On April 4, 2024 Celyad Oncology (Euronext: CYAD) (the "Company"), reported its financial results for the fiscal year 2023 ended December 31, 2023, and provides a business update (Press release, Celyad, APR 4, 2024, View Source [SID1234641775]).

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Michel Lussier, interim Chief Executive Officer of Celyad Oncology, commented: "Over the last 2 years, Celyad Oncology has completed a significant strategic shift with the ambition to stay at the forefront of innovation in immunotherapy, and more precisely, chimeric antigen receptor (CAR) T-cell therapy. I am glad to report that, throughout the past year, the hard work and dedication of the entire Celyad Oncology team has generated remarkable achievements and positive changes throughout the Company, confirming the value creation potential of our strategic choices."

2023 corporate accomplishments
The Company has secured an EUR 9.8 million private placement from historical shareholders intended to cover our operating expenses well into the second quarter of 2025.
2023 operational highlights
Multiplex short hairpin ribonucleic acid (shRNA) non-gene edited technology – The company developed a chimeric micro-RNA (miRNA) cluster to enable multiplexing of shRNAs, designed for easy, efficient, and tunable downregulation of up to four target genes simultaneously in CAR T-cells and data presented and published in 2023.
Updated results will be presented at the 27th American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) Annual Meeting in Baltimore, US (May 7-11, 2024) during the Immune Targeting and Approaches with Genetically-Modified Cells and Cell Therapies Poster Session on Wednesday May 8 (abstract 837).
Multispecific NKG2D-based CAR T-cell platform – Different CD19/NKG2DL, BCMA/NKG2DL and PSMA/NKG2DL multispecific CAR T-cells were developed throughout the year and have provided the proof-of-concept that NKG2DL are valuable targets in a multispecific CAR approach by demonstrating our CD19/NKG2DL multispecific CAR T-cells could counteract relapses due to CD19 antigen loss in vivo.
Updated results will be presented at the 27th ASGCT (Free ASGCT Whitepaper) Annual Meeting in Baltimore, US (May 7-11, 2024) during the Immune Targeting and Approaches with Genetically-Modified Cells and Cell Therapies Poster Session on Friday May 10 (abstract 1800).
Full year 2023 financial review
As of December 31, 2023, the Company’s Treasury position amounts to €7.0 million.

After due consideration of detailed budgets and estimated cash flow forecasts for the years 2024 and 2025, the Company projects that its existing cash and cash equivalents will be sufficient to fund its estimated operating and capital expenditures into the second quarter of 2025, i.e over at least the next 12 months from the date that the financial statements are issued.

Key financial figures for full-year 2023, compared with full-year 2022, are summarized below:

Selected key financial figures (€ millions) Full year 2023 Full year 2022
Revenue 0.1 –
Research and development expenses (4.6) (18.9)
General and administrative expenses (6.0) (10.5)
Change in fair value of contingent consideration 0 14.7
Impairment of Oncology intangible assets 0 (35.1)
Other income/(expenses) 2.1 9.0
Operating loss (8.5) (40.9)
Loss for the period/year (8.5) (40.9)
Net cash used in operations (15.2) (28.0)
Treasury position (1) 7.0 12.4
(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. Management’s purpose of this measure 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 2023 and in 2022.

Research and Development (R&D) expenses were €4.6 million in 2023 as compared to €18.9 million in 2022, a year-over-year decrease of €14.3 million. The decrease in the Company’s R&D expenses is primarily driven by the Company’s decision to discontinue some of clinical and preclinical programs 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 employee expenses mainly related to headcount reduction to support the Company’s reorganization.

General and Administrative (G&A) expenses were €6.0 million in 2023 as compared to €10.5 million in 2022, a decrease of €4.5 million. This decrease is mainly related to the decrease in employee expenses related to headcount reduction and management changes to support the Company’s reorganization and to a decrease in insurance costs and consulting fees.

There is no change in fair value of the contingent consideration and other financial liabilities as Management has determined that there has been no event (such as a firm sublicense or collaboration contract) that increases the probability of the projected future revenue or cash outflow due to Celdara Medical, LLC and Dartmouth College, indicating that the probability is remote, similar to December 31, 2022.

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 Property, plant & equipment from the terms of the asset purchase agreement between Celyad and Cellistic for €1.3 million.

Net loss for the year ended December 31, 2023, was €8.5 million, or €0.33 per share, compared to a net loss of €40.9 million, or €1.81 per share, for the same period in 2022. As noted above, the decrease in net loss between periods was primarily due to the non-cash impairment adjustment on the Oncology intangible assets done in 2022 and to the decrease of R&D and General and administrative expenses in 2023.

Net cash used in operations for the year ended December 31, 2023, which excludes non-cash effects, amounted to €15.2 million, which is in line with net cash used in operations of €28.0 million for the year ended December 31, 2022.

Celyad Inc. non-cash impairment
An impairment review of its financial results for the financial year ended 31 December 2023 show a non-cash impairment of EUR 14.9 million on a statutory basis only.

This results from the business strategy change, under which the Company has decided to discontinue the development of its remaining clinical programs, shifting from an organization focused on clinical development to one prioritizing R&D discovery and the monetization of its IP portfolio through partnerships, collaborations and license agreements. According to the accounting standards definition, as uncertainty exists on the timing and amount of the new strategy outcomes, the Company had to recognize a full impairment loss on the remaining value of the financial participation on the subsidiary Celyad Inc. This accounting conclusion, which reflects a picture of the situation on 31 December 2023, does not affect the Management’s commitment to continue the exploitation of this US subsidiary in the new business strategy of the Company. Furthermore, this impairment may be reversed once there will be no more uncertainty on the chance to recover the financial participation into Celyad Inc.

The net assets of the Company per 31 December 2023, on a BE-GAAP non-consolidated basis, having fallen below half of the Company’s capital, the board of directors will submit to the ordinary shareholders meeting on the 6th of May 2024 the proposal to continue the Company’s activities in accordance with article 7:228 of the Belgian Code for Companies and Associations. The board of directors will publish a special report in this respect, by the 5th of April 2024 together with the convening notice with proposed resolutions for the shareholders’ meeting.

Annual Report 2023
The Annual Report for the year ended December 31, 2023 will be published on April 05, 2024, and will be available on the Company’s website, www.celyad.com. The Company’s statutory auditor, BDO Réviseurs d’Entreprises SRL, has confirmed that the completed audit has not revealed any material misstatement in the consolidated financial statements. BDO 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.

Upcoming anticipated milestones
Celyad Oncology will attend the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in San Diego, US (April 5-10, 2024) and present two posters at the 27th American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) Annual Meeting in Baltimore, US (May 7-11, 2024), two important annual meetings to share the latest scientific research and technologies in immuno-oncology.
The Company anticipates the arrival of a new CEO in the first half of 2024.
Financial Calendar 2024
May 6th, 2024 Annual shareholders meeting
September 20th, 2024 First Half 2024 Interim Results
The financial calendar is communicated on an indicative basis and may be subject to change.