Ms. Carolyn Egbert of Aeterna reports

LEADING INDEPENDENT PROXY ADVISORY FIRM ISS RECOMMENDS AETERNA ZENTARIS AND CEAPRO SECURITYHOLDERS VOTE FOR THE ARRANGEMENT AGREEMENT TO APPROVE THE MERGER OF EQUALS TO CREATE A DIVERSIFIED BIOPHARMACEUTICAL COMPANY

Leading independent proxy adviser Institutional Shareholder Services Inc. (ISS) has recommended that Aeterna Zentaris Inc. and Ceapro Inc. securityholders vote for the all-stock merger of equals transaction pursuant to the terms announced on Dec. 14, 2023.

Following its assessment of the transaction, ISS stated in its Aeterna Zentaris vote for recommendation, among other things:

"On balance, the deal has strong strategic merit, third party solicitation was unable to generate any other actionable proposals and governance conflicts appear to have been reasonably managed."

ISS noted, among other things, in its Ceapro vote for recommendation:

"The arrangement is the result of arm's-length negotiations between the parties and carries sound strategic logic."

"Aeterna Zentaris's board of directors is pleased that ISS came to the same conclusion as the board, that the shareholders should support the transaction with Ceapro," said Carolyn Egbert, chair of Aeterna Zentaris. "The combination with Ceapro is the result of a fulsome review of strategic alternatives to maximize value for shareholders and, following extensive discussions, we believe the transaction presents a compelling upside opportunity for investors in both companies."

Ronald Miller, chairman of Ceapro, stated, "We are thrilled ISS agrees with us that this is an exciting transaction to merge with Aeterna Zentaris and combine two complementary companies and teams, in support of our plan to drive significant growth."

Following the closing of the transaction, which is expected to occur in the beginning of the second quarter of 2024, the former shareholders of Ceapro will own approximately 50 per cent of Aeterna Zentaris and the pretransaction securityholders of Aeterna Zentaris will own the remaining approximately 50 per cent, assuming the exercise of all warrants to be issued to the securityholders of Aeterna Zentaris as part of the transaction.

Key attributes of the combined company include:

• Recurring revenue to support business expansion. The combined company will benefit from continuing revenue from existing Ceapro products -- which provide near-term revenue owing to the streamlined development and commercialization opportunities in the cosmeceutical and nutraceutical space -- along with licence revenue from the partnering of Aeterna Zentaris's pharmaceutical products, including Macrilen/Ghryvelin, which have the potential to create long-term value for investors. These revenue streams will be used to support the development of high-potential-return products and represent a more diversified value proposition for investors.
• Diversified commercial and development product pipeline. The combined company will have a stronghold in the active ingredients market and value-driving cosmeceutical products (such as oat beta glucan and avenanthramides, which are found in leading skin care product brands, including Aveeno, Jergens, Neutrogena, Lubriderm and other leading brand names) and nutraceuticals. It will also benefit from a robust pipeline of innovative products in development.
• Dual-listing expected to improve trading volume and capital market profile. Shareholders of each company will share in future value creation, with existing securityholders of Aeterna Zentaris and Ceapro to each own approximately 50 per cent of the combined company, respectively (assuming the exercise of all transaction warrants). The anticipated dual Nasdaq and Toronto Stock Exchange listing is expected to provide additional volume and an improved capital market profile for the combined company.
• Strengthened combined balance sheet. The combined company will be well capitalized to support continuing commercial operations while strategically investing in product research and development to advance differentiated, innovative products.
• Operational synergies and leadership. The combined company will benefit from established pharmaceutical research and development capabilities and infrastructure to support development activities and draw on existing executives to form the new management team.

The terms of the transaction include: (i) Aeterna Zentaris will acquire all of the issued and outstanding common shares of Ceapro from the shareholders of Ceapro in exchange for Aeterna Zentaris common shares, and (ii) each of the outstanding options to purchase Ceapro shares will be exchanged for a replacement option allowing their holders to acquire Aeterna Zentaris shares on similar terms, by way of a statutory plan of arrangement.

The transaction will require the approval of at least 66-2/3 per cent of the votes cast by Ceapro shareholders and 66-2/3 per cent of the votes cast by Ceapro shareholders and Ceapro optionholders, voting together as a single class, at a special meeting of Ceapro's securityholders. The issuance of Aeterna Zentaris shares, transaction warrants and replacement options by Aeterna Zentaris under the transaction is subject to the approval of a simple majority of the votes cast by Aeterna shareholders at a special meeting of Aeterna Zentaris shareholders. Moreover, Aeterna Zentaris shareholders will also be required to approve, by simple majority, the proposed changes to the Aeterna Zentaris board of directors as part of the transaction, as well as, by a majority of at least 66-2/3 per cent of the votes cast by Aeterna Zentaris shareholders, the proposed consolidation of the Aeterna Zentaris shares. ISS recommended that Aeterna Zentaris shareholders vote for all of these resolutions as part of the transaction.

Your vote is important

Aeterna Zentaris and Ceapro securityholders must vote their proxy before 11 a.m. (Eastern Time) on March 8, 2024.

We seek Safe Harbor.