Aeterna Zentaris Reports Fourth Quarter and Full-Year 2012 Financial and Operating Results

   Aeterna Zentaris Reports Fourth Quarter and Full-Year 2012 Financial and
                              Operating Results

PR Newswire

QUEBEC CITY, March 21, 2013

All amounts are in U.S. dollars (unless otherwise noted)

QUEBEC CITY, March 21, 2013 /PRNewswire/ - Aeterna Zentaris Inc.
(NASDAQ:AEZS) (TSX: AEZ) (the "Company"), a late-stage drug development
company specializing in oncology and endocrinology, today reported financial
and operating results as at and for the fourth quarter and the year ended
December 31, 2012.

Key Developments in 2012

AEZS-108 (Doxorubicin Peptide Conjugate)

  *Special Protocol Assessment ("SPA") granted by the U.S. Food and Drug
    Administration ("FDA") for the initiation of a Phase 3 study in advanced
    recurrent endometrial cancer. This is an open-label, randomized,
    multicenter trial which will be conducted in North America and Europe,
    comparing AEZS-108 with doxorubicin as second-line therapy for
    locally-advanced, recurrent or metastatic endometrial cancer. The trial
    will involve approximately 500 patients and the primary efficacy endpoint
    is improvement in median overall survival.
  *Initiation of the Phase 2 portion of the Phase 1/2 trial in castration-
    and taxane-resistant prostate cancer ("CRPC") supported by a three-year
    $1.6 million grant from the National Institutes of Health ("NIH") to an
    investigator to support this study. Results for the Phase 1 portion
    demonstrated that AEZS-108 was well tolerated and early evidence of
    antitumor activity was observed in men with CRPC.

AEZS-130 (Oral Ghrelin Agonist)

  *Phase 3 trial results for AEZS-130 as a diagnostic test for adult growth
    hormone deficiency ("AGHD") presented at the 6^th International Congress
    of the Growth Hormone Research and Insulin-like Growth Factor Society in
    Munich, Germany. The data expanded on the previously disclosed data in
    June 2012 at the 94^th ENDO Annual Meeting and Expo. Both sets of data
    confirm AEZS-130's potential of possibly becoming the first approved oral
    diagnostic test for AGHD.
  *Subsequent to year-end, New Drug Application ("NDA") as a diagnostic test
    for AGHD remains in preparation.

Perifosine (Oral AKT Inhibitor)

  *Phase 3 trial results for perifosine + capecitabine ("Xeloda") showed no
    benefit in overall survival and in progression-free survival in the
    refractory colorectal cancer ("CRC") setting.
  *Subsequent to year-end, the Company determined to discontinue the Phase3
    trial with perifosine in multiple myeloma further to the Data Safety
    Monitoring Board's ("DSMB") recommendation to do so, following its
    preplanned safety and efficacy first interim analysis. The DSMB reported
    that it was unlikely the study would achieve a significant difference in
    its primary endpoint, progression-free survival. No safety concerns were
    raised.

Corporate Developments

At-the-Market Issuance Program

  *During 2012, the Company issued a total of 1.2 million common shares
    (retroactively adjusted to reflect the Share Consolidation described
    below) under the January 2012 At‑The-Market ("ATM") Program for aggregate
    gross proceeds of $8.8 million.

Share Consolidation and NASDAQ Minimum Bid Price Compliance

  *The Company consolidated its issued and outstanding common shares on a
    6-to-1 basis (the "Share Consolidation"), effective as of October 2, 2012,
    in order to regain compliance with The NASDAQ Stock Market ("NASDAQ")
    minimum bid price requirement. Aeterna Zentaris' common shares began
    trading on a consolidated basis on October5, 2012 and the Company
    regained NASDAQ compliance on October 19, 2012.

Public Offering

  *On October 17, 2012, the Company completed a public offering (the
    "Offering") of 6.6 million units at a purchase price of $2.50 per unit,
    generating net proceeds of $15.1 million.

Cash and cash equivalents totalled $39.5 million as at December 31, 2012,
compared to $46.9 million as at December 31, 2011.

Juergen Engel, Ph D, Aeterna Zentaris President and Chief Executive Officer,
commented, "2012 was a challenging year. We had to face disappointing Phase 3
results for perifosine in colorectal cancer, and more recently, in multiple
myeloma. Despite these obstacles, we believe we demonstrated our ability to
take on these challenges as we analyzed the situation, made the necessary
strategic adjustments and implemented cost cutting measures needed to move
forward. We now look to 2013 with great anticipation, as we focus on reaching
the next milestones for our major drug development programs: our Phase 3 trial
in endometrial cancer under an SPA, as well as Phase 2 trials in
triple-negative breast cancer, bladder and prostate cancer with AEZS-108 and
the NDA filing for AEZS-130 as an oral diagnostic test for AGHD."

Dennis Turpin, CPA, CA, SVP and Chief Financial Officer at Aeterna Zentaris
stated, "Based on our current expectations, with $39.5 million in cash and
cash equivalent as at December 31, 2012, we believe we have sufficient capital
resources to fund our planned operations into at least the first half of
2014."

CONSOLIDATED RESULTS AS AT AND FOR THE FOURTH QUARTER ENDED DECEMBER31, 2012

Revenues were $9.5 million for the three-month period ended December 31, 2012,
compared to $12.6 million for the same period in 2011. The decrease is mainly
due to the recording of a $2.6 million milestone payment from Yakult with
respect to the initiation of a Phase 1 trial with perifosine in CRC in Japan
during the last quarter of 2011.

R&D costs, net of refundable tax credits and grants were $5.5 million for the
three-month period ended December 31, 2012, compared to $7.8 million for the
same period in 2011. The decrease is attributable to lower employee
compensation and benefit costs, as no annual cash bonuses were recorded during
the fourth quarter of 2012, as well as to continued cost-saving measures
resulting in a lower number of employees. The decrease is also related to
comparative lower third-party costs associated with the development of
PI3K/Erk inhibitors and other products during the fourth quarter of 2012 and
the weakening of the euro against the US dollar.

Selling, general and administrative ("SG&A") expenses were $3.5 million for
the three-month period ended December31, 2012, compared to $5.4 million for
the same period in 2011. The comparative decrease is mainly related to 2011
events. During the three-month period ended December 31, 2011, the Company
recognized an impairment loss on property, plant and equipment ($0.3 million),
an increase in onerous lease provision ($0.2 million) and marketing expenses
incurred in Europe ($0.5 million). In addition, the quarter-to-quarter
decrease is attributable to the employee benefits expense decrease ($0.4
million) and the related foreign exchange loss decrease ($0.5 million), partly
offset by transaction costs related to share purchase warrants ($0.4 million).

Net loss for the three-month period ended December 31, 2012 was $6.9 million
or $0.29 per basic and diluted share, compared to $7.5 million or $0.44 per
basic and diluted share for the same period in 2011. The decrease in net loss
is largely due to lower net R&D costs, SG&A expenses and income tax expense,
as well as to higher margin contribution from Cetrotide^®, partly offset by
the significant decrease in license fee revenues, and in net finance income.

CONSOLIDATED RESULTS FOR THE YEAR ENDED DECEMBER 31, 2012

Revenues were $33.7 million for the year ended December 31, 2012, compared to
$36.1 million for the same period in 2011. The decrease is mainly due to the
recording of a $2.6 million milestone payment from Yakult with respect to the
initiation of a Phase 1 trial with perifosine in CRC in Japan during the last
quarter of 2011.

R&D costs, net of refundable tax credits and grants,  were $20.6 million for
the year ended December 31, 2012, compared to $24.5 million for the same
period in 2011. The decrease is attributable to lower employee compensation
and benefit costs, as no annual cash bonuses were recorded during the fourth
quarter of 2012, as well as to continued cost-saving measures resulting in a
lower number of employees. The decrease is also related to comparative lower
third-party costs associated with the development of most of the Company's
products except for AEZS-108 and perifosine, and the weakening of the euro
against the US dollar.

Selling, general and administrative ("SG&A") expenses were $13.2 million for
the year ended December 31, 2012, compared to $16.2 million for the same
period in 2011. The comparative decrease is mainly related to 2011 events.
During the year ended December 31, 2011, the Company recognized an impairment
loss on its Cetrotide^® asset ($1.1 million), an impairment loss on property,
plant and equipment ($0.3 million), an increase in onerous lease provision
($0.2 million) and marketing expenses incurred in Europe ($0.9 million). In
addition, the year-over-year decrease in SG&A expenses is attributable to the
decreases in employee benefit expenses ($0.8 million) and royalty expenses
($0.2 million), as well as the weakening of the euro against the US dollar,
partly offset by transaction costs related to share purchase warrants
($0.4million), share-based compensation costs related to collaborators ($0.3
million) and an increase in legal fees ($0.3million).

Net loss for the year ended December 31, 2012 was $20.4 million, or $1.03 per
basic and diluted share, compared to $27.1million, or $1.72 per basic and
diluted share for the same period in 2011. The decrease is largely due to
lower net R&D costs, SG&A expenses and income tax expense, as well as to
higher margin contribution from sales and higher net finance income, partly
offset by the significant decrease in license fee revenues.

ADOPTION OF ADVANCE NOTICE BY-LAW

The Company also announces that its Board of Directors has approved an
amendment to its by-laws to add an advance notice requirement (the "By-Law
Amendment"), which requires advance notice to be given to the Company in
circumstances where nominations of persons for election as a director of the
Company are made by shareholders other than pursuant to: (i) a requisition of
a meeting made pursuant to the provisions of the Canada Business Corporations
Act (the "CBCA"); or (ii) a shareholder proposal made pursuant to the
provisions of the CBCA. Among other things, the By-law Amendment fixes a
deadline by which shareholders must submit a notice of director nominations to
the Company prior to any annual or special meeting of shareholders where
directors are to be elected and sets forth the information that a shareholder
must include in the notice for it to be valid.In the case of an annual
meeting of shareholders, notice to the Company must be given not less than
30and not more than 65 days prior to the date of the annual meeting, however,
in the event the meeting is to be held on a date that is less than 50 days
after the date on which the first public announcement of the date of the
annual meeting was made, notice may begiven not later than the close of
business on thetenth day following such public announcement.The By-Law
Amendment is effective immediately and will be submitted to shareholders for
confirmation and ratification at the Company's upcoming annual meeting of
shareholders to be heldon May8, 2013.

CONFERENCE CALL

Management will be hosting a conference call for the investment community
beginning at 8:30 a.m. (Eastern Time) tomorrow, Friday, March 22, 2013, to
discuss the 2012 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, outside Canada, 888-231-8191. They may also
listen through the Internet at www.aezsinc.com 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 ("MD&A") for the
fiscal year 2012 with the associated Audited Consolidated Financial Statements
can be found at www.aezsinc.com in the Investors section.

About Aeterna Zentaris Inc.

Aeterna Zentaris is an oncology and endocrinology drug development company
currently investigating treatments for various unmet medical needs. The
Company's pipeline encompasses compounds at all stages of development, from
drug discovery through to marketed products. For more information please visit
www.aezsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the
safe harbour provisions of the U.S. Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
that could cause the Company's actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties include, among
others, the availability of funds and resources to pursue R&D projects, the
successful and timely completion of clinical studies, the risk that safety and
efficacy data from any of our Phase 3 trials may not coincide with the data
analyses from previously reported Phase 1 and/or Phase 2 clinical trials, the
ability of the Company to take advantage of business opportunities in the
pharmaceutical industry, uncertainties related to the regulatory process and
general changes in economic conditions. Investors should consult the Company's
quarterly and annual filings with the Canadian and U.S. securities commissions
for additional information on risks and uncertainties relating to
forward-looking statements. Investors are cautioned not to rely on these
forward-looking statements. The Company does not undertake to update these
forward-looking statements. We disclaim any obligation to update any such
factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future results, events
or developments, unless required to do so by a governmental authority or by
applicable law.

Consolidated Statements of Comprehensive Loss Information

(in thousands,                          
except share       Three-month periods
and per share             ended
data)                December 31,              Years ended December 31,
                  2012        2011        2012        2011        2010
                   $           $           $           $           $
Revenues                                                             
Sales and                                                      
royalties             9,165        9,317       31,538       31,306       24,857
License fees                                                   
and other               380        3,310        2,127        4,747        2,846
                    9,545      12,627      33,665      36,053      27,703
Operating                                                      
expenses                                                                  
Cost of sales        7,489       8,114      26,820      27,560      18,700
Research and                                                   
development
costs, net of
refundable tax
credits and
grants                5,523        7,793       20,604       24,517       21,257
                                                           
Selling,                                                       
general and
administrative
expenses              3,469        5,408       13,245       16,170       12,552
                   16,481      21,315      60,669      68,247      52,509
Loss from                                                      
operations          (6,936)      (8,688)     (27,004)     (32,194)     (24,806)
Finance income         689       1,434       6,974       6,231       1,792
Finance costs        (700)         (2)       (382)           -     (5,437)
Net finance                                                    
(costs) income         (11)        1,432        6,592        6,231      (3,645)
Loss before                                                    
income taxes        (6,947)      (7,256)     (20,412)     (25,963)     (28,451)
Income tax                                                     
expense                   -        (263)            -      (1,104)            -
Net loss           (6,947)     (7,519)    (20,412)    (27,067)    (28,451)
Other                                                          
comprehensive
loss:                                                                     
Items that may                                                 
be
reclassified
subsequently
to profit or
loss                                                                      
Foreign                                                        
currency
translation
adjustments           (204)          169        (504)        (789)        1,001
Items that                                                     
will not be
reclassified
to profit or
loss                                                                      
Actuarial loss                                                 
on defined
benefit plans       (3,705)      (1,335)      (3,705)      (1,335)          191
Comprehensive                                                  
loss               (10,856)      (8,685)     (24,621)     (29,191)     (27,259)
Net loss per                                                   
share                                                                     
Basic               (0.29)      (0.44)      (1.03)      (1.72)      (2.26)
Diluted             (0.29)      (0.44)      (1.03)      (1.72)      (2.26)
Weighted                                                       
average number
of shares
outstanding                                                               
Basic           24,181,462  17,185,156  19,775,073  15,751,331  12,609,902
Diluted         24,181,462  17,185,156  19,775,073  15,751,331  12,609,902

Consolidated Statement of Financial Position Information

                                                    As at December 31,
(in thousands)                                         2012     2011
                                                       $         $
Cash and cash equivalents                              39,521   46,881
Trade and other receivables and other current assets   13,780   13,258
Restricted cash                                           826      806
Property, plant and equipment                           2,147    2,512
Other non-current assets                               11,391   11,912
Total assets                                           67,665   75,369
Payables and other current liabilities                 15,675   17,784
Long-term payable (current and non-current portions)       30       88
Warrant liability (current and non-current portions)    6,176    9,204
Non-financial non-current liabilities*                 52,479   52,839
Total liabilities                                      74,360   79,915
Shareholders' deficiency                              (6,695)  (4,546)
Total liabilities and shareholders' deficiency         67,665   75,369

_________________________

*Comprised mainly of non-current portion of deferred revenues, employee
future benefits and provision.



SOURCE AETERNA ZENTARIS INC.

Contact:

Investor Relations
Ginette Beaudet Vallières
Investor Relations Coordinator
(418) 652-8525 ext. 265
gvallieres@aezsinc.com

Media Relations
Paul Burroughs
Director of Communications
(418) 652-8525 ext. 406
pburroughs@aezsinc.com