regulatory authority having jurisdiction over the Corporation, including without limitation any requisite approval of stock exchanges on which the Shares are listed. |
Section 5.5 | Fractional Rights and Fractional Shares |
(a) | The Corporation will not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. Any such fractional Right shall be null and void and the Corporation will not have any obligation or liability in respect thereof. |
(b) | The Corporation shall not be required to issue fractional Shares upon exercise of the Rights or to distribute certificates that evidence fractional Shares. In lieu of issuing fractional Shares, the Corporation shall pay to the registered holder of Rights Certificates at the time such Rights are exercised as herein provided, an amount in cash equal to the same fraction of the Market Price of one Share at the date of such exercise. The Rights Agent shall have no obligation to make any payments in lieu of fractional Shares unless the Corporation shall have provided the Rights Agent with the necessary funds to pay in full all amounts payable in accordance with Subsection 2.2e)iii). |
Section 5.6 | Rights of Action |
Section 5.7 | Holder of Rights Not Deemed a Shareholder |
Section 5.8 | Notice of Proposed Actions |
Section 5.9 | Notices |
(a) | if to the Corporation: |
(b) | if to the Rights Agent: |
(c) | if to the holder of any Rights, to the address of such holder as it appears on the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the Corporation for the Shares. |
Section 5.10 | Costs of Enforcement |
Section 5.11 | Regulatory Approvals |
Section 5.12 | Declaration as to Non-Canadian and Non-U.S. Holders |
Section 5.13 | Successors |
Section 5.14 | Benefits of this Agreement |
Section 5.15 | Determination and Actions by the Board of Directors |
Section 5.16 | Governing Law |
Section 5.17 | Language |
Section 5.18 | Counterparts |
Section 5.19 | Severability |
Section 5.20 | Reconfirmation |
Section 5.21 | Time of the Essence |
AETERNA ZENTARIS INC. | |||
By: | |||
Name: Michael V. Ward | |||
Title: President and Chief Executive Officer |
COMPUTERSHARE TRUST COMPANY OF CANADA | |||
By: | |||
Name: Martine Gauthier | |||
Title: Professional, Client Services | |||
By: | |||
Name: Steve Gilbert | |||
Title: Professional, Client Services |
AETERNA ZENTARIS INC. | |||
By: | |||
Authorized Signing Officer | |||
By: | |||
Authorized Signing Officer |
COMPUTERSHARE TRUST COMPANY OF CANADA, in the City of Montreal | |||
By: | |||
Authorized Signing Officer |
Date: | |||
Signature | |||
(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever) | |||
Signature Guaranteed |
Signature | |||
(Please print name below signature) |
Date: | |||
Signature | |||
(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever) | |||
Signature Guaranteed |
Signature | |||
(Please print name below signature |
Date: | |||
Signature | |||
(La signature doit correspondre en tous points au nom apparaissant au recto du présent certificat de Droits, sans modification, ajout ni changement d’aucune sorte.) | |||
(Signature avalisée) |
Signature | ||
(Veuillez écrire le nom en lettres moulées sous la signature) |
Date: | |||
Signature | |||
(La signature doit correspondre en tous points au nom apparaissant au recto du présent certificat de Droits, sans modification, ajout ni changement d’aucune sorte.) | |||
(Signature avalisée) |
Signature | ||
(Veuillez écrire le nom en lettres moulées sous la signature) |
1. | Services: As a consultant you will perform such services as may be mutually agreed to between you and the Corporation (the “Services”) from time to time. We have agreed that you will perform the Services described in Schedule “A” hereto. The Corporation anticipates the provision of these Services will require not more than One Hundred Twenty (120) hours of work each month, with any additional hours to be agreed upon in advance between the parties. To assist in the provision of the Services, you will have the title of Senior Vice President, Chief Financial Officer. |
2. | Standard of Care. You will provide the Services to the best of your ability and in a competent and professional manner. You represent and warrant that you have sufficient expertise and resources, and the ability, to provide the Services. You will act in good faith and in the best interests of the Corporation in carrying out the Services. |
3. | Term: The term of this Agreement will commence as of the Effective Date and unless sooner terminated as provided herein, will continue for an indefinite term (the “Term”). |
4. | Conflict of Interest: You represent that (a) there are, as of the date hereof, no conflicts of interest or fiduciary obligations, written or unwritten, which would affect your ability to provide the Services; and (b) during the Term of this Agreement, you will not enter into any agreement, or undertake any other course of action which may reasonably be expected to give rise to a conflict of interest on your part or materially impair your ability to provide the Services hereunder. The Corporation agrees the voluntary team positions held by you at the Effective Date do not give rise to a conflict of interest under this section 4. |
5. | Direction & Control: You will be solely responsible for determining the means and methods of performing the Services at all times complying with the standards contained in Section 6 below. You will ensure that you devote adequate time and attention in order to provide the Services as required herein provided you are under no obligation to provide the Services for any particular number of hours a day, or for any particular number of days a week. It is understood and agreed between the parties that you are not limited in providing services to any other person during the term of this Agreement provided that the provision of such Services does not breach the provisions of this Agreement including Section 4 and do not compete with the business of the Corporation. Except as expressly set out herein to the contrary, you will provide all necessary tools, equipment and labour related to the provision of the Services. |
6. | Service Standards: You will perform the Services in accordance with (i) the overall standards and lawful policies and procedures established by the Corporation, including any code of ethics or business conduct adopted by the Corporation (including any future revisions of such policies, procedures or other codes of business conduct) and you acknowledge having been given copies of the Corporation’s Code of Conduct and Business Ethics in advance of executing this Agreement; and (ii) all applicable laws, rules and regulations, and all requirements of all applicable regulatory, self-regulatory and administrative bodies. |
7. | Reporting: You will report on the Services to the President and Chief Executive Officer of the Corporation (“CEO”). You will also provide reporting as part of your Services as a member of the executive management team of the Corporation, including to the Corporation’s Audit Committee and Board, as required. |
8. | Location: The Services will be principally performed at your home office in Toronto. You agree domestic and international travel will be required in the provision of the Services. Time travelling will be paid up to eight (8) hours per round trip at an hourly rate of C$150.00. |
9. | Consulting Fees: In consideration of the Services rendered hereunder, you will be paid a consulting fee of C$150.00 per hour (the “Base Fees”), plus goods and services or harmonized sales tax eligible under the Excise Tax Act, 1985 (Canada) (“HST”), as required. The Base Fee will be paid monthly in arrears, payable within 30 days of submission of appropriate invoices reflecting the Services rendered in the previous month. You will not invoice the Corporation for more than the hours set out in section 1 (together with any time travelling) unless you have obtained prior approval from the CEO for such additional hours. All or part of the Base Fees may be paid through an affiliate of the Corporation. |
10. | Clawback Entitlement: If the Corporation finds, after full consideration of the facts, that you engaged in fraud, theft, embezzlement or any other criminal act of a similar nature in the performance of the Services, you agree the Corporation is entitled to obtain reimbursement from you, to the full extent permitted by governing law and to the extent it determines (in its sole discretion) that it is in the Corporation’s best interest to do so. This subsection 10 does not limit the Corporation’s right to take other appropriate actions with respect to you, including termination of this engagement and other remedial and recovery action. |
11. | Independent Status: The parties agree that you are a self-employed independent contractor and that you are not an employee or agent of the Corporation and this Agreement will not create any partnership, joint venture, employer/employee, principal/agent, master/servant or any other relationship between the parties except that of independent contractor. Accordingly, the Corporation has no responsibility to make deductions for, or to pay, benefits, health, welfare and pension costs, withholdings for income taxes, employment insurance premiums, Workers’ Compensation premiums, Canada Pension Plan premiums, payroll taxes, disability insurance premiums or any other similar charges with respect to the payment for the Services. |
12. | Expenses: The Corporation will reimburse you for reasonable entertainment, travel and other business expenses, incurred on behalf of or at the request of the Corporation, so long as they are in incurred accordance with the Corporation’s policies and rules for such reimbursements. As an independent contractor, you are solely responsible for any and all other expenses incurred in providing the Services and the Corporation is not responsible for reimbursing you for any other expenses. |
13. | Confidentiality: You acknowledge that you have received and will receive or conceive, in carrying on or in the course of providing Services to the Corporation, Confidential Information (defined below) pertaining to the activities, the technologies, the operations and the business, past, present and future, of the Corporation, which information is not in the public domain. You acknowledge that such Confidential Information belongs to the Corporation and that its disclosure or unauthorized use could be damaging or prejudicial to the Corporation and contrary to the Corporation’s best interests. Accordingly, you agree that you will maintain as confidential all information obtained under or in connection with this Agreement and will not use or disclose such information to any third party without prior consent of the Corporation. You agree to take no action that may cause any such information to lose its character as Confidential Information. This clause does not extend to information which was rightfully in your possession prior to the commencement of the negotiations that led to this Agreement, which was already in the public domain, or which becomes so at a future date through no fault by you. |
14. | Ownership of Developments and Intellectual Property in Developments: You acknowledge and agree that all rights, titles and interests in or to the Developments and all Intellectual Property (defined below) in and to the Developments shall be owned exclusively by the Corporation as of their creation and you will make full and prompt disclosure to the Corporation of all information relating to any Developments unless specifically released from such obligation in writing by the Corporation’s Board of Directors. Copyrightable work included in Developments shall be deemed to "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended). Without further compensation, you hereby irrevocably quit-claim and assign, and agree to assign to the Corporation, or any designee, your entire right, title and interest in and to the Developments and all Intellectual Property in and to the Developments. You understand that this assignment is intended to, and does, extend to Developments currently in existence, in development, as well as Developments which have yet to be created. |
a) | result or derive from the relationship created under this Agreement or from your knowledge or use of the Corporation’s confidential information; |
b) | are conceived or made by you (individually or in collaboration with others) in the course of your engagement by the Corporation under this Agreement; |
c) | result from or derive from the use or application of the resources of the Corporation; or |
d) | relate to the business operations of actual or demonstrably anticipated research and development by the Corporation. |
a) | rights to any patents, trademarks, service marks, trade names, domain names, copyright, database rights, designs, industrial designs, trade secrets, integrated circuit rights and topography rights; and |
b) | all domestic and foreign registrations, applications, divisionals, continuations, continuations in-part, re-examinations and renewals thereof. |
15. | Further Assurances. You shall, at the Corporation’s expense, perform all actions reasonably requested by the Corporation (whether during or after the Term) to establish and confirm title and ownership of Developments and all Intellectual Property in and to the Developments (including, without limitation, assignments, consents, powers of attorney and other instruments). You agree to execute on demand, whether during or after the Term, any applications, transfers, assignments or other documents as the Corporation may consider necessary for the purpose of either: |
a) | obtaining maintaining, or vesting or assigning absolute title in any Developments and any Intellectual Property related thereto to the Corporation; or |
b) | applying for, prosecuting, obtaining or protecting any patent, copyright, industrial design or trade-mark registration or any other similar right pertaining to any Intellectual Property in Developments in any country. You further agree to cooperate and assist the Corporation in every way possible in the application for or prosecution of rights pertaining to such Intellectual Property. |
16. | Remedies: You recognize and expressly acknowledge that the Corporation would be subject to irreparable harm should any of the provisions of sections 13 and 14 be infringed, or should any of your obligations under this Agreement be breached by you, and that damages alone will be an inadequate remedy for any breach or violation thereof and that the Corporation, in addition to all other remedies, will be entitled as a matter of right to equitable relief, including temporary or permanent injunction to restrain such breach. |
17. | Ownership of Files and Other Property: Any property of the Corporation, including any file, sketch, drawing, letter, report, memorandum or other document, any equipment, machinery, tool, instrument or other device, any diskette, recording tape, compact disc, software, electronic communication device or any other property, which comes into your control or possession during the Term in the performance or in the course of performing the Services for the Corporation, regardless of whether you participated in its preparation or design, how it may have come under your control or into your possession and whether it is an original or a copy, shall at all times remain the property of the Corporation and, forthwith upon any request by the Corporation and upon the termination of this Agreement (for any reason), shall promptly be returned to the Corporation or its designated representative. You may not keep a copy or give one to a third party without the prior expressly written permission of the Chairman of the Board. |
18. | Termination: This Agreement and the relationship created under this Agreement may be terminated by you or the Corporation, as the case may be prior to the expiry of the Term, upon the occurrence of any of the following events: |
a) | By the Corporation upon the material breach or default by you of any provision of this Agreement; or |
b) | By the Corporation at any time by providing thirty (30) days written notice to you. During this working notice period you will assist with transitional duties as required by the Corporation; or |
c) | By you by providing at least thirty (30) days prior written notice and during such working notice period assisting with transitional duties as required by the Corporation. Any such notice shall not relieve either party of their mutual obligations to perform under this Agreement (it being understood the Corporation is under no obligation to utilize you to provide Services during this period); or |
d) | Immediately upon your death; or |
e) | Upon the mutual agreement of the parties. |
19. | Privacy and Personal Information: You acknowledge that as a result of your engagement, you may become aware of personal information (as such term is defined in the Personal Information Electronic Documents Act) which is collected, used or disclosed by the Corporation. You agree that you will not, without the prior written consent of the Corporation, disclose or make available any such personal information to any other person or entity except in accordance with the Corporation’s express instructions. You agree that any personal information provided to you by the Corporation will only be used by you for such purposes as are specified therein and for no other purpose. You agree to execute any such further agreements required to evidence your agreement in respect thereof. |
20. | Indemnity: You agree to indemnify the Corporation from and against any and all claims, costs, liabilities, damages, charges and expenses, arising out of or in connection with this Agreement or the Services, including any costs, losses or penalties incurred by the Corporation as a result of the Corporation’s failure to make any deductions, withholdings, remittances and contributions required by law, if any. If the Corporation should ever be required by any governmental authority at any time to pay on your behalf any assessments including, but not limited to, income taxes, employment insurance premiums, workers’ compensation premiums, Canada Pension Plan premiums, payroll taxes or any other similar charges, you will, forthwith upon notice, reimburse the Corporation for such payment, together with interest and any penalties applicable thereon. Your obligation under this paragraph will survive the termination or expiration of this Agreement. |
21. | Survival: Notwithstanding the termination of this Agreement, each party shall remain bound by the provisions of this Agreement which by their terms impose obligations upon that party that extend beyond the termination of this Agreement. |
22. | Binding Arbitration: Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined exclusively by arbitration administered by the International Centre for Dispute Resolution Canada ("ICDR Canada") and carried out in Toronto, Ontario, Canada, before one arbitrator, with the cost of such arbitration to be split equally between the parties. The arbitration shall be conducted in accordance with ICDR Canada's Canadian Arbitration Rules, except as modified herein. The arbitrator may award any form of relief permitted under this Agreement and applicable law. The arbitrator shall have no jurisdiction to vary the express terms of this Agreement. The decision of the arbitrator shall be in writing, in English, and shall state the reasons for the award. The decision rendered by the arbitrator may be entered in any court of competent jurisdiction. The parties hereto waive, to the fullest extent permitted by law, any rights to appeal to, or to seek review of such award by, any court. The parties hereto further agree to obtain the arbitral tribunal's agreement to preserve the confidentiality of the arbitration. |
23. | Notices: Any notice given hereunder shall be given in writing and sent by registered or certified mail or hand-delivered. If such notice is sent by registered or certified mail, it shall be deemed to have been received five (5) business days following the date of its mailing if the postal services are working normally. If such is not the case, the notice must be sent by electronic mail, hand-delivered or served by bailiff, at the discretion of the sender. In the case of sending by electronic mail, hand-delivery or service, the notice shall be deemed to have been received the same day. It is agreed that if the delivery date is a non-business day, the notice shall be deemed to have been received on the following business day. |
24. | General: |
a) | This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and the parties acknowledge and agree that its execution has not been induced by, nor do either of the parties rely upon or regard as material, any representations or writings whatsoever not incorporated and made a part of this Agreement. This Agreement supersedes any prior agreements understandings, negotiations and discussions, whether oral or written, between the parties with respect to the subject matter hereof. |
b) | No amendment, change or modification of this Agreement will be valid unless in writing signed by the parties hereto. |
c) | This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. |
d) | If any provision of this Agreement will be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement will not be affected by such invalidity. Moreover, if any provision of this Agreement is deemed to be overbroad or otherwise unenforceable as written, the parties agree that such provision should be modified and reformed, and then enforced, to the maximum extent permitted by applicable law. |
e) | This Agreement is personal to you and may not be assigned. |
25. | Acknowledgment: By entering into this Agreement, you acknowledge and agree that you have read and understand your obligations under this Agreement, agree to all of the terms hereof and have been given the opportunity to seek independent legal advice in respect of the same. You understand and agree that you are an independent contractor and are not and will not be an employee of the Corporation. You agree that the Corporation will not be obligated to make any payments to you upon termination of this Agreement except in respect of Services rendered to the date of termination. |
26. | Counterparts: This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed to be an original and such counterparts will together constitute one and the same Agreement |
1. | I have reviewed this annual report on Form 20-F of Aeterna Zentaris Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as at, and for, the periods presented in this report; |
4. | The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting 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 generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as at the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and |
5. | The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting. |
1. | I have reviewed this annual report on Form 20-F of Aeterna Zentaris Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as at, and for, the periods presented in this report; |
4. | The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting 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 generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as at the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and |
5. | The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Document and Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2018
shares
| |
Document Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | AETERNA ZENTARIS INC. |
Entity Central Index Key | 0001113423 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 16,440,760 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenues | |||
License fees (note 6) | $ 24,325 | $ 458 | $ 497 |
Product sales (note 6) | 2,167 | 0 | 0 |
Royalty income (note 6) | 184 | 0 | 0 |
Sales commission and other | 205 | 465 | 414 |
Total revenues | 26,881 | 923 | 911 |
Cost of sales | 2,104 | 0 | 0 |
Gross income | 24,777 | 923 | 911 |
Operating expenses (note 20) | |||
Research and development costs | 2,932 | 10,704 | 16,495 |
General and administrative expenses | 8,894 | 8,198 | 7,147 |
Selling expenses | 3,109 | 5,095 | 6,745 |
Total operating expenses | 14,935 | 23,997 | 30,387 |
Income (loss) from operations | 9,842 | (23,074) | (29,476) |
Settlements (note 27) | (1,400) | 0 | 0 |
Gain (loss) due to changes in foreign currency exchange rates | 656 | 502 | (70) |
Change in fair value of warrant liability (note 17) | 263 | 2,222 | 4,437 |
Other finance income | 278 | 75 | 150 |
Net finance income (costs) | 1,197 | 2,799 | 4,517 |
Income (loss) before income taxes | 9,639 | (20,275) | (24,959) |
Income tax (expense) recovery (note 22) | (5,452) | 3,479 | 0 |
Net income (loss) | 4,187 | (16,796) | (24,959) |
Items that may be reclassified subsequently to profit or loss: | |||
Foreign currency translation adjustments | (260) | (1,430) | 569 |
Items that will not be reclassified to profit or loss: | |||
Actuarial gain (loss) on defined benefit plans | 193 | 694 | (1,479) |
Comprehensive income (loss) | $ 4,120 | $ (17,532) | $ (25,869) |
Net income (loss) per share (basic) (note 26) (in dollars per share) | $ 0.25 | $ (1.12) | $ (2.41) |
Net income (loss) per share (diluted) (note 26) (in dollars per share) | $ 0.24 | $ (1.12) | $ (2.41) |
Weighted average number of shares outstanding (note 26) | |||
Basic (in shares) | 16,440,760 | 14,958,704 | 10,348,879 |
Diluted (in shares) | 17,034,812 | 14,958,704 | 10,348,879 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cash flows from operating activities | |||
Net income (loss) for the year | $ 4,187 | $ (16,796) | $ (24,959) |
Items not affecting cash and cash equivalents: | |||
Change in fair value of warrant liability (note 17) | (263) | (2,222) | (4,437) |
Provision for restructuring and other costs (note 16) | (136) | 3,083 | (8) |
Recapture of inventory previously written off | 0 | (643) | 0 |
Depreciation, amortization and impairment (notes 12 and 13) | 58 | 94 | 280 |
Deferred income taxes (note 22) | 3,479 | (3,479) | 0 |
Share-based compensation costs | 570 | 182 | 1,082 |
Employee future benefits (note 18) | 316 | 246 | 382 |
Amortization of deferred revenues (note 6) | (609) | (458) | (345) |
Foreign exchange (gain) loss on items denominated in foreign currencies | (652) | (553) | 87 |
Gain on disposal of property, plant and equipment | (9) | (136) | (1) |
Other non-cash items | 35 | (19) | (83) |
Transaction cost allocated to warrants issued (note 19) | 0 | 0 | 56 |
Changes in operating assets and liabilities (note 21) | (151) | (2,212) | (1,064) |
Net cash provided by/(used in) operating activities | 6,825 | (22,913) | (29,010) |
Cash flows from financing activities | |||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | 0 | 7,788 | 9,924 |
Proceeds from warrants exercised (note 19) | 0 | 242 | 0 |
Net cash provided by financing activities | 0 | 8,030 | 9,924 |
Cash flows from investing activities | |||
Purchase of property, plant and equipment (note 12) | (9) | (4) | (66) |
Proceeds for disposals of property, plant and equipment (note 12) | 24 | 161 | 2 |
Change in restricted cash equivalents | (50) | 150 | (250) |
Net cash provided by (used in) investing activities | (35) | 307 | (314) |
Effect of exchange rate changes on cash and cash equivalents | |||
Effect of exchange rate changes on cash and cash equivalents | (58) | 357 | (51) |
Net change in cash and cash equivalents | 6,732 | (14,219) | (19,451) |
Cash and cash equivalents – beginning of year (note 6) | 7,780 | 21,999 | 41,450 |
Cash and cash equivalents – end of year (note 6) | $ 14,512 | $ 7,780 | $ 21,999 |
Consolidated Statements of Cash Flows - Parenthetical - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of cash flows [abstract] | |||
Payments for share issue costs | $ 0 | $ 250 | $ 1,107 |
Business overview |
12 Months Ended |
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Dec. 31, 2018 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Business overview | 1 Business overview Summary of business Aeterna Zentaris Inc. ("Aeterna Zentaris" or the "Company") is a specialty biopharmaceutical company which is commercializing novel pharmaceutical therapies. On December 20, 2017, the United States Food and Drug Administration ("FDA") granted marketing approval for Macrilen™ (macimorelin) to be used in the diagnosis of patients with adult growth hormone deficiency ("AGHD"). On January 16, 2018, the Company, through Aeterna Zentaris GmbH, entered into a license and assignment agreement with Strongbridge Ireland Limited ("Strongbridge") to carry out development, manufacturing, registration, regulatory and supply chain services for the commercialization of Macrilen™ (macimorelin) in the United States and Canada (the "License and Assignment Agreement"). Effective December 19, 2018, Strongbridge sold the United States and Canadian rights to Macrilen™ to Novo Nordisk ("Novo"). Reporting entity The accompanying consolidated financial statements include the accounts of Aeterna Zentaris Inc., an entity incorporated under the Canada Business Corporations Act, and its wholly-owned subsidiaries (collectively referred to as the "Group"). Aeterna Zentaris Inc. is the ultimate parent company of the Group. The Company currently has three wholly-owned direct and indirect subsidiaries, Aeterna Zentaris GmbH ("AEZS Germany"), based in Frankfurt, Germany, Zentaris IVF GmbH, a wholly-owned subsidiary of AEZS Germany, based in Frankfurt, Germany, and Aeterna Zentaris, Inc., an entity incorporated in the state of Delaware and with offices in Summerville, South Carolina, in the United States. The registered office of the Company is located at 1155 Rene-Levesque Blvd. West, 41st Floor, Montreal, Quebec H3B 3V2, Canada and its principal place of business is 315 Sigma Drive, Summerville, South Carolina 29486. The Company's common shares are listed on both the Toronto Stock Exchange (the "TSX") and on the NASDAQ Capital Market (the "NASDAQ"). Basis of presentation (a) Statement of compliance These consolidated financial statements as at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The accounting policies in these consolidated financial statements are consistent with those of the previous financial year except for the adoption of those standards in 2018 (note 4) and are consistent with the previous quarter. These consolidated financial statements were approved by the Company's Board of Directors on March 29, 2019. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates and the exercise of management's judgment in applying the Company's accounting policies. Areas involving a high degree of judgment or complexity and areas where assumptions and estimates are significant to the Company's consolidated financial statements are discussed in note 4 - Critical accounting estimates and judgments. (b) Principles of consolidation These consolidated financial statements include any entity in which the Company directly or indirectly holds more than 50% of the voting rights or over which the Company exercises control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. An entity is included in the consolidation from the date that control is transferred to the Company, while any entities that are sold are excluded from the consolidation from the date that control ceases. All inter-company balances and transactions are eliminated on consolidation. (c) Foreign currency Items included in the financial statements of the Group's entities are measured using the currency of the primary economic environment in which the entities operate (the "functional currency") which is U.S. dollars for the Company and its U.S. subsidiary, Aeterna Zentaris, Inc. and Euro ("EUR") for its German subsidiaries. Assets and liabilities of the German subsidiaries are translated from EUR balances at the period-end exchange rates, and the results of operations are translated from EUR amounts at average rates of exchange for the period. The resulting translation adjustments are included in accumulated other comprehensive income within shareholders' equity (deficiency). Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the underlying transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities not denominated in the functional currency are recognized in the consolidated statement of comprehensive income (loss). |
Assessment of liquidity and management's plans |
12 Months Ended |
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Dec. 31, 2018 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Assessment of liquidity and management's plans | 2 Assessment of liquidity and management's plans Since inception, the Company has incurred significant expenses in its efforts to develop and commercialize products. 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 MacrilenTM (macimorelin) in the United States and Canada (note 6). As at December 31, 2018, the Company had an accumulated deficit of $310 million. The Company has $14,512 of cash and cash equivalents as at December 31, 2018, and management believes it has sufficient liquidity to meet its current obligations of $5,596 and continue its planned level of expenses for at least, but not limited to the next twelve months from the date of issuance of these consolidated financial statements. The Company is focused on managing its operating expenses, and has the discretion to limit research and development costs, administrative expenses and capital expenditures in order to maintain its liquidity, until such time that additional sources of funding can be obtained. The Company’s principal focus is on the licensing and development of MacrilenTM (macimorelin) and it currently does not have any other approved product. In January 2018, the Company signed a license and assignment agreement with Strongbridge Ireland Ltd., which as of December 19, 2018 is a wholly-owned subsidiary of Novo Nordisk A/S (“Novo”), to carry out development, manufacturing, registration and commercialization of MacrilenTM (macimorelin) in the U.S. and Canada (the “License and Assignment Agreement”) (see note 6). Consistent with Strongbridge, Novo is funding 70% of the pediatric clinical trial submitted to the EMA and FDA, the Company's sole development priority. On March 12, 2019, the Company announced that its board of directors has formed a special committee of independent directors (the "Special Committee") to review strategic options available to the Company. The Special Committee has approved the engagement by the Company of a financial advisor that is working with management to assist the Special Committee and the board of directors in considering a wide range of transactions (including opportunities for the license of MacrilenTM (macimorelin) outside of the United States and Canada, or other monetization transactions relating to MacrilenTM (macimorelin). Management has evaluated whether material uncertainties exist relating to events or conditions as described in Note 4 and has considered the following in making that critical judgment. The Company’s current operating budget and cash flows from operating activities in 2019 are expected to decline compared with 2018, however, the Company believes it will experience an increase in its royalty income, which, when combined with its forecasted cash flows, the Company believes will provide sufficient liquidity to finance operations and meet its commitments for at least, but not limited to, twelve months from the date of approval of these financial statements. |
Summary of significant accounting policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||
Corporate Information And Statement Of IFRS Compliance [Abstract] | ||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | 3 Summary of significant accounting policies The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements except for the adoption of those standards in 2018 (note 4) and have been applied consistently by all Group entities. Cash and cash equivalents Cash and cash equivalents consist of unrestricted cash on hand and balances with banks, as well as short-term interest-bearing deposits, such as money market accounts, that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, with a maturity of three months or less from the date of acquisition. Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method for all inventories. The Company's policy is to write down inventory that has become obsolete and inventory that has a cost basis in excess of its expected net realizable value. Increases in the reserve are recorded as charges in cost of product sales. For product candidates that have not been approved by the FDA, inventory used in clinical trials is written down at the time of production and recorded as research and development ("R&D") costs. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the clinical trial. All direct manufacturing costs incurred after approval are capitalized into inventory. Restricted cash equivalents Restricted cash equivalents are comprised of bank deposits, related to a guarantee for a long-term operating lease obligation and for a corporate credit card program that cannot be used for current purposes. Property, plant and equipment and depreciation Items of property, plant and equipment are recorded at cost, net of related government grants and accumulated depreciation and impairment charges. Depreciation is calculated using the following methods, annual rates and period:
Depreciation expense, which is recorded in the consolidated statement of comprehensive income (loss), is allocated to the appropriate functional expense categories to which the underlying items of property, plant and equipment relate. Identifiable intangible assets and amortization Identifiable intangible assets with finite useful lives consist of in-process R&D acquired in business combinations, patents and trademarks. In-process R&D acquired in business combinations is recognized at fair value at the acquisition date. Patents and trademarks are comprised of costs, including professional fees incurred in connection with the filing of patents and the registration of trademarks for product marketing and manufacturing purposes net of related government grants, impairment losses, where applicable, and accumulated amortization. Identifiable intangible assets with finite useful lives are amortized, from the time at which the assets are available for use, on a straight-line basis over their estimated useful lives of eight to fifteen years for in-process R&D and patents and ten years for trademarks. Amortization expense, which is recorded in the consolidated statement of comprehensive income (loss), is allocated to the appropriate functional expense categories to which the underlying identifiable intangible assets relate. Goodwill Goodwill is recognized as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the fair value of the net identifiable assets acquired and liabilities assumed, as of the acquisition date. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill acquired in business combinations is allocated to groups of cash generating units ("CGU") that are expected to benefit from the synergies of the combination. Impairment of assets Items of property, plant and equipment and identifiable intangible assets with finite lives subject to depreciation or amortization, respectively, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Management is required to assess at each reporting date whether there is any indication that an asset may be impaired. Where such an indication exists, the asset's recoverable amount is compared to its carrying value, and an impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows, or CGU. In determining value in use of a given asset or CGU, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are allocated to the appropriate functional expense categories to which the underlying identifiable intangible assets relate, and are recorded in the consolidated statement of comprehensive income (loss). Items of property, plant and equipment and amortizable identifiable intangible assets with finite lives that suffered impairment are reviewed for possible reversal of the impairment if there has been a change, since the date of the most recent impairment test, in the estimates used to determine the impaired asset's recoverable amount. However, an asset's carrying amount, increased due to the reversal of a prior impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, had the original impairment not occurred. Goodwill is not subject to amortization and instead is tested for impairment annually or more often if there is an indication that the CGU to which the goodwill has been allocated may be impaired. Impairment is determined for goodwill by assessing whether the carrying value of a CGU, including the allocated goodwill, exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. In the event that the carrying amount of goodwill exceeds its recoverable amount, an impairment loss is recognized in an amount equal to the excess. Impairment losses related to goodwill are not subsequently reversed. Share purchase warrants Share purchase warrants are classified as liabilities when the Company does not have the unconditional right to avoid delivering cash to the holders in the future. Each of the Company's share purchase warrants contains a written put option, arising upon the occurrence of a fundamental transaction, as that term is defined in the share purchase warrants, including a change of control. As a result of the existence of these put options, and despite the fact that the repurchase feature is conditional on a defined contingency, the share purchase warrants are required to be classified as a financial liability, since such contingency could ultimately result in the transfer of assets by the Company. The warrant liability is initially measured at fair value, and any subsequent changes in fair value are recognized as gains or losses through profit or loss. Any transaction costs related to the share purchase warrants are expensed as incurred. The warrant liability is classified as non-current, unless the underlying share purchase warrants will expire or be settled within 12 months from the end of a given reporting period. Employee benefits Salaries and other short-term benefits Salaries and other short-term benefit obligations are measured on an undiscounted basis and are recognized in the consolidated statement of comprehensive income (loss) over the related service period or when the Company has a present legal or constructive obligation to make payments as a result of past events and when the amount payable can be estimated reliably. Post-employment benefits The Company's subsidiary in Germany maintains defined contribution and unfunded defined benefit plans, as well as other benefit plans for its employees. For defined benefit pension plans and other post-employment benefits, net periodic pension expense is actuarially determined on a quarterly basis using the projected unit credit method. The cost of pension and other benefits earned by employees is determined by applying certain assumptions, including discount rates, the projected age of employees upon retirement, the expected rate of future compensation and employee turnover. The employee future benefits liability is recognized at its present value, which is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related future benefit liability. Actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized in other comprehensive income (loss), net of tax, and simultaneously reclassified in the deficit in the consolidated statement of financial position in the year in which the actuarial gains and losses arise and without recycling to the consolidated statement of comprehensive income (loss) in subsequent periods. For defined contribution plans, expenses are recorded in the consolidated statement of comprehensive income (loss) as incurred–namely, over the period that the related employee service is rendered. Termination benefits Termination benefits are recognized in the consolidated statement of comprehensive income (loss) when the Company is demonstrably committed, without the realistic possibility of withdrawal, to a formal detailed plan to terminate employment earlier than originally expected. Termination benefit liabilities expected to be settled after 12 months from the end of a given reporting period are discounted to their present value, where material. Financial instruments The Company classifies its financial instruments in the following categories: "Financial assets at fair value through profit or loss ("FVTPL"); "Financial assets at amortized cost"; "Financial liabilities at "FVTPL"; and "Financial liabilities at amortized cost". Financial assets at FVTPL: Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of comprehensive income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in the statement of comprehensive income (loss) in the period in which they arise. Financial liabilities at FVTPL: These financial liabilities are initially recognized at fair value, and transaction costs directly attributable to issuing the warrants are expensed in the statement of comprehensive income (loss). Financial liabilities that are required to be measured at FVTPL have all fair value movements, excluding those related to changes in the credit risk of the liability which are recorded in other comprehensive income (loss), recognized in the statement of comprehensive income (loss). Financial assets at fair value through other comprehensive income (FVTOCI): Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income (loss) in the period in which they arise. Financial assets at amortized cost: A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date, and are initially recognized at fair value and subsequently carried at amortized cost less any impairment. Impairment of financial assets at amortized cost: The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. The following table shows the classification of the Company’s financial assets/liabilities under IFRS 9 Financial Instruments ("IFRS 9") and the previous classifications under IAS 39: Financial asset/liability IFRS 9 Classification IAS 39 Classification Cash and cash equivalents Amortized cost Loans and receivables Trade and other receivables Amortized cost Loans and receivables Restricted cash and cash equivalents Amortized cost Loans and receivables Warrant liability (derivative) FVTPL FVTPL Payable and accrued liabilities Amortized cost Other financial liabilities Share capital Common shares are classified as equity. Incremental costs that are directly attributable to the issuance of common shares and stock options are recognized as a deduction from equity, net of any tax effects. Where offerings result in the issuance of units (where each unit is comprised of a common share of the Company and a share purchase warrant, exercisable in order to purchase a common share or fraction thereof), proceeds received in connection with those offerings are allocated between share capital and share purchase warrants based on the residual method. Proceeds are allocated to warrant liability based on the fair value of the share purchase warrants, and the residual amount of proceeds is allocated to share capital. Transaction costs in connection with such offerings are allocated to the liability and equity unit components in proportion to the allocation of proceeds. Provisions Provisions represent liabilities to the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, such as organizational restructuring, when it is probable that an outflow of resources will be required to settle the obligation and where the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are made for any contracts which are deemed onerous. A contract is onerous if the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Provisions for onerous contracts are measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Present value is determined based on expected future cash flows that are discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized in finance costs. Revenue recognition License fees License fees representing non-refundable payments received at the time of executing the license agreements. The Company’s promise to grant a license provides its customer with either a right to access the Company’s intellectual property ("IP") or a right to use the Company’s IP. Revenue from a license that provides a customer the right to use the Company’s IP is recognized at a point in time when the transfers to the licensee is completed and the license period begins. Revenue from a license that provides access to the Company’s IP over a license term is considered to be a performance obligation satisfied over time and, therefore, revenue is recognized over the term of the license arrangement. Royalty and milestone income Royalty income earned through a license is recognized when the underlying sales have occurred. Milestone income is recognized at the point in time when it is highly probable that the respective milestone event criteria are met, and the risk of reversal of revenue recognition is remote. Other revenue also includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales, and is recognized when control transfers to the third party and the related performance obligations are satisfied. Share-based compensation costs The Company operates an equity-settled share-based compensation plan under which the Company receives services from directors, senior executives, employees and other collaborators as consideration for equity instruments of the Company. The Company accounts for all forms of share-based compensation using the fair value-based method. Fair value of stock options is determined at the date of grant using the Black-Scholes option pricing model, which includes estimates of the number of awards that are expected to vest over the vesting period. Where granted share options vest in installments over the vesting period (defined as graded vesting), the Company treats each installment as a separate share option grant. Share-based compensation expense is recognized over the vesting period, or as specified vesting conditions are satisfied, and credited to other capital. Any consideration received by the Company in connection with the exercise of stock options is credited to share capital. Any other capital component of the share-based compensation is transferred to share capital upon the issuance of shares. Current and deferred income tax Income tax on profit or loss comprises current and deferred tax. Tax is recognized in profit or loss, except that a change attributable to an item of income or expense recognized as other comprehensive income (loss) or directly in equity is also recognized directly in other comprehensive income (loss) or directly in equity. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The current income tax charge is calculated in accordance with tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company's subsidiaries operate and generate taxable income. Deferred income tax is recognized on temporary differences (other than, where applicable, temporary differences associated with unremitted earnings from foreign subsidiaries and associates to the extent that the investment is essentially permanent in duration, and temporary differences associated with the initial recognition of goodwill) arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or R&D non-refundable tax credits in the Group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Research and development costs Research costs are expensed as incurred. Development costs are expensed as incurred, except for those that meet the criteria for deferral, in which case the costs are capitalized and amortized to operations over the estimated period of benefit. No development costs have been capitalized during any of the periods presented. Net income (loss) per share Basic net income (loss) income per share is calculated using the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share is calculated based on the weighted average number of common shares outstanding during the year, plus the effects of dilutive common share equivalents, such as stock options and share purchase warrants. This method requires that diluted net income (loss) per share be calculated using the treasury stock method, as if all common share equivalents had been exercised at the beginning of the reporting period, or period of issuance, as the case may be, and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of the common shares during the period. |
Critical accounting estimates and judgments |
12 Months Ended |
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Dec. 31, 2018 | |
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract] | |
Critical accounting estimates and judgments | 4 Critical accounting estimates and judgments The preparation of 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 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. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. (a) Critical accounting estimates and assumptions Critical accounting estimates and assumptions are those that have a significant risk of causing material adjustment and are often applied to matters or outcomes that are inherently uncertain and subject to change. As such, management cautions that future events often vary from forecasts and expectations and that estimates routinely require adjustment. The following discusses the most significant accounting estimates and assumptions that the Company has made in the preparation of the consolidated financial statements. Accounting for the Macrilen License and Assignment Agreement See the performance obligations further described in note 6 - Licensing arrangements. Fair value of the warrant liability and stock options Determining the fair value of the warrant liability and stock options requires judgment related to the selection of the most appropriate pricing model, the estimation of stock price volatility and the expected term of the underlying instruments. Any changes in the estimates or inputs utilized to determine fair value could result in a significant impact on the Company's future operating results, liabilities or other components of shareholders' equity. Fair value assumptions used are described in note 17 - Warrant liability and 19 - Share and other capital. Impairment of goodwill and identifiable intangible assets The annual impairment assessment related to goodwill requires to estimate the recoverable amount, which has been determined using value in use model. The Company also concluded that there was only one CGU as management monitors goodwill and identifiable intangible assets on an overall entity basis. Future events could cause the assumptions utilized in the impairment tests to change, resulting in a potentially adverse effect on the Company's future results due to increased impairment charges. Employee future benefits The determination of expenses and obligations associated with employee future benefits requires the use of assumptions, such as the discount rate to measure obligations, the projected age of employees upon retirement, the expected rate of future compensation and estimated employee turnover. Because the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results that are estimated based on the aforementioned assumptions. Additional information is included in note 18 - Employee future benefits. Income taxes The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of Group entities' ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful commercialization of the Company's products. To the extent that management's assessment of any Group entity's ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets, and future income tax provisions or recoveries could be affected.Additional information is included in note 22 - Income taxes. . |
Recent accounting pronoucements |
12 Months Ended |
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Dec. 31, 2018 | |
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract] | |
Recent accounting pronouncements | 5 Recent accounting pronouncements Accounting standards adopted in 2018 IFRS 9 Financial instruments IFRS 9 replaces the provisions of IAS 39 Financial Instruments: Recognition and Measurement ("IAS 39") that relate to the recognition, classification and measurement of financial assets and financial liabilities, de-recognition of financial instruments, impairment of financial assets and hedge accounting. The Company's financial assets are mainly comprised of cash and cash equivalents, trade and other receivables, and restricted cash equivalents, which are classified and accounted for under IFRS 9 at amortized cost. Financial liabilities are mainly comprised of payables and accrued liabilities, which are accounted for at amortized cost, and the warrant liability, which is a derivative that is accounted for at fair value through profit and loss (FVTPL). The impairment of financial assets, including trade and other receivables, is now assessed using the simplified method of the expected credit loss model: previously, the incurred loss model was used. Applying the expected credit loss model has not had a significant impact on the value of the financial assets. The Company applied the modified retrospective method upon adoption of IFRS 9 on January 1, 2018. This method requires the recognition of the cumulative effect of initially applying IFRS 9 to retained earnings (deficit) and not to restate prior years. The application of this new standard resulted in changes in accounting policies but has no impact on opening deficit. IFRS 15 Revenue from contracts with customers Effective January 1, 2018, the Company has adopted IFRS 15 Revenue from Contracts with Customers (“IFRS 15”). This new standard was applied using a modified retrospective approach. The adoption of IFRS 15 did not have a significant impact on the timing or measurement of the Company’s revenue and no adjustment to the opening balance of deficit as at January 1, 2018 has been recorded as result of adopting IFRS 15. The impacts of adoption of the new standard are summarized below: The Company's revenue consists of licensing fees representing non-refundable payments received at the time of executing the license agreement, which are recognized as revenue upon execution of the license agreements when the Company has no significant future performance obligation and collectability of the fees is probable. Under IFRS 15, the Company determines whether the Company's promise to grant a license provides its customer with either a right to access the Company’s IP or a right to use the Company’s IP. Revenue from a license that provides a customer the right to use the Company’s IP is recognized at a point in time when the transfer to the licensee is completed and the license period begins. Revenue from a license that provides access to the Company's IP over a license term is considered to be a performance obligation satisfied over time and, therefore, revenue is recognized over the term of the license arrangement. Revenue consists also of royalty income from the out-licensing of IP, which is recognized as earned and from manufacturing and other services, where revenue is recognized when control transfers to the third party and the Company’s performance obligations are satisfied. The adoption of IFRS 15 did not significantly change the timing or amount of revenue recognized from these manufacturing and other services arrangements, nor did it change accounting for these royalty arrangements, as the standard's royalty exception is applied for IP licenses. Furthermore, the Company receives milestone payments related to the out-licensing of IP. IFRS 15 resulted in the following changes in timing and amount of revenue recognized under these arrangements.In January 2018, the Company received $24.0 million of which $23.6 million was recognized in the consolidated statements of comprehensive income (loss) and $0.4 million was deferred to the consolidated statements of financial position and is being amortized until June 2023 when we expect to commence product sales for the pediatric indication. Under IAS 18, the full $24.0 million would have been deferred to the consolidated statements of financial position and would have been amortized to the consolidated statements of comprehensive income (loss) evenly until October 2027, representing the expiry date of the underlying patents. The Company applied the modified retrospective method upon adoption of IFRS 15 on January 1, 2018. This method requires the recognition of the cumulative effect of initially applying IFRS 15 to deficit and not to restate prior years. The application of this new standard effective January 1, 2018 had no impact on opening deficit. Accounting standards not yet adopted In January 2016, the IASB issued IFRS 16, Leases ("IFRS 16"), which supersedes IAS 17, Leases, and the related interpretations on leases: IFRIC 4, Determining Whether an Arrangement Contains a Lease; Standard Interpretations Committee ("SIC") 15, Operating Leases - Incentives; and SIC 27, Evaluating the Substance of Transactions in the Legal Form of a Lease. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted for companies that also apply IFRS 15. The Company is currently assessing the impact that this new standard may have on the Company's consolidated financial statements. In June 2017, IFRIC 23, "Uncertainty over Income Tax Treatment" ("IFRIC 23"), was issued. IFRIC 23 provides guidance on how to value uncertain income tax positions based on the probability of whether the relevant tax authorities will accept the company's tax treatments. A company is to assume that a taxation authority with the right to examine any amounts reported to it will examine those amounts and will have full knowledge of all relevant information when doing so. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019. The adoption of this interpretation is not expected to have a significant impact on the Company's consolidated financial statements. In June 2015, the IASB published ED/2015/5 Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14) combining two issues submitted separately to the IFRS Interpretations Committee into a single package of narrow-scope amendments to IAS 19 Employee Benefits and IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. However, in April 2017 the IASB decided to pursue the amendments to IAS 19 and in September 2017 confirmed it would do so despite putting off the amendments to IFRIC 14. The amendments in Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) are: (i) if a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement and (ii) amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. An entity applies the amendments to plan amendments, curtailments or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 January 2019. The adoption of these amendments is not expected to have a significant impact on the Company's consolidated financial statements. |
Licensing arrangement |
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Subclassifications of assets, liabilities and equities [abstract] | |
Licensing arrangement | 6 Licensing arrangements Macrilen License and Assignment Agreement On January 16, 2018, the Company through Aeterna Zentaris GmbH entered into a license and assignment agreement (the "License and Assignment Agreement") with Strongbridge to carry out development, manufacturing, registration, regulatory and supply chain services for the commercialization of Macrilen™ (macimorelin) in the United States and Canada, which provides for (i) the "right to use" license relating to the Adult Indication; (ii) the sale of the right to acquire a license of a future FDA-approved Pediatric Indication; (iii) Strongbridge has agreed to fund 70% of the costs of a pediatric clinical trial submitted for approval to the EMA and FDA to be run by the Company with customary oversight from a joint steering committee; and (iv) for an Interim Supply Arrangement. (i) Adult Indication Under the terms of the License and Assignment Agreement, and for as long as Macrilen™ (macimorelin) is patent-protected, the Company will be entitled to a 15% royalty on annual net sales up to $75.0 million and an 18% royalty on annual net sales above $75.0 million. Following the end of patent protection in United States or Canada for Macrilen™ (macimorelin), the Company will be entitled to a 5% royalty on net sales in that country. In addition, the Company will also receive one-time payments ranging from $4.0 million to $100.0 million upon the achievement of commercial milestones going from $25.0 million annual net sales up to $500.0 million annual net sales. In January 2018, the Company received a cash payment of $24.0 million from Strongbridge and on July 23, 2018, Strongbridge launched product sales of Macrilen™ (macimorelin) in the United States. (ii) Pediatric Indication Upon approval by the FDA of a pediatric indication for Macrilen™ (macimorelin), the Company will receive a one-time milestone payment of $5.0 million. This amount will be recognized once it is probable that it will be received. Transaction price Analysis of the total discounted cash flows of both the $24.0 million payment and the $5.0 million payment upon FDA approval of the Pediatric Instance demonstrates that 84% of the future revenue streams would be derived from the Adult Indication and 16% from the Pediatric Indication. On a relative fair value basis, the Company has allocated the transaction price to the performance obligations resulting in $23.6 million being allocated to the Adult Indication and being recognized as license fee revenue in the consolidated statements of comprehensive income (loss) effective January 2018, and $400 being allocated to the right to a future Pediatric Indication, which is recognized as deferred revenue on the consolidated statements of financial position and amortized monthly beginning January 2018 into the consolidated statements of comprehensive income (loss). (iii) PIP study During 2018, the Company invoiced Strongbridge $358 as its share of the costs incurred by the Company under the PIP. The Company considers the funding arrangement under the PIP to be a collaboration arrangement under IFRS 11 and has accounted for the invoicing as a reduction of costs incurred during the period. This amount is presented in the consolidated statement of financial position as trade and other receivables and has been fully collected. (iv) Interim Supply Arrangement The Company has agreed under the License and Assignment Agreement to supply ingredients for the manufacture of Macrilen™ (macimorelin) during an interim period at a price that is set ‘at cost’, without any profit margin. The Company believes the stand-alone selling price of the manufacturing ingredients to be their cost, as that approximates the amount at which Strongbridge would be able to procure those same goods with other suppliers. During 2018, the Company invoiced $2,167 and has received payment in full of these invoices. These items are presented in the consolidated statements of comprehensive income (loss) as product sales and cost of goods sold. Novo purchase of Strongbridge License Agreement Effective December 19, 2018, Strongbridge sold the entity which owned the License and Assignment Agreement for the United States and Canadian rights to Macrilen™ to Novo . Zoptrex™ License Agreements On July 1, 2016, the Company entered into a license agreement (the "Cyntec License Agreement") with Cyntec Co., Ltd. ("Cyntec"), an affiliate of Orient EuroPharma Co., Ltd. ("OEP") for Zoptrex™ (zoptarelin doxorubicin) for the initial indication of endometrial cancer. Under the terms of the Cyntec License Agreement, the Company was paid a nonrefundable upfront cash payment (the "License Fee") of EUR 0.5 million in consideration for the license to Cyntec of the Company's intellectual property related to Zoptrex™ and the grant to Cyntec of the right to commercialize Zoptrex™ in a territory consisting of Taiwan and nine countries in southeast Asia (the "OEP Territory"). Cyntec has also agreed to make additional payments to the Company upon achieving certain pre-established regulatory and commercial milestones. Furthermore, the Company will receive royalties based on future net sales of Zoptrex™ in the OEP Territory. Cyntec will be responsible for the development, registration, reimbursement and commercialization of the product in the OEP Territory. The Company also entered into related Technology Transfer and Supply Agreements with another affiliate of OEP, pursuant to which the Company will transfer to such affiliate the technology necessary to permit the affiliate to manufacture finished Zoptrex™ using quantities of the active pharmaceutical agreement purchased from the Company pursuant to the Supply Agreement. On December 1, 2014, the Company entered into an exclusive master collaboration agreement ("Master Collaboration Agreement"), a technology transfer and technical assistance agreement ("Tech Transfer Agreement") and a license agreement ("Sinopharm License Agreement") with Sinopharm A-Think Pharmaceuticals Co., Ltd. ("Sinopharm") for the development, manufacture and commercialization of Zoptrex™ in all human uses, in the People's Republic of China, including Hong Kong and Macau (collectively, the "Sinopharm Territory"). Under the terms of the TTA, Sinopharm made a one-time, non-refundable payment (the "Transfer Fee") of $1,000 to the Company in consideration for the transfer of technical documentation and materials, know-how and technical assistance services. Additionally, pursuant to the Sinopharm License Agreement, the Company is entitled to receive additional consideration upon achieving certain milestones, including the occurrence of certain regulatory and commercial events in the Sinopharm Territory. Furthermore, the Company is entitled to royalties on future net sales of Zoptrex™ in the Sinopharm Territory. The Company has continuing involvement in the aforementioned arrangements, including the transfer of documentation, know-how and materials, as well as the provision of technical assistance, such as quality systems implementation, analytical and stability testing, territory-specific development initiatives, and other services. The Company deferred the non-refundable License and Transfer Fees and is amortizing the related payment as revenue on a straight-line basis over the period during which the aforementioned services are rendered and obligations are performed. At December 31, 2017, the Company had deferred revenues net of amortization of $541 relating to non-refundable upfront payments and, due to events that occurred in 2017, the Company does not anticipate development of Zoptrex™ under the licensing agreements. In the first quarter of 2018, the Company recognized this amount as revenue. |
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Cash and cash equivalents | 7 Cash and cash equivalents
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Trade and other receivables | 8 Trade and other receivables
See note 24 - Financial instruments and financial risk management for discussion of credit losses. |
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Inventory | 9 Inventory
The Company recognized $2,087 of inventory costs as cost of sales in the consolidated statement of comprehensive income (loss) for the year ended December 31, 2018 (2017 - nil). |
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Prepaid expenses and other current assets | 10 Prepaid expenses and other current assets
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Subclassifications of assets, liabilities and equities [abstract] | |
Restricted cash equivalents | 11 Restricted cash equivalents The Company had restricted cash equivalents amounting to $418 at December 31, 2018 and $381 at December 31, 2017. These balances consist of certificates of deposit that are used as collateral for corporate credit cards and leases. |
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Property, plant and equipment | 12 Property, plant and equipment Components of the Company's property, plant and equipment are summarized below.
Depreciation of $35 ($100 in 2017 and $112 in 2016) is presented in the consolidated statement of comprehensive income (loss) as follows: $20 ($69 in 2017 and $80 in 2016) in R&D costs, $10 ($10 in 2017 and $11 in 2016) in general and administrative ("G&A") expenses and $5 ($21 in 2017 and $21 in 2016) in selling expenses. |
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Identifiable intangible assets | 13 Identifiable intangible assets Identifiable intangible assets with finite useful lives consist entirely of in-process R&D costs, patents and trademarks with such assets expected to be fully amortized by 2021. Changes in the carrying value of the Company's identifiable intangible assets with finite useful lives are summarized below.
* Recorded as R&D costs in the consolidated statements of comprehensive income (loss). |
Goodwill |
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Goodwill | 14 Goodwill The change in carrying value is as follows:
Management's evaluation of impairment in goodwill is based on estimates that are derived from our licensee's projected sales of Macrilen for 2019 (both units and selling price), annual revenue growth rate, growth in operating expenses, the effect of future costs of the pediatric development program (the "PIP") and discount rate for generating the Company's net present value. There was no impairment assessed at December 31, 2018. |
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Payables and accrued liabilities | 15 Payables and accrued liabilities
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Provision for restructuring costs and other costs | 16 Provision for restructuring and other costs In the third quarter of 2017, Aeterna Zentaris GmbH, and its Works Council approved a restructuring program (the "2017 German Restructuring"), which was rolled out as a consequence of the negative Phase 3 clinical trial results of Zoptrex™ and the related impact on the product pipeline. This was also part of the continued strategy to transition into a commercially operating specialty biopharmaceutical organization focused on the development and commercialization of Macrilen™ (macimorelin), including through out-licensing arrangements and pursuing in-licensing opportunities. The changes in the Company's provision for restructuring and other costs can be summarized as follows:
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Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liability | 17 Warrant liability The change in the Company's warrant liability can be summarized as follows:
A summary of the activity related to the Company's share purchase warrants is provided below.
_________________________ * A portion of the Series A warrants was exercised using the cashless feature. Therefore, the total number of equivalent shares issued was 301,343. The following table summarizes the share purchase warrants outstanding and exercisable as at December 31, 2018:
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 all warrants outstanding as at December 31, 2018. The Black-Scholes option pricing model uses "Level 2" inputs, as defined by IFRS 13, Fair value measurement ("IFRS 13") and as discussed in note 24 - Financial instruments and financial risk management.
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Employee future benefits |
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Employee Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee future benefits | 18 Employee future benefits The Company's subsidiary in Germany provides unfunded defined benefit pension plans and unfunded post-employment benefit plans for certain groups of employees. Provisions for pension obligations are established for benefits payable in the form of retirement, disability and surviving dependent pensions. The unfunded defined benefit pension plans are final salary pension plans, which provide benefits to members (or to their surviving dependents) in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on the member's length of service and on his or her base salary in the final years leading up to retirement. Current pensions vary in accordance with applicable statutory requirements, which foresee an adjustment every three years on an individual basis that is based on inflationary increases or in relation to salaries of comparable groups of active employees in the Company. An adjustment may be denied by the Company if the Company's financial situation does not allow for an increase in pensions. These plans are unfunded, and the Company meets benefit payment obligations as they fall due. The change in the Company's accrued benefit obligations is summarized as follows:
The cumulative amount of actuarial net losses recognized in other comprehensive income (loss) as at December 31, 2018 is $4,084($4,277 as at December 31, 2017 and $4,971 as at December 31, 2016). The significant actuarial assumptions applied to determine the Company's accrued benefit obligations are as follows:
The calculation of the pension benefit obligation is sensitive to the discount rate assumption. Effective January 1, 2018, management determined that the discount rate assumption should be adjusted from 1.7% to 1.9% as a result of changes in the European economic environment. Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in Germany. These assumptions translate into an average remaining life expectancy in years for a pensioner retiring at age 65:
The most recent actuarial reports give effect to the pension and post-employment benefit obligations as at December 31, 2018. The next actuarial reports are planned for December 31, 2019. In accordance with the assumptions used as at December 31, 2018, undiscounted defined pension benefits expected to be paid, in Euro, are as follows:
The weighted average duration of the defined benefit obligation is 15.3 years. Total expenses for the Company's defined contribution plan in its German subsidiary amounted to approximately $75 for the year ended December 31, 2018 ($119 for 2017 and $129 for 2016). If variations in the following assumptions had occurred during 2018, the impact on the Company's pension benefit obligation of $13,100 as at December 31, 2018 would have been as follows:
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Share and other capital |
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Share Capital, Reserves And Other Equity Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share and other capital | 19 Share 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. Common shares issued in connection with "At-the-Market" ("ATM") drawdowns April 2016 ATM Program On April 1, 2016, the Company entered into an ATM sales agreement (the "April 1, 2016 ATM Program"), under which the Company was able, at its discretion and from time to time, to sell up to 3 million common shares through ATM issuances on the NASDAQ for aggregate gross proceeds of up to approximately $10 million. The April 2016 ATM Program provides that common shares were to be sold at market prices prevailing at the time of sale and, as a result, prices varied. Between April 1, 2016 and March 24, 2017, the Company issued a total of 1,706,968 common shares under the April 2016 ATM Program at an average issuance price of $3.52 per share for aggregate gross proceeds of $6.0 million less cash transaction costs of $190 and previously deferred financing costs of $225. March 2017 ATM Program On March 28, 2017, the Company commenced a new ATM offering pursuant to its existing ATM Sales Agreement, dated April 1, 2016, under which the Company was able, at its discretion, from time to time, to sell up to a maximum of 3 million common shares through ATM issuances on the NASDAQ, up to an aggregate amount of $9.0 million (the "March 2017 ATM Program"). The common shares were to be sold at market prices prevailing at the time of the sale of the common shares and, as a result, sale prices varied. Between March 28, 2017 and April 18, 2017, the Company issued a total of 597,994 common shares under the March 2017 ATM Program at an average issuance price of $2.97 per share for aggregate gross proceeds of $1,780,000 less cash transaction costs of $55 and previously deferred financing costs of $65. April 2017 ATM Program On April 27, 2017, the Company entered into a New ATM Sales Agreement and filed with the Securities and Exchange Commission (the "SEC") a prospectus supplement (the "April 2017 ATM Prospectus Supplement" or "April 2017 ATM Program") related to sales and distributions of up to a maximum of 2.24 million common shares through ATM issuances on the NASDAQ, up to an aggregate amount of $6.9 million under the New ATM Sales Agreement. The common shares will be sold at market prices prevailing at the time of the sale of the common shares and, as a result, prices may vary. The New ATM Sales Agreement and the April 2017 ATM Program superseded and replaced the March 2017 ATM Program, which itself superseded and replaced the April 2016 ATM Program. The April 2017 ATM Prospectus Supplement supplements the base prospectus included in the Company's Shelf Registration Statement on Form F-3, as amended (the "2017 Shelf Registration Statement"), which was declared effective by the SEC on April 27, 2017. The 2017 Shelf Registration Statement allowed the Company to offer up to $50 million of common shares and is effective for a three-year period. Between May 30, 2017 and December 31, 2017, the Company issued a total of 1,805,758 common shares under the April 2017 ATM Program at an average issuance price of $2.08 per share for aggregate gross proceeds of $3,761,000 less cash transaction costs of $115 and previously deferred financing costs of $285. Because of these issuances, the exercise price of the Series A warrants issued in March 2015 was adjusted to $1.07 pursuant to the anti-dilution provisions contained in such warrants. Public offerings November 2016 Offering On November 1, 2016, the Company completed a registered direct offering of 2.1 million units (the "Units"), with each Unit consisting of one common share or one pre-funded warrant to purchase one common share and 0.45 of a warrant to purchase one common share (the "November 2016 Offering"). Total gross cash proceeds raised through the November 2016 Offering amounted to $7.6 million, less cash transaction costs of $1.0 million, and previously deferred transactions costs of $27. The warrants are exercisable six months after their date of issuance and for a period of three years thereafter at an exercise price of $4.70 per share. The warrants contain a call provision which provides that, in the event the Company's common shares trade at or above $10 on the market during a specified measurement period and subject to a minimum volume of trading during such measurement period, then, subject to certain conditions, the Company has the right to call for cancellation all or any portion of the warrants which are not exercised by holders within 10 trading days following receipt of a call notice from the Company. Upon complete exercise for cash, these warrants would result in the issuance of an aggregate of 945,000 common shares that would generate additional proceeds of approximately $4.4 million, although these warrants may be exercised on a "net" or "cashless" basis. See also note 17 - Warrant liability. The Company estimated the fair value attributable to the warrants as of the date of grant by applying probability to multiple Black-Scholes pricing models, to which the following weighed average assumptions were applied: a risk-free annual interest rate of 0.63%, an expected volatility of 112.48%, an expected life of 1.63 years and a dividend yield of 0.0%. In addition, the Company reduced the fair value of these warrants to take into consideration the fair value of the $10.00 call option, which was also calculated using the Black-Scholes pricing model with similar assumptions as described above. As a result, on November 1, 2016, being the date of issuance, the total fair value of the share purchase warrants was estimated at $400. The pre-funded warrants were offered in the November 2016 Offering to the investor because the purchase of Units would have resulted in the investor beneficially owning more than an "initial beneficial ownership limitation" of 4.9% of the Company's common shares following the offering. The pre-funded warrants, which were exercisable immediately upon issuance and for a period of five years at an exercise price of $3.60 per share, were fully exercised between November 10, 2016 and December 19, 2016. Total gross proceeds payable to the Company in connection with the exercise of the pre-funded warrants were pre-funded by the investor and therefore were included in the proceeds of the offering. No additional consideration was required to be paid to the Company upon exercise of the pre-funded warrants. Total gross proceeds of the November 2016 Offering were allocated as follows: $400 was allocated to the warrant liability, $3,239 was allocated to the pre-funded warrants, and the balance of $3,921 was allocated to Share capital. Transaction costs were allocated to the liability and equity components in proportion to the allocation of proceeds. As such, an amount of $56 was allocated to the warrant liability and immediately recognized in general and administrative expenses in the consolidated statement of comprehensive income (loss), an amount of $544 was allocated to share capital and an amount of $450 was allocated to pre-funded warrants. Upon exercise of the pre-funded warrants, the net proceeds initially allocated to the pre-funded warrants were re-allocated to share capital. Shareholder rights plan The Company has a shareholder rights plan (the "Rights Plan") that provides the Board of Directors and the Company's shareholders with additional time to assess any unsolicited take-over bid for the Company and, where appropriate, to pursue other alternatives for maximizing shareholder value. Under the Rights Plan, one right has been issued for each currently issued common share, and one right will be issued with each additional common share that may be issued from time to time. The Rights Plan was approved, ratified and confirmed by the Company's shareholders at its annual meeting of shareholders held on May 10, 2016. The Board of Directors reviewed the terms of the Existing Rights Plan for conformity with current Canadian securities laws, as well as the evolving practices of public corporations in Canada, with respect to shareholder rights plan design and has made some minor amendments thereto as a result. The Board of Directors determined it appropriate and in the best interests of the shareholders to continue the Rights Plan and approved the amended and restated rights plan (the "Rights Plan") on March 26, 2019. The Rights Plan will take effect immediately upon receipt of approval of the shareholders of the Corporation at the annual and special meeting of shareholders scheduled to be held on May 8, 2019. Other capital The Company accounts for costs associated with share-based compensation from security grants under its long-term incentive plan and stock option plans as other capital in its consolidated statements of changes in shareholders' equity (deficiency) and as general and administrative expenses in its consolidated statements of comprehensive income (loss). Long-term incentive plan At the 2018 annual and special meeting of shareholders, the Company's shareholders approved the adoption of the 2018 long-term incentive plan (the "LTIP"), which allows the Board of Directors to issue up to 11.4% of the total issued and outstanding common shares at any given time to eligible individuals at an exercise price to be determined by the Board of Directors at the time of the grant, subject to a ceiling, as stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards. This LTIP replaces the stock option plan (the "Stock Option Plan") for its directors, senior executives, employees and other collaborators who provide services to the Company. The Company's Board of Directors amended the Stock Option Plan on March 20, 2014 and the Company's Shareholders approved, ratified and confirmed the Stock Option Plan on May 10, 2016. Options granted under the Stock Option Plan prior to the 2014 amendment expire after a maximum period of10 years following the date of grant. Options granted after the 2014 amendment expire after a maximum period of seven years following the date of grant. During 2018, the Company granted Deferred Share Units (DSU) and stock options.The following tables summarizes the activity under the LTIP and, previously, the Stock Option Plan:
As at December 31, 2018, the total compensation cost related to unvested US Dollar stock options not yet recognized amounted to $198 ($444 in 2017). This amount is expected to be recognized over a weighted average period of 1.15 years (1.38 years in 2017). The Company settles stock options exercised through the issuance of new common shares as opposed to purchasing common shares on the market to settle stock option exercises. Fair value input assumptions for US dollar-denominated grants The table below shows the assumptions, or weighted average parameters, applied to the Black-Scholes option pricing model in order to determine share-based compensation costs over the life of the awards.
The Black-Scholes pricing models referred above use "Level 2" inputs in calculating fair value, as defined by IFRS 13, and as discussed in note 24 - Financial instruments and financial risk management. |
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Analysis of income and expense [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | 20 Operating expenses The nature of the Company's operating expenses from continuing operations include the following:
Most of the employment agreements entered into between the Company and its executive officers include termination provisions, whereby the executive officers would be entitled to receive benefits that would be payable if the Company were to terminate the executive officers' employment without cause or if their employment is terminated following a change of control. Separation benefits generally are calculated based on an agreed-upon multiple of applicable base salary and incentive compensation and, in certain cases, other benefit amounts. |
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Statement of cash flows [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental disclosure of cash flow information | 21 Supplemental disclosure of cash flow information
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Income taxes |
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Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes | 22 Income taxes Significant components of current and deferred income tax expense (recovery) are as follows:
The reconciliation of the combined Canadian federal and provincial income tax rate to the income tax expense is provided below:
Deferred income tax assets are recognized to the extent that the realization of the related tax benefit through reversal of temporary differences and future taxable profits is probable. Income (loss) before income taxes Income (loss) before income taxes is attributable to the Company's tax jurisdictions as follows:
Significant components of deferred tax assets and liabilities are as follows:
Significant components of unrecognized deferred tax assets are as follows:
As at December 31, 2018, amounts and expiry dates of tax attributes to be deferred for which no deferred tax asset was recognized were as follows:
The Company has estimated non-refundable R&D investment tax credits of approximately $5,894 which can be carried forward to reduce Canadian federal income taxes payable and which expire at dates ranging from 2019 to 2038. Furthermore, the Company has unrecognized tax assets in respect of operating losses to be carried forward in Germany and in the United States. The federal tax losses amount to approximately $205,343 in Germany (EUR 173,733) for which there is no expiry date, and to $3,322 in the United States, which expire as follows:
The operating loss carryforwards and the tax credits claimed are subject to review, and potential adjustment, by tax authorities. Other deductible temporary differences for which tax assets have not been booked are not subject to a time limit, except for share issuance expenses which are amortizable over five years. |
Capital disclosures |
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Dec. 31, 2018 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Capital disclosures | 23 Capital disclosures The Company's objective in managing capital, consisting of shareholders' equity, with cash and cash equivalents and restricted cash equivalents being its primary components, is to ensure sufficient liquidity to fund R&D costs, selling expenses, G&A expenses and working capital requirements. Over the past several years, the Company has raised capital via public equity offerings and issuances under various ATM sales programs as its primary source of liquidity, as discussed in note 19 - Share and other capital. The capital management objective of the Company remains the same as that in previous periods. The policy on dividends is to retain cash to keep funds available to finance the activities required to advance the Company's product development portfolio and to pursue appropriate commercial opportunities as they may arise. The Company is not subject to any capital requirements imposed by any regulators or by any other external source. |
Financial instruments and financial risk management |
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Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments and financial risk management | 24 Financial instruments and financial risk management Financial assets (liabilities) as at December 31, 2018 and December 31, 2017 are presented below.
Fair value As discussed in note 17 - Warrant liability, the Black-Scholes valuation methodology uses "Level 2" inputs in calculating fair value, as defined in IFRS 13, which establishes a hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The input levels discussed in IFRS 13 are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). Level 3 – Inputs for an asset or liability that are not based on observable market data (unobservable inputs). The carrying values of the Company's cash and cash equivalents, trade and other receivables, restricted cash equivalents, payables and accrued liabilities and provision for restructuring and other costs approximate their fair values due to their short-term maturities or to the prevailing interest rates of the related instruments, which are comparable to those of the market. Financial risk factors The following provides disclosures relating to the nature and extent of the Company's exposure to risks arising from financial instruments, including credit risk, liquidity risk, market risk (share price risk) and foreign exchange risk and how the Company manages those risks. (a) Credit risk Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of this exposure resulting in losses. The Company's exposure to credit risk currently relates to the financial assets at amortized cost in the table above. The Company holds its available cash in amounts that are readily convertible to known amounts of cash and deposits its cash balances with financial institutions that have an investment grade rating of at least "P-2" or the equivalent. This information is supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial information to ensure that it invests its cash in creditworthy and reputable financial institutions. Once there are indicators that there is no reasonable expectation of recovery, such financial assets are written off but are still subject to enforcement activity. As at December 31, 2018, trade accounts receivable for an amount of approximately $197 were with four counterparties of which $55 was past due or impaired and fully provided for (2017 - $25 with three counterparties and $5 past due or impaired and fully provided for).The licensee is obligated to pay its quarterly royalties, 60 days after quarter-end. Generally, the Company does not require collateral or other security from customers for trade accounts receivable; however, credit is extended following an evaluation of creditworthiness. In addition, the Company performs ongoing credit reviews of all of its customers and establishes an allowance for doubtful accounts when accounts are determined to be uncollectible. On this basis, as at December 31, 2018, the Company has provided for all outstanding and unpaid amounts relating to its operations before its licensing of MacrilenTM(macemorelin). The licensee has paid all amounts owing within 90 days of invoicing. The maximum exposure to credit risk approximates the amount recognized in the Company's consolidated statement of financial position. (b) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. As indicated in note 23 - Capital disclosures, the Company manages this risk through the management of its capital structure. It also manages liquidity risk by continuously monitoring actual and projected cash flows as further discussed in note 2 - Assessment of liquidity and management's plans. The Board of Directors reviews and approves the Company's operating and capital budgets, as well as any material transactions occurring outside of the ordinary course of business. The Company has adopted an investment policy in respect of the safety and preservation of its capital to ensure the Company's liquidity needs are met. The instruments are selected with regard to the expected timing of expenditures and prevailing interest rates. (c) Market risk Share price risk The change in fair value of the Company's warrant liability, which is measured at FVTPL, results from the periodic "mark-to-market" revaluation as further described in note 15 as it applies to its outstanding share purchase warrants. The valuation models are impacted, among other inputs, by the market price of the Company's common shares. As a result, the change in fair value of the warrant liability, which is reported in the consolidated statements of comprehensive income (loss), has been and may continue in future periods to be materially affected most notably by changes in the Company's common share closing price, which on the NASDAQ ranged from $1.19 to $3.87 during the year ended December 31, 2018. If variations in the market price of our common shares of -30% and +30% were to occur, the impact on the Company's net income related to the warrant liability held at December 31, 2018 would be as follows:
(d) Foreign exchange risk Entities using the Euro as their functional currency The Company is exposed to foreign exchange risk due to its investments in foreign operations whose functional currency is the Euro. As at December 31, 2018, if the US dollar had increased or decreased by 10% against the Euro, with all variables held constant, net income for the year ended December 31, 2018 would have been lower or higher by approximately $1,134 (2017 - $1,087). |
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Operating Segments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | 25 Segment information The Company operates in a single operating segment, being the biopharmaceutical segment. Geographical information Revenues by geographical area are detailed as follows:
Revenues have been allocated to geographic regions based on the country of residence of the Company's external customers or licensees. Non-current assets* by geographical area are detailed as follows:
Major customers representing 10% or more of the Company's revenues in each of the last three years are as follows:
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Net income (loss) per share |
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Earnings per share [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) per share | 26 Net income (loss) per share The following table sets forth pertinent data relating to the computation of basic and diluted net income (loss) per share attributable to common shareholders.
Net income (loss) per share is calculated by dividing net income (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 share purchase warrants. In periods with reported net losses, all stock options and share purchase 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 share purchase warrants have not been included in the computation of net loss per share because to do so would be anti-dilutive. |
Commitments and contingencies |
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Other Provisions, Contingent Liabilities and Contingent Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | 27 Commitments and contingencies The Company is committed to various operating leases for its premises. Expected future minimum lease payments, which also include future payments in connection with utility service agreements and future minimum sublease receipts under non-cancellable operating leases (subleases), as well as future payments in connection with service and manufacturing agreements, as at December 31, 2018 are as follows:
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. Securities class action lawsuit The Company and certain of its current and former officers are defendants in a class-action lawsuit pending in the U.S. District Court for the District of New Jersey, brought on behalf of shareholders of the Company. The lawsuit alleges violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements made by the defendants between August 30, 2011 and November 6, 2014 (the "Class Period"), regarding the safety and efficacy of Macrilen™ (macimorelin) and the prospects for the approval of the Company's New Drug Application for the product by the FDA. The plaintiffs represent a class comprised of purchasers of the Company's common shares during the Class Period and seek damages, costs and expenses and such other relief as determined by the Court. The Company considers the claims that have been asserted in the lawsuit to be without merit and is vigorously defending against them. The Company cannot, however, predict at this time the outcome or potential losses, if any, with respect to this lawsuit. Other lawsuits In late July 2017, the Company terminated for cause the employment agreement of Mr. David A. Dodd, the former President and Chief Executive Officer and it also terminated the employment of Mr. Philip A. Theodore, the former Senior Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary. On August 3, 2017, the Company filed a lawsuit against both Messrs. Dodd and Theodore for damages suffered by the Company for breach of confidence and/or breach of fiduciary duty in an amount to be determined prior to trial. On December 21, 2017, Messrs. Dodd and Theodore brought a counterclaim against the Company and its Chair, Carolyn Egbert, in the amount of CAN$6.0 million alleging, among other things, that defamatory statements were made against Messrs. Dodd and Theodore. On December 21, 2018, the matter was amicably resolved with the Company agreeing to make a payment to Mr. Dodd in the amount of $775. The parties consider their contractual relationship as having been terminated. Cogas Consulting, LLC ("Cogas") filed a lawsuit against the Company in state court in Fulton County, Georgia on February 2, 2018. The lawsuit was removed to federal court in Georgia. In the lawsuit, Cogas alleged that its employee (and sole shareholder) John Sharkey was entitled to a "success fee" commission on the Strongbridge License Agreement. Cogas was claiming damages in the form of a lost commission on the transaction. Cogas claims its commission is 5% on payments the Company receives within the first three years after January 14, 2018 including 5% of the $24.0 million Strongbridge already paid the Company, plus 5% of any royalty Strongbridge pays the Company through January 17, 2021. On November 5, 2018, the matter was amicably resolved with the Company agreeing to make a payment to Cogas in the amount of $625. The parties now consider their contractual relationship as having been terminated. |
Reclassification on comparative figures |
12 Months Ended |
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Dec. 31, 2018 | |
Disclosure of reclassifications or changes in presentation [abstract] | |
Reclassification on comparative figures | 28 Reclassification on comparative figures To consolidate the presentation of similar items, during 2018, the Company reclassified certain of its prior year comparative balance sheet items as follows: Prepaid expenses and other current assets The semi-finished goods inventory of $87 that was classified as inventory as at December 31, 2017 has been reclassified to prepaid expenses and other current assets as at December 31, 2018. Provision for restructuring and other costs The current portion of onerous contract provisions of $173 that was classified as payables and accrued liabilities as at December 31, 2017 has been reclassified to provision for restructuring and other costs as at December 31, 2018. The full balance of provisions, comprising $310 of onerous contract provisions and $718 of non-current portion of provision for restructuring costs, as at December 31, 2017 has been reclassified to provision for restructuring and other costs at December 31, 2018. |
Summary of significant accounting policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Information And Statement Of IFRS Compliance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of compliance | (a) Statement of compliance These consolidated financial statements as at December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018, 2017 and 2016 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The accounting policies in these consolidated financial statements are consistent with those of the previous financial year except for the adoption of those standards in 2018 (note 4) and are consistent with the previous quarter. These consolidated financial statements were approved by the Company's Board of Directors on March 29, 2019. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates and the exercise of management's judgment in applying the Company's accounting policies. Areas involving a high degree of judgment or complexity and areas where assumptions and estimates are significant to the Company's consolidated financial statements are discussed in note 4 - Critical accounting estimates and judgments. |
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Principles of consolidation | (b) Principles of consolidation These consolidated financial statements include any entity in which the Company directly or indirectly holds more than 50% of the voting rights or over which the Company exercises control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. An entity is included in the consolidation from the date that control is transferred to the Company, while any entities that are sold are excluded from the consolidation from the date that control ceases. All inter-company balances and transactions are eliminated on consolidation. |
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Foreign currency | (c) Foreign currency Items included in the financial statements of the Group's entities are measured using the currency of the primary economic environment in which the entities operate (the "functional currency") which is U.S. dollars for the Company and its U.S. subsidiary, Aeterna Zentaris, Inc. and Euro ("EUR") for its German subsidiaries. Assets and liabilities of the German subsidiaries are translated from EUR balances at the period-end exchange rates, and the results of operations are translated from EUR amounts at average rates of exchange for the period. The resulting translation adjustments are included in accumulated other comprehensive income within shareholders' equity (deficiency). Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the underlying transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities not denominated in the functional currency are recognized in the consolidated statement of comprehensive income (loss). |
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of unrestricted cash on hand and balances with banks, as well as short-term interest-bearing deposits, such as money market accounts, that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, with a maturity of three months or less from the date of acquisition. |
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Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method for all inventories. The Company's policy is to write down inventory that has become obsolete and inventory that has a cost basis in excess of its expected net realizable value. Increases in the reserve are recorded as charges in cost of product sales. For product candidates that have not been approved by the FDA, inventory used in clinical trials is written down at the time of production and recorded as research and development ("R&D") costs. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the clinical trial. All direct manufacturing costs incurred after approval are capitalized into inventory. |
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Restricted cash equivalents | Restricted cash equivalents Restricted cash equivalents are comprised of bank deposits, related to a guarantee for a long-term operating lease obligation and for a corporate credit card program that cannot be used for current purposes. |
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Property, plant and equipment and depreciation | Property, plant and equipment and depreciation Items of property, plant and equipment are recorded at cost, net of related government grants and accumulated depreciation and impairment charges. Depreciation is calculated using the following methods, annual rates and period:
Depreciation expense, which is recorded in the consolidated statement of comprehensive income (loss), is allocated to the appropriate functional expense categories to which the underlying items of property, plant and equipment relate. |
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Identifiable intangible assets and amortization | Identifiable intangible assets and amortization Identifiable intangible assets with finite useful lives consist of in-process R&D acquired in business combinations, patents and trademarks. In-process R&D acquired in business combinations is recognized at fair value at the acquisition date. Patents and trademarks are comprised of costs, including professional fees incurred in connection with the filing of patents and the registration of trademarks for product marketing and manufacturing purposes net of related government grants, impairment losses, where applicable, and accumulated amortization. Identifiable intangible assets with finite useful lives are amortized, from the time at which the assets are available for use, on a straight-line basis over their estimated useful lives of eight to fifteen years for in-process R&D and patents and ten years for trademarks. Amortization expense, which is recorded in the consolidated statement of comprehensive income (loss), is allocated to the appropriate functional expense categories to which the underlying identifiable intangible assets relate. |
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Goodwill | Goodwill Goodwill is recognized as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the fair value of the net identifiable assets acquired and liabilities assumed, as of the acquisition date. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill acquired in business combinations is allocated to groups of cash generating units ("CGU") that are expected to benefit from the synergies of the combination. |
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Impairment of assets | Impairment of assets Items of property, plant and equipment and identifiable intangible assets with finite lives subject to depreciation or amortization, respectively, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Management is required to assess at each reporting date whether there is any indication that an asset may be impaired. Where such an indication exists, the asset's recoverable amount is compared to its carrying value, and an impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows, or CGU. In determining value in use of a given asset or CGU, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are allocated to the appropriate functional expense categories to which the underlying identifiable intangible assets relate, and are recorded in the consolidated statement of comprehensive income (loss). Items of property, plant and equipment and amortizable identifiable intangible assets with finite lives that suffered impairment are reviewed for possible reversal of the impairment if there has been a change, since the date of the most recent impairment test, in the estimates used to determine the impaired asset's recoverable amount. However, an asset's carrying amount, increased due to the reversal of a prior impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, had the original impairment not occurred. Goodwill is not subject to amortization and instead is tested for impairment annually or more often if there is an indication that the CGU to which the goodwill has been allocated may be impaired. Impairment is determined for goodwill by assessing whether the carrying value of a CGU, including the allocated goodwill, exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. In the event that the carrying amount of goodwill exceeds its recoverable amount, an impairment loss is recognized in an amount equal to the excess. Impairment losses related to goodwill are not subsequently reversed. |
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Share purchase warrants | Share purchase warrants Share purchase warrants are classified as liabilities when the Company does not have the unconditional right to avoid delivering cash to the holders in the future. Each of the Company's share purchase warrants contains a written put option, arising upon the occurrence of a fundamental transaction, as that term is defined in the share purchase warrants, including a change of control. As a result of the existence of these put options, and despite the fact that the repurchase feature is conditional on a defined contingency, the share purchase warrants are required to be classified as a financial liability, since such contingency could ultimately result in the transfer of assets by the Company. The warrant liability is initially measured at fair value, and any subsequent changes in fair value are recognized as gains or losses through profit or loss. Any transaction costs related to the share purchase warrants are expensed as incurred. The warrant liability is classified as non-current, unless the underlying share purchase warrants will expire or be settled within 12 months from the end of a given reporting period. |
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Employee benefits | Employee benefits Salaries and other short-term benefits Salaries and other short-term benefit obligations are measured on an undiscounted basis and are recognized in the consolidated statement of comprehensive income (loss) over the related service period or when the Company has a present legal or constructive obligation to make payments as a result of past events and when the amount payable can be estimated reliably. Post-employment benefits The Company's subsidiary in Germany maintains defined contribution and unfunded defined benefit plans, as well as other benefit plans for its employees. For defined benefit pension plans and other post-employment benefits, net periodic pension expense is actuarially determined on a quarterly basis using the projected unit credit method. The cost of pension and other benefits earned by employees is determined by applying certain assumptions, including discount rates, the projected age of employees upon retirement, the expected rate of future compensation and employee turnover. The employee future benefits liability is recognized at its present value, which is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related future benefit liability. Actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized in other comprehensive income (loss), net of tax, and simultaneously reclassified in the deficit in the consolidated statement of financial position in the year in which the actuarial gains and losses arise and without recycling to the consolidated statement of comprehensive income (loss) in subsequent periods. For defined contribution plans, expenses are recorded in the consolidated statement of comprehensive income (loss) as incurred–namely, over the period that the related employee service is rendered. Termination benefits Termination benefits are recognized in the consolidated statement of comprehensive income (loss) when the Company is demonstrably committed, without the realistic possibility of withdrawal, to a formal detailed plan to terminate employment earlier than originally expected. Termination benefit liabilities expected to be settled after 12 months from the end of a given reporting period are discounted to their present value, where material. |
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Financial instruments | Financial instruments The Company classifies its financial instruments in the following categories: "Financial assets at fair value through profit or loss ("FVTPL"); "Financial assets at amortized cost"; "Financial liabilities at "FVTPL"; and "Financial liabilities at amortized cost". Financial assets at FVTPL: Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of comprehensive income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in the statement of comprehensive income (loss) in the period in which they arise. Financial liabilities at FVTPL: These financial liabilities are initially recognized at fair value, and transaction costs directly attributable to issuing the warrants are expensed in the statement of comprehensive income (loss). Financial liabilities that are required to be measured at FVTPL have all fair value movements, excluding those related to changes in the credit risk of the liability which are recorded in other comprehensive income (loss), recognized in the statement of comprehensive income (loss). Financial assets at fair value through other comprehensive income (FVTOCI): Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income (loss) in the period in which they arise. Financial assets at amortized cost: A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date, and are initially recognized at fair value and subsequently carried at amortized cost less any impairment. Impairment of financial assets at amortized cost: The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. The following table shows the classification of the Company’s financial assets/liabilities under IFRS 9 Financial Instruments ("IFRS 9") and the previous classifications under IAS 39: Financial asset/liability IFRS 9 Classification IAS 39 Classification Cash and cash equivalents Amortized cost Loans and receivables Trade and other receivables Amortized cost Loans and receivables Restricted cash and cash equivalents Amortized cost Loans and receivables Warrant liability (derivative) FVTPL FVTPL Payable and accrued liabilities Amortized cost Other financial liabilities |
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Share capital | Share capital Common shares are classified as equity. Incremental costs that are directly attributable to the issuance of common shares and stock options are recognized as a deduction from equity, net of any tax effects. Where offerings result in the issuance of units (where each unit is comprised of a common share of the Company and a share purchase warrant, exercisable in order to purchase a common share or fraction thereof), proceeds received in connection with those offerings are allocated between share capital and share purchase warrants based on the residual method. Proceeds are allocated to warrant liability based on the fair value of the share purchase warrants, and the residual amount of proceeds is allocated to share capital. Transaction costs in connection with such offerings are allocated to the liability and equity unit components in proportion to the allocation of proceeds. |
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Provisions | Provisions Provisions represent liabilities to the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, such as organizational restructuring, when it is probable that an outflow of resources will be required to settle the obligation and where the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are made for any contracts which are deemed onerous. A contract is onerous if the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Provisions for onerous contracts are measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Present value is determined based on expected future cash flows that are discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized in finance costs. |
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Revenue recognition | Revenue recognition License fees License fees representing non-refundable payments received at the time of executing the license agreements. The Company’s promise to grant a license provides its customer with either a right to access the Company’s intellectual property ("IP") or a right to use the Company’s IP. Revenue from a license that provides a customer the right to use the Company’s IP is recognized at a point in time when the transfers to the licensee is completed and the license period begins. Revenue from a license that provides access to the Company’s IP over a license term is considered to be a performance obligation satisfied over time and, therefore, revenue is recognized over the term of the license arrangement. Royalty and milestone income Royalty income earned through a license is recognized when the underlying sales have occurred. Milestone income is recognized at the point in time when it is highly probable that the respective milestone event criteria are met, and the risk of reversal of revenue recognition is remote. Other revenue also includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales, and is recognized when control transfers to the third party and the related performance obligations are satisfied. |
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Share-based compensation costs | Share-based compensation costs The Company operates an equity-settled share-based compensation plan under which the Company receives services from directors, senior executives, employees and other collaborators as consideration for equity instruments of the Company. The Company accounts for all forms of share-based compensation using the fair value-based method. Fair value of stock options is determined at the date of grant using the Black-Scholes option pricing model, which includes estimates of the number of awards that are expected to vest over the vesting period. Where granted share options vest in installments over the vesting period (defined as graded vesting), the Company treats each installment as a separate share option grant. Share-based compensation expense is recognized over the vesting period, or as specified vesting conditions are satisfied, and credited to other capital. Any consideration received by the Company in connection with the exercise of stock options is credited to share capital. Any other capital component of the share-based compensation is transferred to share capital upon the issuance of shares. |
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Current and deferred income tax | Current and deferred income tax Income tax on profit or loss comprises current and deferred tax. Tax is recognized in profit or loss, except that a change attributable to an item of income or expense recognized as other comprehensive income (loss) or directly in equity is also recognized directly in other comprehensive income (loss) or directly in equity. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The current income tax charge is calculated in accordance with tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company's subsidiaries operate and generate taxable income. Deferred income tax is recognized on temporary differences (other than, where applicable, temporary differences associated with unremitted earnings from foreign subsidiaries and associates to the extent that the investment is essentially permanent in duration, and temporary differences associated with the initial recognition of goodwill) arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or R&D non-refundable tax credits in the Group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. |
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Research and development costs | Research and development costs Research costs are expensed as incurred. Development costs are expensed as incurred, except for those that meet the criteria for deferral, in which case the costs are capitalized and amortized to operations over the estimated period of benefit. No development costs have been capitalized during any of the periods presented. |
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Net income (loss) per share | Net income (loss) per share Basic net income (loss) income per share is calculated using the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share is calculated based on the weighted average number of common shares outstanding during the year, plus the effects of dilutive common share equivalents, such as stock options and share purchase warrants. This method requires that diluted net income (loss) per share be calculated using the treasury stock method, as if all common share equivalents had been exercised at the beginning of the reporting period, or period of issuance, as the case may be, and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of the common shares during the period. Net income (loss) per share is calculated by dividing net income (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 share purchase warrants. In periods with reported net losses, all stock options and share purchase 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 share purchase 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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Critical accounting estimates and judgments | (a) Critical accounting estimates and assumptions Critical accounting estimates and assumptions are those that have a significant risk of causing material adjustment and are often applied to matters or outcomes that are inherently uncertain and subject to change. As such, management cautions that future events often vary from forecasts and expectations and that estimates routinely require adjustment. The following discusses the most significant accounting estimates and assumptions that the Company has made in the preparation of the consolidated financial statements. Accounting for the Macrilen License and Assignment Agreement See the performance obligations further described in note 6 - Licensing arrangements. Fair value of the warrant liability and stock options Determining the fair value of the warrant liability and stock options requires judgment related to the selection of the most appropriate pricing model, the estimation of stock price volatility and the expected term of the underlying instruments. Any changes in the estimates or inputs utilized to determine fair value could result in a significant impact on the Company's future operating results, liabilities or other components of shareholders' equity. Fair value assumptions used are described in note 17 - Warrant liability and 19 - Share and other capital. Impairment of goodwill and identifiable intangible assets The annual impairment assessment related to goodwill requires to estimate the recoverable amount, which has been determined using value in use model. The Company also concluded that there was only one CGU as management monitors goodwill and identifiable intangible assets on an overall entity basis. Future events could cause the assumptions utilized in the impairment tests to change, resulting in a potentially adverse effect on the Company's future results due to increased impairment charges. Employee future benefits The determination of expenses and obligations associated with employee future benefits requires the use of assumptions, such as the discount rate to measure obligations, the projected age of employees upon retirement, the expected rate of future compensation and estimated employee turnover. Because the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results that are estimated based on the aforementioned assumptions. Additional information is included in note 18 - Employee future benefits. Income taxes The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of Group entities' ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful commercialization of the Company's products. To the extent that management's assessment of any Group entity's ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets, and future income tax provisions or recoveries could be affected.Additional information is included in note 22 - Income taxes. . |
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Recent accounting pronouncements | IFRS 9 Financial instruments IFRS 9 replaces the provisions of IAS 39 Financial Instruments: Recognition and Measurement ("IAS 39") that relate to the recognition, classification and measurement of financial assets and financial liabilities, de-recognition of financial instruments, impairment of financial assets and hedge accounting. The Company's financial assets are mainly comprised of cash and cash equivalents, trade and other receivables, and restricted cash equivalents, which are classified and accounted for under IFRS 9 at amortized cost. Financial liabilities are mainly comprised of payables and accrued liabilities, which are accounted for at amortized cost, and the warrant liability, which is a derivative that is accounted for at fair value through profit and loss (FVTPL). The impairment of financial assets, including trade and other receivables, is now assessed using the simplified method of the expected credit loss model: previously, the incurred loss model was used. Applying the expected credit loss model has not had a significant impact on the value of the financial assets. The Company applied the modified retrospective method upon adoption of IFRS 9 on January 1, 2018. This method requires the recognition of the cumulative effect of initially applying IFRS 9 to retained earnings (deficit) and not to restate prior years. The application of this new standard resulted in changes in accounting policies but has no impact on opening deficit. IFRS 15 Revenue from contracts with customers Effective January 1, 2018, the Company has adopted IFRS 15 Revenue from Contracts with Customers (“IFRS 15”). This new standard was applied using a modified retrospective approach. The adoption of IFRS 15 did not have a significant impact on the timing or measurement of the Company’s revenue and no adjustment to the opening balance of deficit as at January 1, 2018 has been recorded as result of adopting IFRS 15. The impacts of adoption of the new standard are summarized below: The Company's revenue consists of licensing fees representing non-refundable payments received at the time of executing the license agreement, which are recognized as revenue upon execution of the license agreements when the Company has no significant future performance obligation and collectability of the fees is probable. Under IFRS 15, the Company determines whether the Company's promise to grant a license provides its customer with either a right to access the Company’s IP or a right to use the Company’s IP. Revenue from a license that provides a customer the right to use the Company’s IP is recognized at a point in time when the transfer to the licensee is completed and the license period begins. Revenue from a license that provides access to the Company's IP over a license term is considered to be a performance obligation satisfied over time and, therefore, revenue is recognized over the term of the license arrangement. Revenue consists also of royalty income from the out-licensing of IP, which is recognized as earned and from manufacturing and other services, where revenue is recognized when control transfers to the third party and the Company’s performance obligations are satisfied. The adoption of IFRS 15 did not significantly change the timing or amount of revenue recognized from these manufacturing and other services arrangements, nor did it change accounting for these royalty arrangements, as the standard's royalty exception is applied for IP licenses. Furthermore, the Company receives milestone payments related to the out-licensing of IP. IFRS 15 resulted in the following changes in timing and amount of revenue recognized under these arrangements.In January 2018, the Company received $24.0 million of which $23.6 million was recognized in the consolidated statements of comprehensive income (loss) and $0.4 million was deferred to the consolidated statements of financial position and is being amortized until June 2023 when we expect to commence product sales for the pediatric indication. Under IAS 18, the full $24.0 million would have been deferred to the consolidated statements of financial position and would have been amortized to the consolidated statements of comprehensive income (loss) evenly until October 2027, representing the expiry date of the underlying patents. The Company applied the modified retrospective method upon adoption of IFRS 15 on January 1, 2018. This method requires the recognition of the cumulative effect of initially applying IFRS 15 to deficit and not to restate prior years. The application of this new standard effective January 1, 2018 had no impact on opening deficit. Accounting standards not yet adopted In January 2016, the IASB issued IFRS 16, Leases ("IFRS 16"), which supersedes IAS 17, Leases, and the related interpretations on leases: IFRIC 4, Determining Whether an Arrangement Contains a Lease; Standard Interpretations Committee ("SIC") 15, Operating Leases - Incentives; and SIC 27, Evaluating the Substance of Transactions in the Legal Form of a Lease. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted for companies that also apply IFRS 15. The Company is currently assessing the impact that this new standard may have on the Company's consolidated financial statements. In June 2017, IFRIC 23, "Uncertainty over Income Tax Treatment" ("IFRIC 23"), was issued. IFRIC 23 provides guidance on how to value uncertain income tax positions based on the probability of whether the relevant tax authorities will accept the company's tax treatments. A company is to assume that a taxation authority with the right to examine any amounts reported to it will examine those amounts and will have full knowledge of all relevant information when doing so. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019. The adoption of this interpretation is not expected to have a significant impact on the Company's consolidated financial statements. In June 2015, the IASB published ED/2015/5 Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14) combining two issues submitted separately to the IFRS Interpretations Committee into a single package of narrow-scope amendments to IAS 19 Employee Benefits and IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. However, in April 2017 the IASB decided to pursue the amendments to IAS 19 and in September 2017 confirmed it would do so despite putting off the amendments to IFRIC 14. The amendments in Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) are: (i) if a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement and (ii) amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. An entity applies the amendments to plan amendments, curtailments or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 January 2019. The adoption of these amendments is not expected to have a significant impact on the Company's consolidated financial statements. |
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Dividends | The capital management objective of the Company remains the same as that in previous periods. The policy on dividends is to retain cash to keep funds available to finance the activities required to advance the Company's product development portfolio and to pursue appropriate commercial opportunities as they may arise. |
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Fair value | As discussed in note 17 - Warrant liability, the Black-Scholes valuation methodology uses "Level 2" inputs in calculating fair value, as defined in IFRS 13, which establishes a hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The input levels discussed in IFRS 13 are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). Level 3 – Inputs for an asset or liability that are not based on observable market data (unobservable inputs). The carrying values of the Company's cash and cash equivalents, trade and other receivables, restricted cash equivalents, payables and accrued liabilities and provision for restructuring and other costs approximate their fair values due to their short-term maturities or to the prevailing interest rates of the related instruments, which are comparable to those of the market. |
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Financial Risk | The following provides disclosures relating to the nature and extent of the Company's exposure to risks arising from financial instruments, including credit risk, liquidity risk, market risk (share price risk) and foreign exchange risk and how the Company manages those risks. (a) Credit risk Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of this exposure resulting in losses. The Company's exposure to credit risk currently relates to the financial assets at amortized cost in the table above. The Company holds its available cash in amounts that are readily convertible to known amounts of cash and deposits its cash balances with financial institutions that have an investment grade rating of at least "P-2" or the equivalent. This information is supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial information to ensure that it invests its cash in creditworthy and reputable financial institutions. Once there are indicators that there is no reasonable expectation of recovery, such financial assets are written off but are still subject to enforcement activity. As at December 31, 2018, trade accounts receivable for an amount of approximately $197 were with four counterparties of which $55 was past due or impaired and fully provided for (2017 - $25 with three counterparties and $5 past due or impaired and fully provided for).The licensee is obligated to pay its quarterly royalties, 60 days after quarter-end. Generally, the Company does not require collateral or other security from customers for trade accounts receivable; however, credit is extended following an evaluation of creditworthiness. In addition, the Company performs ongoing credit reviews of all of its customers and establishes an allowance for doubtful accounts when accounts are determined to be uncollectible. On this basis, as at December 31, 2018, the Company has provided for all outstanding and unpaid amounts relating to its operations before its licensing of MacrilenTM(macemorelin). The licensee has paid all amounts owing within 90 days of invoicing. The maximum exposure to credit risk approximates the amount recognized in the Company's consolidated statement of financial position. (b) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. As indicated in note 23 - Capital disclosures, the Company manages this risk through the management of its capital structure. It also manages liquidity risk by continuously monitoring actual and projected cash flows as further discussed in note 2 - Assessment of liquidity and management's plans. The Board of Directors reviews and approves the Company's operating and capital budgets, as well as any material transactions occurring outside of the ordinary course of business. The Company has adopted an investment policy in respect of the safety and preservation of its capital to ensure the Company's liquidity needs are met. The instruments are selected with regard to the expected timing of expenditures and prevailing interest rates. (c) Market risk Share price risk The change in fair value of the Company's warrant liability, which is measured at FVTPL, results from the periodic "mark-to-market" revaluation as further described in note 15 as it applies to its outstanding share purchase warrants. The valuation models are impacted, among other inputs, by the market price of the Company's common shares. As a result, the change in fair value of the warrant liability, which is reported in the consolidated statements of comprehensive income (loss), has been and may continue in future periods to be materially affected most notably by changes in the Company's common share closing price, which on the NASDAQ ranged from $1.19 to $3.87 during the year ended December 31, 2018. If variations in the market price of our common shares of -30% and +30% were to occur, the impact on the Company's net income related to the warrant liability held at December 31, 2018 would be as follows:
(d) Foreign exchange risk Entities using the Euro as their functional currency The Company is exposed to foreign exchange risk due to its investments in foreign operations whose functional currency is the Euro. |
Summary of significant accounting policies (Tables) |
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Corporate Information And Statement Of IFRS Compliance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of property, plant and equipment | Items of property, plant and equipment are recorded at cost, net of related government grants and accumulated depreciation and impairment charges. Depreciation is calculated using the following methods, annual rates and period:
Components of the Company's property, plant and equipment are summarized below.
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Cash and cash equivalents (Tables) |
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Subclassifications of assets, liabilities and equities [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents |
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Trade and other receivables (Tables) |
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Schedule of trade and other receivables |
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Inventory (Tables) |
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Subclassifications of assets, liabilities and equities [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventories |
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Prepaid expenses and other current assets (Tables) |
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Subclassifications of assets, liabilities and equities [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Of Detailed Information About Prepaid And Other Current Assets |
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Property, plant and equipment (Tables) |
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Components of property, plant and equipment | Items of property, plant and equipment are recorded at cost, net of related government grants and accumulated depreciation and impairment charges. Depreciation is calculated using the following methods, annual rates and period:
Components of the Company's property, plant and equipment are summarized below.
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Identifiable intangible assets (Tables) |
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Disclosure of Intangible Assets | Identifiable intangible assets with finite useful lives consist entirely of in-process R&D costs, patents and trademarks with such assets expected to be fully amortized by 2021. Changes in the carrying value of the Company's identifiable intangible assets with finite useful lives are summarized below.
* Recorded as R&D costs in the consolidated statements of comprehensive income (loss). |
Goodwill (Tables) |
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Reconciliation of changes in goodwill | The change in carrying value is as follows:
Management's evaluation of impairment in goodwill is based on estimates that are derived from our licensee's projected sales of Macrilen for 2019 (both units and selling price), annual revenue growth rate, growth in operating expenses, the effect of future costs of the pediatric development program (the "PIP") and discount rate for generating the Company's net present value. There was no impairment assessed at December 31, 2018. |
Payables and accrued liabilities (Tables) |
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Subclassifications of assets, liabilities and equities [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of payables and accrued liabilities |
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Provision for restructuring costs and other costs (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subclassifications of assets, liabilities and equities [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring And Related Costs | The changes in the Company's provision for restructuring and other costs can be summarized as follows:
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Warrant liability (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes In Warrant Liability | The change in the Company's warrant liability can be summarized as follows:
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 all warrants outstanding as at December 31, 2018. The Black-Scholes option pricing model uses "Level 2" inputs, as defined by IFRS 13, Fair value measurement ("IFRS 13") and as discussed in note 24 - Financial instruments and financial risk management.
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Summary Of Share Purchase Warrant Activity | A summary of the activity related to the Company's share purchase warrants is provided below.
_________________________ * A portion of the Series A warrants was exercised using the cashless feature. Therefore, the total number of equivalent shares issued was 301,343. |
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Summary of Share Purchase Warrants Outstanding And Exercisable | The following table summarizes the share purchase warrants outstanding and exercisable as at December 31, 2018:
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Employee future benefits (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of net defined benefit liability (asset) | The change in the Company's accrued benefit obligations is summarized as follows:
In accordance with the assumptions used as at December 31, 2018, undiscounted defined pension benefits expected to be paid, in Euro, are as follows:
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Disclosure of defined benefit plans | The significant actuarial assumptions applied to determine the Company's accrued benefit obligations are as follows:
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in Germany. These assumptions translate into an average remaining life expectancy in years for a pensioner retiring at age 65:
If variations in the following assumptions had occurred during 2018, the impact on the Company's pension benefit obligation of $13,100 as at December 31, 2018 would have been as follows:
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Share and other capital (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Capital, Reserves And Other Equity Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of change in stock options issued | The following tables summarizes the activity under the LTIP and, previously, the Stock Option Plan:
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Disclosure of number and weighted average remaining contractual life of outstanding share options |
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Disclosure of range of exercise prices of outstanding share options |
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Disclosure of indirect measurement of fair value of goods or services received, share options granted during period | The table below shows the assumptions, or weighted average parameters, applied to the Black-Scholes option pricing model in order to determine share-based compensation costs over the life of the awards.
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Operating expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of income and expense [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Expenses | The nature of the Company's operating expenses from continuing operations include the following:
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Supplemental disclosure of cash flow information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of cash flows [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of changes in operating assets and liabilities |
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Income taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of current and deferred income tax expense | Significant components of current and deferred income tax expense (recovery) are as follows:
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Reconciliation of income tax rate to the income tax expense | The reconciliation of the combined Canadian federal and provincial income tax rate to the income tax expense is provided below:
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Components of loss before tax | Income (loss) before income taxes is attributable to the Company's tax jurisdictions as follows:
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Components of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities are as follows:
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Components of unrecognized deferred tax assets | Significant components of unrecognized deferred tax assets are as follows:
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Disclosure of tax attributes to be deferred | As at December 31, 2018, amounts and expiry dates of tax attributes to be deferred for which no deferred tax asset was recognized were as follows:
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Disclosure of federal tax losses | The Company has estimated non-refundable R&D investment tax credits of approximately $5,894 which can be carried forward to reduce Canadian federal income taxes payable and which expire at dates ranging from 2019 to 2038. Furthermore, the Company has unrecognized tax assets in respect of operating losses to be carried forward in Germany and in the United States. The federal tax losses amount to approximately $205,343 in Germany (EUR 173,733) for which there is no expiry date, and to $3,322 in the United States, which expire as follows:
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Financial instruments and financial risk management (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of fair value measurement of assets | Financial assets (liabilities) as at December 31, 2018 and December 31, 2017 are presented below.
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Disclosure of fair value measurement of liabilities | Financial assets (liabilities) as at December 31, 2018 and December 31, 2017 are presented below.
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Disclosure of nature and extent of risks arising from financial instruments | If variations in the market price of our common shares of -30% and +30% were to occur, the impact on the Company's net income related to the warrant liability held at December 31, 2018 would be as follows:
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Segment information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of geographical areas | Non-current assets* by geographical area are detailed as follows:
Revenues by geographical area are detailed as follows:
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Disclosure of major customers | Major customers representing 10% or more of the Company's revenues in each of the last three years are as follows:
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Net income (loss) per share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Pertinent Data Relating to the Computation of Basic and Diluted Net (Loss) Income Per Share | The following table sets forth pertinent data relating to the computation of basic and diluted net income (loss) per share attributable to common shareholders.
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Commitments and contingencies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Provisions, Contingent Liabilities and Contingent Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected future minimum lease payments | The Company is committed to various operating leases for its premises. Expected future minimum lease payments, which also include future payments in connection with utility service agreements and future minimum sublease receipts under non-cancellable operating leases (subleases), as well as future payments in connection with service and manufacturing agreements, as at December 31, 2018 are as follows:
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Business overview (Details) |
12 Months Ended | |
---|---|---|
Nov. 17, 2015 |
Dec. 31, 2018
subsidiary
|
|
Corporate Information And Statement Of IFRS Compliance [Abstract] | ||
Stock split, conversion ratio | 100 | |
Number of subsidiaries | 3 |
Assessment of liquidity and management's plans (Details) - USD ($) $ in Thousands |
Jan. 16, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Disclosure of geographical areas [line items] | |||||
Deficit | $ (309,781) | $ (314,161) | |||
Cash and cash equivalents (note 7) | 14,512 | 7,780 | $ 21,999 | $ 41,450 | |
Current liabilities | $ 5,596 | $ 5,769 | |||
FDA Approval Of Pediatric Use | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Percentage of cost sharing | 70.00% |
Summary of significant accounting policies - Property, plant and equipment and depreciation (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful lives, annual depreciation rate | 0.2 |
Furniture and fixtures | Minimum | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful lives, annual depreciation rate | 0.1 |
Furniture and fixtures | Maximum | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful lives, annual depreciation rate | 0.2 |
Computer equipment | Minimum | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful lives, annual depreciation rate | 0.25 |
Computer equipment | Maximum | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful lives, annual depreciation rate | 0.3333 |
Summary of significant accounting policies - Identifiable Intangible Assets And Amortization (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Trademark | |
Disclosure of detailed information about intangible assets [line items] | |
Intangible assets other than goodwill, useful lives | 10 years |
Minimum | In process R&D and Patents | |
Disclosure of detailed information about intangible assets [line items] | |
Intangible assets other than goodwill, useful lives | 8 years |
Maximum | In process R&D and Patents | |
Disclosure of detailed information about intangible assets [line items] | |
Intangible assets other than goodwill, useful lives | 15 years |
Summary of significant accounting policies - Financial Instruments (Details) |
Dec. 31, 2017
USD ($)
|
---|---|
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Financial assets | $ 0 |
Summary of significant accounting policies - Research and Development Costs (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Capitalized costs during the period | $ 0 |
Recent accounting pronoucements - Narrative (Details) - Strongbridge |
Jan. 16, 2018
USD ($)
|
---|---|
Disclosure of geographical areas [line items] | |
Non-refundable upfront payment received | $ 24,000,000.0 |
Adult Indication | |
Disclosure of geographical areas [line items] | |
Non-refundable upfront payment received | 23,600,000 |
Pediatric Indication | |
Disclosure of geographical areas [line items] | |
Non-refundable upfront payment received | $ 400,000 |
Licensing arrangement (Details) € in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 16, 2018
USD ($)
|
Jul. 01, 2016
EUR (€)
|
Dec. 01, 2014
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Disclosure of geographical areas [line items] | |||||
Deferred revenues | $ 258,000 | $ 55,000 | |||
License Agreement Terms | |||||
Disclosure of geographical areas [line items] | |||||
Deferred revenues | $ 541,000 | ||||
Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Non-refundable upfront payment received | $ 24,000,000.0 | ||||
Share of costs from PIP | 358,000 | ||||
Ingredient cost reimbursement | $ 2,167,000 | ||||
Cyntec | License Agreement Terms | |||||
Disclosure of geographical areas [line items] | |||||
Non-refundable upfront payment received | € | € 0.5 | ||||
Sinopharm | License Agreement Terms | |||||
Disclosure of geographical areas [line items] | |||||
Non-refundable upfront payment received | $ 1,000,000 | ||||
FDA Approval Of Pediatric Use | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Percentage of cost sharing | 70.00% | ||||
Payment for milestone | $ 5,000,000.0 | ||||
Royalty Milestone One | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Royalty, percent of net sales | 15.00% | ||||
Annual net sales threshold | $ 75,000,000.0 | ||||
Royalty Milestone Two | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Royalty, percent of net sales | 18.00% | ||||
Annual net sales threshold | $ 75,000,000.0 | ||||
Royalty Milestone Three | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Royalty, percent of net sales | 5.00% | ||||
Minimum | Commercial Milestone | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Payment for milestone | $ 4,000,000.0 | ||||
Annual net sales threshold | 25,000,000.0 | ||||
Maximum | Commercial Milestone | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Payment for milestone | 100,000,000.0 | ||||
Annual net sales threshold | 500,000,000.0 | ||||
Adult Indication | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Non-refundable upfront payment received | $ 23,600,000 | ||||
Percent of future revenue streams | 84.00% | ||||
Pediatric Indication | Strongbridge | |||||
Disclosure of geographical areas [line items] | |||||
Non-refundable upfront payment received | $ 400,000 | ||||
Percent of future revenue streams | 16.00% |
Cash and cash equivalents (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Subclassifications of assets, liabilities and equities [abstract] | ||||
Cash on hand and balances with banks | $ 3,501 | $ 7,099 | ||
Interest-bearing deposits with maturities of three months or less | 11,011 | 681 | ||
Total cash and cash equivalents | $ 14,512 | $ 7,780 | $ 21,999 | $ 41,450 |
Trade and other receivables (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Trade and other receivables [abstract] | ||
Trade accounts receivable (net of allowance for doubtful accounts of $55 (2017 - $5)) | $ 142 | $ 20 |
Allowance for doubtful accounts | 55 | 5 |
Value added tax | 49 | 186 |
Other receivables | 103 | 15 |
Trade and other current receivables | $ 294 | $ 221 |
Inventory (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Subclassifications of assets, liabilities and equities [abstract] | ||
Finished goods | $ 0 | $ 554,000 |
Work in process | 240,000 | 0 |
Total inventory | 240,000 | 554,000 |
Inventory costs recognized | $ 2,087,000 | $ 0 |
Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Subclassifications of assets, liabilities and equities [abstract] | ||
Prepaid insurance | $ 832 | $ 410 |
Prepaid inventory | 175 | 87 |
Other | 203 | 329 |
Current prepayments and other current assets | $ 1,210 | $ 826 |
Restricted cash equivalents (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Subclassifications of assets, liabilities and equities [abstract] | ||
Restricted cash equivalents | $ 418 | $ 381 |
Property, plant and equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | $ 101 | ||
Depreciation expense | 35 | $ 100 | $ 112 |
Ending balance of property, plant and equipment | 65 | 101 | |
Cost | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 3,119 | 4,712 | |
Additions | 9 | 4 | |
Disposals / Retirements | (895) | (2,203) | |
Reclassifications | 0 | ||
Impact of foreign exchange rate changes | (91) | 606 | |
Ending balance of property, plant and equipment | 2,142 | 3,119 | 4,712 |
Accumulated depreciation | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | (3,018) | (4,508) | |
Disposals / Retirements | 889 | 2,178 | |
Depreciation expense | 35 | 100 | |
Impact of foreign exchange rate changes | 87 | (588) | |
Ending balance of property, plant and equipment | (2,077) | (3,018) | (4,508) |
Equipment | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 58 | ||
Ending balance of property, plant and equipment | 44 | 58 | |
Equipment | Cost | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 2,268 | 3,919 | |
Additions | 1 | 2 | |
Disposals / Retirements | (758) | (2,160) | |
Reclassifications | 11 | ||
Impact of foreign exchange rate changes | (64) | 507 | |
Ending balance of property, plant and equipment | 1,458 | 2,268 | 3,919 |
Equipment | Accumulated depreciation | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | (2,210) | (3,799) | |
Disposals / Retirements | 752 | 2,135 | |
Depreciation expense | 19 | 50 | |
Impact of foreign exchange rate changes | 63 | (496) | |
Ending balance of property, plant and equipment | (1,414) | (2,210) | (3,799) |
Furniture and fixtures | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 15 | ||
Ending balance of property, plant and equipment | 2 | 15 | |
Furniture and fixtures | Cost | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 19 | 19 | |
Additions | 0 | 0 | |
Disposals / Retirements | 0 | 0 | |
Reclassifications | (11) | ||
Impact of foreign exchange rate changes | (1) | 0 | |
Ending balance of property, plant and equipment | 7 | 19 | 19 |
Furniture and fixtures | Accumulated depreciation | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | (4) | (2) | |
Disposals / Retirements | 0 | 0 | |
Depreciation expense | 1 | 2 | |
Impact of foreign exchange rate changes | 0 | 0 | |
Ending balance of property, plant and equipment | (5) | (4) | (2) |
Computer equipment | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 21 | ||
Ending balance of property, plant and equipment | 13 | 21 | |
Computer equipment | Cost | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 790 | 737 | |
Additions | 8 | 2 | |
Disposals / Retirements | (137) | (43) | |
Reclassifications | 0 | ||
Impact of foreign exchange rate changes | (24) | 94 | |
Ending balance of property, plant and equipment | 637 | 790 | 737 |
Computer equipment | Accumulated depreciation | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | (769) | (692) | |
Disposals / Retirements | 137 | 43 | |
Depreciation expense | 14 | 30 | |
Impact of foreign exchange rate changes | 22 | (90) | |
Ending balance of property, plant and equipment | (624) | (769) | (692) |
Leasehold improvements | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 7 | ||
Ending balance of property, plant and equipment | 6 | 7 | |
Leasehold improvements | Cost | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | 42 | 37 | |
Additions | 0 | 0 | |
Disposals / Retirements | 0 | 0 | |
Reclassifications | 0 | ||
Impact of foreign exchange rate changes | (2) | 5 | |
Ending balance of property, plant and equipment | 40 | 42 | 37 |
Leasehold improvements | Accumulated depreciation | |||
Reconciliation of changes in property, plant and equipment [abstract] | |||
Beginning balance of property, plant and equipment | (35) | (15) | |
Disposals / Retirements | 0 | 0 | |
Depreciation expense | 1 | 18 | |
Impact of foreign exchange rate changes | 2 | (2) | |
Ending balance of property, plant and equipment | $ (34) | $ (35) | $ (15) |
Property, plant and equipment - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation | $ 35 | $ 100 | $ 112 |
R&D | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation | 20 | 69 | 80 |
General and Administrative | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation | 10 | 10 | 11 |
Selling | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation | $ 5 | $ 21 | $ 21 |
Identifiable intangible assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Balances – Beginning of the year | $ 90 | $ 70 |
Additions | 0 | 0 |
Impairment (loss) reversal | 0 | 44 |
Recurring amortization expense | (23) | (38) |
Impact of foreign exchange rate changes | (5) | 14 |
Balances – End of the year | 62 | 90 |
Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Balances – Beginning of the year | 34,246 | 30,032 |
Additions | 0 | 0 |
Impairment (loss) reversal | 0 | 0 |
Recurring amortization expense | 0 | 0 |
Impact of foreign exchange rate changes | (1,603) | 4,214 |
Balances – End of the year | 32,643 | 34,246 |
Accumulated amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Balances – Beginning of the year | 34,156 | 29,962 |
Additions | 0 | 0 |
Impairment (loss) reversal | 0 | (44) |
Recurring amortization expense | 23 | 38 |
Impact of foreign exchange rate changes | (1,598) | 4,200 |
Balances – End of the year | $ 32,581 | $ 34,156 |
Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of changes in goodwill [abstract] | ||
Beginning balance | $ 8,613 | $ 7,553 |
Impact of foreign exchange rate changes | (403) | 1,060 |
Ending balance | 8,210 | 8,613 |
Cost | ||
Reconciliation of changes in goodwill [abstract] | ||
Beginning balance | 8,613 | 7,553 |
Impact of foreign exchange rate changes | (403) | 1,060 |
Ending balance | 8,210 | 8,613 |
Accumulated impairment loss | ||
Reconciliation of changes in goodwill [abstract] | ||
Beginning balance | 0 | 0 |
Impact of foreign exchange rate changes | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Payables and accrued liabilities (Details) $ in Thousands |
Jan. 31, 2019
payment
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
---|---|---|---|
Disclosure of non-adjusting events after reporting period [line items] | |||
Trade accounts payable | $ 1,282 | $ 1,222 | |
Accrued research and development costs | 26 | 127 | |
Salaries, employment taxes and benefits | 183 | 390 | |
Financing of insurance premiums | 738 | 0 | |
Other accrued liabilities | 737 | 1,075 | |
Payables and accrued liabilities | $ 2,966 | $ 2,814 | |
2019 Insurance | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Insurance premium, interest rate | 6.50% | ||
Insurance premium, number of monthly payments | payment | 8 |
Provision for restructuring costs and other costs - Schedule of Restructuring Reserve (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 3,497 | $ 732 |
Provision recognized | 317 | 3,115 |
Utilization of provision | 1,900 | 454 |
Change in the provision | (453) | (51) |
Unwinding of discount and impact of foreign exchange rate changes | (163) | 155 |
Ending balance | 1,298 | 3,497 |
Less: current portion | (887) | (2,469) |
Non-current portion | 411 | |
Other provision | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 9 | 158 |
Provision recognized | 0 | 0 |
Utilization of provision | 9 | 152 |
Change in the provision | 0 | 0 |
Unwinding of discount and impact of foreign exchange rate changes | 0 | 3 |
Ending balance | 0 | 9 |
Less: current portion | 0 | |
Non-current portion | 0 | |
Cetrotide(R) onerous contracts | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 473 | 574 |
Provision recognized | 317 | 0 |
Utilization of provision | 222 | 145 |
Change in the provision | 0 | (20) |
Unwinding of discount and impact of foreign exchange rate changes | (21) | 64 |
Ending balance | 547 | 473 |
Less: current portion | (136) | |
Non-current portion | 411 | |
2017 German Restructuring: onerous lease | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,208 | 0 |
Provision recognized | 0 | 1,113 |
Utilization of provision | 467 | 19 |
Change in the provision | (21) | 10 |
Unwinding of discount and impact of foreign exchange rate changes | (57) | 104 |
Ending balance | 663 | 1,208 |
Less: current portion | (663) | |
Non-current portion | 0 | |
2017 German Restructuring: severance | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,807 | 0 |
Provision recognized | 0 | 2,002 |
Utilization of provision | 1,202 | 138 |
Change in the provision | (432) | (41) |
Unwinding of discount and impact of foreign exchange rate changes | (85) | (16) |
Ending balance | 88 | $ 1,807 |
Less: current portion | (88) | |
Non-current portion | $ 0 |
Warrant liability - Schedule of Changes In Warrant Liability (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of changes in fair value measurement, liabilities [abstract] | |||
Balance – Beginning of the year | $ 3,897 | $ 6,854 | $ 10,891 |
Share purchase warrants exercised during the year | 0 | (735) | 0 |
Change in fair value of share purchase warrants | (263) | (2,222) | (4,437) |
Balance - End of the year | 3,634 | 3,897 | 6,854 |
Warrant liability | |||
Reconciliation of changes in fair value measurement, liabilities [abstract] | |||
Share purchase warrants issued during the year (note 19) | $ 0 | $ 0 | $ 400 |
Warrant liability - Summary of Share Purchase Warrant Activity (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share Purchase Warrants Outstanding | |||
Warrants outstanding, beginning of period (in shares) | 3,417,840 | 3,779,245 | 2,842,309 |
Warrants issued during period (in shares) | 0 | 0 | 945,000 |
Warrants exercised during period (in shares) | 0 | (331,730) | 0 |
Warrants expired during period (in shares) | (25,996) | (29,675) | (8,064) |
Warrants outstanding, end of period (in shares) | 3,391,844 | 3,417,840 | 3,779,245 |
Share Purchase Warrants Outstanding, Weighted Average Exercise Price | |||
Weighted average exercise price, beginning of period (in usd per share) | $ 7.59 | $ 9.66 | $ 11.30 |
Weighted average exercise price, issued during period (in usd per share) | 0.00 | 0.00 | 4.70 |
Weighted average exercise price, exercised during period( in usd per share) | 0.00 | 1.07 | 0.00 |
Weighted average exercise price, expired during period (in usd per share) | 185.00 | 345.00 | 4.23 |
Weighted average exercise price, end of period (in usd per share) | $ 6.23 | $ 7.59 | $ 9.66 |
Warrants Not Settleable In Cash | Series A Warrants | |||
Share Purchase Warrants Outstanding, Weighted Average Exercise Price | |||
Shares issued upon exercise (in shares) | 301,343 |
Warrant liability - Summary of Warrants Outstanding and Exercisable (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Disclosure of range of exercise prices of outstanding share options [line items] | ||||
Number of warrants outstanding (in shares) | 3,391,844 | 3,417,840 | 3,779,245 | 2,842,309 |
Weighted average remaining contractual life (years) | 1 year 9 months 4 days | |||
Exercise Price Range One | ||||
Disclosure of range of exercise prices of outstanding share options [line items] | ||||
Exercise price (in usd per share) | $ 1.07 | |||
Number of warrants outstanding (in shares) | 115,844 | |||
Weighted average remaining contractual life (years) | 1 year 2 months 9 days | |||
Exercise Price Range Two | ||||
Disclosure of range of exercise prices of outstanding share options [line items] | ||||
Exercise price (in usd per share) | $ 4.70 | |||
Number of warrants outstanding (in shares) | 945,000 | |||
Weighted average remaining contractual life (years) | 1 year 4 months 2 days | |||
Exercise Price Range Three | ||||
Disclosure of range of exercise prices of outstanding share options [line items] | ||||
Exercise price (in usd per share) | $ 7.10 | |||
Number of warrants outstanding (in shares) | 2,331,000 | |||
Weighted average remaining contractual life (years) | 1 year 11 months 16 days |
Warrant liability - Schedule Of Inputs And Assumptions Used In Determining The Fair Value Of Warrants Outstanding (Details) - Level 2 of fair value hierarchy - Warrant liability - Option pricing model |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
March 2015 Series A Warrants | |
Disclosure of range of exercise prices of outstanding share options [line items] | |
Number of equivalent shares (in shares) | shares | 115,844 |
Market-value per share price (in usd per share) | $ 2.94 |
Weighted average exercise price (in usd per share) | $ 1.07 |
Risk-free annual interest rate | 2.58% |
Expected volatility | 81.81% |
Expected life (years) | 1 year 2 months 9 days |
Expected dividend yield | 0.00% |
December 2015 Warrants | |
Disclosure of range of exercise prices of outstanding share options [line items] | |
Number of equivalent shares (in shares) | shares | 2,331,000 |
Market-value per share price (in usd per share) | $ 2.94 |
Weighted average exercise price (in usd per share) | $ 7.10 |
Risk-free annual interest rate | 2.47% |
Expected volatility | 122.00% |
Expected life (years) | 1 year 11 months 16 days |
Expected dividend yield | 0.00% |
November 2016 Warrants | |
Disclosure of range of exercise prices of outstanding share options [line items] | |
Number of equivalent shares (in shares) | shares | 945,000 |
Market-value per share price (in usd per share) | $ 2.94 |
Weighted average exercise price (in usd per share) | $ 4.70 |
Risk-free annual interest rate | 2.56% |
Expected volatility | 78.95% |
Expected life (years) | 1 year 4 months 2 days |
Expected dividend yield | 0.00% |
Other equity, call option price (in usd per share) | $ 10 |
Employee future benefits - Changes in Accrued Benefit Obligations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Amounts recognized: | |||
Amounts recognized in net loss | $ (275) | $ (441) | $ (500) |
Amounts recognized in other comprehensive loss | 4,084 | 4,277 | 4,971 |
Unfunded Plan | Pension benefit plans | |||
Amounts recognized: | |||
Amounts recognized in net loss | (290) | (344) | (369) |
Amounts recognized in other comprehensive loss | 843 | (1,089) | (852) |
Unfunded Plan | Other benefit plans | |||
Amounts recognized: | |||
Amounts recognized in net loss | (26) | 98 | (13) |
Amounts recognized in other comprehensive loss | 3 | (31) | 17 |
Present value of defined benefit obligation | Unfunded Plan | Pension benefit plans | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Balances – Beginning of the year | 14,145 | 13,197 | 12,375 |
Current service cost | 66 | 107 | 87 |
Interest cost | 224 | 237 | 282 |
Actuarial (gain) loss arising from changes in financial assumptions | (193) | (694) | 1,479 |
Benefits paid | (492) | (485) | (399) |
Impact of foreign exchange rate changes | (650) | 1,783 | (627) |
Balances – End of the year | 13,100 | 14,145 | 13,197 |
Present value of defined benefit obligation | Unfunded Plan | Other benefit plans | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Balances – Beginning of the year | 84 | 217 | 281 |
Current service cost | 6 | 14 | 13 |
Interest cost | 1 | 3 | 0 |
Actuarial (gain) loss arising from changes in financial assumptions | 19 | (115) | 0 |
Benefits paid | (2) | (66) | (60) |
Impact of foreign exchange rate changes | (3) | 31 | (17) |
Balances – End of the year | $ 105 | $ 84 | $ 217 |
Employee future benefits - Narrative (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Disclosure of defined benefit plans [line items] | ||||
Cumulative amount of actuarial net losses recognized | $ 4,084 | $ 4,277 | $ 4,971 | |
Defined contribution plan expenses | $ 75 | $ 119 | $ 129 | |
Pension benefit plans | ||||
Disclosure of defined benefit plans [line items] | ||||
Discount rate | 1.90% | 1.70% | 1.60% | |
Weighted average duration of the defined benefit obligation | 15.3 | |||
Unfunded Plan | Pension benefit plans | ||||
Disclosure of defined benefit plans [line items] | ||||
Cumulative amount of actuarial net losses recognized | $ 843 | $ (1,089) | $ (852) | |
Present value of defined benefit obligation | Unfunded Plan | Pension benefit plans | ||||
Disclosure of defined benefit plans [line items] | ||||
Net defined benefit liability (asset) | $ 13,100 | $ 14,145 | $ 13,197 | $ 12,375 |
Employee future benefits - Actuarial Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Pension benefit plans | |||
Disclosure of defined benefit plans [line items] | |||
Discount rate | 1.90% | 1.70% | 1.60% |
Pension benefits increase | 1.80% | 1.80% | 1.80% |
Rate of compensation increase | 2.00% | 2.00% | 2.00% |
Other benefit plans | |||
Disclosure of defined benefit plans [line items] | |||
Discount rate | 1.90% | 1.70% | 1.60% |
Pension benefits increase | 1.80% | 1.80% | 1.80% |
Rate of compensation increase | 2.00% | 2.00% | 2.00% |
Male | Pension benefit plans | |||
Disclosure of defined benefit plans [line items] | |||
Average remaining life expectancy at the end of the reporting period | 20 years | 20 years | 20 years |
Average remaining life expectancy of those retiring twenty years after the end of the reporting period | 28 years | 22 years | 22 years |
Female | Pension benefit plans | |||
Disclosure of defined benefit plans [line items] | |||
Average remaining life expectancy at the end of the reporting period | 24 years | 24 years | 24 years |
Average remaining life expectancy of those retiring twenty years after the end of the reporting period | 31 years | 26 years | 26 years |
Employee future benefits - Undiscounted Defined Pensions Benefits to be Paid (Details) - Pension benefit plans $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | $ 15,976 |
2019 | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | 453 |
2020 | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | 458 |
2021 | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | 463 |
2022 | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | 468 |
2023 | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | 476 |
Thereafter | |
Disclosure of defined benefit plans [line items] | |
Total undiscounted defined pension benefits expected to be paid | $ 13,658 |
Employee future benefits - Impact On Pension Benefit Obligation Based On Assumptions (Details) - Pension benefit plans $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Change interest rate by 0.25% | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Change in percentage, increase | 0.25% |
Change in percentage, decrease | 0.25% |
Increase | $ (467) |
Decrease | $ 498 |
Change salary rate by 0.25% | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Change in percentage, increase | 0.25% |
Change in percentage, decrease | 0.25% |
Increase | $ 19 |
Decrease | $ (17) |
Change pension by 0.25% | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Change in percentage, increase | 0.25% |
Change in percentage, decrease | 0.25% |
Increase | $ 372 |
Decrease | $ (355) |
Change mortality by 1 year | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Change in mortality, increase | 1 year |
Change in mortality, decrease | 1 year |
Increase | $ 464 |
Decrease | $ (463) |
Share and other capital - Common Shares Issued in Connection with "At-the-Market" ("ATM") Drawdowns (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 7 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 27, 2017 |
Apr. 18, 2017 |
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Mar. 24, 2017 |
Dec. 31, 2016 |
Mar. 28, 2017 |
Apr. 01, 2016 |
|
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | $ 0 | $ 7,788 | $ 9,924 | ||||||
Payments for share issue costs | $ 0 | $ 250 | $ 1,107 | ||||||
April 2016 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Shares authorized (in shares) | 3,000,000 | ||||||||
Number of shares authorised (in shares) | $ 10,000 | ||||||||
Sale of stock, number of shares issued (in shares) | 1,706,968 | ||||||||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | $ 6,000 | ||||||||
Payments for share issue costs | 190 | ||||||||
Finance costs | $ 225 | ||||||||
March 2017 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Number of shares authorised (in shares) | $ 9,000 | ||||||||
Sale of stock, number of shares issued (in shares) | 597,994 | ||||||||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | $ 1,780 | ||||||||
Payments for share issue costs | 55 | ||||||||
Finance costs | $ 65 | ||||||||
April 2017 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Shares authorized (in shares) | 2,240,000 | ||||||||
Number of shares authorised (in shares) | $ 6,900 | ||||||||
Sale of stock, number of shares issued (in shares) | 1,805,758 | ||||||||
Proceeds from issuances of common shares, warrants (including pre-funded warrants), net of cash transaction costs of $nil, $250 and $1,107 in 2018, 2017, and 2016, respectively (note 19) | $ 3,761 | ||||||||
Payments for share issue costs | 115 | ||||||||
Finance costs | $ 285 | ||||||||
Shelf Registration Statement 2017 | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Number of shares authorised (in shares) | $ 50,000 | ||||||||
Sale of stock offering period | 3 years | ||||||||
Average | April 2016 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Sale of stock, price per share (USD per share) | $ 3.52 | ||||||||
Average | March 2017 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Sale of stock, price per share (USD per share) | $ 2.97 | ||||||||
Average | April 2017 ATM Program | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Sale of stock, price per share (USD per share) | $ 2.08 | ||||||||
Series A Warrants | |||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||||||||
Exercise price (in usd per share) | $ 1.07 |
Share and other capital - November 2016 Offering (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Nov. 01, 2016 |
Mar. 11, 2015 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Payments for share issue costs | $ 0 | $ 250 | $ 1,107 | |||
Proceeds from warrants exercised | 0 | 242 | 0 | |||
Warrant liability | 3,634 | 3,897 | 6,854 | $ 10,891 | ||
Gain (loss) on change in fair value of warrant liability | (263) | $ (2,222) | $ (4,437) | |||
Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Number of securities called by warrants (in shares) | 0.45 | |||||
Period after date of issuance in which warrants become exercisable | 6 months | |||||
Sale of stock offering period | 3 years | |||||
Exercise price (in usd per share) | $ 4.70 | |||||
Pre-Funded Warrants | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Allocation of equity | $ 3,239 | |||||
Share issue related cost | 450 | |||||
Share capital | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Allocation of equity | 3,921 | |||||
Share issue related cost | $ 544 | |||||
Common share | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Number of securities called by warrants or rights (in shares) | 2,100,000 | |||||
Number of securities called by warrants (in shares) | 945,000 | |||||
Proceeds from issuance or sale of equity | $ 7,600 | |||||
Payments for share issue costs | 1,000 | |||||
Finance costs | $ 27 | |||||
Sale of stock, price per share (USD per share) | $ 10.00 | |||||
Warrants exercisable in share-based payment arrangement, number of trading days immediately prior to exercise date | 10 days | |||||
Proceeds from warrants exercised | $ 4,400 | |||||
Warrant liability | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Warrant liability | 400 | $ 3,634 | ||||
Warrant liability | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Share issue related cost | 56 | |||||
General and Administrative | Public Stock Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Gain (loss) on change in fair value of warrant liability | $ 56 | |||||
Pre-Funded Warrants | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Exercise price (in usd per share) | $ 3.60 | |||||
Warrants Not Settleable In Cash | Registered Direct Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Risk-free annual interest rate | 0.63% | |||||
Expected volatility | 112.48% | |||||
Expected life (years) | 1 year 7 months 17 days | |||||
Expected dividend yield | 0.00% | |||||
Warrants Not Settleable In Cash | Series C Warrant | Public Stock Offering | ||||||
Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Line Items] | ||||||
Initial beneficial ownership limitation option one | 4.90% | |||||
Warrant exercise period | 5 years |
Share and other capital - Stock Options Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 19, 2014 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Maximum percentage of number of common shares that may be issued | 11.40% | ||
Stock options | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Stock options expiration period | 10 years | 7 years | |
Employee Stock Option, USD | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Total compensation costs | $ 198 | $ 444 | |
Unrecognized stock based compensation costs, weighted average period for recognition | 1 year 1 month 24 days | 1 year 4 months 17 days |
Share and other capital - Change in Stock Options Issued (Details) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
shares
|
Dec. 31, 2018
CAD ($)
shares
|
Dec. 31, 2017
USD ($)
shares
|
Dec. 31, 2017
CAD ($)
shares
|
Dec. 31, 2016
USD ($)
shares
|
Dec. 31, 2016
CAD ($)
shares
|
|
Employee Stock Option, USD | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Balance – Beginning of the year, Number (in shares) | shares | 712,415 | 712,415 | 966,539 | 966,539 | 272,874 | 272,874 |
Granted, Number (in shares) | shares | 426,000 | 426,000 | 390,000 | 390,000 | 713,573 | 713,573 |
Forfeited, Number (in shares) | shares | (249,599) | (249,599) | (643,271) | (643,271) | (10,034) | (10,034) |
Cancelled, Number (in shares) | shares | 0 | 0 | 0 | 0 | (9,874) | (9,874) |
Expired, Number (in shares) | shares | 0 | 0 | (853) | (853) | 0 | 0 |
Balance – End of period, Number (in shares) | shares | 888,816 | 888,816 | 712,415 | 712,415 | 966,539 | 966,539 |
Balance – Beginning of the year, Weighted average exercise price (in US and CAN dollars per share) | $ | $ 4.66 | $ 7.23 | $ 25.88 | |||
Granted, Weighted average exercise price (in US and CAN dollars per share) | $ | 1.74 | 2.05 | 3.47 | |||
Forfeited, Weighted average exercise price (in US and CAN dollars per share) | $ | 3.23 | 6.02 | 99.22 | |||
Cancelled, Weighted average exercise price (in US and CAN dollars per share) | $ | 0.00 | 0.00 | 157.11 | |||
Expired, Weighted average exercise price (in US and CAN dollars per share) | $ | 0.00 | 704.88 | 0.00 | |||
Balance – End of period, Weighted average exercise price (in US and CAN dollars per share) | $ | $ 3.66 | $ 4.66 | $ 7.23 | |||
Employee Stock Option, CAD | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Balance – Beginning of the year, Number (in shares) | shares | 1,503 | 1,503 | 1,858 | 1,858 | 3,787 | 3,787 |
Forfeited, Number (in shares) | shares | (104) | (104) | 0 | 0 | (1,028) | (1,028) |
Cancelled, Number (in shares) | shares | 0 | 0 | 0 | 0 | (901) | (901) |
Expired, Number (in shares) | shares | (530) | (530) | (355) | (355) | 0 | 0 |
Balance – End of period, Number (in shares) | shares | 869 | 869 | 1,503 | 1,503 | 1,858 | 1,858 |
Balance – Beginning of the year, Weighted average exercise price (in US and CAN dollars per share) | $ | $ 605.84 | $ 820.27 | $ 845.46 | |||
Forfeited, Weighted average exercise price (in US and CAN dollars per share) | $ | 668.65 | 0.00 | 967.63 | |||
Cancelled, Weighted average exercise price (in US and CAN dollars per share) | $ | 0.00 | 0.00 | 758 | |||
Expired, Weighted average exercise price (in US and CAN dollars per share) | $ | 367.70 | 1,728.15 | 0.00 | |||
Balance – End of period, Weighted average exercise price (in US and CAN dollars per share) | $ | $ 743.56 | $ 605.84 | $ 820.27 |
Share and other capital - Range of Exercise Prices of Outstanding Share Options (Details) |
Dec. 31, 2018
USD ($)
shares
year
$ / shares
|
Dec. 31, 2018
CAD ($)
shares
year
$ / shares
|
Dec. 31, 2017
USD ($)
shares
|
Dec. 31, 2017
CAD ($)
shares
|
Dec. 31, 2016
USD ($)
shares
|
Dec. 31, 2016
CAD ($)
shares
|
Dec. 31, 2015
USD ($)
shares
|
Dec. 31, 2015
CAD ($)
shares
|
---|---|---|---|---|---|---|---|---|
Employee Stock Option, USD | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 888,816 | 888,816 | 712,415 | 712,415 | 966,539 | 966,539 | 272,874 | 272,874 |
Weighted average remaining contractual life (years) | year | 6.55 | 6.55 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 3.66 | $ 4.66 | $ 7.23 | $ 25.88 | ||||
Number of share options exercisable (in shares) | shares | 426,442 | 426,442 | ||||||
Weighted average remaining contractual life (years) | year | 6.68 | 6.68 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 5.29 | |||||||
Employee Stock Option, USD | Exercise Price Range One | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 211,000 | 211,000 | ||||||
Weighted average remaining contractual life (years) | year | 8.62 | 8.62 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 1.71 | |||||||
Number of share options exercisable (in shares) | shares | 161,000 | 161,000 | ||||||
Weighted average remaining contractual life (years) | year | 9.35 | 9.35 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 1.79 | |||||||
Employee Stock Option, USD | Exercise Price Range Two | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 490,000 | 490,000 | ||||||
Weighted average remaining contractual life (years) | year | 6.41 | 6.41 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 2.06 | |||||||
Number of share options exercisable (in shares) | shares | 130,000 | 130,000 | ||||||
Weighted average remaining contractual life (years) | year | 5.62 | 5.62 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 2.05 | |||||||
Employee Stock Option, USD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 157,148 | 157,148 | ||||||
Weighted average remaining contractual life (years) | year | 4.75 | 4.75 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 3.46 | |||||||
Number of share options exercisable (in shares) | shares | 104,774 | 104,774 | ||||||
Weighted average remaining contractual life (years) | year | 4.75 | 4.75 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 3.46 | |||||||
Employee Stock Option, USD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 26,000 | 26,000 | ||||||
Weighted average remaining contractual life (years) | year | 3.97 | 3.97 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 4.58 | |||||||
Number of share options exercisable (in shares) | shares | 26,000 | 26,000 | ||||||
Weighted average remaining contractual life (years) | year | 3.97 | 3.97 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 4.58 | |||||||
Employee Stock Option, USD | Exercise Price Range Five | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 4,668 | 4,668 | ||||||
Weighted average remaining contractual life (years) | year | 2.77 | 2.77 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 260.87 | |||||||
Number of share options exercisable (in shares) | shares | 4,668 | 4,668 | ||||||
Weighted average remaining contractual life (years) | year | 2.77 | 2.77 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 260.87 | |||||||
Employee Stock Option, CAD | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 869 | 869 | 1,503 | 1,503 | 1,858 | 1,858 | 3,787 | 3,787 |
Weighted average remaining contractual life (years) | year | 1.41 | 1.41 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 743.56 | $ 605.84 | $ 820.27 | $ 845.46 | ||||
Number of share options exercisable (in shares) | shares | 943 | 943 | ||||||
Weighted average remaining contractual life (years) | year | 1.41 | 1.41 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 743.56 | |||||||
Employee Stock Option, CAD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 428 | 428 | ||||||
Weighted average remaining contractual life (years) | year | 0.94 | 0.94 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 570.00 | |||||||
Number of share options exercisable (in shares) | shares | 502 | 502 | ||||||
Weighted average remaining contractual life (years) | year | 0.94 | 0.94 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 570.00 | |||||||
Employee Stock Option, CAD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Number of options outstanding (in shares) | shares | 441 | 441 | ||||||
Weighted average remaining contractual life (years) | year | 1.87 | 1.87 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 912.00 | |||||||
Number of share options exercisable (in shares) | shares | 441 | 441 | ||||||
Weighted average remaining contractual life (years) | year | 1.87 | 1.87 | ||||||
Weighted average exercise price (in US and CAN dollars per share) | $ 912.00 | |||||||
Minimum | Employee Stock Option, USD | Exercise Price Range One | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 1.46 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 1.46 | |||||||
Minimum | Employee Stock Option, USD | Exercise Price Range Two | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 1.80 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 1.80 | |||||||
Minimum | Employee Stock Option, USD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 2.12 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 2.12 | |||||||
Minimum | Employee Stock Option, USD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 3.51 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 3.51 | |||||||
Minimum | Employee Stock Option, USD | Exercise Price Range Five | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 4.59 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 4.59 | |||||||
Minimum | Employee Stock Option, CAD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 570.00 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 570.00 | |||||||
Minimum | Employee Stock Option, CAD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 741.01 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 741.01 | |||||||
Maximum | Employee Stock Option, USD | Exercise Price Range One | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 1.79 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 1.79 | |||||||
Maximum | Employee Stock Option, USD | Exercise Price Range Two | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 2.11 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 2.11 | |||||||
Maximum | Employee Stock Option, USD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 3.50 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 3.50 | |||||||
Maximum | Employee Stock Option, USD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 4.58 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 4.58 | |||||||
Maximum | Employee Stock Option, USD | Exercise Price Range Five | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 1,044.00 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 1,044.00 | |||||||
Maximum | Employee Stock Option, CAD | Exercise Price Range Three | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 741.00 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 741.00 | |||||||
Maximum | Employee Stock Option, CAD | Exercise Price Range Four | ||||||||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | ||||||||
Exercise price, outstanding (in US and CAN dollars per share) | $ 912.00 | |||||||
Exercise price, exercisable (in US and CAN dollars per share) | $ / shares | $ 912.00 |
Share and other capital - Disclosure of Assumptions Used to Determine Share-based Compensation Costs (Details) - Employee Stock Option, USD |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
year
|
Dec. 31, 2017
USD ($)
year
|
Dec. 31, 2016
USD ($)
|
|
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Expected dividend yield | 0.00% | 0.00% | |
Expected volatility | 129.23% | 137.60% | |
Risk-free annual interest rate | 2.51% | 1.53% | |
Expected life (years) | year | 3.60 | 3.26 | |
Weighted average share price (in dollars per share) | $ 1.74 | $ 2.05 | |
Granted, Weighted average exercise price (in US and CAN dollars per share) | 1.74 | 2.05 | $ 3.47 |
Weighted average grant date fair value (in dollars per share) | $ 1.39 | $ 1.62 |
Operating expenses (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Key management personnel compensation | |||
Salaries and short-term employee benefits | $ 2,388 | $ 2,081 | $ 2,430 |
Consultants fees | 62 | 0 | 0 |
Termination benefits | 356 | 0 | 0 |
Post-employment benefits | 147 | 59 | 78 |
Share-based compensation costs | 462 | 87 | 1,051 |
Key management personnel compensation | 3,415 | 2,227 | 3,559 |
Other employees compensation: | |||
Salaries and short-term employee benefits | 1,325 | 3,584 | 3,574 |
Termination benefits (note 16) | 0 | 1,806 | 0 |
Post-employment benefits | 275 | 441 | 500 |
Share-based compensation costs | 108 | 95 | 31 |
Other employee compensation | 1,708 | 5,926 | 4,105 |
Professional fees | 6,421 | 7,153 | 7,157 |
Insurance | 1,303 | 949 | 870 |
Third-party R&D | 498 | 3,758 | 11,796 |
Contracted sales force | 256 | 22 | 14 |
Travel | 256 | 831 | 1,185 |
Marketing services | 176 | 698 | 5 |
Laboratory supplies | 139 | 2 | 30 |
Other goods and services | 342 | 162 | 160 |
Leasing costs, net of sublease receipts | 344 | 2,247 | 1,131 |
Sublease income | 121 | 359 | 345 |
Transaction costs related to share purchase warrants | 0 | 0 | 56 |
Depreciation and amortization | 60 | 138 | 195 |
Impairment (reversal) losses | 0 | (44) | 85 |
Operating foreign exchange (gains) losses | 17 | (72) | 39 |
Operating expense, excluding compensation cost | 9,812 | 15,844 | 22,723 |
Total operating expenses | $ 14,935 | $ 23,997 | $ 30,387 |
Supplemental disclosure of cash flow information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Increase (Decrease) In Operating Capital [Abstract] | |||
Trade and other receivables | $ (95) | $ 158 | $ 228 |
Inventory | 314 | 0 | 0 |
Prepaid expenses and other current assets | 448 | (343) | (45) |
Other non-current assets | 150 | 39 | (233) |
Payables and accrued liabilities | (586) | (1,080) | (199) |
Taxes payable | 1,669 | 0 | 0 |
Deferred revenues | 400 | 0 | 555 |
Provision for restructuring and other costs (note 16) | (1,957) | (435) | (911) |
Employee future benefits (note 18) | (494) | (551) | (459) |
Increase (decrease) in working capital | $ 151 | $ 2,212 | $ 1,064 |
Income taxes - Components of Current and Deferred Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Taxes [Abstract] | |||
Current tax (expense) recovery | $ 0 | $ 0 | $ 0 |
Deferred tax: | |||
Origination and reversal of temporary differences | (4,003) | 6,395 | 9,199 |
Adjustments in respect of prior years | 742 | (149) | 36 |
Change in unrecognized tax assets | (2,191) | (2,767) | (9,235) |
Income tax (expense) recovery | $ (5,452) | $ 3,479 | $ 0 |
Income taxes - Reconciliation of the Combined Canadian Federal and Provincial Income Tax Rate to the Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Taxes [Abstract] | |||
Combined Canadian federal and provincial statutory income tax rate | 26.70% | 26.80% | 26.90% |
Income tax (expense) recovery based on combined statutory income tax rate | $ (2,574) | $ 5,434 | $ 6,714 |
Change in unrecognized tax assets | (1,963) | (2,701) | (9,235) |
Change in unrecognized tax assets related to OCI | (188) | (228) | 436 |
Share issuance costs | (40) | 164 | 224 |
Permanent difference attributable to the use of local currency for tax reporting | 792 | (71) | (30) |
Change in enacted rates used | (58) | (358) | (16) |
Permanent difference attributable to net change in fair value of warrant liability | 70 | 595 | 1,194 |
Share-based compensation costs | (152) | (49) | (291) |
Difference in statutory income tax rate of foreign subsidiaries | (917) | 768 | 972 |
Adjustments in respect of prior years | (372) | (149) | 36 |
Other | (50) | 74 | (4) |
Income tax (expense) recovery | $ (5,452) | $ 3,479 | $ 0 |
Income taxes - Loss Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of geographical areas [line items] | |||
Loss before income taxes | $ 9,639 | $ (20,275) | $ (24,959) |
Germany | |||
Disclosure of geographical areas [line items] | |||
Loss before income taxes | 16,297 | (13,950) | (19,179) |
Canada | |||
Disclosure of geographical areas [line items] | |||
Loss before income taxes | (5,504) | (5,592) | (5,659) |
United States | |||
Disclosure of geographical areas [line items] | |||
Loss before income taxes | $ (1,154) | $ (733) | $ (121) |
Income taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Non-current: | ||
Deferred tax assets | $ 4,410 | $ 8,987 |
Current: | ||
Deferred tax liabilities, current | 286 | 0 |
Non-current: | ||
Deferred tax liabilities, noncurrent | 4,124 | 5,508 |
Deferred tax liabilities | 4,410 | 5,508 |
Deferred tax assets (liabilities), net | 0 | 3,479 |
Operating losses carried forward | ||
Current: | ||
Deferred tax assets, current | 0 | 3,479 |
Non-current: | ||
Deferred tax assets, noncurrent | 764 | 696 |
Intangible assets | ||
Non-current: | ||
Deferred tax assets, noncurrent | 3,646 | 4,812 |
Deferred revenues | ||
Current: | ||
Deferred tax liabilities, current | 38 | 0 |
Non-current: | ||
Deferred tax liabilities, noncurrent | 4,074 | 5,316 |
Restricted cash | ||
Current: | ||
Deferred tax liabilities, current | 153 | 0 |
Payables and accrued liabilities | ||
Current: | ||
Deferred tax liabilities, current | 95 | 0 |
Property, plant and equipment | ||
Non-current: | ||
Deferred tax liabilities, noncurrent | 3 | 5 |
Other | ||
Non-current: | ||
Deferred tax liabilities, noncurrent | $ 47 | $ 187 |
Income taxes - Components of Unrecognized Deferred Tax Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets | ||
Current: | $ 649 | $ 584 |
Non-current: | 99,977 | 103,486 |
Unrecognized deferred tax assets | 100,626 | 104,070 |
Deferred revenues and other provisions | ||
Deferred tax assets | ||
Current: | 649 | 584 |
Deferred revenues | ||
Deferred tax assets | ||
Non-current: | 0 | 0 |
Operating losses carried forward | ||
Deferred tax assets | ||
Non-current: | 81,731 | 82,421 |
SR&ED Pool | ||
Deferred tax assets | ||
Non-current: | 9,148 | 9,167 |
Unused tax credits | ||
Deferred tax assets | ||
Non-current: | 5,894 | 8,019 |
Employee future benefits | ||
Deferred tax assets | ||
Non-current: | 2,048 | 2,296 |
Property, plant and equipment | ||
Deferred tax assets | ||
Non-current: | 448 | 407 |
Share issuance expenses | ||
Deferred tax assets | ||
Non-current: | 467 | 841 |
Other | ||
Deferred tax assets | ||
Non-current: | $ 241 | $ 335 |
Income taxes - Disclosure of Tax Attributes to be Deferred (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | $ 100,626 | $ 104,070 |
Canada | Federal | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 65,562 | |
Canada | Federal | Expiration Year 2028 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 7,880 | |
Canada | Federal | Expiration Year 2029 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,791 | |
Canada | Federal | Expiration Year 2030 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,104 | |
Canada | Federal | Expiration Year 2031 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 1,753 | |
Canada | Federal | Expiration Year 2032 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,250 | |
Canada | Federal | Expiration Year 2033 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 3,721 | |
Canada | Federal | Expiration Year 2034 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,153 | |
Canada | Federal | Expiration Year 2035 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 10,418 | |
Canada | Federal | Expiration Year 2036 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 10,592 | |
Canada | Federal | Expiration Year 2037 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 7,343 | |
Canada | Federal | Expiration Year 2038 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 6,557 | |
Canada | Provincial | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 64,161 | |
Canada | Provincial | Expiration Year 2028 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 6,494 | |
Canada | Provincial | Expiration Year 2029 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,773 | |
Canada | Provincial | Expiration Year 2030 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,089 | |
Canada | Provincial | Expiration Year 2031 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 1,737 | |
Canada | Provincial | Expiration Year 2032 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,250 | |
Canada | Provincial | Expiration Year 2033 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 3,721 | |
Canada | Provincial | Expiration Year 2034 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 4,153 | |
Canada | Provincial | Expiration Year 2035 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 10,452 | |
Canada | Provincial | Expiration Year 2036 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 10,592 | |
Canada | Provincial | Expiration Year 2037 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | 7,343 | |
Canada | Provincial | Expiration Year 2038 | ||
Disclosure of geographical areas [line items] | ||
Tax attributes to be deferred for which no deferred tax asset was recognized | $ 6,557 |
Income taxes - Narrative (Details) - Dec. 31, 2018 € in Thousands, $ in Thousands |
USD ($) |
EUR (€) |
---|---|---|
Germany | ||
Disclosure of geographical areas [line items] | ||
Unused tax losses for which no deferred tax asset recognised | $ 205,343 | € 173,733 |
United States | ||
Disclosure of geographical areas [line items] | ||
Unused tax losses for which no deferred tax asset recognised | 3,322 | |
R&D Investment Tax Credits | ||
Disclosure of geographical areas [line items] | ||
Unused tax credits for which no deferred tax asset recognised | $ 5,894 |
Income taxes - Disclosure of Federal Tax Losses (Details) - United States $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | $ 3,322 |
Expiration Year 2028 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 369 |
Expiration Year 2029 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 178 |
Expiration Year 2034 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 151 |
Expiration Year 2035 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 447 |
Expiration Year 2036 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 195 |
Expiration Year 2037 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | 709 |
Expiration Year 2038 | |
Disclosure of geographical areas [line items] | |
Unused tax losses for which no deferred tax asset recognised | $ 1,273 |
Financial instruments and financial risk management - Schedule Of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | $ 7,303 | $ (1,885) |
Cash and Cash Equivalents | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 14,512 | 7,780 |
Trade And Other Receivables | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 245 | 35 |
Restricted cash equivalents (note 11) | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 418 | 381 |
Financial assets at amortized cost | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 15,175 | 8,196 |
Financial assets at amortized cost | Cash and Cash Equivalents | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 14,512 | 7,780 |
Financial assets at amortized cost | Trade And Other Receivables | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 245 | 35 |
Financial assets at amortized cost | Restricted cash equivalents (note 11) | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 418 | 381 |
Payables and accrued liabilities | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (2,940) | (2,687) |
Provision for restructuring and other costs (note 16) | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (1,298) | (3,497) |
Warrant liability | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (3,634) | (3,897) |
Financial liabilities at fair value through profit or loss, category | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (3,634) | (3,897) |
Financial liabilities at fair value through profit or loss, category | Payables and accrued liabilities | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 0 | 0 |
Financial liabilities at fair value through profit or loss, category | Provision for restructuring and other costs (note 16) | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | 0 | 0 |
Financial liabilities at fair value through profit or loss, category | Warrant liability | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (3,634) | (3,897) |
Financial liabilities at amortised cost, category | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (4,238) | (6,184) |
Financial liabilities at amortised cost, category | Payables and accrued liabilities | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (2,940) | (2,687) |
Financial liabilities at amortised cost, category | Provision for restructuring and other costs (note 16) | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | (1,298) | (3,497) |
Financial liabilities at amortised cost, category | Warrant liability | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial asset (liabilities) | $ 0 | $ 0 |
Financial instruments and financial risk management - Narrative (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
counterparty
$ / shares
|
Dec. 31, 2017
USD ($)
counterparty
|
|
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Foreign exchange risk exposure | $ 1,134,000 | $ 1,087,000 |
Trade receivables | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Trade receivables, number of counterparties | counterparty | 4 | 3 |
Credit risk | Trade And Other Receivables | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Trade receivables | $ 197,000 | $ 25,000 |
Credit risk | Financial assets past due but not impaired | Trade And Other Receivables | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Trade receivables | $ 55,000 | 5,000 |
Credit risk | Financial assets impaired | Trade And Other Receivables | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Trade receivables | $ 0 | |
Equity price risk | Trade and Warrant Liability | Minimum | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Common stock, share price (USD per share) | $ / shares | $ 1.19 | |
Equity price risk | Trade and Warrant Liability | Maximum | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Common stock, share price (USD per share) | $ / shares | $ 3.87 |
Financial instruments and financial risk management - Effect Of Share Price Variations On Warrant Liability (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Nov. 01, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Disclosure of detailed information about financial instruments [line items] | |||||
Warrant liability | $ 3,634 | $ 3,897 | $ 6,854 | $ 10,891 | |
Bottom Of Range | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Sensitivity analysis for types of market risk, reasonably possible change in risk variable, other relevant impact | 1,792 | ||||
Top Of Range | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Sensitivity analysis for types of market risk, reasonably possible change in risk variable, other relevant impact | (1,504) | ||||
Warrant liability | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Warrant liability | 3,634 | $ 400 | |||
Warrant liability | Market risk | Bottom Of Range | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Sensitivity analysis for types of market risk, reasonably possible change in risk variable, other relevant impact | 1,792 | ||||
Warrant liability | Market risk | Top Of Range | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Sensitivity analysis for types of market risk, reasonably possible change in risk variable, other relevant impact | $ (1,504) |
Segment information - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
segment
| |
Operating Segments [Abstract] | |
Number of operating segments | 1 |
Segment information - Revenues by Geographical Area (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of geographical areas [line items] | |||
Revenue | $ 26,881 | $ 923 | $ 911 |
Ireland | |||
Disclosure of geographical areas [line items] | |||
Revenue | 24,910 | 0 | 0 |
United States | |||
Disclosure of geographical areas [line items] | |||
Revenue | 1,416 | 452 | 410 |
China | |||
Disclosure of geographical areas [line items] | |||
Revenue | 275 | 262 | 249 |
Singapore | |||
Disclosure of geographical areas [line items] | |||
Revenue | 0 | 0 | 101 |
British Virgin Islands | |||
Disclosure of geographical areas [line items] | |||
Revenue | 280 | 206 | 100 |
Other | |||
Disclosure of geographical areas [line items] | |||
Revenue | $ 0 | $ 3 | $ 51 |
Segment information - Non-current Assets by Geographical Area (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disclosure of geographical areas [line items] | ||
Non-current assets | $ 8,755 | $ 12,814 |
Germany | ||
Disclosure of geographical areas [line items] | ||
Non-current assets | 8,599 | 12,552 |
United States | ||
Disclosure of geographical areas [line items] | ||
Non-current assets | 153 | 102 |
Canada | ||
Disclosure of geographical areas [line items] | ||
Non-current assets | $ 3 | $ 160 |
Segment information - Summary of Major Customer Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of major customers [line items] | |||
Revenue | $ 26,881 | $ 923 | $ 911 |
Company 1 | |||
Disclosure of major customers [line items] | |||
Revenue | 26,127 | 0 | 0 |
Company 2 | |||
Disclosure of major customers [line items] | |||
Revenue | 0 | 0 | 20 |
Company 3 | |||
Disclosure of major customers [line items] | |||
Revenue | 275 | 262 | 249 |
Company 4 | |||
Disclosure of major customers [line items] | |||
Revenue | 0 | 323 | 222 |
Company 5 | |||
Disclosure of major customers [line items] | |||
Revenue | 0 | 129 | 167 |
Company 6 | |||
Disclosure of major customers [line items] | |||
Revenue | 0 | 0 | 101 |
Company 7 | |||
Disclosure of major customers [line items] | |||
Revenue | $ 280 | $ 206 | $ 100 |
Net income (loss) per share (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Earnings per share [line items] | |||
Net income (loss) | $ 4,187 | $ (16,796) | $ (24,959) |
Basic weighted average number of shares outstanding (in shares) | 16,440,760 | 14,958,704 | 10,348,879 |
Diluted weighted average number of shares outstanding (in shares) | 17,034,812 | 14,958,704 | 10,348,879 |
Stock options | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 889,685 | 713,918.000 | 968,397 |
Share purchase warrants | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,391,844 | 3,417,840 | 3,779,245 |
Commitments and contingencies - Expected Future Minimum Payments (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Disclosure of finance lease and operating lease by lessor [line items] | |
Minimum lease payments | $ 1,006 |
Minimum sublease receipts | (141) |
Service and manufacturing | 2,180 |
Total | 3,045 |
Less than 1 year | |
Disclosure of finance lease and operating lease by lessor [line items] | |
Minimum lease payments | 408 |
Minimum sublease receipts | (117) |
Service and manufacturing | 2,180 |
Total | 2,471 |
1 - 3 years | |
Disclosure of finance lease and operating lease by lessor [line items] | |
Minimum lease payments | 533 |
Minimum sublease receipts | (24) |
Service and manufacturing | 0 |
Total | 509 |
4 - 5 years | |
Disclosure of finance lease and operating lease by lessor [line items] | |
Minimum lease payments | 60 |
Minimum sublease receipts | 0 |
Service and manufacturing | 0 |
Total | 60 |
More than 5 years | |
Disclosure of finance lease and operating lease by lessor [line items] | |
Minimum lease payments | 5 |
Minimum sublease receipts | 0 |
Service and manufacturing | 0 |
Total | $ 5 |
Commitments and contingencies - Contingencies Narrative (Details) $ in Millions |
1 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 21, 2018
USD ($)
|
Nov. 05, 2018
USD ($)
|
Feb. 02, 2018
USD ($)
|
Jan. 16, 2018
USD ($)
|
Dec. 21, 2017
USD ($)
|
Dec. 21, 2017
CAD ($)
|
Aug. 31, 2017
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Disclosure of contingent liabilities [line items] | |||||||||
Contingent liabilities | $ 0 | $ 0 | |||||||
Messrs, Dodd And Theodore | |||||||||
Disclosure of contingent liabilities [line items] | |||||||||
Damages sought | $ 6,000,000 | $ 6.0 | |||||||
Payments for legal settlements | $ 775,000 | ||||||||
Mr. Dodd | |||||||||
Disclosure of contingent liabilities [line items] | |||||||||
Damages sought | $ 1,700,000 | ||||||||
Strongbridge | |||||||||
Disclosure of contingent liabilities [line items] | |||||||||
Upfront payment received | $ 24,000,000.0 | ||||||||
Entering into significant commitments or contingent liabilities | Cogas | |||||||||
Disclosure of contingent liabilities [line items] | |||||||||
Payments for legal settlements | $ 625,000 | ||||||||
Commission percentage | 5.00% | ||||||||
Commission period | 3 years | ||||||||
Entering into significant commitments or contingent liabilities | Strongbridge | |||||||||
Disclosure of contingent liabilities [line items] | |||||||||
Upfront payment received | $ 24,000,000.0 | $ 24,000,000 |
Reclassification on comparative figures - Narrative (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Reclassification From Inventory To Prepaid Expenses And Other Current Assets | |
Disclosure of reclassifications or changes in presentation [line items] | |
Reclassifications on comparative figures | $ 87 |
Reclassification From Payables And Accrued Liabilities To Provision For Restructuring And Other Costs | |
Disclosure of reclassifications or changes in presentation [line items] | |
Reclassifications on comparative figures | 173 |
Reclassification From Onerous Contract Provisions To Provision For Restructuring And Other Costs [Member] | |
Disclosure of reclassifications or changes in presentation [line items] | |
Reclassifications on comparative figures | 310 |
Reclassification From Non-Current Portion Of Provision For Restructuring Costs To Provision For Restructuring And Other Costs | |
Disclosure of reclassifications or changes in presentation [line items] | |
Reclassifications on comparative figures | $ 718 |
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