Third Quarter 2008 Highlights

    - Appointment on September 1, 2008, of Juergen Engel, Ph.D. as President
      and CEO of AEterna Zentaris, replacing Juergen Ernst who had been
      acting as Interim President and CEO since April 2008. Mr. Ernst, the
      former Chairman of the Company, was appointed Executive Chairman
      effective September 1, 2008;
    - Completion of patient recruitment for the second efficacy trial of the
      Phase 3 program in benign prostatic hyperplasia (BPH) with lead
      compound, cetrorelix;
    - Start of second stage of recruitment for the Phase 2 trial in ovarian
      cancer with AEZS-108. The trial is part of a Phase 2 program in
      gynaecological cancers which will include up to 82 women;
    - Signing of a license and cooperation agreement for the
      commercialization of cetrorelix in BPH, with Handok Pharmaceuticals
      Co., Ltd. (Handok) for the Korean market. Subsequent to quarter end,
      signing of another agreement with Handok for the commercialization of
      ozarelix in BPH for the Korean market; and
    - Recovery of worldwide rights from Ardana plc (LSE: ARA) for the Growth
      Hormone Secretagogue (GHS) compound, AEZS-130. Future development
      options are currently being evaluated for the use of this compound in
      growth hormone deficiencies.

Subsequent to Quarter-End

On November 11, 2008, AEterna Zentaris signed a definitive agreement to sell to Cowen Healthcare Royalty Partners, L.P. ("CHRP") its rights to royalties on future sales of Cetrotide(R) covered by its license agreement with Merck Serono. The license agreement between AEterna Zentaris and Merck Serono was signed in 2000 and granted Merck Serono exclusive rights to market, distribute and sell Cetrotide worldwide, with the exception of Japan, in the field of in vitro fertilization. On closing, AEterna Zentaris will receive $52.5 million from CHRP. In addition, contingent on 2010 net sales of Cetrotide(R) reaching a specified level, AEterna Zentaris would receive an additional payment of $2.5 million from CHRP.

Under the terms of the agreement, if cetrorelix which is currently in Phase 3 clinical trials for the treatment of benign prostatic hyperplasia, is approved for sale by the European regulatory authorities in an indication other than in vitro fertilization, AEterna Zentaris has agreed to make a one-time cash payment to CHRP for an amount ranging from $5 million up to a maximum of $15 million. The amount which would be due to CHRP will be higher the earlier the product receives European regulatory approval.

"We are very pleased with the Cowen Healthcare Royalty Partners transaction for Cetrotide(R) which is in line with our strategy of generating non-dilutive financing. With this transaction, we strengthened our financial position to focus on the development of cetrorelix in BPH, while pursuing partnership opportunities for its future commercialization," said Juergen Engel, Ph.D., President and Chief Executive Officer of AEterna Zentaris. "At the drug development level, both our Phase 3 program in BPH with cetrorelix, and our Phase 2 program with our lead oncology compound, AEZS-108 in ovarian and endometrial cancer, met their recruitment goals as scheduled and remain on track. First results for cetrorelix in BPH are still expected in the third quarter of 2009, while those for AEZS-108 should be disclosed in the next few months."

CONSOLIDATED RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2008

Consolidated sales and royalties increased to $8.6 million for the three-month period ended September 30, 2008, compared to $7.4 million for the same period in 2007. The increase in sales and royalties for the three-month period ended September 30, 2008 compared to the same period last year is related primarily to additional sales of Cetrotide(R), partly offset by the exclusion of sales from Impavido(R) in the third quarter of 2008.

License fees revenues decreased to $2.4 million for the three-month period ended September 30, 2008 compared to $3.7 million for the same period in 2007. The decrease for the three-month period ended September 30, 2008, compared to the same period in 2007, is mainly attributable to a milestone payment received in 2007 from Ardana plc.

Consolidated R&D costs, net of tax credits and grants were $13.9 million for the three-month period ended September 30, 2008 compared to $9.8 million for the same period in 2007. Additional R&D expenses for the three-month period ended September 30, 2008, compared to the same period in 2007 are mainly related to the advancement of the Phase 3 program in BPH with the compound, cetrorelix.

Consolidated selling, general and administrative (SG&A) expenses were $3.3 million for the three-month period ended September 30, 2008 compared to $5.8 million for the same period in 2007. The decrease in SG&A expenses for the three-month period ended September 30, 2008 compared to the same period in 2007 is primarily related to organizational changes and cost saving measures that were implemented in the second quarter of 2008.

Consolidated net loss for the three-month period ended September 30, 2008 was $13.9 million or $0.26 per basic and diluted share compared to $8.7 million or $0.16 per basic and diluted share for the same period in 2007. The increase in net loss for the three-month period ended September 30, 2008 compared to the same period last year, is mainly related to the advancement of the cetrorelix Phase 3 program for BPH, lower manufacturing margins and foreign exchange loss.

The cash and short-term investments were $11 million as at September 30, 2008.

CONFERENCE CALL

Management will be hosting a conference call for the investment community beginning at 10:00 a.m. Eastern Time, today, November 13, 2008, to discuss third quarter 2008 financial results. To participate in the live conference call by telephone, please dial 416-646-3095, 514-807-8791 or 800-814-4859. Individuals interested in listening to the conference call on the Internet may do so by visiting www.aezsinc.com. A replay will be available on the Company's Web site for 30 days.

About AEterna Zentaris Inc.

AEterna Zentaris Inc. is a global biopharmaceutical company focused on endocrine therapy and oncology with proven expertise in drug discovery, development and commercialization.

News releases and additional information are available at www.aezsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which 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 the 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 except if we are requested by a governmental authority or applicable law.

Attachment: Financial summary

    (In thousands of US dollars, except share
    and per share data)

                                  Three months ended       Nine months ended
                                        Sept. 30,               Sept. 30,
    (Unaudited)                     2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                     $           $           $           $
    Revenues
    Sales and royalties            8,630       7,372      24,822      22,392
    License fees                   2,399       3,671       6,412       9,436
    -------------------------------------------------------------------------
                                  11,029      11,043      31,234      31,828
    -------------------------------------------------------------------------
    Operating expenses
    Cost of sales                  4,986       3,290      14,348       9,675
    Research and development
     costs, net of tax
     credits and grants*        13,880       9,835      44,914      25,557
    Selling, general and
     administrative*             3,277       5,847      14,287      15,257
    Depreciation and
     amortization:
      Property, plant and
       equipment                     433         426       1,199       1,183
      Intangible assets              839       1,024       2,555       3,014
    -------------------------------------------------------------------------
                                  23,415      20,422      77,303      54,686
    -------------------------------------------------------------------------
    Loss from operations         (12,386)     (9,379)    (46,069)    (22,858)
    Other income (expenses)
    Interest income                  149         494         737       1,369
    Interest expense                   -         (15)        (68)        (68)
    Foreign exchange (loss)
     gain                         (1,324)       (170)        429        (766)
    Loss on disposal of
     long-lived assets held
     for sale                        (90)          -        (125)          -
    -------------------------------------------------------------------------
                                  (1,265)        309         973         535
    -------------------------------------------------------------------------
    Loss before income taxes     (13,651)     (9,070)    (45,096)    (22,323)
    Income tax (expense)
     recovery                       (228)      1,012        (228)      4,287
    -------------------------------------------------------------------------
    Net loss from continuing
     operations                  (13,879)     (8,058)    (45,324)    (18,036)
    Net loss from
     discontinued operations           -        (646)          -        (624)
    -------------------------------------------------------------------------
    Net loss for the period      (13,879)     (8,704)    (45,324)    (18,660)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net loss per share from
     continuing operations
    Basic and diluted              (0.26)      (0.15)      (0.85)      (0.34)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net loss per share
    Basic and diluted              (0.26)      (0.16)      (0.85)      (0.35)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number
     of shares
    Basic and diluted         53,187,470  53,184,803  53,187,470  53,181,248
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    * Stock-based
         compensation costs
         included in:
          Research and
           development                50          64         166         180
          Selling, general
           and administra-
           tive                       52         447          78       1,312
    -------------------------------------------------------------------------
                                     102         511         244       1,492
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Consolidated Statement of Comprehensive Income

                                  Three months ended       Nine months ended
                                        Sept. 30,               Sept. 30,
    (Unaudited)                     2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                     $           $           $           $
    Net loss for the period      (13,879)     (8,704)    (45,324)    (18,660)
    Other comprehensive
     income (loss):
      Foreign currency
       translation                (3,169)      6,315      (2,650)     13,204
      Variation in the fair
       value of short-term
       investments                   (15)         81          (3)        (87)
    -------------------------------------------------------------------------
    Comprehensive loss           (17,063)     (2,308)    (47,977)     (5,543)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (In thousands of US dollars)
    CONSOLIDATED BALANCE SHEETS                   September 30,  December 31,
    Unaudited                                             2008          2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                           $             $
    Cash and short-term investments                     10,957        41,387
    Other current assets                                15,374        18,193
                                                 ----------------------------
                                                        26,331        59,580
    Long-term assets                                    46,227        63,783
                                                 ----------------------------
    Total assets                                        72,558       123,363
                                                 ----------------------------
                                                 ----------------------------

    Current liabilities                                 17,611        22,255
    Deferred revenues                                    4,508         3,333
    Long-term payable                                      197             -
    Employee future benefits                             9,384         9,184
                                                 ----------------------------
                                                        31,700        34,772
    Shareholders' equity                                40,858        88,591
                                                 ----------------------------
    Total liabilities and shareholders' equity          72,558       123,363
                                                 ----------------------------
                                                 ----------------------------

SOURCE AETERNA ZENTARIS INC.

Under the terms of the agreement, if cetrorelix, which is currently in Phase III clinical trials for the treatment of benign prostatic hyperplasia, is approved for sale by European regulatory authorities in an indication other than in vitro fertilization, AEterna Zentaris has agreed to make a one-time cash payment to CHRP in an amount ranging from $5 million up to a maximum of $15 million. The amount which would be due to CHRP will be higher the earlier the product receives European regulatory approval.

RBC Capital Markets acted as exclusive financial advisor to AEterna Zentaris in connection with this transaction. The transaction is expected to close within the next 15 business days.

The licensing agreement between AEterna Zentaris and Merck Serono was signed in 2000 and granted Merck Serono exclusive rights to market, distribute and sell Cetrotide worldwide, with the exception of Japan, in the field of in vitro fertilization.

Juergen Engel, president and CEO of AEterna Zentaris, said: "We are very pleased with this transaction which is in line with our strategy of generating non-dilutive financing through non-core asset monetization. We now expect to end the year 2008 with approximately $50 million in cash, providing us with the financial resources for the continued development of cetrorelix in benign prostatic hyperplasia."

http://www.datamonitor.com

Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall 
not be liable for errors or delays in the content, or for any actions 
taken in reliance thereon

The open-label, non-comparative multi-center Phase II program will treat up to 82 women with luteinizing hormone-releasing hormone (LHRH)-receptor positive ovarian and endometrial cancerous tumors. The primary endpoint for the program is the partial or complete tumor response rate according to response evaluation criteria in solid tumors (RECIST) or Gynaecologic Cancer Intergroup guidelines.

Paul Blake, chief medical officer of AEterna Zentaris, said: "We are very pleased with this additional data on the early signal of potential efficacy of our lead oncology compound, AEZS-108 in both endometrial and ovarian cancer.

"The data also strengthens our belief that increased clinical benefit for patients could be achieved by specifically targeting LHRH-receptor expressing tumors using doxorubicin. Finally, this program remains on track and we expect to disclose full results over the next few months."

http://www.datamonitor.com

Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall 
not be liable for errors or delays in the content, or for any actions 
taken in reliance thereon

Under the terms of the agreement, if cetrorelix, which is currently in Phase 3 clinical trials for the treatment of benign prostatic hyperplasia, is approved for sale by European regulatory authorities in an indication other than in vitro fertilization, AEterna Zentaris has agreed to make a one-time cash payment to CHRP in an amount ranging from $5 million up to a maximum of $15 million. The amount which would be due to CHRP will be higher the earlier the product receives European regulatory approval.

"We are very pleased with this transaction which is in line with our strategy of generating non-dilutive financing through non-core asset monetization," said Juergen Engel, Ph.D., President and Chief Executive Officer of AEterna Zentaris. "We now expect to end the year 2008 with approximately $50 million in cash, providing us with the financial resources for the continued development of cetrorelix in BPH."

"Our investment in Cetrotide(R) is consistent with our strategy to invest in unique commercial-stage products with strong marketing partners, and attractive risk reward profiles," said Todd C. Davis, Co-Founder and Managing Director of CHRP. "There is a growing demand for fertility treatment products around the globe and we believe Cetrotide(R) is well positioned to expand its presence in the market."

The transaction is expected to close within the next 15 business days.

RBC Capital Markets acted as exclusive financial advisor to AEterna Zentaris in connection with this transaction.

About Cetrotide(R) (cetrorelix)

Cetrotide(R) (cetrorelix) was the first luteinizing hormone-releasing hormone (LHRH) antagonist treatment approved for in vitro fertilization. It is administered to women to prevent premature ovulation in order to increase fertility success rate. Developed in cooperation with Medicine Nobel-Prize winner, Professor Andrew Schally of Veterans Affairs, Miami, Florida, it was launched in Europe in 1999 and in the United States in 2001. Cetrotide(R) is currently marketed worldwide by Merck Serono, except for Japan where it is marketed by Nippon Kayaku and Shionogi.

Cetrorelix is also currently in a Phase 3 program in benign prostatic hyperplasia involving 1,500 patients in North America and Europe. First results are expected in Q3 2009 with an NDA filing to follow in 2010 and potential launch in 2011.

About Cowen Healthcare Royalty Partners

Cowen Healthcare Royalty Partners ("CHRP") is a global healthcare private equity firm with over $500 million in capital under management. The firm invests principally in commercial-stage biopharmaceutical and medical device companies and products, through the purchase of royalty or Synthetic Royalty(SM) interests, debt and equity. CHRP's investment team has over 90 years of healthcare related experience including principal investing, structured finance, healthcare industry senior management, Wall Street research and consulting, scientific and clinical experience. For more information, please visit www.cowenroyalty.com.

About AEterna Zentaris Inc.

AEterna Zentaris Inc. is a global biopharmaceutical company focused on endocrine therapy and oncology, with proven expertise in drug discovery, development and commercialization.

News releases and additional information are available at www.aezsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which 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 the 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 except if we are requested by a governmental authority or applicable law.

SOURCE AETERNA ZENTARIS INC.