Financial Reports

• Enrollment ongoing in Phase 1 dose-escalation IMMUNICY-1 trial for lead shRNA-based allogeneic CAR T candidate, CYAD-211, for relapsed/refractory (r/r) multiple myeloma (MM)
• In July 2022, the U.S. Food and Drug Administration (FDA) lifted the clinical hold for the T-cell-inhibitory-molecule (TIM)-based allogeneic CAR T candidate CYAD-101 for metastatic colorectal cancer (mCRC)
• Company to increase strategic focus on collaborations related to broad intellectual property portfolio
• Conference call and webcast scheduled for today, August 5^th, at 2:00 p.m. CEST / 8:00 a.m. EDT

Mont-Saint-Guibert, Belgium – Celyad Oncology SA (Euronext & Nasdaq: CYAD) (the “Company”), a clinical-stage biotechnology company focused on the discovery and development of chimeric antigen receptor T cell (CAR T) therapies for cancer, today announced an update on its financial results and recent business developments for the first half ended June 30, 2022.

“As the Company continues to evolve, we are excited about a renewed focus on additional value drivers for Celyad Oncology. Importantly, with our world-class intellectual property focused on allogeneic CAR T technology, we have multiple opportunities for partnerships with peers in the industry,” commented Michel Lussier, interim Chief Executive Officer of Celyad Oncology. “We also were proud to recently announce that the FDA lifted the clinical hold on our CYAD-101 program. In addition, we look forward to the upcoming data read out for CYAD-211 in the second half of 2022. We are truly ushering in a new chapter for Celyad Oncology by unlocking the potential of not only our product candidates, but also our portfolio of IP, technology, and overall expertise in cell therapy.” 

Second Quarter 2022 and Recent Business Highlights

• The Board of Directors named Hilde Windels as Chair of the Board of Directors
• Michel Lussier named Interim Chief Executive Officer of the Company

Pipeline and Business Updates

CYAD-211 – Allogeneic shRNA-based, anti-BCMA CAR T for r/r MM

CYAD-211 is an investigational, short hairpin RNA (shRNA)-based allogeneic CAR T candidate for the treatment of r/r MM. CYAD-211 is engineered to co-express a B cell maturation antigen (BCMA) targeting CAR and a single shRNA, which interferes with the expression of the CD3ζ component of the T-cell receptor (TCR) complex.

• Preliminary data reported in December 2021 from the dose-escalation segment of the IMMUNICY-1 Phase 1 trial evaluating CYAD-211 following cyclophosphamide/fludarabine (CyFlu) preconditioning chemotherapy in patients with r/r MM showed evidence of clinical activity with a good tolerability profile including no evidence of Graft versus Host Disease. In addition, all patients in the trial had detectable CYAD-211 cells in the peripheral blood.
• Enrollment is currently ongoing in the IMMUNICY-1 Phase 1 trial to evaluate enhanced lymphodepletion (eLD) and increased CYAD-211 doses with the aim to improve cell persistence and potentially maximize the clinical benefit of CYAD-211. The IMMUNICY-1 protocol also allows for CYAD-211 redosing in certain patients.
• Additional data updates from the eLD cohorts of the Phase 1 IMMUNICY-1 trial of CYAD-211 for r/r MM are expected during second half of 2022.

CYAD-101 – Allogeneic TIM-based NKG2D CAR T for mCRC

CYAD-101 is an investigational, non-gene edited, allogeneic CAR T candidate engineered to co-expresses the TIM peptide alongside a CAR based on NKG2D, a receptor expressed on natural killer (NK) and T cells, that binds to eight stress-induced ligands.

• In June 2022 we submitted our complete response to the clinical hold of the CYAD-101-002 phase 1b trial to the FDA stating our intent to amend the eligibility criteria to exclude patients who have bilateral lung metastases and patients who have received treatment with epidermal growth factor receptor (EGFR) targeting monoclonal antibodies within the previous 9 months prior to trial recruitment. In July 2022, based on that complete response, we received notification that the FDA lifted the clinical hold on the CYAD-101-002 phase 1b trial

shARC Platform

Discovery research continues on programs focused on the co-expression of Interleukin-18 in conjunction with our short hairpin RNA shRNA technology platform, also known as our shARC (shRNA Armored CAR) franchise, with a focus on the development of next-generation, allogeneic CAR T candidates.

CYAD-02 – Autologous NKG2D CAR-T for r/r AML and MDS

CYAD-02 is an investigational, autologous CAR T therapy that co-expresses both the NKG2D CAR and a single shRNA targeting the NKG2D ligands MICA/MICB on the CAR T cells.

• In December 2021, the Company presented clinical results from the dose-escalation CYCLE-1 Phase 1 trial evaluating CYAD-02 for the treatment of r/r acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS). Data from the trial showed that a single shRNA can target two independent genes (MICA/MICB) to enhance the phenotype of the CAR T cells. In addition, the dual knockdown showed a positive contribution to the initial clinical activity of CYAD-02 as well as a trend towards increased engraftment and persistence compared to the first-generation, autologous NKG2D receptor CAR T.
• The Company continues to explore potential partnership opportunities for the future development of CYAD-02.

Strategic Focus on Intellectual Property

The Company maintains a robust intellectual property portfolio within the landscape of CAR T, including twelve foundational U.S.

patents associated with allogeneic CAR T for the treatment of cancer as well as patents for NKG2D receptor-based cell therapies. We believe these patents provide an avenue for the Company to develop its own programs as well as to seek potential partnership opportunities.  

First Half 2022 Financial Results

Key financial figures for the first half of 2022, compared with the first half of 2021 and full year 2021, are summarized below:

Selected key financial figures (€ millions)	Half Year 30 June 2022	Half Year 30 June 2021	Full Year 31 December 2021
Revenue	–	–	–
Research and development expenses	(10.5)	(10.0)	(20.8)
General and administrative expenses	(6.2)	(4.8)	(9.9)
Change in fair value of contingent consideration	1.1	(2.0)	0.8
Other income/(expenses)	1.6	1.8	3.4
Operating loss	(14.1)	(14.9)	(26.4)
Loss for the period/year	(14.1)	(14.9)	(26.5)
Net cash used in operations	(16.3)	(12.2)	(26.6)
Cash and cash equivalents	14.4	12.0	30.0

Research and Development expenses were €10.5 million for the first half of 2022, compared to €10.0 million for the first half of 2021. The €0.5 million increase was mainly driven by intellectual property filing and maintenance fees to strengthen intellectual property prosecution and the increase of employee expenses mainly related to the full expense impact of the employees recruited during 2021 to support the Group’s preclinical and clinical programs, employee turnover and management changes, both of which were partially offset by the decrease in clinical activities resulting from the Phase 1b CYAD-101-002 (KEYNOTE-B79) trial which was on clinical hold during the second quarter of 2022.

General and Administrative expenses were €6.2 million for the first half of 2022, compared to €4.8 million for the first half of 2021. This increase is primarily attributable to an increase in insurance costs for the period, combined with an increase in employee expenses mainly related to management changes through the six-month period ended June 30, 2022.

A fair value adjustment of €1.1 million (non-cash income) related to the reassessment of the contingent consideration and other financial liabilities associated with the advancement of the Company’s NKG2D-based CAR T candidates as of June 30, 2022, required by International Financial Reporting Standards (IFRS), was mainly driven by the updated assumptions on projected revenue associated with the Company’s CYAD-101 program, for which the timing of the potential commercialization has been delayed by one year. Additionally, the addressable patient population for CYAD-101 has been reduced based on recent safety findings from the CYAD-101-002 Phase 1b trial. The fair value adjustment was also driven by updated assumptions to discount rate and revaluation of the U.S. dollar foreign exchange rate.

The Company also posted €1.6 million in net other income for the first half of 2022, compared to a net other income of €1.8 million for the first half of 2021. Other income for the first half of 2022 is primarily due to grant income from the Walloon Region of €1.4 million.

Net loss for the first half of 2022 was €14.1 million, or € (0.62) per share, compared to a net loss of €14.9 million, or € (1.02) per share, for the first half of 2021.

Net cash used in operations was €16.3 million for the first half of 2022, compared to €12.2 million for the first half of 2021.

As of June 30, 2022, the Company had cash and cash equivalents of €14.4 million ($15.0 million).

As of June 30, 2022, the total number of basic shares outstanding were 22.6 million similar to December 31, 2021.

Celyad Oncology First Half 2022 Conference Call Details

Date: Friday, August 5, 2022

Time: 2 p.m. CEST / 8 a.m. EDT

Dial-in: +1 201 493 6779 (International), + 1 877 407 9716 (United States) or +32 (0) 800 73 904 (Belgium). Please ask to be joined into the Celyad Oncology SA call.

The conference call will be webcast live and archived within the “Events” section of the Celyad Oncology website.

• Phase 1 IMMUNICY-1 trial demonstrated encouraging data to date for CYAD-211 including a good tolerability profile and evidence of clinical activity in relapsed/refractory multiple myeloma (r/r MM) patients
• Investigation ongoing of findings in CYAD-101-002 Phase 1b trial following announcement of clinical hold by FDA
• Cash position of €30.0 million ($34.0 million) as of December 31, 2021
• Conference call and webcast scheduled for March 25 at 1:00 p.m. CET / 8:00 a.m. EDT

Mont-Saint-Guibert, Belgium – Celyad Oncology SA (Euronext & Nasdaq: CYAD) (the “Company”), a clinical-stage biotechnology company focused on the discovery and development of chimeric antigen receptor T cell (CAR T) therapies for cancer, today announced its financial results for the fiscal year 2021 ended December 31, 2021 and provided a business update.

“This is a transformative time for Celyad Oncology as we work towards becoming a leading innovator in the allogeneic CAR T space. Over the past year, our team executed in evaluating our dynamic shRNA proprietary technology platform and introduced our armored CAR T franchise while delivering important updates across our CAR T pipeline. In addition, we expect our recently announced private placement with Fortress Investment Group to act as a catalyst for our corporate initiatives to advance our intellectual property and allogeneic CAR T product candidates,” commented Filippo Petti, Chief Executive Officer of the Company. “Although we are facing a current challenge with the CYAD-101 Phase 1b trial, the safety of our patients is our first priority, and we are focusing our efforts on the current investigation. The situation does not take away from the important work our team is doing and we believe we can look forward to announcing exciting upcoming milestones in 2022.”

Update on Clinical and Preclinical Programs

CYAD-211 – Allogeneic shRNA-based, anti-BCMA CAR T candidate for r/r MM

• The dose-escalation, Phase 1 IMMUNICY-1 trial is evaluating the tolerability and clinical activity of a single infusion of CYAD-211 following preconditioning with CyFlu (cyclophosphamide and fludarabine) in patients with r/r MM.
  • At the 63rd American Society of Hematology (ASH) Annual Meeting and Exposition in December 2021, the Company presented the latest clinical data from the trial that showed a good tolerability profile and evidence of clinical activity. Data showed no dose-limiting toxicities, GvHD or CAR T-related encephalopathy syndrome (CRES). There was one Grade 1 cytokine release syndrome (CRS) event and three patients experienced Grade 3 or 4 treatment-related blood disorders. Three out of 12 total patients with r/r MM evaluated for activity achieved partial response, one in each dose-level, while eight patients had stable disease. All patients had detectable CYAD-211 cells in the peripheral blood, although engraftment was short lasting.
  • The next segment of the IMMUNICY-1 study will evaluate CYAD-211 following enhanced lymphodepleting (eLD) regimens with the aim to improve cell expansion and persistence and potentially maximize the clinical activity of CYAD-211. In addition, the IMMUNICY-1 protocol allows for redosing of CYAD-211 in certain patients.
  • Enrollment in the eLD cohorts of the IMMUNICY-1 trial is ongoing with additional data expected in the second half of 2022.

CYAD-101 – Allogeneic TIM-based, NKG2D CAR T Candidate for Metastatic Colorectal Cancer (mCRC).

• In December 2021, the Company announced the first patient was dosed in the Phase 1b CYAD-101-002 (KEYNOTE-B79) Phase 1b trial. The CYAD-101-002 trial is part of a collaboration with MSD, a tradename of Merck & Co., Inc., Kenilworth, NJ, USA, through a subsidiary. The trial is evaluating the Company’s TCR Inhibitory Molecule (TIM)-based allogeneic NKG2D CAR T cell investigational therapy, CYAD-101, administered concurrently with FOLFOX chemotherapy, followed by MSD’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab), in patients with refractory mCRC with microsatellite stable/mismatch-repair proficient disease.
• In February 2022, the Company voluntarily placed the Phase 1b trial on clinical hold after two fatalities occurred that presented with similar pulmonary findings. Subsequently, in March 2022, the U.S. Food & Drug Administration (FDA) put the Company on a clinical hold. The Company is currently investigating these findings and evaluating any similar events in additional patients treated on study. The Company expects to provide additional updates on the trial in the future.
• CYAD-101 is the only investigational candidate from the Company using the TIM technology.

CYAD-203 – Preclinical allogeneic shRNA-based, IL-18-armored NKG2D CAR T for Solid Tumors

• Preclinical data presented at the Society for Immunotherapy of Cancer (SITC) 36th Annual Meeting demonstrated enhanced anti-tumor activity of NKG2D CAR T cells when armored with the cytokine Interleukin-18 (IL-18), supporting the continued development of CYAD-203 as well as future allogeneic IL-18-armored CAR T candidates.
• IND-enabling studies are currently in progress alongside production of the clinical grade vector. Submission of the IND application to the FDA for CYAD-203 is anticipated by year-end 2022.

CYAD-02 – Autologous NKG2D receptor CAR T Candidate for relapsed or refractory Acute Myeloid Leukemia or Myelodysplastic Syndrome (r/r AML / MDS)

• At the ASH Annual Meeting and Exposition in December 2021, the Company presented the latest clinical data from the Phase 1 CYCLE-1 dose-escalation trial of CYAD-02 for the treatment of r/r AML / MDS.
  • Data from the trial showed that a single shRNA can target two independent genes (MICA/MICB) to enhance the phenotype of the CAR T cells. In addition, the dual knockdown of these genes showed a positive contribution to the initial clinical activity of CYAD-02 as well as a trend towards increased engraftment and persistence compared to our first-generation, autologous NKG2D receptor CAR T candidate, CYAD-01. A comparison of cellular kinetics for CYAD-02 and CYAD-01 trend towards increased engraftment and persistence of CYAD-02, potentially associated with the knockdown of MICA/MICB and reduced fratricide in vivo.

Upcoming Anticipated Milestones

• Enrollment in the cohorts evaluating enhanced lymphodepletion is ongoing in the CYAD-211 IMMUNICY-1 trial and additional data from the trial are expected in the second half of 2022.
• IND-enabling studies continue for CYAD-203, with submission of an IND application to the FDA for CYAD-203 anticipated by year-end 2022.

Full Year 2021 Financial Review

As of December 31, 2021, the Company had cash and cash equivalents of €30.0 million ($34.0 million).

Based on the Company’s current scope of activities, the Company estimates that its cash and cash equivalents as of December 31, 2021, combined with the remaining access to the equity purchase agreement established with Lincoln Park Capital Fund, LLC, should be sufficient to fund operating expenses and capital expenditure requirements until mid-2023.

Key financial figures for full-year 2021, compared with full-year 2020, are summarized below:

Selected key financial figures (€ millions)	Full year 2021	Full year 2020
Revenue	–	–
Research and development expenses	(20.8)	(21.5)
General and administrative expenses	(9.9)	(9.3)
Change in fair value of contingent consideration	0.8	9.2
Other income/(expenses)	3.4	4.6
Operating loss	(26.4)	(17.0)
Loss for the period/year	(26.5)	(17.2)
Net cash used in operations	(26.6)	(27.7)
Treasury position(1)	30.0	17.2

⁽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 2021 and in 2020.

Research and Development (R&D) expenses were €20.8 million in 2021 as compared to €21.5 million in 2020,  a year-over-year decrease of €0.7 million. The decrease in the Company’s R&D expenses is primarily driven by the Company’s decision to discontinue the development of CYAD-01 in the fourth quarter of 2020, 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 €9.9 million in 2021 as compared to €9.3 million in 2020, 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 (€0.8 million) relating to the contingent consideration and other financial liabilities as of December 31, 2021 was mainly driven by updated assumptions associated with the timing of the potential commercialization of the Company’s allogenic CYAD-101 CAR T program for mCRC and autologous CYAD-02 CAR T program for r/r AML/MDS as well as to reflect the future development of the program through potential partnership. The decrease of the liability is also driven by an update to the fair value measurement based on factors such as the weighted average cost of capital, the revaluation of the U.S. dollar against the Euro and updated assumptions on probability of success associated with the Company’s CAR T programs as of December 31, 2021.

The Company’s other income is associated with grants received from the Walloon Region mainly in the form of recoverable cash advances (RCAs) and R&D tax credit income:

• Grant income (RCAs): additional grant income has been recognized in 2021 on grants in the form of RCAs. According to IFRS standards, the Company has recognized grant income for the period amounting to €2.7 million and a liability component of €1.6 million is accounted for as a financial liability.
• Grant income (Others): additional grant income has been recognized in 2021 on grants received from the Federal Belgian Institute for Health Insurance Inami (€0.3 million) and from the regional government (for €1.1 million), not referring to RCAs and not subject to reimbursement.
• With respect to R&D tax credit, the current year income is predicated on a R&D tax credit recorded as (€0.7 million), which has been updated to take into account all information available as of this date and is in line with previous year.

In 2021, other income was partially compensated by other expenses including the remeasurement income on the RCAs of €0.3 million for the year 2021 and amendment fees associated with the Dartmouth license agreement signed in December 2021 for €1.1 million.

Net loss for the year ended December 31, 2021 was €26.5 million, or €1.70 per share, compared to a net loss of €17.2 million, or €1.23 per share, for the same period in 2020. As noted above, the increase in net loss between periods was primarily due to the decrease change in fair value of contingent consideration combined with the decrease on other income/expenses.

Net cash used in operations for the year ended December 31, 2021, which excludes non-cash effects, amounted to €26.6 million, which is in line with net cash used in operations of €27.7 million for the year ended December 31, 2020.

Annual Report 2021

The Annual Report for the year ended December 31, 2021 will be published on March 24, 2022, and will be available on the Company’s website, www.celyad.com. The Company’s statutory auditor, EY Bedrijfsrevisoren BV/Réviseurs d’Entreprises 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 25^th at 1:00 p.m. CET / 8:00 a.m. EDT to review the financial and operating results for Full Year 2021. 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: + 1 866 652 5200
• Belgium: +32 (0) 800 389 13
• International: +1 412 317 6060

The conference call will be webcast live and archived within the “Events” section of the Celyad Oncology website.

Financial Calendar

Q1 2022 Financial Results             May 5, 2022

H1 2022 Financial Results             August 5, 2022

Q3 2022 Financial Results             November 10, 2022