**Exhibit11.1**

**CODE OF ETHICAL CONDUCT**

 

Æterna Zentaris Inc. (“Æterna Zentaris”) andall of the directors, officers and employees of Æterna Zentaris and itssubsidiaries (collectively with Æterna Zentaris, the “Company”) are committedto preserving the reputation of the Company for integrity and excellence andconducting the businesses and activities of the Company honestly and ethicallyand in compliance with applicable laws, rules and regulations.

 

Accordingly, the Board of Directors of ÆternaZentaris has adopted this Code of Ethical Conduct, which applies to alldirectors, officers and employees of the Company and its subsidiaries,including, but not limited to, Æterna Zentaris’ principal executive officer,principal financial officer, principal accounting officer or controller andpersons performing similar functions. This Code of Ethical Conduct is intendedto meet the requirements for a code of ethics under the Sarbanes-Oxley Act of2002 (and the related regulations adopted by the Securities and ExchangeCommission) and the applicable Marketplace Rules of The Nasdaq StockMarket, Inc.

 

This Code of Ethical Conduct does notsummarize all of the Company’s policies. You must also comply with the Company’sother policies which are set forth elsewhere. In addition, this Code of EthicalConduct reflects general principles of conduct and does not anticipate or coverin detail every topic or situation. If you have a question about anythingcovered in this Code of Ethical Conduct or if you are unsure about whether someaction would be consistent with this Code of Ethical Conduct, you agree to askthe Head of Legal Affairs of Æterna Zentaris GmbH or the Corporate Secretary ofÆterna Zentaris (the “Compliance Officer”). Similarly, if you should encountera situation in which you are unsure what to do, you agree to tell the Head ofLegal Affairs of Æterna Zentaris GmbH or the Compliance Officer and ask forhelp.

 

**Policies and Practice**

 

***General Conduct- Conflicts of Interest***

 

You should act ethically, honestly and withintegrity. Your duty to act ethically, honestly and with integrity includesavoiding actual or apparent conflicts of interest between your personal,private interests and the interests of the Company, including using yourposition to receive improper personal benefits. This obligation applies to bothbusiness relationships and personal activities. A “conflict of interest” existswhenever your interests (financial or otherwise) interfere or conflict in anyway (or even appear to interfere or conflict) with the Company’s interests. Aconflict of interest can arise when you take actions or have interests that maymake it difficult to perform your work for the Company objectively andeffectively. Conflicts of interest may also arise when you, or members of yourfamily, receive improper personal benefits as a result of your position withthe Company, regardless of from where those benefits are received.

 

You also owe the Company a duty to advanceits legitimate interests when the opportunity to do so arises. You areprohibited from (i) taking for yourself personally opportunities thatproperly belong to the Company or are discovered through the use of the Company’sresources, property, information or your position with the Company; (ii) usingcorporate property, information (confidential or otherwise) or position forpersonal gain; or (iii) competing with the Company. You should conductyour personal affairs so that there can be no unfavorable reflection on theCompany, either express or implied.

 

 ***Compliance with Laws, Rules and Regulations***

 

In performing your duties on behalf of theCompany, you must comply with all applicable governmental laws, rules andregulations, as well as the rules and regulations of any stock exchangesand quotation systems on which Æterna Zentaris’ securities are listed.

 

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***PublicDisclosure - Confidentiality of Non-Public Information***

 

As a public company, Æterna Zentaris mustprovide full, fair, accurate, timely, and understandable disclosure in reportsand documents that Æterna Zentaris files with, or submits to, the Securitiesand Exchange Commission or other regulators and in other public communicationsby Æterna Zentaris.

 

Consequently, the Company’s books, businessrecords, accounts and financial statements must be maintained in reasonabledetail, must appropriately reflect the Company’s transactions and must conformboth to applicable legal and regulatory requirements, including, if applicable,maintaining the financial and accounting records in accordance with generallyaccepted accounting principles, and to the Company’s system of internalcontrols. Unrecorded or “off the books” funds or assets should not bemaintained unless permitted by applicable law or regulation.

 

In addition, all employees, officers anddirectors of the Company are expected to comply with the Company’s disclosurecontrols and procedures to ensure that material information relating to theCompany is timely recorded, processed, summarized and reported in accordancewith all applicable laws, rules and regulations. You must ensure that allinformation or data that you report to management is accurate and honest, andyou must fully and accurately comply with all audits, requests for specialrecord keeping or retention of documents, documents or other material from oron behalf of the Company’s auditors or the Company’s management.

 

You must also take all reasonable measures toprotect the confidentiality of non-public information about the Company and itscustomers obtained or created in connection with your activities and preventthe unauthorized disclosure of such information unless required by applicablelaw or regulation or legal or regulatory process.

 

**Compliance with this Code ofEthical Conduct**

 

All employees, officers and directors of theCompany, regardless of level or seniority in the Company, have a duty toreview, understand and adhere strictly to the guidelines set forth in this Codeof Ethical Conduct.

 

The Company is committed to holding allemployees, officers and directors accountable for adherence to this Code ofEthical Conduct.

 

**Dutyto Report Violations of this Code of Ethical Conduct - No Retaliation**

 

The Company recognizes that employees may bereluctant in reporting certain types of potential issues relating to violationsof the Code of Ethical Conduct. It is for that reason, in addition to thoseenumerated above, that the Company has selected an independent third partysupplier to provide a confidential and anonymous communication channel forreporting concerns about possible violations of the Code of Ethical Conduct aswell as financial and/or accounting irregularities or fraud.

 

All inquiries will be transmitted to theChair of the Audit Committee and handled promptly and discreetly. Anonymity andconfidentiality will be maintained insofar as is possible. The Companyemployees will not be penalized, dismissed, demoted or suspended and noretaliatory action will be taken against them for reporting or inquiring ingood faith about potential breaches of the Code of Ethical Conduct, or forseeking guidance on how to handle suspected breaches.

 

Details, on how to access this reportingservice or how to contact the Compliance Officer or the Subsidiaries LegalDepartment, are available on Æterna Zentaris’ Web site atwww.aeternazentaris.com under section Investors/Governance.

 

**Disciplinary Actions**

 

The Company is committed to the appropriate,prompt investigation and follow-up of any violation or suspected violation ofthis Code of Ethical Conduct. Reports of violations will be investigated.

 

As far as legally possible, violations ofthis Code of Ethical Conduct may result in disciplinary measures, including,depending on the individual circumstances, the level of involvement andknowledge and the severity of the violation, (i) warning and/or reprimand;(ii) demotion; or (iii) termination of the employment.

 

In addition, violations of this Code ofEthical Conduct may also constitute violations of law and may result in civiland criminal penalties for you, your supervisors and/or the Company.

 

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**Waivers of any Provision of thisCode of Ethical Conduct**

 

Any request for a waiver of any provision ofthis Code of Ethical Conduct for a director, officer or employee of the Companymust be in writing and addressed to the Compliance Officer. The Board ofDirectors of Æterna Zentaris must approve any waiver with respect to this Codeof Ethical Conduct that involves a director or an executive officer of ÆternaZentaris. Waivers of any provision of this Code of Ethical Conduct for anofficer or employee of the Company (other than a person who is a director orexecutive officer of Æterna Zentaris) may be made by the Compliance Officer.

 

Æterna Zentaris is required to publiclydisclose any waivers granted to a director or executive officer of ÆternaZentaris, along with the reasons for such waivers, in accordance with theprovisions of the Securities Exchange Act of 1934, as amended, and the relevantrules, if any, of any stock exchanges and quotation systems on which ÆternaZentaris’ securities are listed.

 

**Amendments to this Code ofEthical Conduct**

 

The Board of Directors of Æterna Zentaris mayupdate or otherwise amend this Code of Ethical Conduct. When there are materialchanges, the Company will provide each director, officer and employee of theCompany with an updated copy of the Code of Ethical Conduct.

 

Adopted and approved by the Board ofDirectors on March 29, 2004 and amended by the Board of Directors on November 3,2004, December 13, 2005 and March 2, 2007

 

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