Aeterna Zentaris Successfully Reached a Key Milestone in the Non-Clinical Development of its Oral Prostate Cancer Vaccine Candidate, AEZS-120

All amounts are in US dollars

QUEBEC CITY, July 20, 2011 /PRNewswire/ - Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company") today announced that it has successfully reached a key milestone in the non-clinical development of its live recombinant prostate cancer vaccine candidate, AEZS-120, for oral administration. The program, partially funded through a grant from the German government, encompassed the full development of a GMP process, including GMP production and quality testing of a clinical batch, as well as a non-clinical safety and toxicology package, as previously agreed with regulatory authorities. Subject to a positive review by German regulatory authorities, the Company aims to start Phase I clinical development in 2012.

The principle of AEZS-120 is based on the recombinant expression and secretion of the prostate specific antigen (PSA) in the approved attenuated vaccine strain Salmonella typhi Ty21a using a proprietary technology. The technology allows for the expression and secretion of an antigen genetically coupled to the non-toxic B subunit of cholera toxin to enhance immunogenicity. In principle, this platform technology is suitable for any prophylactic or therapeutic vaccine indication by varying the antigen.

AEZS-120 has been developed through a research collaboration with the Department of Medical Radiation Biology and Cell Research, and the Department of Microbiology of the University of Würzburg, Germany. The collaboration was funded with a total of $890,000 for Aeterna Zentaris and $870,000 for the university partner by the German Ministry of Education and Research (BMBF) for a period of three years. As part of the collaboration, a melanoma vaccine based on the recombinant expression of a modified B-Raf protein has been generated.

Juergen Engel, Ph.D., President and CEO of Aeterna Zentaris stated, "We are very enthusiastic about the potential of AEZS-120 which represents the first off-the shelf oral tumor vaccine in development and offers a favorable cost profile compared to individualized tumor vaccines. We believe that this successful key non-clinical milestone for AEZS-120 validates our strategy of employing public grants for the early development of highly innovative therapies."

Joachim Fensterle, Ph.D., Director, Head of Vaccine Development at Aeterna Zentaris and spokesperson for the research consortium added, "We now plan to fully complete the non-clinical package and discuss the data with regulatory authorities. Following a positive outcome of these discussions, we aim to file a clinical trial application at the beginning of 2012."

About AEZS-120

AEZS-120 is a live recombinant oral tumor vaccine candidate based on Salmonella typhi Ty21a as a carrier strain. Salmonella typhi Ty21a is an approved oral typhoid vaccine which has been safely applied in more than 350 million doses. The principle of AEZS-120 is based on the recombinant expression of prostate specific antigen fused to the B subunit of cholera toxin and a secretion signal in the presence of the Escherichia coli type I hemolysin secretion system. The proprietary system allows the secretion of the antigen together with an immunological adjuvant which has been demonstrated to be required for optimal induction of CD8 T-cell responses by recombinant Salmonella based bacterial vaccines. The proof-of-concept was already demonstrated for the mouse homologue of AEZS-120 in a mouse tumor challenge model.

In general, by varying the antigen and/or the carrier, this proprietary platform technology is suitable for virtually any therapeutic or prophylactic vaccine indication with a relatively favorable cost of goods expectation in large scale.

About Aeterna Zentaris Inc.

Aeterna Zentaris is a late-stage oncology drug development company currently investigating potential treatments for various cancers including colorectal, multiple myeloma, endometrial, ovarian, prostate and bladder cancer. The Company's innovative approach of "personalized medicine" means tailoring treatments to a patient's specific condition and to unmet medical needs. Aeterna Zentaris' deep pipeline is drawn from its proprietary discovery unit providing the Company with constant and long-term access to state-of-the-art therapeutic options. 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 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.

SOURCE AETERNA ZENTARIS INC.