T-cells attacking cancer cell illustration of microscopic photos

Highly encouraging data on dose responses

Celyad 27 November 2018 Update
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Celyad

Highly encouraging data on dose responses

Q3 update

Pharma & biotech

 

27 November 2018

Price

€22.12

Market cap

€264m

$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

3.0

(14.8)

(41.1)

Rel (local)

0.0

(6.7)

(32.5)

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

Q218 update

Q318

THINK interim data

Q418

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

Celyad has presented an update on its CYAD-01 solid cancer trials with haematological data due in early December. There are strong indications that optimal effects can be gained by use of high doses, possibly with Cy-Flu preconditioning, or by combining CYAD-01 with chemotherapy in solid cancer. An allogenic colorectal trial will start in early 2019; an allogeneic product (CYAD-101) could have a major market in multiple cancer types. Our indicative value remains at €1,090m (€89/share) pending more 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

NKR CAR T-cell therapy targets “stressed” cancer cells. In early data (at SITC in November) CYAD-01 with prior FOLFOX (which stresses cells) in metastatic colorectal cancer (mCRC) gave one complete and two partial pathological responses at a 3x108 dose; the study continues. In stand-alone therapy, three patients who had peak CYAD-01 blood levels of over 7,000 cells/ml showed stable disease (SD). Initial data from a trial using Cy-Flu preconditioning indicates much higher peak dose cell levels; more data is due in mid-2019. By year-end 2018, the first mCRC patients will be enrolled in a trial with allogeneic cells (CYAD-101) following FOLFOX. Potentially, CYAD-101 offers a more affordable, rapid -response therapy for thousands of patients. Celyad holds key patents in allogeneic therapy (licensed by Novartis). A shRNA approach (licensed from Horizon Discovery) is in preclinical development. These developments give Celyad a leading position in solid cancers, an area other CAR therapies find hard to access (see 2017 report).

Haematological update in December at ASH

At the ASH meeting on December 3rd, Celyad will provide an update on its trials in Acute Myeloid Leukaemia (AML). This is likely to be the first indication, in our view, to be filed for regulatory approval. The abstract shows that 3/7 (42%) patients had some form of CR; one of these led to a stem cell transplant; first reported in November 2017. Two others had SD with blast reductions. An eighth patient should be reported. The variable responses indicate that multiple factors besides dose are likely to be involved. There were no Multiple Myeloma (0/3) or MDS (0/1) responses; these were all treated at low doses. AML patients are likely to benefit from Cy-Flu preconditioning and multiple courses of treatment.

Valuation: Nominal remains at €89 per share

The data to date indicates that Celyad is closing in on the optimal dose and administration regimen for CYAD-01 and CYAD-101. Our indicative value remains at €1,090m (€89 per share). September 30 cash was €55.9m.

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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Level 12, Office 1205

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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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