An anonymous director reports

AETERNA ZENTARIS ISSUES LETTER TO SHAREHOLDERS AND MANAGEMENT PROXY CIRCULAR AHEAD OF SPECIAL MEETING OF SHAREHOLDERS TO APPROVE MERGER OF EQUALS WITH CEAPRO

Aeterna Zentaris Inc. has issued a letter to shareholders and management proxy circular ahead of its special meeting of shareholders to approve its merger of equals transaction with Ceapro Inc.

The two innovative biopharmaceutical development companies previously announced that they had entered into a definitive agreement to combine operations in an all-stock merger of equals transaction. The combined company is expected to be listed on the Nasdaq Capital Market and the Toronto Stock Exchange, subject to the receipt of all necessary approvals. A new name for the combined company is expected to be announced following the closing of the transaction.

Aeterna's board of directors has been actively working for over two years to find a transformational opportunity for Aeterna, and strongly believe that the transaction with Ceapro is attractive for both companies and their respective shareholders. Currently, Ceapro's revenue-generating cosmeceutical based business includes the production of extracts and "active ingredients" from renewable plant resources that are found in leading skin care products, including brands such as Aveeno, Jergens, Neutrogena, Lubriderm and other leading brand names. With Aeterna's pipeline and development expertise in higher-margin pharmaceutical products, Aeterna believes the combined company has the potential to generate significant value in the near and long term as a result of, but not limited to, the following:

• Greater potential for stable cash flow to support R&D (research and development) of potentially higher-return pharmaceutical products. Ceapro currently generates revenues from two main active ingredients, oat beta glucan and avenanthramides, extracted and purified using its proprietary technology. Cash from these products is planned to be used along with Aeterna's revenue from the commercialization or licensing of Aeterna's macimorelin product to support the development of the combined company's roster of exciting, high-potential-return products, ideally creating growing and sustainable revenue for the combined company and investors.
• Greater diversification of commercial and development product pipeline lowers risk. The combined company is expected to benefit from an extensive and diversified pipeline of innovative products in development, including Ceapro's quicker-to-market biotechnology products and Aeterna's exciting potentially higher-return, but longer-horizon, products. With this pipeline rejuvenation, the combined company is anticipated to boast:
  • More products in the pipeline that are closer to potential commercialization;
  • An enhanced ability to strategically focus financial and company resources in a manner that provides the most value to the company and shareholders;
  • A more compelling value proposition and lower-risk profile.
• Expanded pharmaceutical research and development capabilities.
• Both Aeterna and Ceapro bring deep expertise and knowledge that are expected to play a key role in advancing the combined company and development pipeline. The combined company will have the infrastructure to support development activities and potentially offer improved efficiencies, in addition to cost savings. The combined company will also have an expanded development pipeline of products which the company is committed to prioritizing as the company evaluates what will provide the best overall potential for the combined company, shareholders and consumers.
• Compelling North American plus European combination.
• Ceapro has an operational presence in North America, which addresses another strategic consideration for Aeterna, a Canadian company in North American markets but whose current operational footprint is largely European. While Aeterna expects to continue to maintain some presence in Europe, Aeterna believes it needs to refocus operations within the North American biotechnology market. Aeterna believes that combining with Ceapro, a company with an established presence in North America, provides better exposure to potential new investors, business development opportunities and talent.
• Expertise and efficiencies. Both companies have expertise that can build upon each other, which is expected to result in a stronger combined company. For example, Aeterna is adept at navigating the conduct of human clinical trials and the crucial regulatory approval process required to bring pharmaceutical products to market. The combined company plans to leverage this expertise with the higher-value pharmaceutical opportunities being advanced by Ceapro for its active ingredients and technologies.

In short, Aeterna's board believes this business combination will provide both companies with the tools needed to begin to effect real change and to provide significant growth and value.

Time is short. Vote for all resolutions today

Aeterna's board of directors recommends a vote in favour of all resolutions at the upcoming special meeting to be held at 11 a.m. Eastern Time on March 12, 2024. In order to be counted at the meeting, your proxy must be received prior to the proxy voting deadline of 11 a.m. ET on March 8, 2024, or, if the meeting is adjourned or postponed, by no later than 48 hours prior to the time fixed for the adjourned or postponed meeting.

If Aeterna shareholders have any questions or require assistance with voting their proxy, please contact Aeterna Zentaris' strategic shareholder adviser and proxy solicitation agent, Kingsdale Advisors, at 1-866-581-1513 (North American toll-free) or 416-623-2513 (outside North America -- text and call enabled), or by e-mail at: contactus@kingsdaleadvisors.com.

Advisors and counsel

Aeterna has engaged Raymond James as its financial adviser, Norton Rose Fulbright as its Canadian and United States legal adviser, FGS Longview as its communications adviser, and Kingsdale Advisors as its proxy solicitor.

About Aeterna Zentaris Inc.

Aeterna is a specialty biopharmaceutical company developing and commercializing a diversified portfolio of pharmaceutical and diagnostic products focused on areas of significant unmet medical need. Aeterna's lead product, macimorelin (Macrilen; Ghryvelin), is the first and only U.S. Food and Drug Administration- and European Commission-approved oral test indicated for the diagnosis of adult growth hormone deficiency (AGHD). Aeterna is leveraging the clinical success and compelling safety profile of macimorelin to develop it for the diagnosis of childhood-onset growth hormone deficiency (CGHD), an area of significant unmet need.

Aeterna is also dedicated to the development of its therapeutic assets and has established a preclinical development pipeline to potentially address unmet medical needs across a number of indications, including neuromyelitis optica spectrum disorder (NMOSD), Parkinson's disease (PD), hypoparathyroidism and amyotrophic lateral sclerosis (ALS; Lou Gehrig's disease).

About Ceapro Inc.

Ceapro is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and active ingredients from oats and other renewable plant resources.

Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical and therapeutics products for humans and animals. Ceapro has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions.

We seek Safe Harbor.