Mr. David Dodd reports

AETERNA ZENTARIS REPORTS FOURTH QUARTER AND FULL-YEAR 2013 FINANCIAL AND OPERATING RESULTS

AEterna Zentaris Inc. has released its financial and operating results as at and for the fourth quarter and the year ended Dec. 31, 2013. All amounts are in U.S. dollars.

Revenues for the year ended Dec. 31, 2013, were $6.2-million, compared with $2.1-million for the same period in 2012. This increase is attributable to the accelerated recognition of deferred revenues.

Research and development costs, net of refundable tax credits and grants, for the three-month period ended Dec. 31, 2013, were fairly stable at $5.3-million, compared with $5.5-million for the same period in 2012. R&D costs, net of refundable tax credits and grants, for the year ended Dec. 31, 2013, were $21.3-million, compared with $20.6-million for the same period in 2012.

Net loss for the three-month period ended Dec. 31, 2013, was $8.2-million, or 22 cents per basic and diluted share, compared with $6.9-million, or 29 cents per basic and diluted share, for the same period in 2012. Net income for the year ended Dec. 31, 2013, was $6.8-million, or 24 cents per basic and diluted share, compared with a net loss of $20.4-million, or $1.03 per basic and diluted share, for the same period in 2012. The comparative quarter-over-quarter increase in net loss is mainly due to increased finance costs (primarily related to the change in fair value of warrant liability), partially offset by higher net income from discontinued operations (related to Cetrotide manufacturing activities and the recognition of related deferred revenues) and lower operating expenses. The comparative year-over-year decrease in net loss is mainly due to higher net income from discontinued operations and higher revenues, partially compensated by higher operating costs and lower finance income.

Cash and cash equivalents totalled $43.2-million as at Dec. 31, 2013, compared with $39.5-million as at Dec. 31, 2012. In January, 2014, subsequent to year-end, the company completed a public offering of 11 million units, generating net proceeds of approximately $12.2-million.

Juergen Ernst, chairman of the board, commented, "Two thousand thirteen and the first few months of 2014 have been an important period of transition for the company as we appointed a new president and chief executive officer, and made other significant organizational changes, resulting in a strong team dedicated to the success of this company."

David Dodd, AEterna Zentaris's president and chief executive officer, commented: "Over the last 12 months we made great strides in the transition toward becoming an operating biopharmaceutical company, filing the new drug application for Macrilena for the evaluation of adult growth hormone deficiency and initiating patient recruitment for the pivotal ZoptEC phase 3 trial in endometrial cancer with zoptarelin doxorubicin. We also significantly improved our financial position in order to secure the necessary funds needed to pursue these two major programs. Over the course of this year, our primary focus will be on finalizing our prelaunch activities for Macrilena and completing initiation of all clinical sites for our ZoptEC phase 3 trial, while we continue to aggressively pursue opportunities to in-license, acquire and/or promote existing commercial products in order to more quickly transform AEterna Zentaris into a successful commercial organization. All of us within the company are highly focused on achieving such a transition."

Pipeline highlights

Macrilena (macimorelin)

A new drug application was accepted for filing by the U.S. Food and Drug Administration with a Prescription Drug User Fee Act date of Nov. 5, 2014. Currently under review, the NDA seeks approval for the commercialization of Macrilena as the first available oral product indicated for the evaluation of adult growth hormone deficiency.

Zoptarelin doxorubicin

The company has reached an agreement with the FDA on a special protocol assessment for the phase 3 ZoptEC (zoptarelin doxorubicin in endometrial cancer) trial in women with locally advanced recurrent or metastatic endometrial cancer. The proposed trial protocol design, clinical end points and planned analysis will therefore be acceptable to support regulatory submission.

AEterna Zentaris has signed a co-development and profit-sharing agreement with Ergomed Clinical Research Ltd. as the contract clinical development organization for the current phase 3 ZoptEC trial. Ergomed has agreed to assume 30 per cent (up to $10-million) of the clinical and regulatory costs for this trial. In turn, Ergomed will receive a single-digit percentage of future net income from the product in the endometrial cancer indication, up to a prespecified amount.

The company has initiated patient recruitment for the phase 3 ZoptEC trial. There are currently over 90 sites actively recruiting patients across 16 countries.

Conference call

Management will be hosting a conference call for the investment community beginning at 8:30 a.m. (Eastern Time) on Friday, March 21, 2014, to discuss the 2013 fourth quarter and full-year results. Individuals interested in participating in the live conference call by telephone may dial, in Canada, 514-807-9895 or 647-427-7450, or outside Canada, 888-231-8191. They may also listen through the Internet at the company's website in the "newsroom" section. A replay will be available on the company's website for 30 days following the live event.

For reference, the management's discussion and analysis of financial condition and results of operations for the fiscal year 2013, as well as the company's consolidated financial statements, can be found at the company's website in the "investors" section.

                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)      
                 (in thousands of U.S. dollars, except per-share amounts)

                                            Three months ended                       Year ended 
                                                      Dec. 31,                         Dec. 31,
                                               2013       2012       2013       2012       2011

Revenues                                                                                                         
Sales                                     $       -  $       -  $      96  $     834  $     250
Licence fees and other                            -        281      6,079      1,219      4,455
                                                  -        281      6,175      2,053      4,705
Operating expenses                                                                         
Cost of sales                                     -          -         51        591        212
Research and development costs, net 
of refundable tax credits and grants          5,345      5,523     21,284     20,592     24,245
Selling, general and administrative 
expenses                                      2,627      2,877     12,316     10,606     11,955
                                              7,972      8,400     33,651     31,789     36,412
(Loss) from operations                       (7,972)    (8,119)   (27,476)   (29,736)   (31,707)
Finance income                                   65        689      1,748      6,974      6,239
Finance (costs)                              (2,689)      (700)    (1,512)      (382)        (8)
Net finance income                           (2,624)       (11)       236      6,592      6,231
(Loss) before income taxes                  (10,596)    (8,130)   (27,240)   (23,144)   (25,476)
Income tax (expense)                              -          -          -          -     (1,104)
Net (loss) from continuing operations       (10,596)    (8,130)   (27,240)   (23,144)   (26,580)
Net income (loss) from discontinued 
operations                                    2,353      1,183     34,055      2,732       (487)
Net income (loss)                         $  (8,243) $  (6,947) $   6,815  $ (20,412) $ (27,067)
Other comprehensive income (loss)                                                      
Items that may be reclassified 
subsequently to profit or loss                                                                           
Foreign currency translation adjustments        424       (204)     1,073       (504)      (789)
Items that will not be reclassified to 
profit or loss                                                                                         
Actuarial gain (loss) on defined benefit 
plans                                         2,346     (3,705)     2,346     (3,705)    (1,335)
Comprehensive income (loss)               $  (5,473) $ (10,856) $  10,234  $ (24,621) $ (29,191)
Net (loss) per share (basic and diluted) 
from continuing operations                    (0.28)     (0.34)     (0.92)     (1.17)     (1.69)
Net income (loss) (basic and diluted) 
from discontinued operations                   0.06       0.05       1.16       0.14      (0.03)
Net income (loss) (basic and diluted) 
per share                                 $   (0.22)     (0.29) $    0.24  $   (1.03) $   (1.72)

We seek Safe Harbor.