Starting in 2023, Celyad Oncology is now entirely focused on its
new business strategy with one clear objective: help to overcome
the current limitations of CAR-T approaches. It plans to do this
via (i) strengthening of its research focus centered around NKG2D,
B7-H6 and shRNA platforms; (ii) maximizing the value of its IP
estate and (iii) driving innovation through strategic
collaborations.
Regulatory News:
Celyad Oncology (Euronext & Nasdaq: CYAD) (the “Company”)
(Brussels:CYAD) (Paris:CYAD) (NASDAQ:CYAD), a biotechnology company
focused on innovative technologies for chimeric antigen receptor
(CAR) T-cell therapies, today announces its financial results for
the fiscal year 2022 ended December 31, 2022 and provides a
business update.
Michel Lussier, Interim Chief Executive Officer of Celyad
Oncology, said: “2022 was a crossroad year for Celyad Oncology,
with important changes and turning points. We strongly believe all
those changes, together with our prior accomplishments,
significantly strengthened our position. Having dealt with the 2022
challenges, Celyad has now positively reinvented itself as a
leaner, more agile organization. We believe that Celyad is well
prepared and has the relevant unique assets and know how to create
significant shareholder value in the next few years.”
Operational highlights
- Since late 2022, the Company has implemented a differentiated
and innovative strategy, increasing its R&D efforts in areas of
expertise where it believes it can leverage the differentiated
nature of its platform technology and continue to bolster its
intellectual property (IP) estate; and
- The Company will continue to explore options to tackle the
major current limitations of CAR T-cell therapies through
development of its dual targeting CARs with NKG2D capabilities,
B7-H6 targeting immunotherapies and multiplexing approach of short
hairpin RNAs (shRNAs).
Upcoming Anticipated Milestones
- The Company will provide an update on its shRNA multiplexing
and dual CAR platforms and business development in the first half
of 2023;
- The Company will take part in the World Oncology Cell Therapy
Congress in Boston, US (25-26 April 2023), as well as in the
Immuno-Oncology summit in London (20-22 June 2023);
- The Company anticipates the arrival of a new CEO in the first
half of 2023; and
- We anticipate fundraising in the first half of 2023.
Full Year 2022 Financial Review
As of December 31, 2022, the Company had cash and cash
equivalents of €12.4 million ($13.3 million).
The Company projects that its existing cash and cash equivalents
should be sufficient to fund operating expenses and capital
expenditure requirements into the fourth quarter of 2023.
After due consideration of detailed budgets and estimated cash
flow forecasts for the years 2023 and 2024, the Company projects
that its existing cash and cash equivalents will not be sufficient
to fund its estimated operating and capital expenditures over at
least the next 12 months from the date that the financial
statements are issued.
The Company is currently evaluating different financing options
to obtain the required funding to extend the Company’s cash runway
beyond 12 months from the date the financial statements are
issued.
Key financial figures for full-year 2022, compared with
full-year 2021, are summarized below:
Selected key financial figures (€
millions)
Full year 2022
Full year 2021
Revenue
-
-
Research and development expenses
(18.9)
(20.8)
General and administrative expenses
(10.5)
(9.9)
Change in fair value of contingent
consideration
14.7
0.8
Impairment of Oncology intangible
assets
(35.1)
-
Other income/(expenses)
9.0
3.4
Operating loss
(40.9)
(26.4)
Loss for the period/year
(40.9)
(26.5)
Net cash used in operations
(28.0)
(26.6)
Treasury position(1)
12.4
30.0
(1) “Treasury position” is an alternative performance measure
determined by adding Short-term investments and Cash and cash
equivalents from the statement of financial position prepared in
accordance with IFRS. The purpose of this measure by Management is
to identify the level of cash available internally (excluding
external sources of financing) within 12 months.
The Company’s license and collaboration agreements generated no
revenue in 2022 and in 2021.
Research and Development (R&D) expenses were €18.9 million
in 2022 as compared to €20.8 million in 2021, a year-over-year
decrease of €1.8 million. The decrease in the Company’s R&D
expenses is primarily driven by the Company’s decision to
discontinue some of preclinical and in process development costs
after the Company’s decision to adopt and implement a new business
strategy over the last few months of 2022, as well as a decrease of
the expenses associated with share-based payments (non-cash
expenses) related to the warrant plan offered to our employees and
directors.
General and Administrative (G&A) expenses were €10.5 million
in 2022 as compared to €9.9 million in 2021, an increase of €0.6
million. This increase is primarily related to higher insurances
costs and consulting fees partially compensated by the decrease of
the expenses associated with the share-based payments (non-cash
expenses) related to the warrants plan offered to our employees and
directors.
The fair value adjustment (€14.7 million) relating to the
contingent consideration and other financial liabilities as of
December 31, 2022, is mainly driven by the full reversal of the
liability. This liability is a result of business combination
accounting (IFRS3) which requires the liability to be recorded
unless the possibility of any outflow is remote.
This impairment comes as a result of the Company’s strategic
shift in focus away from clinical development and the early stage
nature of the implementation of the Celyad 2.0 strategy, which
involves shifting from an organization focused on clinical
development to one prioritizing R&D discovery and the
monetization of its intellectual property (IP) portfolio through
partnerships, collaborations and license agreements. To date, no
effective sublicence contract nor collaboration contract has been
entered into, and as a result there is uncertainty as to the timing
and amount of associated short, medium and long term revenues.
Given this uncertainty, and per accounting standards, the
Company recognizes a full impairment loss on the remaining value of
goodwill, In Process Research and Development, and Horizon
Discovery’s shRNA platform, resulting in a non-cash impairment of
€35.1 million on a consolidated basis for the financial year ended
December 31, 2022.
This accounting conclusion, which reflects the Company’s
financial situation as of December 31, 2022, does not affect
Management’s commitment to continue in its efforts to pursue the
potential monetization of the Company’s IP. If and when such a firm
sublicense or collaboration contract occurs and hence increases the
probability of revenue, the Management will estimate the reversal
of the impairment which will be limited so that the carrying amount
of the asset does not exceed its recoverable amount along with the
remeasurement of the related contingent liability.
The Company’s other income is principally associated with grants
received from the Walloon Region mainly in the form of recoverable
cash advances (RCAs) and R&D tax credit income as well as the
gain on sale of the CTMU activities:
- Grant income (RCAs): additional grant income has been
recognized in 2022 on grants in the form of RCAs. According to IFRS
standards, the Company has earned grants for the period amounting
to €1.6 million, out of which €0.5 million is accounted for as a
financial liability and the remaining €1.1 million as a grant
income;
- Grant income (Others): additional grant income has been
recognized in 2022 on grants received and from the regional
government (for €0.9 million), not referring to RCAs and not
subject to reimbursement;
- With respect to R&D tax credit, the current year income is
€0.5 million; and
- Gain on sale of CTMU activities (for €5.2 million) results from
the terms of the asset purchase agreement between Celyad Oncology
and Cellistic under which Cellistic agreed to acquire Celyad
Oncology’s Manufacturing Business Unit for a total consideration of
€6.0 million.
Net loss for the year ended December 31, 2022 was €40.9 million,
or €1.81 per share, compared to a net loss of €26.5 million, or
€1.70 per share, for the same period in 2021. As noted above, the
increase in net loss between periods was primarily due to the
non-cash impairment adjustment on the Oncology intangible
assets.
Net cash used in operations for the year ended December 31,
2022, which excludes non-cash effects, amounted to €28.0 million,
which is in line with net cash used in operations of €26.6 million
for the year ended December 31, 2021.
The net assets of the Company as of December 31, 2022, on a
BE-GAAP non-consolidated basis, have fallen below half of the
Company’s capital. As a result, in accordance with Article 7:228 of
the Belgian Code for Companies and Associations, the Board of
Directors plans to submit for a vote, at its May 5, 2023
shareholders’ meeting, its business plan including a proposal to
continue the Company’s activities. The Board of Directors will
publish a detailed report regarding this proposal on or around
April 3, 2023, together with the convocation with proposed
resolutions for the shareholders’ meeting.
Annual Report 2022
The Annual Report for the year ended December 31, 2022 will be
published on March 23, 2023, and will be available on the Company’s
website, www.celyad.com. The Company’s statutory auditor, EY
Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL (EY), has
confirmed that the completed audit has not revealed any material
misstatement in the consolidated financial statements. EY also
confirmed that the accounting data reported in the press release
are consistent, in all material respects, with the consolidated
financial statements from which it has been derived.
Conference Call and Webcast Details
A conference call will be held on Friday, March 24th at 1:00
p.m. CET / 8:00 a.m. EDT to review the financial and operating
results for full year 2022. Please dial into the call five to ten
minutes prior to start time using the appropriate number below and
ask to join the “Celyad Oncology SA call”:
- United States / International: +1-877-407-9716 or
+1-201-493-6779
- Belgium: +32 (0) 800-73-904 (Fixed) or +32 (0) 800-73-566
(Mobile)
Participants may also access to the live webcast link for
instant telephone access to the event. Archived recording will be
available in the "Events" section of the Celyad website after the
event.
Financial Calendar 2023
May 5th, 2023
First Quarter 2023 Business Update
May 5th, 2023
Annual shareholders meeting
August 3rd, 2023
First Half 2023 Interim Results
November 9th, 2023
Third Quarter 2023 Business Update
The financial calendar is communicated on an indicative basis
and may be subject to change.
About Celyad Oncology
Celyad Oncology is a biotechnology company focused on the
discovery and development of innovative technologies chimeric
antigen receptor (CAR) T-cell therapies. The Company is focusing on
opportunities to fully harness the true potential of its
proprietary technology platforms and intellectual property and
support the development of next-generation CAR T candidates in
solid tumors and hematological malignancies. Celyad Oncology is
based in Mont-Saint-Guibert, Belgium and New York, NY. For more
information, please visit www.celyad.com.
Celyad Oncology Forward-Looking Statement
This release may contain forward-looking statements, within the
meaning of applicable securities laws, including the Private
Securities Litigation Reform Act of 1995, as amended, including,
without limitation, statements regarding beliefs about and
expectations for the Company’s updated strategic business model,
including associated potential benefits, transactions and
partnerships, statements regarding the potential value of the
Company’s IP, statements regarding the Company’s financial
statements and cash runway, statements regarding the Company’s
future hiring plans, statements regarding the Company’s future
fundraising plans, and statements regarding the continuation of the
Company’s existence. The words “will,” “believe,” “potential,”
“continue,” “target,” “project,” “should” and similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. Any
forward-looking statements in this release are based on
management’s current expectations and beliefs and are subject to a
number of known and unknown risks, uncertainties and important
factors which might cause actual events, results, financial
condition, performance or achievements of Celyad Oncology to differ
materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, without
limitation, risks related to the material uncertainty about the
Company’s ability to continue as a going concern; the Company’s
ability to realize the expected benefits of its updated strategic
business model; the Company’s ability to develop its IP assets and
enter into partnerships with outside parties; the Company’s ability
to enforce its patents and other IP rights; the possibility that
the Company may infringe on the patents or IP rights of others and
be required to defend against patent or other IP rights suits; the
possibility that the Company may not successfully defend itself
against claims of patent infringement or other IP rights suits,
which could result in substantial claims for damages against the
Company; the possibility that the Company may become involved in
lawsuits to protect or enforce its patents, which could be
expensive, time-consuming, and unsuccessful; the Company’s ability
to protect its IP rights throughout the world; the potential for
patents held by the Company to be found invalid or unenforceable;
and other risks identified in Celyad Oncology’s U.S. Securities and
Exchange Commission (SEC) filings and reports, including in the
latest Annual Report on Form 20-F filed with the SEC and subsequent
filings and reports by Celyad Oncology. These forward-looking
statements speak only as of the date of publication of this
document and Celyad Oncology’s actual results may differ materially
from those expressed or implied by these forward-looking
statements. Celyad Oncology expressly disclaims any obligation to
update any such forward-looking statements in this document to
reflect any change in its expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based, unless required by law or regulation.
Source: Celyad Oncology SA
Celyad Oncology SA
Consolidated Statement of Comprehensive Loss
(€'000)
For the year ended December
31,
2022
2021
Revenue
-
-
Cost of sales
-
-
Gross profit
-
-
Research and Development expenses
(18 928)
(20 773)
General & Administrative expenses
(10 546)
(9 908)
Change in fair value of contingent
consideration
14 679
847
Impairment of Oncology intangible
assets
(35 084)
-
Other income
9 360
4 909
Other expenses
(338)
(1 466)
Operating Loss1
(40 857)
(26 391)
Financial income
185
144
Financial expenses
(198)
(255)
Loss before taxes
(40 870)
(26 502)
Income taxes
(65)
(10)
Loss for the period
(40 935)
(26 512)
Basic and diluted loss per share (in
€)
(1.81)
(1.70)
[1] For 2022 and 2021, the Group does not have any
non-controlling interests and the losses for the year are fully
attributable to owners of the parent.
Celyad Oncology SA
Consolidated Statement of Financial Position
(€’000)
December 31,
December 31,
2022
2021
NON-CURRENT ASSETS
4 891
45 651
Goodwill and Intangible
assets
864
36 168
Property, Plant and Equipment
309
3 248
Non-current Trade and Other
receivables
-
2 209
Non-current Grant receivables
3 454
3 764
Other non-current assets
264
262
CURRENT ASSETS
14 825
34 292
Trade and Other Receivables
1 118
668
Current Grant receivables
-
1 395
Other current assets
1 017
2 211
Short-term investments
-
-
Cash and cash equivalents
12 445
30 018
Assets held for sale
245
-
TOTAL ASSETS
19 716
79 943
EQUITY
4 317
43 639
Share Capital
78 585
78 585
Share premium
6 317
6 317
Other reserves
34 800
33 172
Capital reduction reserve
234 562
234 562
Accumulated deficit
(349 947)
(308 997)
NON-CURRENT
LIABILITIES
4 973
22 477
Bank loans
-
-
Lease liabilities
118
1 730
Recoverable Cash advances
(RCAs)
4 584
5 851
Contingent consideration payable
and other financial liabilities
-
14 679
Post-employment benefits
13
53
Other non-current liabilities
258
164
CURRENT LIABILITIES
10 426
13 827
Bank loans
-
-
Lease liabilities
137
902
Recoverable Cash advances
(RCAs)
437
362
Trade payables
4 752
6 611
Other current liabilities
5 100
5 952
TOTAL EQUITY AND
LIABILITIES
19 716
79 943
Celyad Oncology SA
Consolidated Net Cash Burn Rate2
(€’000)
For the year ended 31
December,
2022
2021
Net cash used in operations
(28 010)
(26 643)
Net cash (used in)/from investing
activities
7 202
(126)
Net cash (used in)/from financing
activities
3 241
39 521
Effects of exchange rate
changes
(6)
32
Change in Cash and cash
equivalents
(17 573)
12 784
Change in Short-term
investments
-
-
Net cash burned over the
period
(17 573)
12 784
1 The operating loss arises from the Company’s loss for the
period before deduction of financial income, financial expenses and
income taxes. The purpose of this measure by Management is to
identify the Company’s results in connection with its operating
activities. 2 Net cash burn rate’ is an alternative performance
measure determined by the year-on-year net variance in the Group’s
treasury position as above defined. The purpose of this measure for
the Management is to determine the change of the treasury
position.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230323005574/en/
Celyad Oncology Contacts: Investor Contact: David
Georges VP Finance and Administration investors@celyad.com
Media Contact: Caroline Lonez R&D Communications and
Business Development communications@celyad.com
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