March 24, 2010 / 11:35 AM / in 8 years

UPDATE 3-Aeterna returns to profit, sees lower license fees

* EPS $0.19 vs loss of $0.27

* Revenue $40.2 million vs $7.2 million

* Shares up 4.7 pct at C$0.88 (Adds company comments; in U.S. dollars unless noted)

TORONTO, March 24 (Reuters) - Aeterna Zentaris AEZ.TO returned to a quarterly profit, helped by higher licensing fees, but said on Wednesday that a scuttled partnership agreement would all but wipe out that benefit for the rest of the year.

The Canadian drugmaker, known for its cancer therapies, was helped in its fourth quarter by $35.2 million in licensing fees from its partners, including $30.4 million from Sanofi-Aventis SA (SASY.PA). This was part of its development and marketing agreement for cetrorelix, a treatment for an enlarged prostate.

That agreement was later scrapped following disappointing late-stage results for the treatment.

Aeterna told analysts on a conference call on Wednesday that it now expects its 2010 licensing fees to drop “substantially.” It also expects its sales and royalties to fall “slightly.”

The company’s shares, which have plunged 75 percent in the past nine months on the disappointing cetrorelix trial results, were up 4.8 percent at 88 Canadian cents on Wednesday.

Aeterna earned $12 million, or 19 cents a share, for the quarter ended Dec. 31, compared with a loss of $14.5 million, or 27 cents a share, a year earlier.

Revenue was $40.2 million, up from $7.2 million.

Earlier this month, European health regulators granted its perifosine blood cancer treatment orphan drug status, marking the second such designation for the drug.

Last year, the drug received a similar designation from the U.S. Food and Drug Administration. The FDA reserves that designation for new treatments for diseases or conditions that affect fewer than 200,000 people in the United States, and grants the drug developers seven years of market exclusivity.

$1=$1.03 Canadian Reporting by Scott Anderson; editing by Rob Wilson

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