TORONTO and EDMONTON - Aeterna Zentaris Inc. (NASDAQ:AEZS) (TSX:AEZS) and Ceapro Inc. (TSX-V:CZO) (OTCQX:CRPOF) announced today the finalization of their previously disclosed merger, creating a combined entity with a diversified portfolio expected to drive shareholder value. The transaction, an all-stock merger of equals, was initially made public on December 14, 2023.
Ronald W. Miller, Chair of the newly merged company, expressed optimism regarding the merger's potential to bring transformational products to market. Gilles Gagnon, the CEO, highlighted the merger's role in enhancing development programs and the company's revenue base. Carolyn Egbert, former Chair of Aeterna, thanked shareholders for their support and looked forward to sustainable business growth.
The merger is anticipated to result in a stable cash flow that will support research and development (R&D) of high-return pharmaceutical products. The company currently generates revenue from two active ingredients, oat beta glucan and avenanthramides, which are used in skincare brands like Aveeno and Burt's Bees. These funds, along with revenue from the commercialization or licensing of macimorelin, are planned to be reinvested in the development of promising pharmaceutical products.
With a more diversified product pipeline, the company expects to lower risk and enhance its ability to focus financial and company resources. The merger also expands the company's pharmaceutical R&D capabilities, with a team that brings deep expertise to advance the development pipeline. The combined company's presence in North America and Europe is seen as a strategic advantage for attracting new investors and business development opportunities.
Following the merger, Aeterna's board of directors has been restructured to include eight members, with Gilles Gagnon serving as President and CEO, and Giuliano La Fratta as Senior Vice President and CFO. A new name for the company is expected to be announced soon and will be subject to shareholder approval at the upcoming annual meeting.
Ceapro shares are expected to be delisted from the TSX Venture Exchange within five business days, and the company is also applying to cease being a reporting issuer under Canadian securities laws. Former Ceapro shareholders are entitled to receive 0.02360 of an Aeterna Zentaris share for each Ceapro share held, subject to the completion of the necessary transmittal documentation.
This merger is based on a press release statement and includes forward-looking statements subject to risks and uncertainties. These statements should not be considered guarantees of future performance, and actual results may differ materially.
Aeterna Zentaris is a specialty biopharmaceutical company engaged in developing and commercializing pharmaceutical and diagnostic products, including the FDA and European Commission approved oral test Macimorelin for adult growth hormone deficiency diagnosis. The company trades under the ticker symbol AEZS on both NASDAQ and TSX.
InvestingPro Insights
As Aeterna Zentaris Inc. (NASDAQ:AEZS) moves forward with its merger with Ceapro Inc., investors are closely monitoring the company's financial health and market performance. According to InvestingPro, AEZS holds more cash than debt on its balance sheet, which is a positive sign for the company's financial stability post-merger. This liquidity could be crucial for funding ongoing research and development, as well as for navigating the integration process.
InvestingPro data reveals that AEZS has a market capitalization of 11.56 million USD, which reflects the current size of the company in the market. Despite a challenging revenue growth rate in the last twelve months as of Q1 2024, with a decline of 62.02%, AEZS demonstrates impressive gross profit margins at 90.69%. This margin indicates the company's ability to control costs and generate profit from its sales, a key factor as it aims to capitalize on its diversified portfolio.
Investors have seen a significant return over the last week, with a 15.77% price total return, which aligns with the positive outlook shared by the company's leadership. While past performance does not guarantee future results, this recent uptick could be a sign of growing investor confidence in the merger's potential to create value.
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