Allogeneic trial first dose given

Celyad 3 December 2018 Update
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Celyad

Allogeneic trial first dose given

AlloSHRINK underway

Pharma & biotech

3 December 2018

Price

€24.30

Market cap

€290m

$1.18/€

Cash (€m) at 30 September 2018

55.9

Shares in issue

11.94m

Free float (Edison estimate)

67%

Code

CYAD

Primary exchange

Euronext Brussels

Secondary exchange

NASDAQ

Share price performance

%

1m

3m

12m

Abs

10.4

(6.2)

(30.4)

Rel (local)

9.1

(0.6)

(20.5)

52-week high/low

€38.7

€20.5

Business description

Celyad is developing an innovative natural killer receptor (NKR) CAR T-cell immune-oncology platform. Celyad has a leading position in CAR for AML and solid tumours and is exploring the use of NKR CAR with chemotherapy. It holds a key granted patent in allogeneic CAR technology.

Next events

ASH data

3 December 2018

FY18 results

Q119

Analysts

Dr John Savin MBA

+44 (0)20 3077 5735

Dr Daniel Wilkinson

+44 (0)20 3077 5734

Celyad is a research client of Edison Investment Research Limited

The allogeneic version of NRK CAR T-cell therapy, CYAD-101, is underway with the first patient dosed. The study mirrors the current colorectal SHRINK trial in combining NKR CAR cell therapy with FOLFOX chemotherapy. This gives Celyad the lead in a potential high-value mass-market solid cancer where allogeneic therapy is likely to be essential. The indicative value is €1,090m (€89 per share) pending further data.

Year
end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/16

8.52

(20.00)

(2.09)

0.0

N/A

N/A

12/17

3.54

(26.80)

(2.79)

0.0

N/A

N/A

12/18e

0.00

(27.25)

(2.43)

0.0

N/A

N/A

12/19e

0.00

(28.50)

(2.38)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Leading position in solid cancers and allogeneic cells

Celyad has a dominant position in CAR therapy for solid cancers (see T-cell cancer therapies). Its NKR CAR T-cell therapy targets ‘stressed’ cancer cells, for example, after chemotherapy like FOLFOX. As an allogenic approach, CYAD-101 is a more affordable, rapid-response potential therapy for many thousands of patients. Of allogeneic competitors in the US, only Cellectis (UCART123 in AML) and Precision Biosciences (PBCAR0191) are in trials but for haematological cancers. Allogene in solid cancers is in preclinical development; UCART19 targets ALL. However, there are many allogeneic trials in China. Celyad has regained its allogeneic therapy rights in key Asian counties from ONO as ONO failed to exercise its option.

AlloSHRINK

Celyad is already evaluating autologous (customised) CYAD-01 with FOLFOX in the open-label SHRINK trial. The alloSHRINK (NCT03692429) study mirrors the SHRINK design. Initial results from three SHRINK patients were disclosed in November 2018. Of these, one had a pathological complete response (CR) and the other two had partial pathological responses. However, cell numbers after infusion were low and no Cy-Flu preconditioning was used. AlloSHRINK is starting its dose escalation phase to test safety and is focusing on any signs of graft vs host disease. A later expansion phase will test the objective response rate. One important secondary endpoint is host vs graft (HvG) response especially after the second and third doses, as HvG could eliminate CYAD-101 cells or block any cell expansion, stopping any therapeutic benefit. The 36-patient trial could compete in late 2021. Celyad holds key patents in allogeneic therapy (licensed by Novartis).

Valuation: Unchanged at €1,090m pending more data

We assign a nominal value of €100m to the allogenic opportunity; this will be revised as response and safety data emerge. AlloSHRINK open-label data is likely to be reported as the trial progresses. Allogeneic products may come to dominate the valuation. The overall indicative value remains €1,090m, €89 per share. More CYAD-01 data is due on 3 December at ASH.

Exhibit 1: Financial summary

€000s

2016

2017

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

8,523

3,540

0

0

Cost of Sales

(53)

(515)

(500)

(500)

Gross Profit

8,470

3,025

(500)

(500)

EBITDA

 

 

(21,246)

(22,317)

(26,500)

(27,750)

Operating Profit (before amort. and except).

 

 

(22,006)

(23,283)

(27,500)

(28,750)

Intangible Amortisation

(756)

(748)

(750)

(750)

Other income and charges

0

(26,273)

0

0

Share-based payments

(2,847)

(2,569)

(2,600)

(2,600)

Operating Profit

(25,609)

(52,873)

(30,850)

(32,100)

Net Interest

1,997

(3,521)

250

250

Profit Before Tax (norm)

 

 

(20,009)

(26,804)

(27,250)

(28,500)

Profit Before Tax (FRS 3)

 

 

(23,612)

(56,394)

(30,600)

(31,850)

Tax

6

1

0

0

Profit After Tax (norm)

(20,003)

(26,803)

(27,250)

(28,500)

Profit After Tax (FRS 3)

(23,606)

(56,393)

(30,600)

(31,850)

Average Number of Shares Outstanding (m)

9.3

9.6

11.2

12.0

EPS - normalised (c)

 

 

(209)

(279)

(243)

(238)

EPS - (IFRS) (c)

 

 

(253)

(586)

(273)

(267)

Dividend per share (c)

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

Operating Margin (before GW and except) (%)

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

53,440

41,232

40,492

39,752

Intangible Assets

49,566

36,508

35,768

35,028

Tangible Assets

3,563

3,290

3,290

3,290

Investments

311

1,434

1,434

1,434

Current Assets

 

 

85,366

36,393

50,659

22,149

Stocks

0

0

0

0

Debtors

1,359

233

233

233

Cash (cash plus deposits)

82,587

33,905

48,171

19,661

Other

1,420

2,255

2,255

2,255

Current Liabilities

 

 

(11,275)

(7,944)

(7,944)

(7,944)

Creditors

(9,960)

(7,509)

(7,509)

(7,509)

Deferred revenue

0

0

0

0

Walloon loans and bank loan

(1,315)

(435)

(435)

(435)

Long Term Liabilities

 

 

(36,646)

(22,146)

(22,146)

(22,146)

Loans (non-current) Bank and Walloon

(7,866)

(1,870)

(1,870)

(1,870)

Other long term liabilities

(28,780)

(20,276)

(20,276)

(20,276)

Net Assets

 

 

90,885

47,535

61,061

31,811

CASH FLOW

Operating Cash Flow

 

 

(26,695)

(46,027)

(26,514)

(27,471)

Net Interest

1,997

(3,521)

264

(29)

Tax

0

0

0

0

Capex

(1,782)

(858)

(1,010)

(1,010)

Acquisitions/disposals

(1,561)

0

0

0

Financing

0

625

46,140

0

Dividends

0

0

0

0

Other

3,109

1,099

(4,614)

0

Net Cash Flow

(24,932)

(48,682)

14,266

(28,510)

Opening net debt/(cash)

 

 

(96,131)

(73,406)

(31,600)

(45,866)

HP finance leases initiated

0

0

0

0

Loan and finance movements

2,207

6,876

(0)

0

Closing net debt/(cash)

 

 

(73,406)

(31,600)

(45,866)

(17,356)

Source: Edison Investment Research estimates, Celyad reports and announcements

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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