On August 7, 2020 Kazia Therapeutics Limited (ASX: KZA;NASDAQ: KZIA), an Australian oncology-focused biotechnology company, reported that the United States Food and Drug Administration (FDA) has awarded Rare Pediatric Disease Designation (RPDD) to Kazia’s paxalisib (formerly GDC-0084) for the treatment of Diffuse Intrinsic Pontine Glioma (DIPG), a rare and highly-aggressive childhood brain cancer (Press release, Kazia Therapeutics, AUG 7, 2020, View Source [SID1234564081]).

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Key Points

With RPDD granted, Kazia may now be eligible to receive a ‘rare pediatric disease priority review voucher’ (PRV) if paxalisib is approved for DIPG
A PRV grants the holder an expedited six-month review of a new drug application by FDA. PRVs can be sold to other companies and have historically commanded prices between US$68 million and US$350 million
RPDD has been awarded following positive emerging preclinical data in DIPG, and with initial clinical efficacy data expected in 2H CY2020; positive clinical data may substantially enhance likelihood of a potential future PRV
The FDA’s RPDD program is intended to advance the development of drugs and biologics for certain serious and life-threatening rare pediatric diseases by providing incentives to industry. Most significant among these incentives is the potential access a priority review voucher at the time of a marketing authorization for the rare paediatric disease.

Kazia CEO, Dr James Garner, commented, "although glioblastoma remains our primary focus for paxalisib, we have been devoting increasing energy to developing the drug in childhood brain cancer as well. For patients diagnosed with DIPG, there are currently no FDA-approved drug treatments, and the average survival from diagnosis is around 9.5 months. The granting of RPDD by the FDA recognises our efforts and achievements so far and leaves us well placed to move paxalisib forward as a potential therapy for DIPG. We continue to be inspired by the dedication of our collaborators in this field and are committed to understanding whether paxalisib may be able to help in this enormously challenging paediatric disease."

Rare Pediatric Disease Designation

The Food and Drug Administration Safety and Innovation Act (2012) established FDA’s RPDD initiative. RPDD may be granted to drugs in development for diseases which primarily affect children (under the age of 18 years), have an incidence of less than 200,000 new cases per annum in the United States, and which are serious or life-threatening.

A sponsor of a drug with RPDD may request a Rare Pediatric Disease Priority Review Voucher (PRV) at the time of a marketing application to FDA. In effect, the PRV shortens the FDA review period for a future marketing application of any drug from 12 months to 6 months. PRVs can be sold to other companies and have historically been transacted at prices in the tens to hundreds of millions of dollars. For a large company launching a billion-dollar drug, the six-month acceleration in regulatory review can be of substantial economic value. In 2019, five pediatric PRVs were granted by FDA.

Phase I Clinical Trial in DIPG

In October 2018, St Jude Children’s Research Hospital in Memphis, TN commenced a phase I clinical trial of paxalisib in DIPG (NCT03696355). This study reported favourable top-line safety data in September 2019 and established 27 mg/m2 as the maximum tolerated dose for paediatric use. The study has completed recruitment, and initial efficacy data is anticipated during the second half of calendar 2020. This data will be used to guide future development of paxalisib in this disease.

Preclinical Research in DIPG

Dr Matt Dun and colleagues at the University of Newcastle, Australia have conducted extensive laboratory research with paxalisib, focused on phosphoproteomic analysis of its activity in DIPG cell lines. Phosphoproteomics is a new approach in cancer research that attempts to discern how complex signaling pathways are modified in tumours. Work at the Dun laboratory has shown paxalisib to be broadly active in DIPG and has identified a number of potential combination strategies which may enhance its activity. Initial data was presented at the Society for Neuro-Oncology (SNO) Pediatric Neuro-Oncology Basic and Translational Research Conference in San Francisco, CA, in May 2019.[1] Further ongoing work in animal models is expected to provide additional insight.

In parallel, related laboratory research is underway in the DMG Research Center at the University of Zurich, Switzerland, under the leadership of Dr Javad Nazarian. Dr Nazarian is also the principal investigator at Center for Genetic Medicine within the Children’s National Medical Center, Washington DC with a focus on DIPG. Laboratory research is also being conducted at St Jude Children’s Research Hospital by Dr Chris Tinkle and Dr Suzanne Baker and colleagues, in parallel to the ongoing phase I clinical trial at that center.

Next Steps

Kazia anticipates that initial efficacy data from the ongoing phase I study at St Jude will be available during 2H CY2020. Future clinical research directions will be determined on the basis of this data, in close consultation with collaborators.

On August 7, 2020 Guardant Health, Inc. (Nasdaq: GH) reported that the U.S. Food and Drug Administration (FDA) has approved Guardant360 CDx for tumor mutation profiling, also known as comprehensive genomic profiling (CGP), in patients with any solid malignant neoplasm (cancerous tumor) (Press release, Guardant Health, AUG 7, 2020, View Source [SID1234563317]). The Guardant360 CDx is also approved as a companion diagnostic to identify non-small cell lung cancer patients with epidermal growth factor receptor (EGFR) alterations who may benefit from treatment with Tagrisso (osimertinib). Guardant360 CDx offers patients and clinicians a simple, faster blood test to help inform personalized treatment options.

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The Guardant360 CDx FDA approval was based on clinical and analytical validation data from over 5,000 samples. In a retrospective analysis of data from pivotal phase III clinical trials, FLAURA and AURA3, non-small cell lung cancer patients identified for treatment with Tagrisso (osimertinib) using the Guardant360 CDx demonstrated progression-free survival rates consistent with those identified using traditional biomarker testing. Since being introduced as a laboratory developed test (LDT), the Guardant360 liquid biopsy LDT has become widely accepted for blood-based CGP with more than 150 peer-reviewed publications.1 It has been used by more than 7,000 oncologists nationwide, and more than 150,000 Guardant360 tests have been performed to date.1 The test is broadly covered by Medicare and many private payers, representing over 170 million lives.1

"The FDA approval of Guardant360 CDx is a landmark decision, demonstrating the value liquid biopsy delivers to oncologists and more importantly, the patients they treat. Traditional tissue biopsy-based tumor profiling, which is often invasive and has longer turnaround times, can contribute to delays in starting treatment and possibly suboptimal therapy. We applaud the FDA for their collaborative review process and for approving the first comprehensive genomic profiling liquid biopsy test," said Helmy Eltoukhy, Guardant Health CEO. "We are confident that our FDA approval will help accelerate wider adoption of guideline-recommended genomic profiling, increase the number of advanced cancer patients who receive potentially life-changing treatments, and pave the way for new companion diagnostic developments for the Guardant360 CDx."

"Personalized medicines such as Tagrisso have been truly life-changing for many non-small cell lung cancer patients who have certain EGFR mutations and are most likely to benefit from this medicine," said Dr. Jhanelle Gray, Senior Member and Chair, Department of Thoracic Oncology, Co-Leader, Chemical Biology & Molecular Medicine Program, Moffitt Cancer Center. "It is crucial that all patients are comprehensively tested before starting treatment to ensure they receive the most appropriate personalized treatment option available."

Each year, more than 600,000 people die from cancer in the United States,2 many of whom may have benefitted from CGP to guide a more personalized treatment plan based on a growing list of effective CGP-informed targeted therapies. Already in 2020, more new targeted therapies have been approved by the FDA compared to previous years. Clinical studies show that patients receiving targeted therapies have improved progression-free survival and higher overall response rates relative to chemotherapy or immunotherapy.3-9 Clinical adoption of targeted therapies lags behind medical guidelines due to several factors, including insufficient tissue for biopsy, which is the case for as many as 30 percent of solid cancer patients.10-12

Since the company’s inception, Guardant Health has been dedicated to unlocking the potential of liquid biopsy to transform cancer by enabling precision oncology at all stages of the disease. The FDA approval of its Guardant360 CDx for tumor mutation profiling and as a companion diagnostic for Tagrisso (osimertinib) represents a critical milestone in the company’s mission to conquer cancer with data. The Guardant360 CDx is also being developed as a companion diagnostic for investigational products in development by other collaborators, including Amgen, Janssen Biotech, Inc., and Radius Health, Inc.

On August 7, 2020 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) ("Merrimack" or the "Company") reported its second quarter 2020 financial results for the period ended June 30, 2020 (Press release, Merrimack, AUG 7, 2020, View Source [SID1234563244]).

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"We are pleased by recent news releases from both Ipsen Pharmaceuticals and Elevation Oncology, which are conducting separate programs which could result in milestone payments to Merrimack. Ipsen announced receipt of Fast Track designation from the FDA for liposomal irinotecan (ONIVYDE) and also recently presented Phase I/II clinical data evaluating liposomal irinotecan (ONIVYDE) as an investigational first-line combination treatment for metastatic pancreatic cancer. Elevation Oncology has recently announced that it has raised $32.5 million in a Series A financing which will enable it to progress the clinical development of seribantumab" said Gary Crocker, Chairman of Merrimack’s Board of Directors. "In addition, Merrimack made continued progress in reducing our operating expenses during the second quarter of 2020, and we expect to see continued reductions during the second half of 2020."

Second Quarter 2020 Financial Results

Merrimack reported net loss of $1.2 million for the second quarter ended June 30, 2020, or $0.09 per basic share, compared to a net loss of $9.4 million, or $0.71 per basic share, for the same period in 2019.

No research and development expenses were recognized for the second quarter ended June 30, 2020 compared to $4.7 million for the same period in 2019.

General and administrative expenses for the second quarter ended June 30, 2020 were $1.2 million, compared to $5.9 million for the same period in 2019.

As of June 30, 2020, Merrimack had cash and cash equivalents and investments of $15.7 million, compared to $16.6 million as of December 31, 2019.

As of June 30, 2020, Merrimack had 13.4 million shares of common stock outstanding.

Updates on Programs Underlying Potential Milestone Payments

Ipsen Pharmaceuticals

On June 17, 2020 Ipsen Pharmaceuticals publicly announced that it had received FDA Fast Track designation for liposomal irinotecan (ONIVYDE) as a first-line combination treatment for metastatic pancreatic cancer.
On July 1, 2020 Ipsen Pharmaceuticals publicly announced that it has presented Phase I/II clinical data evaluating liposomal irinotecan (ONIVYDE) as an investigational first-line combination treatment for metastatic pancreatic cancer at the ESMO (Free ESMO Whitepaper) World Congress on Gastrointestinal Cancer, and confirmed that is has initiated the NAPOLI-3 Phase III clinical study (NCT04083235) comparing the safety and efficacy of liposomal irinotecan + 5-fluorouracil/leucovorin (5-FU/LV) + oxaliplatin (OX) (NALIRIFOX) to gemcitabine + nab-paclitaxel in the first-line setting.
Elevation Oncology

On July 21, 2020 Elevation Oncology publicly announced that it had raised a $32.5 M Series A financing to support various activities including the clinical development of seribantumab.

On August 7, 2020 Vigeo Therapeutics reported that it is expanding indications for its tumor microenvironment (TME)-targeting oncology platform, which inhibits tumor growth by reprogramming normal cells that were recruited and coopted by a tumor (Press release, Vigeo Therapeutics, AUG 7, 2020, View Source [SID1234563243]). Dose expansion for its Phase Ib/II study is ongoing for multiple solid tumors, and combination studies with immune checkpoint inhibitors and with standard-of-care chemotherapy are being planned for the latter half of this year.

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"The company was founded on the idea that targeting the tumor microenvironment (TME) is best strategy for treating cancer," Jing Watnick, Ph.D., CEO, said during a presentation at the LifeSci Partners Summer Symposium on August 5.

Vigeo’s platform approach "reprograms myeloid-derived suppressor cells in IO-cold patients’ TME, activates cytotoxic T lymphocyte (CTL) cells and M1 Tumor-associated macrophages (TAMs) in that microenvironment, and converts the environment from immuno-suppressive to immuno-stimulated," she explained.

Within the industry, therapeutic programs that target the tumor microenvironment have been beset by challenges "related to the size of the protein, delivery and stability," she said. "Our program lets us overcome those burdens."

VT1021, Vigeo’s lead compound, is a first-in-class CD36/CD47 dual-targeting compound.

"VT1021 is a five amino acid cyclic peptide derived from prosaposin (Psap). Psap is a precursor of saposin A, B, C and D, and functions as a lipid hydrolase activator," Watnick said.

The compound binds to myeloid-derived suppressor cells in the tumor microenvironment and induces the production of thrombospondin-1 (TSP-1) within the tumor. Then TSP-1 binds both to CD36 and CD47 to induce antitumor effects and therefore suppress the growth of tumors that have high expression of CD36 or CD47.

"That is a very important aspect of the compound," Watnick noted. "By binding to CD36, CD47, and other cell surface molecules, TSP-1 induces apoptosis in tumor and endothelial cells; regulates cell adhesion, migration, invasion, and proliferation; and modulates the immune and inflammatory responses. TSP-1 is fully activated in the TME."

Breaking down the interactions by binding site, she pointed out that when TSP-1 binds to CD36, it induces apoptosis in tumor and endothelial cells and increases the M1:M2 macrophage ratio, which affects cell adhesion and survival. By binding to CD47, TSP-1 stimulates CD8+ T cell functions, and also blocks what she called "do not eat me" signals, allowing the macrophages to kill the tumor cells. It also increases activity of CTL cells, allowing better targeting of tumor cells.

Compared to magrolimab, an anti-CD47 therapy, Watnick said, "VT1021 has 1,000 times more affinity than magrolimab, so it avoids the toxicity of some of the anti-CD47 programs. It also has the benefit of binding to CD36," which makes it more potent than anti-CD47 therapies.

In preclinical studies, VT1021 showed strong single-agent efficacy, exhibited by tumor regression and inhibition of metastasis in mouse models of ovarian, pancreatic, breast, glioblastoma, prostate, lung and melanoma solid tumors.

"What’s most interesting," Watnick said, "is that in the ovarian tumor model, we stopped treatment at day 50 and then re-challenged the model one month later. Within one week of re-administration, VT1021 again triggered antitumor activity and again caused tumor regression."

In the pancreatic tumor model, the tumor size was reduced by half between day 25, when the treatment was administered, and day 45 when the models were assessed. At that time, she continued, "The animals also had slightly higher M1:M2 ratios, which indicated that the treatment was reprogramming the microenvironment."

As Watnick noted, "Resistance to various chemotherapies strongly correlates to upregulation of CD47, which sensitizes cells to TSP-1-mediated killing. When combined with anti-PD-1 therapy, VT1021 alleviates several sources of tumor suppression." Vigeo expects to begin combination trials by year’s end.

In pancreatic cancer studies, combining VT1021 and an anti-PD-1 monoclonal antibody (mAb) resulted in synergistic effects that improved survival and regressed the tumor. Watnick showed data from a study by Sui, et al, scheduled for Nature later this year. In that chart, the longest survivability for subjects receiving the anti-PD-1 mAb was 35 days after the initial treatment; for those receiving VT1021, the longest survival was 40 days; and for those receiving the combination therapy the longest survival was 75 days.

Data from Vigeo Therapeutics’ dose escalation study also appeared promising. Of the 28 patients who could be evaluated, 43% achieved a partial response or disease stability. One (with thymoma, a tumor originating from the epithelial cells of the thymus) had a partial response that probably exhibited high expression levels of CD36 and CD47. "I said ‘probably’ because the size of the tumor was too small to biopsy, but a biomarker array analysis concluded it most likely had high expression levels of DC36 and CD47.

"The 11 who achieved disease stability had very striking binding, which made us very excited," she continued. Based on those indications, "High CD36 and CD47 expression with TSP-1 induction could be a very strong panel of indicators of clinical response."

That possibility is being evaluated in the clinic now.

Vigeo Therapeutics’ clinical trial development plan for VT1021 calls for completing the expansion studies for multiple indications, followed by an FDA meeting in 2021, leading to a monotherapy trial for select indications. Watnick said she is hoping for accelerated approval in 2023 and the onset of a confirmatory trial in 2024.

For combination trials, the company plans to stagger the launches for four indications. If they launch as scheduled, completion of the last trial is anticipated by the end of 2022.

The Cambridge, Massachusetts company raised a total of $27.5 million in Series A and Series B rounds through Morningside Venture Investments in 2015 and 2018. Now it is raising Series C funding to support continued clinical development.

"We’re thinking of going out aggressively, presenting our data to potential partners," Watnick added. "We’re open to discussions."

On August 7, 2020 Celyad Oncology SA (Euronext & Nasdaq: CYAD), a clinical-stage biotechnology company focused on the discovery and development of chimeric antigen receptor T cell (CAR T) therapies for cancer, reported its consolidated financial results for the first half of 2020 and provided its second quarter business update (Press release, Celyad, AUG 7, 2020, View Source [SID1234563242]).

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"In the first half of 2020, we’ve further strengthened our position as a leading innovator in the development of CAR T therapies for cancer with a steady stream of clinical and preclinical data across our development pipeline and technology platforms. The advancement of our allogeneic programs, including additional data we recently provided from the Phase 1 alloSHRINK trial evaluating CYAD-101 for the treatment of metastatic colorectal cancer, as well as our next-generation, non-gene edited CYAD-200 series of CAR T candidates, led by CYAD-211, for the treatment of multiple myeloma, supports our commitment to delivering next-generation CAR T candidates for the treatment of cancer," commented Filippo Petti, Chief Executive Officer of Celyad Oncology. "Our team is very excited by the significant progress we continue to make across our programs and has worked tirelessly throughout the COVID-19 pandemic to keep our programs on track to provide several clinical updates in the second half of 2020."

Second Quarter 2020 and Recent Business Highlights

Reported updates from the Company’s allogeneic CAR T franchise, including additional data from the Phase 1 alloSHRINK trial evaluating CYAD-101 for the treatment of metastatic colorectal cancer (mCRC) and its short hairpin RNA (shRNA) platform underpinning the next-generation, non-gene edited CYAD-200 series of CAR T candidates

Announced that the U.S. Food and Drug Administration (FDA) accepted the Investigational New Drug (IND) application for CYAD-211 and permitted it to go into effect for the treatment of relapsed or refractory multiple myeloma (r/r MM)

Granted four additional patents associated with the Company’s allogeneic CAR T patent estate

Awarded €3.3 million in non-dilutive funding from the Walloon Region of Belgium associated with CYAD-101
Launched the Company’s corporate rebranding, including changing its name to Celyad Oncology. The new name highlights the Company’s significant progress with its next-generation CAR T programs and emphasizes its commitment to cancer patients

Update on Clinical and Preclinical Programs

CYAD-101 – Allogeneic TIM-based, NKG2D CAR T for Refractory Metastatic Colorectal Cancer with Microsatellite Stable Disease

Celyad Oncology’s first-in-class, non-gene edited clinical candidate CYAD-101, which co-express NKG2D and the novel inhibitory peptide TIM (TCR Inhibitory Molecule), continues to advance in the alloSHRINK Phase 1 trial for the treatment of mCRC. During the American Society of Oncology (ASCO) (Free ASCO Whitepaper) Virtual Scientific Program, the Company presented data from the first fifteen patients enrolled in the ongoing alloSHRINK trial assessing safety and clinical activity of CYAD-101 administered following FOLFOX chemotherapy in refractory patients with advanced mCRC with microsatellite stable (MSS) disease:

Treatment with CYAD-101 was well-tolerated, with no clinical evidence of Graft-versus-Host Disease (GvHD) observed

In addition, anti-tumor activity was observed in the trial with two patients who achieved a confirmed partial response (PR), according to RECIST 1.1 criteria, and nine patients who achieved stable disease (SD), including two patients with SD through six months

Recent analysis of the dose-escalation segment of the alloSHRINK trial showed median progression free survival (mPFS) was 3.9 months for patients treated with CYAD-101 following FOLFOX chemotherapy

No correlation was observed between clinical responses and the degree of human leukocyte antigen (HLA) matching between patients and CYAD-101 donor cells, indicating that CYAD-101 can be used in a broad patient population regardless of the HLA haplotype

Celyad Oncology SA | Rue Édouard Belin 2, 1435 Mont-Saint-Guibert, Belgium | +32 10 39 41 00

The expansion cohort of the alloSHRINK trial will evaluate CYAD-101 following FOLFIRI preconditioning chemotherapy in refractory mCRC patients with MSS disease, at the recommended dose of one billion cells per infusion. Enrollment in the expansion cohort of the study is expected to begin during the fourth quarter of 2020.

CYAD-211 – Allogeneic shRNA-based, BCMA CAR T for Relapsed or Refractory Multiple Myeloma

CYAD-211 is the lead program from the Company’s CYAD-200 series of proprietary non-gene edited allogeneic short hairpin (shRNA)-based CAR T candidates. CYAD-211 is engineered to co-express a BCMA-targeting chimeric antigen receptor and a single shRNA, which interferes with the expression of the CD3z component of the T-cell receptor (TCR) complex. In July 2020, the IND application for CYAD-211 went into effect with the FDA, and the Company plans to initiate the Phase 1 IMMUNICITY trial evaluating CYAD-211 following preconditioning chemotherapy in r/r MM by year-end 2020.

CYAD-01 – Autologous NKG2D CAR T for Relapsed or Refractory Acute Myeloid Leukemia and Myelodysplastic Syndrome

The Company’s first-in-class NKG2D CAR T clinical candidate CYAD-01 continues to advance in the ongoing Phase 1 THINK trial for the treatment of patients with relapsed or refractory acute myeloid leukemia (r/r AML) and myelodysplastic syndrome (MDS). Based on preliminary clinical activity data from the dose-escalation Phase 1 DEPLETHINK trial, the Company has deprioritized the trial and stopped enrollment. The Company expects to announce preliminary data from CYAD-01 produced with the OptimAb manufacturing process from the expansion cohort of the Phase 1 THINK trial by year-end 2020.

CYAD-02 – Autologous NKG2D CAR T for Relapsed or Refractory Acute Myeloid Leukemia and Myelodysplastic Syndrome

In January 2020, the Company announced that the first patient was dosed in the Phase 1 dose-escalation CYCLE-1 trial evaluating CYAD-02 for the treatment of r/r AML and MDS. In July 2020, the Company began enrollment in the third dose cohort of the trial. The CYCLE-1 trial is assessing the safety and clinical activity of a single infusion of CYAD-02 produced with the OptimAb manufacturing process following preconditioning chemotherapy with cyclophosphamide and fludarabine. Preliminary data from CYCLE-1 trial are expected by year-end 2020.

Upcoming Milestones

Plan to begin enrollment in the expansion cohort of the Phase 1 alloSHRINK trial evaluating CYAD-101 following FOLFIRI preconditioning chemotherapy in refractory mCRC patients with MSS disease during the fourth quarter of 2020

Report additional data from the CYAD-01 program in r/r AML and MDS, including the dose-expansion cohort of the Phase 1 THINK trial by year-end 2020

Report preliminary data from the dose-escalation Phase 1 CYCLE-1 trial evaluating CYAD-02 in r/r AML and MDS by year-end 2020
Expect to initiate the dose-escalation Phase 1 trial evaluating CYAD-211 in r/r MM by year-end quarter 2020

COVID-19 Update

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. As of the date of our half year report, Belgium and United States, where the Company operates, continues to be impacted by the pandemic. The length or severity of this pandemic cannot be predicted, but the Company anticipates that there may be an additional impact from a prolonged COVID-19 environment on the planned development activities of the Company.

To date, COVID-19 has had no impact on the Company’s financial statements and corporate cash flow, and the Company expects that its existing treasury position will be sufficient, based on the current scope of activities, to fund operating expenses and capital expenditure requirements into third quarter 2021.

As previously disclosed, the coronavirus pandemic has led to enrollment delays in the Company’s Phase 1 clinical trials within its relapsed/refractory acute myeloid leukemia and myelodysplastic syndromes program. Principally, for several weeks between March and April 2020, the Company experienced a delay in enrollment in the CYAD-01 THINK and DEPLETHINK trials as multiple clinical trial sites, both in Belgium and the United States, paused activities associated with new patient enrollment to prioritize resources to patients with COVID-19. By the end of the second quarter, recruitment in the CYAD-01 THINK and DEPLETHINK trials had recovered. In comparison, enrollment in the CYAD-02 CYCLE-1 dose-escalation trial was less affected by the coronavirus pandemic, partially due to the staggered enrollment associated with the trial.

Operations and timelines associated with the Company’s allogeneic programs, CYAD-101 and CYAD-211, have been insignificantly impacted by the coronavirus pandemic given activities over the first half of 2020 were primarily focused on non-clinical workstreams, including the technology transfer of CYAD-101 into its manufacturing facility in Mont-Saint-Guibert, Belgium and the submission of the IND application for CYAD-211, which in July 2020, the Company announced that the IND application for CYAD-211 is in effect with the FDA.

The long-term impact of COVID-19 on the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted, including a potential second wave of the pandemic, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among other things, but potential prolonged closures or other business disruptions may negatively affect its operations and the operations of its agents, contractors, consultants or collaborators, which could have a material adverse impact its business, results of operations and financial condition.

The Company’s license and collaboration agreements generated nominal revenue in the first half of 2020 similar to first half 2019.

Research and Development expenses were €11.1 million for the first half of 2020, compared to €12.7 million for the first half of 2019. The €1.6 million decrease was primarily driven by lower preclinical and process development expenses and decreased clinical costs associated with the autologous r/r AML and MDS franchise.

General and Administrative expenses were €4.8 million for the first half of 2020, compared to €4.5 million for the first half of 2019. The difference of €0.3 million was primarily due to increased insurance costs for the period.

The Company’s other income/other expenses mainly include non-cash expenses relating to contingent consideration liability reassessment required by International Financial Reporting Standards (IFRS), with the liability mainly associated with the advancement in the Company’s NKG2D-based CAR T candidates. Overall, the Company posted a €0.6 million in other expenses for the first half of 2020 compared to a net other income of €1.3 million for the first half of 2019. The net other loss for the first half of 2020 is primarily due to the fair value adjustment related to a €2.4 million expense on the contingent consideration and other financial liabilities partially compensated by additional grant income from the Walloon Region of €1.6 million during the period.

Net loss was €16.6 million, or €(1.19) per share, for the first half of 2020 compared to a net loss of €16.0 million, or €(1.34) per share, for the same period of 2019. The increase in net loss between periods was primarily due to the decrease in net other income. Net cash used in operations, which excludes non-cash effects, was €14.6 million for the first half of 2020, compared to €16.1 million for the first half 2019. The difference was driven primarily by a decrease in spend associated with Research and Development as described above.

As of June 30, 2020, Celyad Oncology had a treasury position of approximately €26.7 million ($30.0 million). The Company expects that the existing treasury position will be sufficient, based on the current scope of activities, to fund operating expenses and capital expenditure requirements into the third quarter of 2021.

Update on New Funding from the Walloon Region of Belgium

In July 2020, the Company was awarded €3.3 million in non-dilutive funding in the form of recoverable cash advances by the Walloon Region associated with Company’s lead allogenic CAR T candidate CYAD-101. The regional funding will help support the development of CYAD-101 for the treatment of mCRC, including the launch of the expansion segment of the ongoing alloSHRINK trial. The funding for technological innovation received on behalf of the Walloon Region was approved by Mr. Willy Borsus, Vice President of Wallonia, Minister of Economy, Foreign Trade, Research and Innovation, Digital, Agriculture and Territorial Development. Under the applicable conditions, the recoverable cash advance is reimbursable over the economic life of the projects. Thirty percent is refundable based on a fixed reimbursement schedule of 20 years, while the balance is refunded under the form of royalties over the same period.

Celyad Oncology First Half 2020 Conference Call Details

Date: Friday, August 7, 2020

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

Conference ID: 13706543

Dial-in: +1 201 493 6784 (International), +1 877 407 9208 (United States) or +32 (0) 800 739 04 (Belgium)

Additionally, investors can use the Live Event Call me Link (Available 15 minutes prior to start time for participant entry) if they wish to have the conference call provider to dial out to them directly to access the live call. If you wish to take advantage of this service, please click on this link, and fill in the information, and then press the green phone button at the bottom.

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