UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                 SCHEDULE 13G/A
                                 Amendment No. 3

                    Under the Securities Exchange Act of 1934


                              Aeterna Zentaris Inc.
-------------------------------------------------------------------------------

                                (Name of Issuer)

                           Common Stock, no par value
-------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                    00797520
-------------------------------------------------------------------------------
                                 (CUSIP Number)

                                October 10, 2006
-------------------------------------------------------------------------------
             (Date of Event Which Requires Filing of this Statement)



             Check the appropriate box to designate the rule pursuant to which
             this Schedule is filed:

                  [X]      Rule 13d-1(b)
                           Rule 13d-1(c)
                           Rule 13d-1(d)


             *The remainder of this cover page shall be filled out for a
             reporting person's initial filing on this form with respect to the
             subject class of securities, and for any subsequent amendment
             containing information which would alter the disclosures provided
             in a prior cover page.

             The information required in the remainder of this cover page shall
             not be deemed to be "filed" for the purpose of Section 18 of the
             Securities Exchange Act of 1934 ("Act") or otherwise subject to
             the liabilities of that section of the Act but shall be subject to
             all other provisions of the Act (however, see the Notes).
-------------------------------------------------------------------------------

CUSIP No. 007975204               SCHEDULE 13G               Page 2 of 5 Pages

-------------------------------------------------------------------------------
1       NAME OF REPORTING PERSON
        S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

        North Sound Capital LLC (1)
-------------------------------------------------------------------------------
2       CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

        (a)[x]
        (b)[ ]
-------------------------------------------------------------------------------
3       SEC USE ONLY
-------------------------------------------------------------------------------
4       CITIZENSHIP OR PLACE OF ORGANIZATION

        Delaware
-------------------------------------------------------------------------------
                       5      SOLE VOTING POWER

                                0
      NUMBER OF        --------------------------------------------------------
       SHARES          6      SHARED VOTING POWER
    BENEFICIALLY
      OWNED BY                  0
       EACH            --------------------------------------------------------
     REPORTING         7      SOLE DISPOSITIVE POWER
      PERSON
       WITH                     0
                       --------------------------------------------------------
                       8      SHARED DISPOSITIVE POWER

                                0
-------------------------------------------------------------------------------
9       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

        0
-------------------------------------------------------------------------------
10      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*

        [ ]
-------------------------------------------------------------------------------
11      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9

        0
-------------------------------------------------------------------------------
12      TYPE OF REPORTING PERSON*

         IA
-------------------------------------------------------------------------------
(1)  The shares described herein are held by North Sound Legacy Institutional
     Fund LLC and North Sound Legacy International Ltd. (the "Funds"). North
     Sound Capital LLC (the "Reporting Person") is the managing member and
     investment advisor, respectively, of the Funds and has voting and
     investment control with respect to the shares held by the Funds. Thomas
     McAuley is the Manager of the Reporting Person. Although each of the
     Reporting Person and Mr. McAuley may be deemed the beneficial owner of the
     shares held by the Funds pursuant to Rule 13d-3 under the Act, neither
     owns such shares directly. Each of the Reporting Person and Mr. McAuley
     disclaims beneficial ownership of the shares held by the Funds except to
     the extent of their respective economic interests in each Fund.
-------------------------------------------------------------------------------

CUSIP No. 007975204               SCHEDULE 13G               Page 3 of 5 Pages

-------------------------------------------------------------------------------

Item 1(a).        Name of Issuer:

                  Aeterna Zentaris Inc.

Item 1(b).        Address of Issuer's Principal Executive Offices:

                  1405 Parc-Technologique Boulevard
                  Quebec, PQ G1P4P5
                  Canada

Item 2(a).        Name of Person Filing.
Item 2(b).        Address of Principal Business Office or, if None, Residence.
Item 2(c).        Citizenship.

                  North Sound Capital LLC
                  20 Horseneck Lane
                  Greenwich, CT 06830
                  Delaware limited liability company

Item 2(d).        Title of Class of Securities:

                  Common Stock, no par value

Item 2(e).        CUSIP Number:

                   007975204

Item 3.           If this statement is filed pursuant to ss.ss.240.13d-1(b) or
                  240.13d-2(b) or (c), check whether the person filing is a:

                  [X] An investment adviser in accordance with
                      ss.13d-1(b)(1)(ii)(E).

Item 4.           Ownership.

                  The following is information regarding the aggregate number
                  and percentage of the class of securities of the issuer
                  identified in Item 1 as of October 11, 2006:

                  (a) Amount beneficially owned: 0

                  (b) Percent of Class: 0

                  (c) Number of shares as to which such person has:

                           (i) sole power to vote or direct the vote: 0

                           (ii) shared power to vote or direct the vote: 0
-------------------------------------------------------------------------------

CUSIP No. 007975204               SCHEDULE 13G               Page 4 of 5 Pages

----------------------------------------------- -------------------------------

                           (iii) sole power to dispose or direct the
                                 disposition of: 0

                           (iv) shared power to dispose or direct the
                                disposition of: 0

Item 5.           Ownership of Five Percent or Less of a Class.

                  [X]

Item 6.           Ownership of More than Five Percent on Behalf of Another
                  Person.

                  Not Applicable

Item 7.           Identification and Classification of the Subsidiary Which
                  Acquired the Security Being Reported on By the Parent Holding
                  Company.

                  Not Applicable

Item 8.           Identification and Classification of Members of the Group.

                  Not Applicable

Item 9.           Notice of Dissolution of Group.

                  Not Applicable

Item 10.          Certification.

                  Certification pursuant to ss.240.13d-1(b):

                  By signing below I certify that, to the best of my knowledge
                  and belief, the securities referred to above were acquired
                  and are held in the ordinary course of business and were not
                  acquired and are not held for the purpose of or with the
                  effect of changing or influencing the control of the issuer
                  of the securities and were not acquired and are not held in
                  connection with or as a participant in any transaction having
                  that purpose or effect.
-------------------------------------------------------------------------------

CUSIP No. 007975204               SCHEDULE 13G               Page 5 of 5 Pages

-------------------------------------------------------------------------------
                                   SIGNATURE

         After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated:  October 11, 2006


                                                 NORTH SOUND CAPITAL LLC


                                                 By: /s/ Thomas McAuley
                                                 ------------------------------
                                                 Name:Thomas McAuley
                                                 Title:Chief Investment Officer