On November 21, 2022 ERYTECH Pharma (Nasdaq & Euronext: ERYP), a clinical-stage biopharmaceutical company developing innovative therapies by encapsulating therapeutic drug substances inside red blood cells, reported a business and financial update for the third quarter of 2022 (Press release, ERYtech Pharma, NOV 22, 2022, View Source [SID1234624345]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"After the setback of our failed Phase 3 trial in pancreatic cancer, we have sharply reduced our costs and focused our resources on our most promising preclinical programs, in particular our red-blood cell derived extracellular vesicles (EV) platform, a platform for which we see increasingly interesting opportunities", said Gil Beyen, Chief Executive Officer of ERYTECH. "The pursuit of strategic options for ERYTECH is continuing and valuable options are under evaluation."

Business Highlights

•Graspa program halted after FDA feedback on envisaged BLA submission in hypersensitive ALL

Considering also the earlier setback of a failed Phase 3 trial in pancreatic cancer, and a non-conclusive early readout of first patients in a Phase 2 trial in TNBC, both with the same product candidate, ERYTECH concluded to halt further development with Graspa, L-asparaginase encapsulated in donor red blood cells, until then the lead candidate for ERYTECH, and focus on its most promising preclinical programs.

•Promising preclinical development with ERYCEVTM, novel red blood cell vesiculation technology

RBC-derived extracellular vesicles are formed naturally during senescence and storage of mature RBCs and are a potentially attractive drug delivery system. Vesiculation of RBCs that have already been loaded with active therapeutic compounds utilizing the ERYCAPS process, entails the potential of producing cargo-loaded RBC-derived extracellular vesicles for the development of novel therapeutic approaches.

ERYCEV results to date illustrate the versatility of ERYTECH’s encapsulation science in RBCs and its potential for leverage in further partnered developments.

•Deep restructuring implemented

Linked to the halt of the Company’s lead program Graspa, a restructuring program was initiated earlier this year. The staff reduction in France was approved by labor authorities in September 2022 and is almost fully implemented. Combined with the approximately 40 people who transferred to Catalent after the sale of the Company’s manufacturing facility in Princeton, the global team size will be less than 25% compared to the start of this year. The Company has retained its R&D team and its expertise in key functional areas to keep the ability to restart a pipeline of partnered development programs and maintain a fully operational dual-listed company.

•Good progress on strategic review and partnering alternatives

ERYTECH has continued to evaluate further valuable strategic options to potentially leverage its assets and capabilities in a business combination with a strategic partner. Valuable options are still under discussion and the Company expects to give further updates on these strategic initiatives before the end of this year.

Q3 2022 Financial Results

•Key financial figures for the first nine months of 2022 compared with the same period of the previous year are summarized below:
In thousands of euros
Q3 2022
(9 months)
Q3 2021
(9 months)
Revenues
—
—
Other income
1,423
3,402
Net gain on asset sale
24,351
—
Operating income
25,774
3,402
Research and development
(20,377)
(34,728)
General and administrative
(10,870)
(12,242)
Operating expenses
(31,248)
(46,770)
Operating income (loss)
(5,474)
(43,368)
Financial income
4,031
4,356
Financial expenses
(881)
(2,570)
Financial income (loss)
3,150
1,786
Income tax
(3,839)
(2)
Net loss
(6,163)
(41,584)

•Net loss for the first nine months of 2022 was €6.2 million, a €35.4 million improvement over the same period of last year, reflecting the €24.4 million net gain on the sale of the Princeton facility, and the sharp decrease in operating expenses, which, at €31.2 million of expenses at the end of the third quarter of this year, were also showing an accelerated decrease of €15.5 million (-33%) year-over-year, with a €14.4 million decrease in R&D expenses, related to the gradual termination of clinical programs, and a €1.4 million decrease in G&A.

•Total operating expenses of €31.2 million included an impairment provision of €2.5 million on the Lyon production facility, related to the end of eryaspase operations, and a €1.9 million provision for restructuring, related to the resizing of French operations and staff.

•Income tax included in 2022 a provision of €3.8 million ($4.1 million), reflecting the maximal potential tax impacts of the capital gain from the sale of the Princeton facility.

•As of September 30, 2022, ERYTECH had cash and cash equivalents totaling €47.3 million (approximately $46.3 million), compared with €33.7 million as of December 31, 2021. The €13.6 million net increase in cash position during the first nine months of 2022 was the result of the net cash of €37.6 million received from the sale of the Princeton facility, a €26.4 million net cash utilization in operating activities and investing activities (excluding the sale of the Princeton facility) and €1.6 million generated in financing activities, including €3.0 million in pre-funding of the expected 2021 R&D tax credit, while the variation of the U.S. dollar against the euro led to a €1.7 million positive currency exchange impact.

•Earlier this year, the company initiated a deep restructuring and cost reduction program, then further intensified with the halt of the Graspa program and BLA process. Considering this ongoing reduction in operating expenses, the Company believes that its current cash position can fund its current programs and planned operating expenses to mid-2024.

Key News Flow and Milestones Expected Over the Next 6 Months

•Update on partnering discussions
•Update on preclinical programs

Q3 2022 Conference Call Details

ERYTECH management will hold a conference call and webcast on Tuesday, November 22, 2022, at 8:30am ET / 2:30pm CET on the business highlights and financial results for the third quarter of 2022. Gil Beyen, CEO, Eric Soyer, CFO/COO, and Iman El-Hariry, CMO, will deliver a brief presentation, followed by a Q&A session.

The audio call is accessible via the below registering link: https://register.vevent.com/register/BIc889e8a2dac94ba08d4c3c7c28bd4976

Once registered, participants will receive a unique access code and the call number details to join the teleconference.

The webcast can be followed live online via the link:
View Source

In addition, the replay of the webcast will be available for a period of one year on this same link.