Annual Report
2021
www.celyad.com
2021 ANNUAL REPORT
2021 Annual Report
Table of Contents
SHAREHOLDERS NEWSLETTER
1. ACTIVITY REPORT .............................................................................................................................. 10
1.1 Who we are - Business Overview ................................................................................................. 10
1.2 Our Strategy ................................................................................................................................. 13
1.3 What differentiates Celyad Oncology? .......................................................................................... 15
1.4 Our Activities and R&D ................................................................................................................. 16
1.5 Lead Programs ............................................................................................................................. 18
1.6 Licensing and Collaboration Agreements ..................................................................................... 22
1.7 Our Manufacturing Capabilities ..................................................................................................... 26
1.8 Our shareholding structure ........................................................................................................... 26
1.9 Post balance sheet events ............................................................................................................ 26
1.10 Our capital expenditures ............................................................................................................... 27
1.11 Financial review of the year ending December 31, 2021 .............................................................. 27
1.11.1. Analysis of the consolidated income statement .............................................................. 27
1.11.2. Analysis of the consolidated statements of financial position ......................................... 29
........................................................ 32
1.11.3. Analysis of the consolidated net cash burn rate
1.12 Personnel ...................................................................................................................................... 33
1.13 Environment .................................................................................................................................. 33
1.14 Going concern
......................................................................................................................... 33
1.15 Risks and uncertainties ................................................................................................................. 34
1.16 Events and circumstances that could have a significant impact on the future .............................. 35
2. CORPORATE GOVERNANCE ............................................................................................................. 36
2.1 General ......................................................................................................................................... 36
2.2 Board of Directors ......................................................................................................................... 36
2.2.1. Composition of the Board of Directors ............................................................................ 36
2.2.2. Board resolutions ............................................................................................................ 40
2.2.3. Director Independence ................................................................................................... 41
2.2.4. Role of the Board in Risk Oversight ................................................................................ 42
2.2.5. Committees within the Board of Directors ....................................................................... 42
2.2.6. Meetings of the Board and the committees..................................................................... 44
2.3 Executive Committee .................................................................................................................... 45
2.4 Conflict of Interest of Directors and members of the Executive Committee and transactions with
affiliated companies ...................................................................................................................... 48
2.4.1. General ........................................................................................................................... 48
2.4.2. Conflicts of interest of Directors ...................................................................................... 48
2.4.3. Existing conflicts of interest of members of the Board of Directors ................................. 48
2.4.4. Related Party Transactions ............................................................................................. 52
2.4.5. Transactions with affiliates .............................................................................................. 52
2.4.6. Code of Business Conduct and Ethics ............................................................................ 52
2.4.7. Market abuse regulations................................................................................................ 53
2.5 Corporate Governance Code ........................................................................................................ 53
2.6 Remuneration Policy ..................................................................................................................... 54
2.6.1.
Introduction ..................................................................................................................... 54
2.6.2. Remuneration of the Board of Directors ......................................................................... 54
2.6.3. Remuneration of the Executive Committee..................................................................... 56
2.6.4. Deviations from this Policy .............................................................................................. 60
2.7 Remuneration report ..................................................................................................................... 61
2.7.1.
Introduction ..................................................................................................................... 61
2.7.2. Total Remuneration ........................................................................................................ 62
2.7.3. Share-based Remuneration ............................................................................................ 65
2.7.4. Termination Indemnities ................................................................................................. 75
2.7.5. Use of the possibility to reclaim the variable remuneration ............................................. 75
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2.7.6. Deviations from the Remuneration Policy ....................................................................... 75
2.7.7. Evolution of the remuneration and the performance of the company and ratio ............... 75
2.7.8. Taking into consideration of the vote of the shareholders ............................................... 76
2.7.9. Statutory Auditor ............................................................................................................. 76
2.8 Description of the principal risks associated to the activities of the Group .................................... 77
2.8.1. Risk Management ........................................................................................................... 77
2.8.2. Organization and values ................................................................................................. 77
2.8.3. Risks analysis ................................................................................................................. 78
2.8.4. Risks related to the Company’s financial position and capital requirements ................... 78
2.8.5. Risks related to Company’s business activities and industry .......................................... 80
2.8.6. Risks related to clinical development....................................................................... 82
2.8.7. Risks related to legal and regulatory risks .............................................................. 85
2.8.8. Risks related to intellectual property ....................................................................... 86
2.8.9. Post-authorisation risks .............................................................................................. 89
2.8.10. Risks linked to the Company’s reliance on third parties ....................................... 89
2.8.11. Risks related to the shares ........................................................................................ 91
2.8.12. Audit activities ................................................................................................................. 93
2.8.13. Controls, supervision and correctives actions ................................................................. 93
3. GROUP STRUCTURE, SHAREHOLDING AND SHARE CAPITAL .................................................... 95
3.1 Group structure ............................................................................................................................. 95
3.2 Capital increase and issuance of shares ...................................................................................... 96
3.3 Warrants plans .............................................................................................................................. 97
3.4 Changes to the share capital ........................................................................................................ 98
3.5 Major Shareholders....................................................................................................................... 98
3.6 Anti-takeover provisions under Belgian laws ................................................................................ 99
3.7 Financial services ....................................................................................................................... 102
4. CONSOLIDATED FINANCIAL STATEMENTS .................................................................................. 103
4.1 Responsibility statement ............................................................................................................. 103
4.2 Statutory auditor’s report to the general meeting of shareholders of Celyad Oncology SA for the
year ended December 31, 2021 (consolidated financial statements) ......................................... 104
4.3 Consolidated financial statements as at December 31, 2021 ..................................................... 109
4.3.1. Consolidated statements of financial position ............................................................... 109
4.3.2. Consolidated statements of comprehensive loss .......................................................... 110
4.3.3. Consolidated statements of changes in equity .............................................................. 111
4.3.4. Consolidated statements of Cash flows ........................................................................ 112
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ....................................................... 113
5.1 General information .................................................................................................................... 113
5.2 Basis of preparation and significant accounting policies ............................................................. 113
5.2.1. Basis of preparation ...................................................................................................... 113
5.2.2. Consolidation ................................................................................................................ 115
5.2.3. Foreign currency translation ......................................................................................... 115
5.2.4. Revenue ....................................................................................................................... 116
5.2.5. Other income ................................................................................................................ 117
5.2.6.
Intangible assets ........................................................................................................... 119
5.2.7. Property, plant and equipment ...................................................................................... 121
Leases .......................................................................................................................... 121
5.2.8.
5.2.9.
Impairment of non-financial assets ............................................................................... 122
5.2.10. Cash and cash equivalents ........................................................................................... 123
5.2.11. Financial assets ............................................................................................................ 123
5.2.12. Financial liabilities ......................................................................................................... 125
5.2.13. Provisions ..................................................................................................................... 126
5.2.14.
Income Taxes ............................................................................................................... 128
5.2.15. Earnings (loss) per share .............................................................................................. 128
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5.2.16. Equity ........................................................................................................................... 129
5.3 Risk Management ....................................................................................................................... 129
........................................................................ 130
5.4 Critical accounting estimates and judgments
5.5 Operating segment information ................................................................................................... 132
Intangible assets ......................................................................................................................... 133
5.6
Intangible assets details and balance roll forward ........................................................ 133
5.6.1.
Impairment testing ........................................................................................................ 135
5.6.2.
5.7 Property, plant and equipment .................................................................................................... 137
5.8 Non-current trade receivables and other non-current assets ...................................................... 138
5.9 Trade receivables and other current assets ................................................................................ 139
5.10 Short-term investments ............................................................................................................... 139
5.11 Cash and cash equivalents ......................................................................................................... 139
5.12 Subsidiaries fully consolidated .................................................................................................... 140
5.13 Share Capital .............................................................................................................................. 140
5.14 Share-based payments ............................................................................................................... 145
5.15 Post-employment benefits .......................................................................................................... 149
5.16 Recoverable Cash Advances ...................................................................................................... 151
5.17 Other non-current liabilities ......................................................................................................... 153
5.18 Trade payables and other current liabilities ................................................................................ 153
5.19 Financial liabilities ....................................................................................................................... 154
5.19.1. Maturity analysis ........................................................................................................... 154
5.19.2. Changes in liabilities arising from financing activities ................................................... 155
5.20 Financial instruments .................................................................................................................. 156
5.20.1. Financial instruments not reported at fair value on statement of financial position ....... 156
5.20.2. Financial instruments reported at fair value on statement of financial position ............. 156
5.21 Income taxes .............................................................................................................................. 159
5.22 Other reserves ............................................................................................................................ 161
5.23 Revenue ..................................................................................................................................... 161
5.24 Research and Development expenses ....................................................................................... 162
5.25 General and Administrative expenses ........................................................................................ 162
5.26 Depreciation and amortization .................................................................................................... 163
5.27 Employee benefit expenses ........................................................................................................ 163
5.28 Change in fair value of contingent consideration, other income and other expenses ................. 163
5.29 Non-recurring operating income and expenses .......................................................................... 165
5.30 Leases ........................................................................................................................................ 165
5.31 Finance income and expenses ................................................................................................... 167
5.32 Loss per share ............................................................................................................................ 167
5.33 Contingent assets and liabilities .................................................................................................. 167
5.34 Commitments .............................................................................................................................. 168
5.34.1. Celdara ......................................................................................................................... 168
5.34.2. Horizon Discovery / PerkinElmer .................................................................................. 169
5.34.3. Other Commitments ...................................................................................................... 170
5.35 Related-party transactions .......................................................................................................... 170
5.35.1. Remuneration of key management ............................................................................... 170
5.35.2. Transactions with non-executive directors .................................................................... 171
5.35.3. Transactions with shareholders .................................................................................... 171
5.36 Events after the close of the fiscal year ...................................................................................... 171
5.37 Statutory accounts as of December 31, 2021 and 2020 according to Belgian GAAP ................. 172
5.37.1. Balance Sheet .............................................................................................................. 172
5.37.2.
Income statement ......................................................................................................... 173
5.37.3. Notes ............................................................................................................................ 174
5.37.4. Summary of valuation rules .......................................................................................... 178
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2021 Annual Report
ANNUAL REPORT 2021
This Annual Report (the “Report”) is dated March 24, 2022 and contains all required information as per the
Belgian Code of the Companies and Associations (the “CCA”).
The affiliates included in this Report are Celyad Oncology SA, Biological Manufacturing Services SA, Celyad
Inc., and CorQuest Medical Inc.
Celyad Oncology SA and its affiliates will be collectively referred to as “the Company”, “the Group”, “Celyad”,
“we” or “us”.
LANGUAGE OF THE REPORT
The Company publishes this Report in French, in accordance with Belgian laws. The Company also provides
an English translation. In case of a difference of interpretation, the French version will prevail.
AVAILABILITY OF THE REPORT
A printed copy of the Report is available free of charge upon request to:
Celyad Oncology SA
Investor Relations
Rue Edouard Belin 2,
B-1435 Mont-Saint-Guibert, Belgium
Tel: +32 10 394100
E-mail: investors@celyad.com
An electronic version of this Report is available on the Company website: http://www.celyad.com/investors/regulated-information
FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements, within the meaning of applicable securities laws, including the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements regarding: the KEYNOTE-B79 trial and the clinical hold.
Forward-looking statements may involve known and unknown risks and uncertainties which might cause actual results, financial condition,
performance or achievements of Celyad Oncology to differ materially from those expressed or implied by such forward-looking statements.
Such risks and uncertainties can be found in Celyad Oncology’s U.S. Securities and Exchange Commission (SEC) filings and reports,
including in the latest Annual Report on Form 20-F filed with the SEC and subsequent filings and reports by Celyad Oncology. These
forward-looking statements speak only as of the date of publication of this document and Celyad Oncology’s actual results may differ
materially from those expressed or implied by these forward-looking statements. Celyad Oncology expressly disclaims any obligation to
update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement is based, unless required by law or regulation.
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2021 Annual Report
Shareholder Letter
Dear Shareholder,
Over 2021, the hard work and dedication of the entire Celyad Oncology team has helped us to continue to
make steady progress advancing our mission to develop next-generation allogeneic CAR T candidates that
offer new therapeutic options to cancer patients with poor prognosis. Our development pipeline has
continued to transition to an allogeneic strategy centered around i) our single-step engineering, All-in-One
vector approach and ii) our proprietary non-gene edited technologies including short hairpin RNA (shRNA)
and T cell receptor Inhibitory Molecule (TIM). Throughout the past twelve months, we’ve announced
encouraging clinical data from our programs at major scientific conferences and further built our position as
a leader in the field of allogeneic CAR T cell therapies.
Reflecting and Driving the “CAR” Forward
At Celyad Oncology (the “Company”), we have made it a priority to leverage our expertise, experience and
technology to establish the Company as a leader in the investigational allogeneic CAR T therapy space.
Although the patient-derived autologous approach has been successful in some malignancies, there remains
a great need for therapies in other kinds of tumors that could benefit from the “off-the-shelf" allogeneic
approach.
Right now, we are particularly excited about our shRNA technology platform. This differentiated technology
allows us to modulate gene expression without the need for gene-editing or the use of multiple vectors.
Importantly, with shRNA technology, we can adjust expression of key genes to create investigational
allogeneic cell therapies. With shRNA, we seek to interfere with the expression of the CD3ζ component of
the T cell receptor complex, while improving the overall profile of these cutting-edge candidates with less
complexity of multi-vector approaches. We truly believe there’s tremendous potential for implementing
shRNA technology in the development of next-generation allogeneic CAR T cell therapies and we’re only
beginning to scratch the surface.
Focused on Execution
In 2021, we reported several important clinical milestones as we continued to deliver on our goal of
advancing our pipeline of investigational allogeneic CAR T therapies.
At the 63rd American Society of Hematology (ASH) Annual Meeting and Exposition we presented the latest
clinical data from the dose-escalation segment of the IMMUNICY-1 Phase 1 trial evaluating CYAD-211, a
shRNA-based anti-BCMA allogeneic CAR T candidate. These data showed evidence of initial clinical activity
for CYAD-211 in patients with relapsed or refractory multiple myeloma (r/r MM) with a good tolerability profile,
including no evidence of Graft-versus-Host Disease, or GvHD, and preliminary cell engraftment. The next
segment of the IMMUNICY-1 study will evaluate CYAD-211 following enhanced lymphodepleting regimens
with the aim to improve cell persistence and potentially maximize the clinical benefit of anti-BCMA cell
therapy. In addition, the IMMUNICY-1 protocol allows for redosing of CYAD-211 in certain patients.
Enrollment in the IMMUNICY-1 trial is ongoing with additional data expected in the second half of 2022.
In December 2021, we announced dosing the first patient in the KEYNOTE-B79 Phase 1b trial evaluating
our TIM-based NKG2D receptor allogeneic candidate, CYAD-101, with MSD’s anti-PD-1 therapy,
KEYTRUDA® (pembrolizumab), in patients with refractory metastatic colorectal cancer (mCRC) with
microsatellite stable (MSS)/mismatch-repair proficient disease. Unfortunately, February 2022 brought an
unexpected challenge, and we voluntarily paused this trial and subsequently announced an FDA hold.
Patient safety is our number one priority, and we are currently working to investigate these events. We plan
to have an update for stakeholders in the near future.
In July 2021, we introduced our armored CAR T franchise centered on the proinflammatory cytokine
interleukin-18, or IL-18. IL-18’s dual mechanism of action directly potentiates the anti-cancer activity of CAR
T cells while also altering the balance of pro- and anti-inflammatory cells within the tumor microenvironment.
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Currently, we are conducting Investigational New Drug (IND)-enabling studies for CYAD-203, our first
shRNA-based allogeneic armored CAR T candidate engineered to co-express IL-18 with the NKG2D CAR
receptor. We anticipate the submission of an IND application for CYAD-203.
Lastly, regarding our next-generation autologous NKG2D CAR T candidate CYAD-02, we announced the
latest data from the program at ASH in December 2021. Results from the CYCLE-1 trial evaluating CYAD-
02 for the treatment of relapsed or refractory (r/r) acute myeloid leukemia (AML) and myelodysplastic
syndromes (MDS) indicated that a single shRNA can target two independent genes to optimize CAR T cell
phenotype. We believe clinical data from CYCLE-1 support the potential and versatility of the shRNA
platform while further validating its uniqueness among currently available gene-expression control
technologies for the development of next-generation CAR T therapies.
Focused on the Future
As we evaluate our progress, it is important to remember that the true potential for our company and its
technologies reaches far beyond the current development pipeline. I’m deeply grateful to all of our team
members who tirelessly deliver each and every day with dedication in pursuit of our mission to develop
innovative cell therapies against cancer.
The value and opportunity provided by our team, development pipeline and underlying platform technologies
are key points of focus for our investors. We remain steadfast in the goal of furthering our pipeline of
investigational allogeneic CAR T therapies in this new year. We appreciate the ongoing support of our
investors as we execute on our growth strategy. On behalf of the entire Celyad Oncology team and board
members, I wish you and your loved ones a happy, healthy and fulfilling 2022!
Regards,
Filippo Petti, CEO Celyad Oncology
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1. Activity Report
1.1 Who we are - Business Overview
We are a clinical-stage biotechnology company focused on the discovery and development of chimeric
antigen receptor T cell (CAR T) therapies for cancer. Our goal is to discover, develop and commercialize
our next-generation CAR T cell therapy product candidates, if approved. We are currently developing a
diversified pipeline of allogeneic and autologous CAR T cell therapy candidates for the treatment of both
hematological malignancies and solid tumors.
Our differentiated pipeline of next generation CAR T candidates is based off the two main approaches in the
field of CAR T: allogeneic, or off-the-shelf, and autologous, or personalized, therapies. Allogeneic CAR T
cells are prepared in advance from healthy donors and are stored frozen until a patient requires treatment.
With the autologous approach, CAR T cells are derived from the patients themselves, first by collection of
the patient’s immune cells through a process called leukapheresis, and then the patient’s cells are
engineered and reintroduced back into the patient via infusion.
Over the past few years, as the CAR T landscape has shifted towards pursuing off-the-shelf approaches,
we have continued to steadily progress our allogeneic CAR T franchise and programs by exploring two
proprietary, non-gene edited technology platforms to target the T cell receptor (TCR) complex – short hairpin
RNA (shRNA) and T cell receptor inhibitory molecule (TIM). In allogeneic adoptive cell therapy, the infusion
of donor-derived T cells to cancer patients with a different background than that of the donor may lead to
multiple reactions. These reactions include the donor cells attacking the patient’s healthy tissue, known as
Graft-versus-Host disease (GvHD), as well as the rejection of the therapy by the patient’s immune system
known as Host-versus-Graft (HvG) reaction.
The TCR, a molecule present on the surface of T cells, is principally responsible for GvHD. At the center of
allogeneic CAR T therapy, the goal is to eliminate or blunt the signaling of the TCR through engineering with
a specific technology. By reducing the signaling of the TCR, the engineered allogeneic CAR T cells fail to
recognize the patient’s healthy tissue as foreign, which avoids GvHD.
We believe non-gene edited technologies offer the opportunity to target the TCR specifically without
extensive genetic manipulation. Through the co-expression of our non-gene edited technologies with a
specific CAR of interest, we can design cell therapy candidates intended to inhibit the function of the TCR
while allowing the donor-derived T cells to target the cancer. We believe this unique strategy offers a
streamlined approach in advancing the allogeneic CAR T landscape.
Our proprietary non-gene edited technologies, shRNA and TIM, offer a unique strategy and streamlined
approach to allogeneic CAR T development:
• Short hairpin RNA (shRNA). shRNA is a dynamic, innovative technology that relies on RNA
interference. The technology allows for the development of allogeneic CAR Ts through the selection
of an optimal shRNA, targeting CD3ζ, a key component of the TCR complex. This results in durable
high-level knockdown of the TCR on T cells to a level equivalent to that seen if the CD3ζ gene was
gene edited with CRISPR/Cas9. In preclinical experiments, the persistence of non-CAR-bearing
allogeneic T cells generated with shRNA was statistically superior to similar cells generated with
CRISPR/Cas9. Preclinical models have also shown the broad applicability of shRNA technology to
knockdown a diverse set of gene targets, including beta-2-microglobulin (B2M), CD52, PD-1,
MICA/MICB and the intracellular lipid kinase diacylglycerol kinase (DGK). In addition, we have
demonstrated concurrent knockdown of multiple gene targets, or multiplexing, using our shRNA
technology platform.
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2021 Annual Report
•
T cell Inhibitory Molecule (TIM). Our novel TIM peptide interferes with the ability of the TCR to signal
and is designed to prevent GvHD. TIM is a truncated form of the CD3ζ component of the TCR
complex which lacks the critical signaling domains of the wild-type CD3ζ. In our allogeneic CAR T
candidate CYAD-101, TIM is co-expressed with a NKG2D CAR to reduce the potential of the TCR
to induce GvHD. Following the expression of TIM, the peptide acts as a competitive inhibitor to
wild-type CD3ζ and is incorporated into the TCR complex.
Central to our pipeline is a cutting-edge All-in-One vector approach where we focus on using a single vector
to generate CAR T cells to simplify the design and development of our cell therapy candidates. The All-in-
One vector approach encodes multiple components of the CAR T construct simultaneously, including the
CAR, our non-gene editing technologies including shRNA and TIM, cell selection marker to assist with the
enrichment of the manufactured cells and potential therapeutic add-ons such as cytokines. This single
transduction, plug and play approach to CAR T development has the potential to streamline process
development and manufacturing while broadening the potential applicability of our candidates.
Schematic of our All-in-one Vector Approach:
shARCTM Platform
Our shRNA armored CAR T, or shARC, platform combines CARs developed
using our shRNA technology along with the co-expression of cytokines, including
interleukin-18 (IL-18), and is designed to provide a more robust CAR T cell
therapy to enhance anti-tumor effects and optimize therapy for cancer patients.
Specifically, IL-18 is a proinflammatory cytokine that directly potentiates the anti-cancer activity of CAR T
cells while also altering the balance of pro- and anti-inflammatory cells within tumor tissue. We are currently
exploring additional platform assets with specific cytokines in our preclinical pipeline.
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Our CAR T Pipeline
The pipeline below presents our allogeneic and autologous product candidates.
2021 Annual Report
AML: Acute myeloid leukemia; BCMA: B-cell maturation antigen; mCRC: Metastatic colorectal cancer; MDS:
Myelodysplastic syndrome; MM: Multiple myeloma; NKG2DL: Natural killer group 2D ligands; r/r: relapse/refractory.
Our lead product candidates include:
• CYAD-101. CYAD-101 is an investigational, non-gene edited, allogeneic CAR T candidate
engineered to co-expresses the TIM peptide alongside a CAR based on NKG2D, a receptor
expressed on natural killer (NK) and T cells, that binds to eight stress-induced ligands. CYAD-101
is currently being evaluated following FOLFOX preconditioning chemotherapy in the Phase 1b
KEYNOTE-B79 trial with MSD’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in refractory
metastatic colorectal cancer (mCRC) patients with microsatellite stable (MSS) / mismatch-repair
proficient (pMMR) disease. In December 2021, we announced the first patient was dosed in the
KEYNOTE-B79 trial. In February 2022, we announced our decision to voluntarily pause the
KEYNOTE-B79 trial to investigate reports of two fatalities that presented with similar pulmonary
findings and evaluate any similar events in additional patients treated on study. On March 1, 2022,
we were informed via-email communication from the FDA that the KEYNOTE-B79 trial has been
placed on clinical hold due to insufficient information to assess risk to study subjects.
• CYAD-211. CYAD-211 is an investigational, shRNA-based allogeneic CAR T candidate for the
treatment of relapsed / refractory multiple myeloma (r/r MM). CYAD-211 is engineered to co-
express a B cell maturation antigen (BCMA) targeting chimeric antigen receptor and a single
shRNA, which interferes with the expression of the CD3ζ component of the TCR complex.
Preliminary data reported in December 2021 from the dose-escalation segment of the IMMUNICY-
1 Phase 1 trial evaluating CYAD-211 following Cyflu chemotherapy in patients with r/r MM, showed
evidence of clinical activity with a good tolerability profile including no evidence of Graft versus Host
Disease (GvHD). In addition, all patients in the trial had detectable CYAD-211 cells in the peripheral
blood. Enrollment is currently ongoing in the IMMUNICY-1 Phase 1 trial to evaluate enhanced
lymphodepletion with the aim to improve cell persistence and potentially maximize the clinical
benefit of CYAD-211. The IMMUNICY-1 protocol also allows for CYAD-211 redosing in certain
patients.
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• CYAD-02. CYAD-02 is an investigational, autologous CAR T therapy that co-expresses both the
NKG2D CAR and a single shRNA targeting the NKG2D ligands MICA/MICB on the CAR T cells. In
December 2021, the Company presented clinical results from the dose-escalation CYCLE-1 Phase
1 trial evaluating CYAD-02 for the treatment of relapsed or refractory (r/r) acute myeloid leukemia
(AML) and myelodysplastic syndromes (MDS). Data from the trial showed that a single shRNA can
target two independent genes (MICA/MICB) to enhance the phenotype of the CAR T cells. In
addition, the dual knockdown showed a positive contribution to the initial clinical activity of CYAD-
02 as well as a trend towards increased engraftment and persistence compared to the first-
generation, autologous NKG2D receptor CAR T.
In addition to our lead clinical product candidates, we have a portfolio of preclinical stage allogeneic product
candidates targeting solid tumors and hematological malignancies, including:
• CYAD-203. CYAD-203 is a preclinical, non-gene edited allogeneic CAR T candidate and our first
armored CAR T candidate engineered to co-express the cytokine interleukin-18 (IL-18) with the
NKG2D CAR receptor. CYAD-203 is currently being evaluated in Investigational New Drug (IND)-
enabling studies and submission of the IND application for treatment of solid tumors is expected in
the second half of 2022. To the Company’s knowledge, CYAD-203 is on track to be first ever IL-18
secreting allogeneic CAR T candidate to enter clinical trials.
1.2
Our Strategy
Our mission is to eliminate cancer and improve life. We are developing innovative cell therapies against
cancer and are driven by the promise to deliver meaningful treatment options to patients seeking hope.
Overall, our objective is to discover, develop and commercialize our next-generation CAR T cell therapies.
We are guided by our passion, led by our deep expertise in oncology and motivated by the patients we
serve. We believe that our innovative CAR T candidates, if approved, could offer patients with advanced
disease alternative therapeutic options where no other treatments exist. Delivering best-in-class cell
therapies for patients with unmet medical needs is our top priority. We aim to do this with the following
strategies:
•
Focus on the development of non-gene edited approaches to allogeneic CAR T therapies.
We are pioneering a differentiated approach to the discovery and development of allogeneic CAR
T cell therapy candidates for the treatment of cancer led by a pair of non-gene edited approaches
including our shRNA and TIM technologies. Through the co-expression of either technology with a
specific CAR of interest, we can design donor-derived cell therapy candidates intended to inhibit
the function of the TCR complex while allowing the T cell product candidates to target cancer. Our
unique strategy, coupled with our All-in-One vector approach, allows us to avoid multiple genetic
modifications and manage costs in the production of our cell therapy candidates. We also aim to
bring the broader potential advantages of allogeneic CAR T therapies to patients including faster
delivery, greater uniformity, better patient accessibility and increased manufacturing scalability as
compared to autologous CAR T therapies.
• Advance our lead shRNA-based allogeneic candidate CYAD-211 for the treatment of r/r MM.
CYAD-211 is an allogeneic CAR T candidate engineered to express a single shRNA to interfere
with the expression of the TCR complex, while targeting BCMA, a clinically validated target found
in multiple myeloma (MM). In 2021, we reported preliminary data from the Phase 1 IMMUNICY-1
trial evaluating CYAD-211 for the treatment of r/r MM following standard lymphodepleting
chemotherapy, which showed CYAD-211 had a good tolerability profile and evidence of clinical
activity in the dose-escalation segment of the trial. Enrollment in the Phase 1 IMMUNICY-1
continues for cohorts 4 and 5 with the treatment of CYAD-211 following enhanced lymphodepletion
regimens consisting of increasing doses of cyclophosphamide and fludarabine. Additional data from
the trial are expected in the second half of 2022.
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2021 Annual Report
• Advance our lead TIM-based allogeneic candidate CYAD-101 for the treatment of advanced
mCRC. The clinical benefit of CAR T therapies for the treatment of solid tumors has been limited
to date partially due to the hostile tumor microenvironment (TME), which surrounds the tumor and
is composed of immune cells, blood vessels and extracellular matrix. Our TIM-based allogeneic
CYAD-101 product candidate is engineered to co-express the chimeric antigen receptor NKG2D,
a receptor expressed on natural killer and T cells that binds to eight stress-induced ligands that are
overexpressed by a broad range of tumors, including mCRC, as well as cells within the TME such
as myeloid-derived suppressor cells (MDSCs) and regulatory T cells (Tregs). CYAD-101 is the first
allogeneic CAR T candidate, to our knowledge, which has demonstrated confirmed objective
responses in the treatment of a solid tumor indication, specifically advanced mCRC, with no clinical
evidence of GvHD. Based on the encouraging data to date for CYAD-101, we signed a clinical trial
collaboration with MSD, a tradename of Merck, to evaluate CYAD-101 with Merck’s anti-PD1
therapy, KEYTRUDA® (pembrolizumab). In December 2021, we announced the first patient was
dosed in the KEYNOTE-B79 trial. In February 2022, we announced our decision to voluntarily
pause the KEYNOTE-B79 trial to investigate reports of two fatalities that presented with similar
pulmonary findings and evaluate any similar events in additional patients treated on study. On
March 1, 2022, we were informed via-email communication from the FDA that the KEYNOTE-B79
trial has been placed on clinical hold due to insufficient information to assess risk to study subjects.
•
Focus on armoring CAR Ts to enhance anti-cancer activity. We are currently exploring an
armored CAR technology in conjunction with our shRNA platform to develop allogeneic CAR Ts to
further optimize cell therapies for cancer patients. Armored CAR Ts are T cells engineered to co-
express a CAR as well as secrete specific cytokines in order to increase the anti-tumor activity of
CAR T cells. These armored CAR Ts fortify the cell therapy to overcome the hostile TME and drive
a strong anti-tumor effect. Our first armored CAR Ts are focused on the expression of the cytokine
Interleukin-18, or IL-18. We believe IL-18 is an ideal cytokine for our armored CAR T franchise as
it directly increases the anti-cancer activity of CAR T cells while also altering the balance of pro-
and anti-inflammatory cells within tumor tissue. Arming CAR Ts with IL-18 offer two key effects: (1)
an autocrine effect, where the IL-18 cytokine can have a beneficial impact on the CAR T cell
function and (2) a paracrine effect, where the IL-18 cytokine can drive the strongly
immunosuppressive environment, present within the majority of tumors, to an environment that's
more pro-inflammatory. We are currently evaluating the co-expression of IL-18 in multiple
discovery-stage next-generation, shRNA-based allogeneic CAR T candidates for our armored CAR
franchise, referred to as our shARC platform. Our first preclinical candidate in the armored CAR
franchise is CYAD-203 – an allogeneic shRNA-based IL-18-armored NKG2D CAR T candidate.
• Broaden our shRNA-based allogeneic pipeline to explore additional cancer and shRNA
targets. We are building a diversified portfolio of allogeneic CAR T candidates leveraging our
dynamic shRNA platform technology. We are focused on a modular approach to designing our
next-generation CAR T candidates by incorporating both clinically validated and novel tumor
targets, while also including the simultaneous knockdown of multiple genes of interest with the co-
expression of multiple shRNAs, or multiplexing. Our current discovery programs include cancer
targets such as CD19, TAG72 and GPC3, while our multiplex efforts are focused on targets such
as beta-2-microglobulin (β2M) and FAS (CD95).
• Explore partnership opportunities for our autologous NKG2D franchise. Despite our focus on
our allogeneic franchise, we still firmly believe that autologous CAR T cell therapies will play an
important role in the treatment of cancers, in particular for indications such as r/r AML and MDS
where there remains a major unmet medical need. We are working to seek a potential partner to
aid in the further development of our autologous NKG2D CAR T candidate CYAD-02 for the
treatment of r/r AML and MDS.
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2021 Annual Report
• Continue to build our proprietary in-house manufacturing expertise and capabilities. We
have developed a Good Manufacturing Practice (GMP)-compliant facility for production of our
allogeneic candidates that we believe allows us to be flexible, rapid, and cost-efficient, while
allowing us to independently improve and optimize the production of our cell therapy candidates
with the capacity to treat hundreds of patients in our early-stage clinical programs. Leveraging our
differentiated All-in-One vector approach, we can enrich for our allogeneic CAR T cells using an
optimized process through positive selection, leading to an approach that is autologous-like for
allogeneic CAR T. Our in-house manufacturing facility has been critical in enabling the delivery of
our clinical programs. We will continue to develop our manufacturing expertise and capability
focusing on both supporting early phase clinical testing but also concentrating on the challenges of
scale-up and commercial level manufacturing of allogeneic CAR T cell therapies. Our
manufacturing facility remains crucial to our long-term success.
• Expand intellectual property portfolio. Our robust IP estate of twelve foundational U.S. patents
associated with allogeneic CAR T for the treatment of cancer, including IP for NKG2D receptor-
based cell therapies, provides a key asset to the Company. With our attractive portfolio, we are
able to strategically develop both novel cell therapy candidates and potential partnerships within
the allogeneic landscape. In addition, we plan to continue to expand this portfolio to help advance
the field more broadly.
• Drive innovation through strategic collaborations to realize the full potential of our unique
CAR T therapies. We are continually exploring opportunities to build strong partnerships with
strategic organizations and key international academic institutions to maximize the therapeutic
potential of our current and future product candidates as well as our intellectual property. We will
continue to explore additional opportunities to create value and develop our platform technologies
and pipeline in pursuit of our mission.
1.3 What differentiates Celyad Oncology?
The level of activity in the CAR T landscape across the globe has exploded over the last few years. The
challenges in this subsection of the oncology industry are significant. Most tumors develop undetected over
years, fine tuning their capacity to resist treatment, before exploding with clinically relevant disease that
rapidly overcomes standard treatment paradigms. Immune-based therapies, including CAR T therapies, are
now delivering clinically relevant responses in certain, limited malignancies. The hope is that this initial
clinical success with CAR T therapy can be further developed to be effective against a much broader range
of cancer.
Encouraging results from clinical trials and several regulatory approvals of CAR T therapies across multiple
indications have continued to fuel the interest in the modality. As of the date of this Annual Report, our
competitors with the adoptive cell therapy landscape, including CAR Ts, TCRs and NK-based cell therapies
include but is not limited to 2seventy bio, Inc., Adicet Bio, Inc, Adaptimmune Therapeutics plc, Alaunos
Therapeutics Inc., Allogene Therapeutics Inc., AlloVir, Inc, Arcellx, Inc., Atara Biotherapeutics, Inc., Autolus
Therapeutics plc, Beam Therapeutics Inc., Bellicum Pharmaceuticals, Inc., Caribou Biosciences, Inc.,
CARsgen Therapeutics Co. Ltd., Cellectis S.A., Cellular Biomedicine Group, Celularity, Inc., Century
Therapeutics, Inc., CRISPR Therapeutics, Inc., Editas Medicines, Inc, Fate Therapeutics, Inc., Gracell
Biotechnologies Inc., Immatics Biotechnologies GmbH, ImmunityBio, Inc., Intellia Therapeutics, Inc., Juno
Therapeutics, Inc. (acquired by Celgene Corporation), Kite Pharma, Inc. (acquired by Gilead Sciences, Inc.),
Legend Biotech USA, Inc., Lyell Immunopharma, Inc., Medigene AG, Mustang Bio, Inc., Nkarta
Therapeutics, Inc., Novartis AG, Poseida Therapeutics, Inc., Precigen, Inc. Precision Biosciences, Inc., Sana
Biotechnology, Inc., SQZ Biotech, Inc., TC BioPharm Ltd., TCR2 Therapeutics, Inc., and Tmunity
Therapeutics, Inc.
Within this extremely competitive space, the clinical challenges faced by all in the field are largely similar
and relate to ensuring target specificity, avoiding toxicity, including on-target, off tissue effects and ensuring
the therapy is sufficiently potent to generate durable clinical responses.
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Our expertise in oncology, our proprietary technologies, and our differentiated approach to developing CAR
Ts is providing the tools with which to tackle some of the challenges, including the difficulty of targeting a
broad array of hematological and solid tumors. Our solutions include:
1. The future is silent: shRNA platform for all CAR Ts
Within two years, we moved our first shRNA-based allogeneic approach from concept to the clinic. The
rapidity of progressing an early-stage preclinical asset into clinical testing required a major effort across the
full organization. However, this focus is important given the potential that shRNA technology offers.
In 2021, we validated the use of our proprietary shRNA technology as a novel allogeneic platform through
our first shRNA-based allogeneic candidate, CYAD-211. CYAD-211 is a BCMA CAR T employing a single
shRNA targeting the CD3ζ component of the TCR complex that generates the allogeneic CAR T cell
phenotype.
This validation was established through clinical data generated from the IMMUNICY-1 trial evaluating CYAD-
211. The IMMUNCY-1 trial was key for our company for two main reasons. Firstly, evidence in the clinic that
the shRNA technology shRNA-based allogeneic CAR Ts were not associated with GvHD provided an
important clinical validation of this approach. Secondly, to we demonstrated the first evidence of clinical
activity of the BCMA CAR T in patients with r/r MM. Our proprietary shRNA technology will underpin our
future CAR T product candidates, which includes multiplexing shRNA to generate bespoke modified CAR T
candidates for specific cancer indications.
The initial clinical validation of the shRNA technology has provided an important milestone event for the
Company. The power and versatility of the shRNA platform, including the ability to multiplex and modulate
the levels of gene expression, continues to support its strength, value, and potential differentiation within the
allogenic cell therapy landscape.
2. shARC Platform
We introduced our armored CAR franchise, known as the shARC platform, in 2021, and are focusing our
efforts on IL-18 for the first candidate, CYAD-203. Published In vivo data showed a proposed mechanism
for superior proliferation and anti-tumor activity with CAR Ts secreting IL-18, as compared to CAR T cells
without the cytokine1. which served as a basis for our use of IL-18 for CYAD-203, our first armored CAR
candidate currently in preclinical trials. As of the date of this Annual Report, CYAD-203 is on track to be the
first IL-18 secreting allogeneic CAR T candidate. We believe armoring CARs alongside our shRNA
technology offers a tremendous opportunity to drive a series of differentiated candidates for both solid tumors
and hematological malignancies.
1.4
Our Activities and R&D
Allogeneic CAR T cells:
We are working to advance the field of allogeneic CAR T therapy by exploring two proprietary, non-gene
edited technology platforms to target the TCR complex. In adoptive cell therapy, the infusion of donor-derived
T cells to cancer patients with a different background than that of the donor may lead to multiple reactions.
These reactions include the donor cells attacking the patient’s healthy tissue, known as Graft-versus-Host
Disease, or GvHD, as well as the rejection of the therapy by the patient’s immune system known as Host-
versus-Graft, or HvG, reaction.
1 Chmielewski, M., & Abken, H. (2017). CAR T Cells Releasing IL-18 Convert to T-Bethigh FoxO1low Effectors that Exhibit
Augmented Activity against Advanced Solid Tumors. Cell reports, 21(11), 3205–3219.
https://doi.org/10.1016/j.celrep.2017.11.063
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2021 Annual Report
The TCR, a molecule present on the surface of T cells, is principally responsible for GvHD. At the center of
allogeneic CAR T therapy, the goal is to eliminate or blunt the signaling of the TCR through engineering with
a specific technology. By reducing the signaling of the TCR, the engineered allogeneic CAR T cells fail to
recognize the patient’s healthy tissue as foreign, which avoids GvHD.
Our non-gene edited technologies target the TCR specifically without extensive genetic manipulation.
Through the co-expression of our non-gene edited technologies with a specific CAR of interest, we can
design cell therapy candidates intended to inhibit the function of the TCR while allowing the T cells to target
the cancer. We believe this unique strategy offers a streamlined approach in advancing the allogeneic CAR
T landscape.
Our Proprietary Short Hairpin RNA (shRNA) Technology
shRNA is a dynamic, innovative technology that allows for the development of allogeneic CAR Ts through
the modulation of gene expression without the need for gene-editing. We are currently engineering T cells
for specific desired features, including the inhibition of alloreactivity, increased persistence and enhanced
antitumor activity or potentially improved tolerability. We believe that shRNA offers us the ability to design
and develop next-generation, non-gene edited allogeneic CAR T therapies with any CAR across a broad
array of targets.
shRNA Armored CAR T (shARC) Platform
In addition, we are developing an armored CAR franchise in conjunction with our shRNA technology, referred
to as shRNA Armored CAR T platform, or shARC. The shARC platform uses our shRNA technology in
combination with a CAR and a specific cytokine to enhance the anti-tumor effects of the cell therapy and
optimize the potential treatment for cancer patients. Initial efforts using the shARC platform have been
centered on the use of shRNA technology to knockdown CD3ζ for the generation of allogeneic CAR Ts in
combination with the co-expression of the pro-inflammatory cytokine IL-18.
Our Proprietary T cell receptor
Technology
Inhibitory Molecule (TIM)
Our novel TIM technology is designed to interfere with the ability of the
TCR to signal to prevent GvHD. TIM is a truncated form of the CD3ζ
component of the TCR complex which lacks the critical signaling
domains of the wild-type CD3ζ. In CYAD-101, TIM is co-expressed with
a NKG2D CAR to reduce the potential of the TCR to induce GvHD.
Following the expression of TIM, the peptide acts as a competitive
inhibitor to wild-type CD3ζ and is incorporated into the TCR complex.
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2021 Annual Report
1.5
Lead Programs
Celyad Oncology is building a diversified pipeline of next-generation allogeneic and autologous CAR T
candidates:
• CYAD-101
CYAD-101 is an investigational, non-gene edited
allogeneic CAR T candidate engineered to co-express
the chimeric antigen receptor based on NKG2D, the
novel inhibitory peptide TIM and a truncated CD19
selection marker. The product candidate leverages
our All-In-One vector approach with a single
transduction, avoiding multiple genetic modifications
and costs associated with additional GMP grade
materials. TIM inhibits CD3ζ and reduces signaling of
the TCR complex, which reduces the potential for
GvHD.
alloSHRINK Phase 1 Trial Overview
In December 2018, we initiated the Phase 1 alloSHRINK trial. alloSHRINK is an open-label trial assessing
the safety and clinical activity of three consecutive administrations of CYAD-101 every two weeks
administered following preconditioning chemotherapy in patients with refractory unresectable mCRC. The
dose-escalation segment of the trial evaluated the administrations of CYAD-101 concurrently with FOLFOX
(combination of 5-fluorouracil, leucovorin and oxaliplatin) chemotherapy regimen at three dose levels (1×108,
3×108, 1×109 cells per infusion). In December 2020, we began enrollment in the expansion cohort of the
alloSHRINK trial, which evaluated three infusions of CYAD-101 at the recommended dose of 1×109 cells per
infusion of CYAD-101 concurrently with FOLFIRI (combination of 5-fluorouracil, leucovorin and irinotecan)
preconditioning chemotherapy for the treatment of advanced mCRC.
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Phase 1 alloSHRINK Clinical Trial Data
Initial positive data from the alloSHRINK trial were reported both at the Society for Immunotherapy of Cancer
(SITC) 2019 and American Society of Clinical Oncology 2020 conferences. In January 2021, we reported
additional translational data for the alloSHRINK trial at the American Society of Clinical Oncology 2021
Gastrointestinal Cancers Symposium.
A total of 15 patients with relapsed/refractory mCRC who progressed after previous treatment with
oxaliplatin-based or irinotecan-based chemotherapies were enrolled in the dose-escalation, alloSHRINK
Phase 1 trial. The number of prior therapies received by patients enrolled in the trial ranged from one to six
with a mean of three.
Data from the trial showed that CYAD-101 following preconditioning chemotherapy was observed to be
generally well-tolerated with no GvHD observed, no dose-limiting toxicities reported, no patient
discontinuation due to treatment-related adverse events and no treatment-related adverse events greater
than Grade 3. Results also showed two patients achieved a partial response (PR) according to RECIST 1.1
criteria, including one patient with a KRAS-mutation.
Nine patients achieved stable disease (SD), with seven patients demonstrating disease stabilization lasting
more than or equal to three months of duration, with a disease control rate of 73%.
Median progression free survival (mPFS) for this segment of the trial was 3.9 months, and median overall
survival (mOS) was 10.6 months. 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 may be able to be used in a broad patient population regardless of the HLA haplotype.
Data from the alloSHRINK trial also showed a tumor burden decrease in eight out of 15 evaluable patients,
including six of nine patients at dose level 3. Clinical activity was observed across all dose levels. There was
no obvious correlation between response, dose-levels nor baseline characteristics.
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2021 Annual Report
available
Of four patients treated at
the highest dose level of
1×109 CYAD-101 cells per
infusion
for
analysis, three patients who
achieved either a confirmed
PR or SD also showed
TCR
hyper-expanded
repertoire
post-treatment
through the emergence of
new T cell clones in the
peripheral blood T cell
repertoire, while one patient
with progressive disease
displayed no evidence of
new T cell clones.
Cytokine modulation was also observed after the first and second infusions of CYAD-101 in the patient who
achieved a confirmed PR from the highest dose level.
All 15 patients from the dose-escalation segment of the alloSHRINK trial were dosed from a single cell bank
of CYAD-101 that was generated in advance from two manufacturing runs each using a fraction of an
apheresis from a single healthy donor.
Preliminary data from the dose expansion cohort evaluating CYAD-101 (1×109 cells per infusion) following
FOLFIRI (combination of 5-fluorouracil, leucovorin and irinotecan) preconditioning chemotherapy showed
CYAD-101 was generally well-tolerated with no dose limiting toxicities or evidence of GvHD. Overall, nine
out of ten evaluable mCRC patients showed stable disease at first tumor assessment. Data also showed
shorter persistence of CYAD-101 cells observed after FOLFIRI preconditioning as compared to FOLFOX
preconditioning.
In 2021, based on improved cell kinetic data and clinical activity data from the alloSHRINK dose-escalation
segment of CYAD-101 following FOLFOX preconditioning, the Company submitted a protocol amendment
to regulatory agencies to modify the Phase 1b KEYNOTE-B79 trial to incorporate FOLFOX as
preconditioning chemotherapy.
Phase 1b KEYNOTE-B79 Trial Overview
In September 2020, we announced a clinical trial collaboration with MSD, a tradename of Merck. The
KEYNOTE-B79 trial will evaluate CYAD-101 following FOLFOX preconditioning chemotherapy, with Merck’s
anti-PD1 therapy, KEYTRUDA® (pembrolizumab), in refractory mCRC patients with MSS / pMMR disease.
In December 2021, we announced the first patient was dosed in the KEYNOTE-B79 trial. In February 2022,
we announced our decision to voluntarily pause the KEYNOTE-B79 trial to investigate reports of two fatalities
that presented with similar pulmonary findings and evaluate any similar events in additional patients treated
on study. On March 1, 2022, we were informed via-email communication from the FDA that the KEYNOTE-
B79 trial has been placed on clinical hold due to insufficient information to assess risk to study subjects.
Page 20 | 180
• CYAD-211
2021 Annual Report
CYAD-211 is an investigational shRNA-based allogeneic
CAR T candidate for the treatment of relapsed or
refractory multiple myeloma (r/r MM). CYAD-211 is
engineered to co-express a BCMA chimeric antigen
receptor and a single shRNA hairpin which interferes
with the expression of the CD3ζ component of the TCR
complex.
Phase 1 IMMUNICY-1 Trial Overview
In November 2020, we initiated the dose-escalation Phase 1 IMMUNICY-1 trial evaluating CYAD-211 for the
treatment of r/r MM.
IMMUNICY-1 is an open-label Phase 1, dose-
escalation trial that will evaluate the safety and
clinical activity of a single infusion of CYAD-211
following
chemotherapy
cyclophosphamide (300 mg/m²) and fludarabine
(30 mg/m²) in patients with r/r MM. The trial
evaluates multiple dose levels of CYAD-211:
3x107, 1x108 and 3x108 cells per infusion.
preconditioning
Preliminary data from the IMMUNICY-1 trial
showed a favorable tolerability profile with no
DLTs, no GvHD and no CAR-T-cell-related
encephalopathy syndrome.
Preliminary cell kinetic data showed all patients had detectable CYAD-211 cells in the peripheral blood,
although engraftment was short lasting. This suggests expansion and persistence of cells might be more
dependent on the depth and period of the lymphodepletion induced by the preconditioning regimen, which
calls for further exploration of lymphodepletion.
Initial clinical activity from the dose-escalation segment of the IMMUNICY-1 trial showed was encouraging
with three patients achieving partial response (PR), one in each dose-level, while eight patients had stable
disease (SD). One patient with SD of 4.5 months duration showed evidence of reduction in size of
plasmacytomas on radiographic studies.
Following the dose-escalation
segment of the IMMUNICY-1
trial, the next segment of the
study will evaluate enhanced
lymphodepleting regimens with
cell
the aim
persistence
potentially
and
maximize the clinical benefit of
CYAD-211. Enrollment in the
improve
to
Page 21 | 180
2021 Annual Report
cohorts evaluating enhanced lymphodepletion is ongoing and additional data from the trial are expected in
the second half of 2022.
• CYAD-02
CYAD-02 is an investigational CAR T therapy that uses an All-in-One vector approach to engineer a patient’s
T cells to express both the NKG2D chimeric antigen receptor and shRNA technology to knockdown the
expression of NKG2D ligands MICA and MICB on the CAR T cells.
of
decrease
In
preclinical models,
targeting MICA and MICB
with a single shRNA lead to
a
ligand
expression (Figure A) on T
cells and enhanced in vitro
B)
expansion
first-
compared
generation
autologous
NKG2D CAR T product
candidate.
(Figure
to
a
CYCLE-1 Trial
In November 2019, we initiated the Phase 1 dose-escalation CYCLE-1 trial that evaluated the safety and
clinical activity of a single
following preconditioning chemotherapy with
cyclophosphamide and fludarabine for the treatment of relapsed or refractory (r/r) acute myeloid leukemia
(AML) and myelodysplastic syndromes (MDS).
infusion of CYAD-02
In December 2021, we reported data from the Phase 1 CYCLE-1 trial at the American Society of Hematology
annual meeting, which overall showed a good tolerability profile of CYAD-02 following CyFlu preconditioning.
Data from the trial showed that a single shRNA can target two independent genes (MICA/MICB) to enhance
the phenotype of the CAR T cells. In addition, the dual knockdown showed a positive contribution to the
initial clinical activity of CYAD-02 as well as a trend towards increased engraftment and persistence
compared to the first-generation, autologous NKG2D receptor CAR T.
1.6
Licensing and Collaboration Agreements
• Celdara
Background
In January 2015, we entered into an agreement with Celdara Medical, LLC, or Celdara in which we
purchased all outstanding membership interests of OnCyte, LLC, or OnCyte. In connection with this
transaction, we entered into an asset purchase agreement to which Celdara sold to OnCyte certain data,
protocols, regulatory documents and intellectual property, including the rights and obligations under two
license agreements between OnCyte and The Trustees of Dartmouth College, or Dartmouth, related to our
CAR T development programs.
In March 2018, we dissolved the affairs of our wholly owned subsidiary OnCyte. As a result of the dissolution
of OnCyte, all the assets and liabilities of OnCyte were fully distributed to us including our license agreement
with Dartmouth.
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2021 Annual Report
Amended Asset Purchase Agreement
In August 2017, we entered into an amendment to the asset purchase agreement described above. In
connection with the amendment, the following payments were made to Celdara: (i) an amount in cash equal
to $10.5 million, (ii) newly issued shares of Celyad valued at $12.5 million, (iii) an amount in cash equal to
$6.0 million in full satisfaction of any payments owed to Celdara in connection with a clinical milestone related
to our CAR-T NKR-2 product candidate, (iv) an amount in cash equal to $0.6 million in full satisfaction of any
payments owed to Celdara in connection with our license agreement with Novartis International
Pharmaceutical Ltd., and (v) an amount in cash equal to $0.9 million in full satisfaction of any payments
owed to Celdara in connection with our former license agreement with Ono Pharmaceutical Co., Ltd.
Under the amended asset purchase agreement, we are obligated to make certain development-based
milestone payments to Celdara up to $40.0 million, certain development-based milestone payments up to
$36.5 million and certain sales-based milestone payments up to $156.0 million. We are required to make
tiered single-digit royalty payments to Celdara in connection with the sales of CAR-T products, subject to
reduction in countries in which there is no patent coverage for the applicable product or in the event Celyad
is required to secure licenses from third parties to commercialize the applicable product. We are also
required to pay Celdara a percentage of sublicense income, including royalty payments, for each sublicense
ranging from the mid-single digits to the mid-twenties, depending on which of a specified list of clinical and
regulatory milestones the applicable product has achieved at the time the sublicense is executed. We are
required to pay Celdara a single-digit percentage of any research and development funding received by us,
not to exceed $7.5 million for each product group. We can opt out of the development of any product if the
data does not meet the scientific criteria of success. We may also opt out of development of any product for
any other reason upon payment of a termination fee of $2.0 million to Celdara.
The Trustees of Dartmouth College (“Dartmouth”)
As described above, as a result of our acquisition of all of the outstanding membership interests of OnCyte
and the asset purchase agreement among us, Celdara and OnCyte, OnCyte became our wholly-owned
subsidiary and acquired certain data, protocols, regulatory documents and intellectual property, including
the rights and obligations under two license agreements between OnCyte and Dartmouth. The first of these
two license agreements concerned patent rights related, in part, to methods for treating cancer involving
chimeric NK and NKP30 receptor targeted therapeutics and T cell receptor-deficient T cell compositions in
treating tumor, infection, GVHD, transplant and radiation sickness, or the CAR-T License, and the second
of these two license agreements concerned patent rights related, in part, to anti-B7-H6 antibody, fusion
proteins and methods of using the same, or the B7H6 License.
In August 2017, we and Dartmouth entered into an amendment agreement in order to combine our rights
under B7H6 Agreement with our rights under the CAR-T License, resulting in the termination of the B7H6
License, and in order to make certain other changes to the agreement. In connection with the amendment,
we paid Dartmouth a non-refundable, non-creditable amendment fee in the amount of $2.0 million in 2017.
Under the amended license agreement, Dartmouth granted us an exclusive, worldwide, royalty-bearing
license to certain know-how and patent rights to make, have made, use, offer for sale, sell, import and
commercialize any product or process for human therapeutics, the manufacture, use or sale of which, is
covered by such patent rights or any platform product. Dartmouth reserves the right to use the licensed
patent rights and licensed know-how, in the same field, for education and research purposes only. The patent
rights included in the amended license agreement also include the patents previously covered by the B7H6
License. In consideration for the rights granted to us under the amended license agreement, we are required
to pay to Dartmouth an annual license fee as well as a low single-digit royalty based on annual net sales of
the licensed products by us, with certain minimum net sales obligations beginning April 30, 2024 and
continuing for each year of sales thereafter. Under the amended license agreement, in lieu of royalties
previously payable on sales by sublicensees, Celyad is required to pay Dartmouth a percentage of
sublicense income, including royalty payments, (i) for each product sublicense ranging from the mid-single
digits to low-single digits, depending on which of a specified list of clinical and regulatory milestones the
applicable product has achieved at the time the sublicense is executed and (ii) for each platform sublicense
in the mid-single digits. Additionally, the agreement requires that we exploit the licensed products, and we
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2021 Annual Report
have agreed to meet certain developmental and regulatory milestones. Upon successful completion of such
milestones, Celyad is obligated to pay to Dartmouth certain clinical and regulatory milestone payments up
to an aggregate amount of $1.5 million and a commercial milestone payment in the amount of $4.0 million.
We are responsible for all expenses in connection with the preparation, filing, prosecution and maintenance
of the patents covered under the agreement.
As further amended in December 2021, this agreement allows Dartmouth to terminate the amended license
after April 30, 2026, extended from the prior date of April 30, 2024, in the event that Celyad fails to meet the
specified minimum net sales obligations for any year (USD 10 million during first year of sales, USD 40
million during the second year of sales and USD 100 million during the third year of sales and every year of
sales thereafter), unless Celyad pays to Dartmouth the royalty Celyad would otherwise be obligated to pay
had Celyad met such minimum net sales obligation. Dartmouth may also terminate the license if Celyad fails
to meet a milestone within the specified time period, unless Celyad pays the corresponding milestone
payment. In connection with the December 2021 amendment, we agreed to certain protective provisions of
any sublicenses and paid Dartmouth a non-refundable, non-creditable amendment fee and an additional
non-refundable, non-creditable sublicense fee to be paid on an annual basis.
• Novartis
On May 1st, 2017, we entered into a non-exclusive license agreement with Novartis International AG, or
Novartis, regarding U.S. patents related to allogeneic CAR-T cells. The agreement includes our intellectual
property rights under U.S. Patent No. 9,181,527. This agreement is related to two undisclosed targets
currently under development by Novartis. Under the terms of the agreement, we received an upfront
payment of $4.0 million and are eligible to receive additional milestone payments in aggregate amounts of
up to $92.0 million. In addition, we are eligible to receive royalties based on net sales of the licensed target
associated products at percentages in the single digits. We retain all rights to grant further licenses to third
parties for the use of allogeneic CAR-T cells.
• Horizon Discovery / PerkinElmer
In April and June 2018, we signed two research and development collaboration and license agreements with
Horizon Discovery Group plc, or Horizon, to evaluate the utility of Horizon’s SMART vector shRNA reagents
to reduce expression of one or more defined targets in connection with the development of our product
candidates. The first agreement was focused on targets related to our autologous CAR-T candidate, CYAD-
02. The second agreement was focused on targets related to our allogenic CAR-T product candidate CYAD-
211 and one pre-clinical allogenic product candidate not yet publicly announced, called CYAD-203.
In December 2018, we exercised our option to convert the second agreement into an exclusive license
agreement, in connection with which we paid Horizon an up-front payment of $1 million. In September 2019,
we exercised our option to convert the first agreement into an exclusive license agreement, in connection
with which we have paid Horizon an up-front payment of $0.1 million and an additional milestone of $0.1
million for the first IND filed by us for CYAD-02. In September 2020, we paid an additional milestone of $0.2
million for the first IND filed by us for CYAD-211.
Under these exclusive license agreements combined, Horizon is eligible to receive additional milestone
payments in development, regulatory and commercial milestone payments, in addition to low single digit
royalties on net sales, subject to customary reductions.
In December 2020, Horizon Discovery was acquired by PerkinElmer, Inc. (Horizon/PKI).
In 2021, Horizon/PKI informed us they believe we are in material breach of these agreements as a result of
certain disclosures we have made in connection with our obligations as a publicly traded company in the
United States and Belgium, although they have not formally delivered to us a notice of material breach or
termination. We believe any such assertion of material breach would be without merit and we would expect
to vigorously defend any such notice of material breach. Any dispute under these agreements would be
subject to arbitration in The Hague under the International Chamber of Commerce Rules. We are currently
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2021 Annual Report
in discussions with Horizon about possible amendments to these agreements in connection with which we
would retain freedom to operate under the in-licensed patents.
Of note, we have filed patent applications which, if issued, would cover other aspects of the product
candidates described above as well as products developed by third parties that deploy similar technology
and targets. These patent applications encompass the downregulation of one or more of the targets covered
under the Horizon/PKI agreements, the use of shRNA to downregulate such targets in immune cells and the
combination of shRNAs with a chimeric antigen receptor in immune cells. We are also developing a second
generation shRNA platform that does not incorporate any of the Horizon Discovery/Perkin Elmer, Inc.
technology described above.
Our lead allogeneic CAR T product candidate, CYAD-101, does not incorporate any of the Horizon
Discovery/Perkin Elmer, Inc. technology described above.
• Merck
In September 2020, we entered into a clinical trial collaboration agreement and subsequent agreements with
MSD International GmbH, or MSD, a subsidiary of Merck & Co., Inc. The agreements relate to the Phase 1b
KEYNOTE-B79 clinical trial, which will evaluate our investigational non-gene edited allogeneic CAR-T
candidate, CYAD-101, following FOLFOX preconditioning chemotherapy, with MSD’s anti-PD-1 therapy,
KEYTRUDA® (pembrolizumab). The trial will enroll refractory metastatic colorectal cancer (mCRC) patients
with microsatellite stable (MSS) / mismatch-repair proficient (pMMR) disease, with the initial goal of
determining the safety and tolerability of the combination therapy. The trial began enrollment in the fourth
quarter of 2021.
In February 2022, we announced our decision to voluntarily pause the KEYNOTE-B79 trial to investigate
reports of two fatalities that presented with similar pulmonary findings and evaluate any similar events in
additional patients treated on study. On March 1, 2022, the Company was informed via-email communication
from the FDA that the KEYNOTE-B79 trial has been placed on clinical hold due to insufficient information to
assess risk to study subjects.
• Mesoblast
On May 8, 2018, we entered into an exclusive license agreement with Mesoblast, an Australian
biotechnology company, to develop and commercialize our intellectual property rights relating to C-Cathez,
an intra-myocardial injection catheter, related to our former cardiovascular business, for which Mesoblast
has paid to Celyad an upfront fee of $1,000,000. In addition to the upfront fee, Celyad may be eligible up to
$20,000,000 in clinical, regulatory, and commercial milestone payments payable in cash or, for certain
milestones, in Mesoblast shares.
On January 17, 2022, we entered into an amendment with Mesoblast to convert the license into non-
exclusive, to remove the termination fee of $2,500,000 from Mesoblast and to extend certain payments
milestones. In consideration for this amendment, Mesoblast has agreed to pay to Celyad $1,500,000 in
Mesoblast ordinary shares.
• Fortress Group
On December 2, 2021, we entered into a Subscription Agreement (the “Subscription Agreement”) with CFIP
CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, pursuant to which we agreed to sell to
Fortress, in an unregistered offering, an aggregate of 6,500,000 ordinary shares at a purchase price of $5.00
per share (the “Private Placement”). The Private Placement closed on December 8, 2021 and resulted in
the receipt of gross proceeds of approximately $32,500,000. In connection with the Subscription Agreement,
we also entered into a Shareholders’ Rights Agreement (the “Shareholders’ Rights Agreement”) with
Fortress, pursuant to which Fortress (i) has the right to select two individuals to be, at Fortress’s option,
either members of our Board of Directors (the “Board”) or non-voting observers of the Board, so long as
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2021 Annual Report
Fortress continues to hold at least 10% of our outstanding ordinary shares; and (ii) received a right of first
offer on any new indebtedness to be incurred by us and a pro rata right of first refusal on any new equity
securities to be issued by us, as well as customary registration rights. We also granted Fortress certain
protective provisions related to our intellectual property portfolio.
1.7
Our Manufacturing Capabilities
Our established in-house process development and manufacturing expertise enables us to seamlessly and
efficiently reproduce materials to advance our cell therapy candidates into early-stage clinical trials. We
control our manufacturing through our 11,000 square foot GMP-compliant manufacturing facility, located in
Mont-Saint-Guibert, Belgium. Our facility’s staff have been instrumental in the preparation of multiple IND
and Clinical Trial Applications (CTAs) filings, through the completion of dozens of production runs, as well
as in implementing multiple chemistry, manufacturing, and control (CMC) amendments associated with our
CAR T programs. We have the flexibility to manufacture both our allogeneic and autologous CAR T
candidates within our GMP facility and we are equipped to support the production of all doses to deliver our
clinical development plan. In addition, leveraging our All-in-One vector approach for CAR T production
means that we can use a consistent manufacturing process across all product candidates. We also plan to
expand our manufacturing capabilities through potential partnerships with contract development and
manufacturing organizations.
1.8
Our shareholding structure
Celyad Oncology SA
(Belgium) – 100%
Biological
Manufacturing
Services SA (Belgium)
Celyad Inc (USA)
CorQuest Medical
Inc (USA)
1.9
Post balance sheet events
On January 17, 2022, the Company entered into an amendment with Mesoblast to convert the license into
non-exclusive whereby the Company agreed, (a) to settle $2,500,000 of receivable as of December 31, 2021
with $1,500,000 and; (b) extend certain milestone payments. The consideration of $1,500,000 was agreed
to be paid by Mesoblast in Mesoblast ordinary shares and the difference $1,000,000 will be recorded in the
income statement in 2022.
On February 28, 2022, the Company announced its decision to voluntarily pause its Phase 1b KEYNOTE-
B79 trial evaluating CYAD-101 administered concurrently with FOLFOX chemotherapy followed by MSD’s
anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in patients with refractory metastatic colorectal cancer
following reports of two fatalities that presented with similar pulmonary findings. The Company is currently
investigating these reports and evaluating any similar events in additional patients treated on study. On
March 1, 2022, the Company was informed via-email communication from the FDA that the KEYNOTE-B79
trial has been placed on clinical hold due to insufficient information to assess risk to study subjects.
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2021 Annual Report
There were no other subsequent events that occur between 2021 year-end and the date when the financial
statements have been authorized by the Board for issue.
1.10 Our capital expenditures
The Company’s actual capital expenditures excluding impact of recognition of right-of-use assets for the
years ended December 31, 2020 and 2021 amounted to €0.2 million and €0.3 million, respectively. These
capital expenditures primarily consisted of the acquisition of laboratory equipment and industrial tools, the
refurbishment of research and development laboratories and leasehold improvements of corporate offices
located in Belgium. The Company expects its capital expenditures to increase in absolute terms in the near
term as the Company continues to advance its research and development programs.
1.11 Financial review of the year ending December 31, 2021
1.11.1. Analysis of the consolidated income statement
The table below sets forth the Group’s consolidated income statement, ending up with a €26.5 million loss
for the year ended 31 December 2021, and comparative information for the year 2020.
(€'000)
Revenue
Cost of sales
Gross profit
Research and Development expenses
General & Administrative expenses
For the year ended 31 December,
2021
2020
-
5
-
-
-
5
(20 773)
(21 522)
(9 908)
(9 315)
Change in fair value of contingent consideration
847
9 228
Other income
Other expenses
Operating Loss2
Financial income
Financial expenses
Loss before taxes
Income taxes
Loss for the period
Basic and diluted loss per share (in €)
4 909
4 731
(1 466)
(114)
(26 391)
(16 987)
144
(255)
217
(434)
(26 502)
(17 204)
(10)
-
(26 512)
(17 204)
(1.70)
(1.23)
The Company’s license and collaboration agreements have generated no revenue in 2021 and 2020.
The Research and Development expenses include pre-clinical, manufacturing, clinical, quality, intellectual
property and regulatory expenses and other research and development expenses, which are aggregated
and presented as a single line in the Company’s consolidated financial statements.
2 The operating loss arises from the Company’s loss for the period before deduction of financial income, financial expenses
and income taxes. The purpose of this measure by Management is to identify the Company’s results in connection with
its operating activities.
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2021 Annual Report
Bottom-line, the R&D expenses show a year-over-year decrease of €0.7 million. The decrease in the
Company’s R&D expenses is primarily driven by (see note 5.24):
•
•
•
•
•
The increase of employee expenses mainly related to movement of employees through the year
ended December 31, 2021 to support the Group’s preclinical and clinical programs
The increase of preclinical activities associated with the CYAD-203 program (next-generation
NKG2D) and other next-generation CAR T candidates, compensated by;
The decrease of process development and clinical development after the Group’s decision in Q4
2020 to discontinue the development of first-generation, autologous CAR T candidate CYAD-01;
The decrease of process development associated to the transition from preclinical to clinical
development of the CYAD-211 program; and
The decrease of the expenses associated with the share-based payments (non-cash expenses)
related to the warrants plan offered to the Company’s employees, managers, and directors.
The key projects driving the research and development expenses in 2021 included:
•
•
The clinical studies conducted on the Company’s Product Candidates;
The preclinical studies conducted on the Company’s CAR T product candidates in allogeneic
settings for solid tumors and the development of the Company’s allogeneic platform, which
evaluates multiple non-gene editing technologies.
General and Administrative expenses were €9.9 million in 2021 as compared to €9.3 million in 2020, an
increase of €0.6 million. This increase primarily relates to higher insurances costs (D&O insurance
principally) and consulting fees related to legal, recruitment and capital raise activities have been partially
compensated by the decrease of the expenses associated with the share-based payments (non-cash
expenses) related to the warrants plan offered to the Group’s employees, managers and directors (see note
5.25).
The fair value adjustment (€0.8 million) relating to the contingent consideration and other financial liabilities
as of December 31, 2021, is mainly driven by (see note 5.28):
•
•
•
•
•
The update of the assumptions associated with the timing of the potential commercialization of the
Group’s allogenic CYAD-101 CAR T program for mCRC which has been delayed by one year;
The update of the assumptions associated with the timing, development and the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS to reflect
the future development of the program through potential partnership, which has been delayed by
one year;
The update in WACC used for fair value measurement purposes at December 31, 2021;
The revaluation of the U.S. dollar against the Euro; and
The updated assumptions on Probability of Success (PoS) associated with the Group’s CAR T
programs.
As of December 31, 2020, the change in fair value of the contingent consideration and other financial
liabilities was mainly driven by updated assumptions associated with the timing of the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS which had been
delayed by one year.
The Company’s other income (see note 5.28) is associated with grants received from the Walloon Region
mainly in the form of recoverable cash advances (RCAs) and R&D tax credit income:
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2021 Annual Report
• Grant income (RCAs): additional grant income has been recognized in 2021 on grants in the form
of recoverable cash advances (RCAs) for contracts numbered 8087, 8088, 8212, 8436 and
1910028. According to IFRS standards, the Company has recognized grant income for the period
amounting to €2.7 million and a liability component of €1.6 million is accounted for as a financial
liability (see disclosure notes 5.16 and 5.19.2). The increase compared to December 31, 2020 is
mainly associated with additional grant income recognized on new conventions signed during the
last quarter of 2020 (contracts numbered 8212 and 8436) and on convention numbered 1910028,
partly compensated by the decrease on grant income recognized on conventions associated to
autologous programs (contract numbered 7685, 8087 and 8088);
• Grant income (Others): additional grant income has been recognized in 2021 on grants received
from the Federal Belgian Institute for Health Insurance Inami (€0.3 million) and from the regional
government (contracts numbered 8066 and 8516 for €1.1 million), not referring to RCAs and not
subject to reimbursement. The increase compared to December 31, 2020 is mainly due to grant
income recognized on new convention signed in the last quarter of 2021 with the regional
government (contract numbered 8516);
•
the remeasurement income on the recoverable cash advances (RCAs) of €0.9 million for the year
2020, which was mainly related to the Group decision to update assumptions associated with the
timing of the potential commercialization of the Group’s autologous AML/MDS CAR T program,
while the remeasurement on the recoverable cash advances (RCAs) is an expense for the year
ended December 31, 2021; and
• with respect to R&D tax credit, the current year income is predicated on a R&D tax credit recorded
(€0.7 million), which has been updated taking into account all information available at this date and
is in line with previous year.
For the year ended December 31, 2021, other expenses mainly refer to (see note 5.28):
•
•
the remeasurement income on the recoverable cash advances (RCAs) of €0.3 million for the year
2021, which is mainly related to the time accretion (which reflects the development of the Group’s
product candidates using CAR T technology and their progress towards market approval in both
autologous and allogeneic programs) and the revaluation of the U.S. dollar against the Euro; and
the other expenses are mainly associated with the amendment fees on license agreement with
Dartmouth signed in December 2021 for €1.1 million.
Therefore, at year-end 2021, the loss from operations amounted to €26.4 million versus €17.0 million in 2020
for the reasons stated above.
Financial results refer mainly to interest on finance leases (see note 5.31).
As a result of the foregoing, the net loss for the financial year 2021 amounts to €26.5 million, compared to a
net loss of €17.2 million for the prior year for the reasons stated above.
1.11.2. Analysis of the consolidated statements of financial position
The table below sets forth the Group’s consolidated statements of financial position for the year ended
December 31, 2021, and comparative information as at December 31, 2020.
(€’000)
December 31,
December 31,
NON-CURRENT ASSETS
Goodwill and Intangible assets
Property, Plant and Equipment
Non-current Trade and Other receivables
Non-current Grant receivables
Other non-current assets
2021
2020 (as adjusted)
45 651
46 379
36 168
3 248
2 209
3 764
262
36 171
4 119
2 117
3 679
293
Page 29 | 180
CURRENT ASSETS
Trade and Other Receivables
Current Grant receivables
Other current assets
Short-term investments
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Share Capital
Share premium
Other reserves
Capital reduction reserve
Accumulated deficit
NON-CURRENT LIABILITIES
Bank loans
Lease liabilities
Recoverable Cash advances (RCAs)
Contingent consideration payable and other financial liabilities
Post-employment benefits
Other non-current liabilities
CURRENT LIABILITIES
Bank loans
Lease liabilities
Recoverable Cash advances (RCAs)
Trade payables
Other current liabilities
TOTAL EQUITY AND LIABILITIES
2021 Annual Report
34 292
19 705
668
1 395
2 211
615
145
1 711
-
-
30 018
17 234
79 943
66 084
43 639
30 994
78 585
6 317
33 172
234 562
(308 997)
48 513
43 349
30 958
191 213
(283 039)
22 477
23 256
-
-
1 730
5 851
14 679
53
164
2 525
4 220
15 526
614
371
13 827
11 834
-
37
902
362
6 611
5 952
1 076
371
4 736
5 614
79 943
66 084
(1) For information on voluntary change in accounting policy, see note 5.2.16.
Intangible assets net book value, as described in note 5.6, mainly refers to:
•
•
The Company’s IPR&D assets related to its oncological programs acquired in 2015 through the
Oncyte business combination. Pursuant to IFRS, the Company does not capitalize research and
development expenses until marketing authorization. Accordingly, all clinical, research and
development spend related to the development of the Company’s CAR T product candidates and
allogeneic platform are accounted for as operating expenses for the year 2021.
The Company’s exclusive agreement for Horizon Discovery’s SHRNA Platform to develop next-
generation allogenic CAR T Therapies acquired for $1.0 million end of December 2018. At the
closing date, milestone payments are capitalized for a total amount of $0.4 million.
• New licenses acquired in 2021 regarding an exclusive patent license agreement signed with the
University of Pennsylvania for an engager targeting Glypican 3 (GPC3) for $0.1 million and an
exclusive license from the Moffitt Cancer Center for an antibody directed to Tumor-associated
glycoprotein (TAG-72), which both will form the basis of a T cell engager to be used with the shRNA
platform technology of the Company for $0.2 million.
Property, plant and equipment net book value mainly refers to right-of-use on leased assets in compliance
with IFRS 16 standard (office and facilities, vehicles and equipment). The decrease of €0.9 million in 2021
comparatively to 2020 is explained by €1.3 million of amortization on the period compensated by the addition
of €0.4 million of new assets mainly related to new laboratory equipment (see note 5.7).
Non-current trade receivables (€2.2 million as of December 31, 2021) mainly refer to discounted and risk-
adjusted milestone receivables, to be cashed in by the Company in accordance with the terms of the
exclusive license agreement signed by the Company with Mesoblast Ltd. for C-Cathez device development
(see note 5.8).
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2021 Annual Report
Non-current grant receivables relate to a receivable on the amounts to collect from the Federal Government
as R&D tax credit recognized for the first time at year-end 2017 (€1.2 million), including a one-time catch-up
effect. Since 2018, further R&D tax credit receivables are recorded on an annual base increment. For the
year ended December 31, 2021, the Company recorded additional R&D tax credit of €0.7 million, taking into
account all information available as of December 31, 2021. The Group received the reimbursement from the
Federal Government of €0.6 million related to the fiscal year 2016 tax credit.(see note 5.8).
At December 31, 2021, the current grant receivables relate to the cash proceeds to be received, associated
with conventions numbered 8088 (CYAD-02 CYCLE 1), 8212 (CYAD-101), 1910028 (CwalityCAR) and 8516
(new convention signed in 2021 regarding new engagers), amount to €1.4 million (see note 5.9), an increase
of €1.3 million compared to year-end 2020.
The Company’s Treasury position 3 amounts to €30.0 million at December 31, 2021 which accounts for an
increase of €12.8 million as compared to year-end 2020, mainly as a result of cash proceeds from capital
raises during the period partly compensated by the Group’s operations expenses (see note 5.10 & 5.11).
Lease liabilities reach a total amount of €2.6 million as of December 31, 2021, decreasing by €1.0 million
compared to the year-end 2020. The decrease is mainly explained by the repayments of leases during the
year 2021 (see note 5.19.2).
The recoverable cash advances (RCAs) reach a total balance of €6.2 million as of December 31, 2021, the
increase of €1.6 million compared to year-end 2020 mainly related to new liability components recognized
in 2021. (see note 5.16 & 5.19.2).
The contingent consideration payable and other financial liabilities amounts to €14.7 million at year-end
which represents a decrease of €0.8 million compared to December 31, 2020. This decrease is mainly driven
by:
•
•
•
•
•
The update of the assumptions associated with the timing of the potential commercialization of the
Group’s allogenic CYAD-101 CAR T program for mCRC which has been delayed by one year;
The update of the assumptions associated with the timing, development and the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS to reflect
the future development of the program through potential partnership, which has been delayed by
one year;
The update in WACC used for fair value measurement purposes at December 31, 2021;
The revaluation of the U.S. dollar against the Euro; and
The updated assumptions on Probability of Success (PoS) associated with the Group’s CAR T
programs.
Trade payables amount to €6.6 million at year-end, which represents an increase of €1.9 million compared
to year-end 2020, which is mainly attributable to monthly effect in the timing of the expenses and the
payments related (see note 5.18).
The other current liabilities amount to €6.0 million at year-end which represents an increase of €0.3 million
compared to prior year-end. This increase is mainly explained by:
3 ‘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. The purpose of this measure
by Management is to identify the level of cash available internally (excluding external sources of financing) within 12
months.
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2021 Annual Report
• An increase on social security and payroll accruals of €0.2 million compared to December 31, 2020
is mainly related to employee movements in 2021;
• An accrual of €0.8 million for the reimbursement of R&D tax credit related to tax audit on fiscal year
2015. In 2020, an accrual had been established to cover for a €1.0 million reimbursement of R&D
tax credit related to an assessment resulting from an audit of fiscal years 2013 and 2014. The
reimbursement will be required through the first quarter of 2022 even though the management plans
to appeal the assessment, compensated by;
•
The decrease of the other current liabilities related to RCAs and other grants by €0.7 million. The
total amount of €1.1 million as of December 31, 2021 is attached to RCA conventions numbered
8087 (CYAD-01 – DEPLETHINK), 8436 (CYAD-211 Immunicy) and 8516 (new engagers) and is
explained by the excess of cash proceeds received from the Walloon Region compared to the
eligible expenses covered by these conventions recognized in 2021;
For more details on other current liabilities, refer to note 5.18.
1.11.3. Analysis of the consolidated net cash burn rate 4
The table below summarizes the net cash burn rate of the Company for the year 2021.
(€'000)
For the year ended 31 December,
2021
2020
Net cash used in operations
(26 643)
(27 665)
Net cash (used in)/from investing activities
(126)
157
Net cash (used in)/from financing activities
39 521
5 396
Effects of exchange rate changes
Change in Cash and cash equivalents
Change in Short-term investments
Net cash burned over the period
32
8
12 784
(22 104)
-
-
12 784
(22 104)
The net cash burn rate for the year ended December 31, 2021 is a net cash inflow amounting to €12.8
million, compared to a net cash outflow of €22.1 million for the year ended December 31, 2020.
The cash outflow resulting from operating activities amounted to €26.6 million for the year ended December
31, 2021, which is in line with the €27.7 million for the year ended December 31, 2020.
Cash flow from investing activities represented a net cash outflow of €0.1 million for the year ended
December 31, 2021, which is in line 2020 activities.
The increase in cash inflow from financing activities is primarily due to:
• An increase in the proceeds from capital raise of €36.6 million obtained in 2021. No capital increase
had occurred in the year 2020; and
• A partial offset coming from lower proceeds received from Walloon Region and Federal
Government in 2021 for a total amount of €4.4 million (compared to €7.3 million in 2020).
4 ‘Net cash burn rate’ is an alternative performance measure determined by the year-on-year net variance in the Group’s
treasury position as above defined. The purpose of this measure for the Management is to determine the change of the
treasury position.
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2021 Annual Report
1.12 Personnel
As of December 31, 2021, we employed 88 full-time employees, 6 part-time employees, 7 members of the
Executive Committee (among them 3 are under services agreement), and 2 managers under management
services agreements.
1.13 Environment
All entities of the Group continue to hold the permits required by their activities and are in compliance with
all applicable environmental rules.
1.14 Going concern 5
Management made an assessment of the Company’s ability to continue as a going concern through
preparation of detailed budgets and cash flow forecasts for the years 2022 and 2023. These forecasts reflect
the strategy of the Group and include significant expenses and cash outflows in relation to the development
of selected research programs and pipeline of products candidates. In performing this assessment,
management considered factors that could indicate the presence of material uncertainties that may cast
significant doubt upon the company’s ability to continue as a going concern. Factors considered included:
operating losses and absence of any firm commitments for additional financing before the reporting date.
As of December 31, 2021, the Company had cash and cash equivalents of €30.0 million and no short-term
investments. On January 8, 2021, we entered into a committed equity purchase agreement (“Purchase
Agreement”) over a 24-month term for up to $40.0 million with Lincoln Park Capital Fund, LLC (“LPC”),
pursuant to which LPC’s purchases are subject to certain conditions, including that the Company may only
deliver a Regular Purchase Notice (as that term is defined in the Purchase Agreement) of its ADSs so long
as the adjusted price of its ADSs exceeds $1.00. Over the remaining lifetime of the Purchase Agreement,
we will have the right to direct LPC to purchase up to an aggregate remaining amount of $28.0 million ADSs,
each of which represents one of our ordinary shares. As of December 31, 2021, the remaining amount of
$28.0 million of this equity purchase agreement is expected to strengthen the Company’s current statement
of financial position while also providing the Company with access to future capital on an as needed basis
and to ensure sufficient funding to cover its operations for the next 12 months from the date the financial
statements are issued.
Based on its current scope of activities, the Company estimates that its cash and cash equivalents as of
December 31, 2021 combined with the remaining access to the equity purchase agreement established with
Lincoln Park Capital Fund, LLC (remaining amount of $28.0 million as of December 31, 2021) should be
sufficient to fund operating expenses and capital expenditure requirements until mid-2023.
After due consideration of the above, the Board of Directors determined that Management has an
appropriate basis to conclude on the business continuity over the next 12 months the date the financial
statements are issued, and hence it is appropriate to prepare the financial statements on a going concern
basis.
5 The uncertainly raised by the COVID-19 pandemic is not impacting going concern. Although there are lot of uncertainties,
it does not impact the Company’s ability to continue operations until mid-2023 considering its treasury position as of
December 31, 2021 combined with the remaining $28.0 million from Lincoln Park Capital Fund. For additional information
on COVID-19 pandemic update, refer to note 5.2.1.
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2021 Annual Report
1.15 Risks and uncertainties
Reference is made to section 2.8 “Description of the principal risks associated to the activities of the Group“.
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. Throughout 2020 and
2021, Belgium and the United States, where the Company operates, have been impacted by temporary
closures. While progress has been made in the fight against the ongoing COVID-19 pandemic, including the
broad dissemination and administration of vaccines in certain countries, the COVID-19 pandemic has
continued to spread globally. The length or severity of this pandemic cannot be predicted, but the Company
anticipates that there may continue to be additional impacts from a prolonged COVID-19 environment on
the planned development activities of the Company.
Timely enrollment in clinical trials is reliant on clinical trial sites which may be adversely affected by global
health matters, including, among other things, the ongoing COVID-19 pandemic and the emerging variants,
such as Delta and Omicron. With regards to the Company’s clinical programs, no major disruption in
enrollment were experienced in the CYAD-101, CYAD-211 or CYAD-02 programs in 2021 due to the
coronavirus pandemic. Enrollment in the respective trials for CYAD-101 and CYAD-211 is ongoing without
any major disruption due to the coronavirus pandemic, however future disruptions may occur. However,
since 2020, certain clinical sites and institutions have not been able to receive visits from the Company or
its representatives during the coronavirus pandemic, which has delayed its data monitoring activities and
delayed its ability to lock the databases for completed studies.
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 the emergence of new variants, such as Delta and
Omicron, and, among other things, additional government restrictions intended to contain COVID-19’s
effects, 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.
In addition, after enrollment in these trials, if patients contract COVID-19 during participation in the
Company’s trials or are subject to isolation or shelter-in-place restrictions, they may drop out of its trials,
miss scheduled follow-up visits or otherwise fail to follow trial protocols. If patients are unable to follow the
trial protocols or if the Company’s trial results are otherwise disputed due to the effects of the COVID-19
pandemic or actions taken to mitigate its spread, the integrity of data from its trials may be compromised or
not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the
applicable program.
Some factors from the COVID-19 pandemic that the Company believes may adversely affect enrollment in
its trials include:
•
The diversion of healthcare resources away from the conduct of clinical trial matters to focus on
pandemic concerns, including the attention of physicians serving as the Company’s clinical trial
investigators, hospitals serving as its clinical trial sites and hospital staff supporting the conduct of
our clinical trials;
• Some patients who would otherwise be candidates for enrollment in the Company’s clinical trials
are at increased risk of severe effects of the coronavirus, which may lead to the death of some
patients and render others too ill to participate, limiting the available pool of participants for its trials;
•
•
•
The fact that there can be no guarantee that any proposed changes to the Company’s protocols, if
necessary, would be acceptable to regulators;
Limitations on travel that interrupt key trial activities, such as clinical trial site initiations and
monitoring; and
Interruption in global shipping affecting the transport of clinical trial materials being used in the
Company’s trials.
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These and other factors arising from the COVID-19 pandemic could worsen in countries that are already
afflicted with the virus or could continue to spread to additional countries, each of which may further
adversely impact the Company’s clinical trials. The global outbreak of the COVID-19 pandemic continues to
evolve, and the conduct of its trials may continue to be adversely affected, despite efforts to mitigate this
impact.
Even if the Company is able to enroll a sufficient number of patients in its clinical trials, delays in patient
enrollment may result in increased costs or may affect the timing or outcome of its clinical trials, which could
prevent completion of these trials and adversely affect its ability to advance the development of its product
candidates.
The impact of COVID-19 on the Company’s business is uncertain at this time and will depend on future
developments, which are highly uncertain and cannot be predicted, including 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 prolonged closures or other business disruptions may negatively affect the
Company’s 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.
1.16 Events and circumstances that could have a significant impact on the
future
The Company has not identified significant events and circumstances that could have a significant impact
on the future in addition to the potential impact of risks described in section 7 of chapter 2: "Description of
the principal risks associated to the activities of the Group".
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2. CORPORATE GOVERNANCE
2.1
General
This section summarizes the rules and principles on the basis of which the corporate governance of the
Company has been organized pursuant to the CCA, the Company's articles of association, and the
Company's corporate governance charter (the “Charter”) adopted in accordance with the Belgian Corporate
Code of Governance 2020 (the “CCG”) and updated regularly by the Board of Directors.
The Company does not incorporate the information contained on, or accessible through, its corporate
website into this Report, and you should not consider it a part of this Report.
The Charter is available on the Company’s website (www.celyad.com) under the Investors/Corporate
Governance tab.
The text of the CCG is available on the website of the Commission of Corporate Governance at
https://www.corporategovernancecommittee.be/fr/over-de-code-2020/code-belge-de-gouvernance-
dentreprise-2020.
The Board of Directors intends to comply with the provisions of the CCG but believes that the size and the
current state of development of the Company justifies certain deviations. These deviations are further
detailed in the Section 2.5 hereinafter.
The Charter includes the following main chapters:
• Structure and organization;
• Shareholder structure;
•
The Board : terms of reference;
• Chairman of the Board;
• Company Secretary;
• Board committees;
• Executive Committee;
• Rules preventing market abuse;
• Miscellaneous and annexes.
2.2
Board of Directors
2.2.1. Composition of the Board of Directors
As provided by the articles 7:85 et sq. of the CCA, the Company is managed by a Board of Directors acting
as a collegiate body. The Board of Directors' role is to pursue the long-term success of the Company by
providing entrepreneurial leadership and enabling risks to be assessed and managed. The Board of
Directors determines the Company's values and strategy, its risk preference and key policies. The Board of
Directors ensures that the necessary leadership, financial and human resources are in place for the
Company to meet its objectives.
The Company has opted for a one-tier governance structure. As provided by Article 7:93 of the CCA, the
Board of Directors is the ultimate decision-making body in the Company, except with respect to those areas
that are reserved by the law or by the Company's articles of association to the Shareholders Meeting.
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The Company's articles of association state that the number of directors of the Company, who may be natural
persons or legal entities and who need not be shareholders, must be at least three. At least half of the
members of the Board of Directors must be non-executive directors and at least three of them must be
independent directors.
A meeting of the Board of Directors is validly constituted if at least half of its members are present in person
or represented at the meeting. If that quorum is not met, a new board meeting may be convened by any
director to deliberate and decide on the matters on the agenda of the board meeting for which a quorum was
not met, provided that at least two members are present. Meetings of the Board of Directors are convened
by the Chairperson of the Board or the CFO or the Chief Legal Officer, or by at least two directors, whenever
the interest of the Company so requires. In principle, the Board of Directors will meet at least four times per
year.
The Chairperson of the Board of Directors shall have a casting vote on matters submitted to the Board of
Directors in the event of a tied vote.
Until such time as the Fortress Shareholders (which shall have the meaning ascribed to it in that certain
shareholders’ rights agreement dated as of December 2, 2021 by and between CFIP CLYD LLC and the
Company, in the form filed with the United States Securities and Exchange Commission on December 3,
2021) own in the aggregate less than 10% of the then outstanding shares (including shares underlying
American Depositary Shares) for a period of more than thirty (30) consecutive days:
(i)
(ii)
(iii)
(iv)
Fortress Investment Group LLC (“Fortress”) shall have the right to select two (2) individuals (the
“Fortress Designees”) to be, at Fortress’s option, (a) members of the Board, (b) non-voting
observers of the Board or (c) a combination thereof (provided that if Fortress selects both Fortress
Designees to be members of the Board, Fortress may also select a third Fortress Designee to be
a non-voting observer of the Board), and
the Board, at Fortress’s option, (a) shall recommend the confirmation or (re)appointment of any
two (2) Fortress Designees as members of the Board at any applicable general meeting of
shareholders of the Company, (b) shall appoint any two (2) Fortress Designees as non-voting
observers of the Board or (c) shall proceed to a combination thereof, and
Upon the termination of the board mandate of any Fortress Designee (for whatever cause), at
the option of Fortress, (a) the Company shall as soon as practicably possible co-opt to the Board
a replacement Fortress Designee, and shall use best efforts to cause the confirmation of the co-
optation at the next general meeting of shareholders of the Company; or (b) the Company shall
as soon as practicably possible approve the appointment of a replacement Fortress Designee as
a non-voting observer of the Board of Directors, and
the Company shall not, directly or indirectly, without the consent of recommend, directly or
indirectly, or take any action to (a) increase the size of the Board or (b) co-opt or appoint to the
Board, in place of the Fortress Designees, any individual other than a Fortress Designee.
At the date of this Report, the Board of Directors consists of 9 members, one of which is an executive director
(with daily management authority) and 8 of which are non-executive directors, including three independent
directors. The Board of Directors is composed of 6 men and 3 women.
Name
Mel Management SRL (1)
Filippo Petti
Serge Goblet
Chris Buyse
Position
Chairman of the Board
Non-Executive Director
Executive Director
Non-executive director
Non-executive director
Christopher LiPuma (2)
Non-executive director
Hilde Windels
Independent director
Term
2025
2024
2024
2024
2022
2022
Ami Patel Shah (3)
Non-Executive Director
2022
Board Committee Membership
Chairman of the Nomination and Remuneration
Committee
Member of the Audit Committee and the
Nomination and Remuneration Committee
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Dominic Piscitelli
Independent Director
Marina Udier
Independent Director
2024
2025
Chairman of the Audit Committee and member of
the Nomination and Remuneration Committee
Member of the Audit Committee
(1) Represented by Michel Lussier.
(2) Christopher LiPuma has been elected as Board member as of January 20, 2022, in replacement of RAD Lifesciences
BV who resigned from the Board on January 14, 2022.
(3) Ami Patel Shah has been elected as Board member on December 7, 2021 in replacement of Maria Koehler who has
resigned from the Board of Directors on August 5, 2021.
The following paragraphs contain brief biographies of each of the directors, or in case of legal entities being
director, their permanent representatives, with an indication of other relevant mandates as member of
administrative, management or supervisory bodies in other companies during the previous five years.
Michel Lussier serves as Chairman of the Board of Directors. Mr. Lussier co-founded Cardio3 Biosciences
SA the company which became Celyad SA. Mr. Lussier currently serves also on several Boards of Directors:
iSTAR Medical SA and Gabi Smart Care SA as Chairman, Occlutech AG as board member. Previously, Mr.
Lussier founded MedPole SA and its North American affiliate Medpole LTD, a Medtech and cell
therapy incubator for start-up companies, serving as CEO until July 2020. From May 2014 and until
September 2020, Mr. Lussier also served as the CEO of Metronom Health Inc, an early stage medical device
company founded by Fjord Ventures, where he also acted as a management consultant. Mr. Lussier served
as a member of the Board of Directors of Biological Manufacturing Services SA until 2017. Prior to that, from
2002 to 2013, he worked for Volcano Corporation, where he served in global leadership positions. Mr.
Lussier started his career with Medtronic where he held a number of technical, marketing, sales then general
management roles. Mr. Lussier obtained a Bachelor of Sciences degree in Electrical Engineering and
Master’s Degree in Biomedical Engineering at the University of Montreal. He also holds an MBA from
INSEAD, France.
Filippo Petti is Chief Executive Officer, Chief Financial Officer of the Company, and Executive Director. Prior
to joining the Company, Mr. Petti worked in healthcare investment banking both at Wells Fargo Securities
and William Blair & Company until 2017. Prior to his roles in investment banking, Mr. Petti spent several
years in equity research covering U.S. biotechnology companies both at William Blair & Company and
Wedbush Securities. He began his career as a research scientist at OSI Pharmaceuticals, Inc. focused on
drug discovery and translational research, and later transitioning into corporate development with the
company. Mr. Petti holds a Master of Business Administration from Cornell University, a Master of Science
from St. John’s University and a Bachelor of Science from Syracuse University.
Serge Goblet holds a Master Degree in Business and Consular Sciences from ICHEC, Belgium and has
many years of international experience as director in Belgian and foreign companies. Mr. Goblet is the
managing director of TOLEFI SA, a Belgian holding company and holds director mandates in subsidiaries
of TOLEFI.
Chris Buyse brings more than 30 years of international financial expertise and experience in introducing
best financial management practices. He is currently Managing Director of FUND+ NV, a fund that invests
in innovative Belgian Life Sciences companies. Between August 2006 and June 2014, Mr. Buyse served as
the Chief Financial Officer and board member of ThromboGenics NV, a leading biotech company that is
listed on NYSE Euronext Brussels. Before joining ThromboGenics, he was the Chief Financial Officer of the
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Belgian biotech company CropDesign, where he coordinated the acquisition by BASF in July 2006. Prior to
joining CropDesign NV he was financial manager of WorldCom/MCI Belux, a European subsidiary of one of
the world’s largest telecommunication companies and he was also the Chief Financial Officer, interim Chief
Executive Officer and member of the Board of Directors of Keyware Technologies. Mr. Buyse holds a
Master’s Degree in applied economic sciences from the University of Antwerp and a Master of Business
Association from Vlerick School of Management in Gent. He currently serves, in his own name or as
permanent representative of a management company, as member of the board of directors of the following
publicly and privately held companies: Bio Incubator NV, Pinnacle Investments SA, CreaBuild NV, Sofia
BVBA, Pienter-Jan BVBA, Life Sciences Research Partners VZW, Inventiva SA, The Francqui Foundation
and EyeDPharma SA. He has also previously held a directorship position at Bone Therapeutics SA from
2008 to 2019. Mr. Buyse is also Board member at Hyloris pharmaceuticals SA and the Foundation Louis-
Jeantet (CH).
Hilde Windels is the Chief Executive Officer of the privately held diagnostics company Antelope Dx BV and
she is also member of its boards of directors. Ms. Windels brings 20 years of experience in biotech with a
track record of business and corporate strategy, building and structuring organizations, private fundraising,
mergers and acquisitions and public capital markets. Ms. Windels has worked as Chief Financial Officer for
several biotech companies, amongst those Belgium based molecular Dx company Biocartis where she
started as Chief Financial Officer CFO in 2011. She transitioned to the co-Chief Executive Officer role in
2015, became Chief Executive Officer in 2017, and served in such role until 2019. Later that year, she joined
MyCartis NV until 2021 as Chief Executive Officer and in 2019 she was appointed CEO of Mycartis’ spin-
out Antelope Dx, where she now also serves as a Board member. Ms. Windels is member of the board of
directors of Erytech and MdxHealth. She holds a Master’s Degrees in Economics (Commercial Engineer)
from the University of Leuven (Belgium).
Dominic Piscitelli brings more than 20 years of industry experience, including debt and equity financings,
in-licensing
launches
transactions, acquisitions, marketing partnerships and commercial product
(XTANDI® and Tarceva®). Since September 2019 Dominic has served as the Chief Financial Officer of
ORIC Pharmaceuticals, Nasdaq-listed biotechnology company, that completed its initial public offering in
April 2020. Prior to joining ORIC, Mr. Piscitelli was CFO of AnaptysBio, a Nasdaq-listed biotechnology
company, where he helped raise over $500 million in an IPO and follow-on financings. From 2012 until 2017,
Mr. Piscitelli was Vice President of Finance, Strategy and Investor Relations at Medivation and played a key
role in its acquisition by Pfizer. Previously, he served as Senior Director of Collaborations and Operations
Finance at Astellas Pharma. Prior to that, Mr. Piscitelli served in various roles of increasing responsibility
culminating as the Vice President, Treasury & Management Finance at OSI Pharmaceuticals, and played a
significant role in their acquisition by Astellas. Mr. Piscitelli began his career with KPMG and is a certified
public accountant. He earned a bachelor’s degree in accounting and an MBA from Hofstra University (New
York).
Marina Udier, Ph.D., serves as CEO of Nouscom after joining as Chief Operating Officer in 2016 from
Versant Ventures, where she was Operating Principal. Prior to Versant, she held senior development and
commercial roles at Novartis in Basel including work as a Global Commercial Head. Previously, Dr. Udier
worked for McKinsey & Company in the US, working with Healthcare Fortune 500 companies in areas of
marketing, strategy and pricing. She has a Ph.D. in Organic Chemistry from Yale University.
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Ami Patel Shah is a Managing Director in Fortress Investment Group LLC’s Intellectual Property Group
based in San Francisco, where she focuses on a wide variety of investment opportunities in connection with
intellectual property and technology. Prior to joining Fortress in 2013, Ms. Shah worked for Intel, most
recently heading Intel’s Global Wireless Patents group, overseeing the Intel’s patent procurement, licensing,
transaction and monetization activities for Intel and their development partners. At Intel, Ms. Shah also held
wide-ranging and deep technical responsibilities, as well as led Intel’s standards bodies interactions. Before
joining Intel, she was with the law firms of Dorsey & Whitney, and Fish & Richardson where she worked on
patent prosecution, licensing and ITC litigation matters. Ms. Shah is recognized as one of the World’s
Leading IP Strategists by Intellectual Asset Magazine in the IAM 300, awarded to individuals with an
established track record in developing and rolling out world-class IP value creation programs. Ms. Shah
began her legal career as an examiner in the United States Patent Office and was an engineer in the auto
industry. Ms. Shah holds a J.D. from Cleveland State University along with a B.S. in Electrical and Computer
Engineering from Wayne State University.
Christopher LiPuma is a Director in Fortress Investment Group LLC’s Intellectual Property Group based in
San Francisco, where he focuses on a wide variety of investment opportunities in connection with intellectual
property, life sciences, and academic institutions. Prior to joining Fortress in 2018, Mr. LiPuma headed
business development for Kastle Therapeutics, a private equity backed biotechnology company acquiring
ultra-orphan drugs. Before joining Kastle, Mr. LiPuma was with OrbiMed Advisors, a life sciences focused
asset management firm. At OrbiMed, Mr. LiPuma worked on royalty monetizations, direct lending to late
development stage and early commercial stage life sciences companies, and several private equity
transactions focused on acquiring legacy assets from big pharma. Mr. LiPuma started his career as an
investment banker at Leerink Partners. Mr. LiPuma holds a B.A. from Hamilton College.
2.2.2. Board resolutions
The Board meets as frequently as the interest of the Company dictate, but in any case, sufficiently regularly
to enable it to discharge its duties effectively, and certainly not less than four times per year.
Each meeting is chaired by the Chairman and, in his absence, by the director appointed by the Board. The
Board may only validly deliberate and decide on issues before it, if at least half of its members are present
or represented. A new meeting must be convened if a quorum is not reached. The second meeting may
validly deliberate and decide on the items that were on the agenda of the first meeting regardless of the
number of directors present or represented, to the extent that at least two members of the Board are
present. Any director may represent more than one other director.
Resolutions are taken by a simple majority of the votes cast, except:
(i)
(ii)
for resolutions regarding the use of the authorized capital, and as long as Serge Goblet is a
director of the Company, the majority of the votes must include the positive vote of Serge Goblet,
or his abstention, to be adopted;
until such time as the Fortress Shareholders own in the aggregate less than 15% of the then
outstanding shares (including shares underlying American Depositary Shares) for a period of
more than thirty (30) consecutive days, any decision in respect of the following require the positive
vote of 90% of the directors present or validly represented: any IP Transaction (defined as the
termination of the Company’s intellectual property or any license, sublicense or contribution of
intellectual property rights to third parties) involving intellectual property rights licensed to the
Company or any of its subsidiaries by the Trustees of Dartmouth College relating to TCR
deficiency (which, for the avoidance of doubt, does not include the Company’s cardiological
medical devices), (such intellectual property rights the “Dartmouth IP”) with any of the following
characteristics: (i) a transfer of litigation or prosecution rights to licensees and sublicensees
associated with any of the Dartmouth IP, (ii) the granting of an exclusive license to any Dartmouth
IP, (iii) the termination of any rights made available to the Company or any of its subsidiaries to
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any Dartmouth IP or (iv) any license or sub)license that (x) does not constitute an arms-length
transaction for fair market value or (y) the terms of which, on their face, are not consistent with
market practice in the jurisdictions and industry in which the Company operates.;
Furthermore, until such time as the Fortress Shareholders own in the aggregate less than 10% of the then
outstanding shares (including shares underlying American Depositary Shares) for a period of more than
thirty (30) consecutive days, the Company shall not, directly or indirectly, without the consent of Fortress,
(a) incur or issue any indebtedness that would encumber any intellectual property of the Company, (b) issue
any Equity Securities (defined as any share and any other security, financial instrument, certificate or other
right (including options, futures, swaps and other derivatives) representing, being exercisable, convertible or
exchangeable into or for, or otherwise providing a right to acquire, directly or indirectly, any of the securities
mentioned above or any other security or financial instrument the value of which is based on any of the
foregoing) of the Company that are senior to the ordinary shares with respect to the right to receive (x)
dividends or other distributions to shareholders or (y) proceeds in the event of the liquidation, dissolution or
winding-up of the Company (including for such purposes in connection with any change of control
transaction), (iii) alter, amend or change the rights, preference or privileges of the shares, including in
connection with any reclassification, recapitalization, reorganization or restructuring, (iv) make any proposal
to amend, repeal or otherwise modify any provision of the Company’s articles of association that would be
reasonably expected to adversely affect the interests of Fortress or any Fortress Shareholder or (v) make
any proposal to modify the rights of any Equity Securities of the Company in a manner adverse to any
Fortress Shareholder.
2.2.3. Director Independence
In application of the article 7:87 of the CCA, a director of a listed company is considered as independent if
he does not entertain with the Company or an important shareholder of the Company any relation the nature
of which could put his independence at risk. If the director is a legal entity, the independence must be
assessed both in the case of the legal entity and its permanent representative. In order to verify if a candidate
director fulfils those conditions, the independence criteria of the article 3.5 of the BCG are applied and can
be summarized as follows:
•
•
•
•
•
•
•
The director has not been an executive member of the Board of Directors, or daily manager of the
Company (or an affiliate of the Company, if any), during a term of three years prior to his or her
election and does not possess any stock option of the Company related to that function;
The director has not been a non-executive director for a cumulative period of more than 12 years;
The director has not been a member of the managerial staff of the Company (or an affiliate of the
Company, if any) during a term of three years prior to his or her election and does not possess any
stock option of the Company related to that function;
The director does not receive and has not received any remuneration or other significant financial
advantage from the Company (or an affiliate of the Company, if any), other than the profit share
(“tantièmes”) and remuneration received in his or her capacity as a non-executive director or as a
member of the supervisory body;
The director does not own any corporate rights that represent 10% or more of the share capital or
voting rights of the Company, Further, the director cannot be appointed by a shareholder who falls
under the conditions set forth in this criterion;
The director does not and, during the year preceding his appointment, did not, have a significant
business relationship with the Company (or an affiliate of the Company, if any), either directly or as
a partner, shareholder, member of the Board of Directors or member of the managerial staff of a
company or of a person that maintains such a relationship;
The director is not and has not been at any time during the past three years, a partner or an
employee of its current or former statutory auditor or of a company or person affiliated therewith;
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2021 Annual Report
•
•
The director is not an executive director of another company in which an executive director of the
Company is a non-executive director or a member of the supervisory body, and has no other
significant ties with executive directors of the Company through his or her involvement in other
companies or bodies;
The director’s spouse, unmarried legal partner and relatives (via birth or marriage) up to the second
degree do not act as a member of the Board of Directors, member of the management board
(“directiecomité / comité de direction”) (should such corporate body be created) or daily manager
or member of the managerial staff in the Company (or an affiliate of the Company, if any), and do
not meet one of the criteria set out above.
The Board of Directors, assisted by the Chief Legal Officer and upon recommendation of the Remuneration
and Nomination Committee, determines annually if the conditions of independence are fulfilled by the
members of the Board.
2.2.4. Role of the Board in Risk Oversight
The Board of Directors is primarily responsible for the oversight of its risk management activities and has
delegated to the Audit Committee the responsibility to assist the Board of Directors in this task. While the
Board of Directors oversees the overall risk management, the Company’s Management is responsible for
the day-to-day risk management processes. The Board of Directors expects the management to consider
risk and risk management in each business decision, to proactively develop and monitor risk management
strategies and processes for day-to-day activities and to effectively implement risk management strategies
adopted by the Board of Directors. The Company believes this division of responsibilities is the most effective
approach for addressing the risks the Company faces.
2.2.5. Committees within the Board of Directors
2.2.5.1
General
Without prejudice to the role, responsibilities and functioning of the Executive Committee as set out below
under section “Executive Committee”, the Board of Directors may set up specialized committees to analyze
specific issues and advise the Board of Directors on those issues. Such committees are advisory bodies
only and the decision-making remains the collegiate responsibility of the Board of Directors. The Board of
Directors determines the terms of reference of each committee with respect to the organization, procedures,
policies and activities of the committee.
2.2.5.2
Audit Committee
At the date of this Report, the Audit Committee consists of three members: Dominic Piscitelli (Chairman),
Marina Udier and Hilde Windels.
The role of the Audit Committee is to ensure the effectiveness of the internal control and risk management
systems, the internal audit (if any) and its effectiveness and the statutory audit of the annual and consolidated
accounts, and to review and monitor the independence of the external auditor, in particular regarding the
provision of additional services to the Company. The Audit Committee reports regularly to the Board of
Directors on the exercise of its functions. The Audit Committee informs the Board of Directors about all areas
in which action or improvement is necessary in its opinion and produces recommendations concerning the
necessary steps that need to be taken. The audit review and the reporting on that review cover the Company
and its subsidiaries as a whole. The members of the Audit Committee are entitled to receive all information
which they need to perform their function from the Board of Directors, Executive Committee and employees.
Each member of the Audit Committee shall exercise this right in consultation with the Chairman of the Audit
Committee.
The Audit Committee’s duties and responsibilities include, among other things: the financial reporting, the
review of internal controls and risk management, and managing the internal and external audit process.
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Those tasks are further described in the Audit Committee charter as set out in the Charter and in the Article
7:99 §4 of the CCA.
Dominic Piscitelli, and Hilde Windels have been identified by the Company’s Board of Directors as having
the necessary expertise in accounting and audit matters to serve as experts on the Audit Committee.
The Audit Committee holds a minimum of four meetings per year.
2.2.5.3
Nomination and Remuneration Committee
As of the date of this Report, the Nomination and Remuneration Committee is composed of three members:
Mel Management SRL represented by Michel Lussier (Chairman), Hilde Windels and Dominic Piscitelli.
The Nomination and Remuneration Committee consists of not less than three directors, or such greater
number as determined by the Board of Directors at any time. All members must be non-executive directors
and at least a majority of its members must be independent in accordance with Article 7:87 of the CCA. The
Company’s Board of Directors has determined that Hilde Windels and Dominic Piscitelli are independent in
accordance with Article 7:87 of the CCA.
The Nomination and Remuneration Committee must have the necessary expertise as regards the
remuneration policy, and this condition is fulfilled if at least one member has had a higher education and has
had at least three years of experience in personnel management or in the field of remunerating directors and
managers. As of the date of this Annual Report, Mel Management SRL represented by Michel Lussier
(Chairman), Hilde Windels and Dominic Piscitelli satisfy this requirement.
The CEO has the right to attend the meetings of the Nomination and Remuneration Committee in an advisory
and non-voting capacity on matters other than those concerning himself. The Nomination and Remuneration
Committee will elect a chairman from amongst its members. The Chairman of the Nomination and
Remuneration Committee is actually Mel Management SRL represented by Michel Lussier.
The role of the Nomination and Remuneration Committee is to assist the Board of Directors in all matters:
• Relating to the selection and recommendation of qualified candidates for membership of the Board
of Directors;
• Relating to the nomination of the CEO;
• Relating to the nomination of the members of the Executive Committee, other than the CEO, upon
proposal by the CEO;
• Relating to the remuneration of independent directors;
• Relating to the remuneration of the CEO;
• Relating to the remuneration of the members of the Executive Committee, other than the CEO,
upon proposal by the CEO;
• On which the Board of Directors or the Chairman of the Board of Directors requests the Nomination
and Remuneration Committee's advice.
Additionally, with regard to matters relating to remuneration, except for those areas that are reserved by law
to the Board of Directors, the Nomination and Remuneration Committee will at least have the following tasks:
• Preparing the remuneration report (which is to be included in the Board of Director’s corporate
governance statement); and
• Explaining its remuneration report at the Annual General Shareholders Meeting.
It will report to the Board of Directors on the performance of these tasks on a regular basis. These tasks are
further described in the terms of reference of the Nomination and Remuneration Committee as set out in the
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Charter. The Nomination and Remuneration Committee will meet at least twice per year, and whenever it
deems it necessary to carry out its duties.
2.2.6. Meetings of the Board and the committees
In 2021, the Board of Directors held 10 meetings by telephone or videoconference:
2021
Board
Members
C. Buyse
S. Goblet
20 Jan
24 Mar
2 Jun
24 Jun
4 Aug
7 Sep
17 Sep
7 Oct
25 Nov
7 Dec
Present
Present
Present
Present
Absent
Present
Absent
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
M. Koehler
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
F. Petti
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
D. Piscitelli
Present
Present
Present
Present
Present
Present
Present
Absent
Present
Present
M. Udier
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
H. Windels
Present
Present
Present
Absent
Present
Present
Present
Present
Present
Present
RAD
Lifesciences
BV Mel
Management
SRL
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
In addition, nine notarized meetings of the Board of Directors took place in 2021 in relation to a capital
increase or the issuance of warrants:
2021
8 Jan
29 Mar
9 Apr
29 Apr
29 Jun
22 Jul
11 oct
20 Oct
8 Dec
Represented Represented Represented Represented Represented Present
Represented Represented Represented
Present
Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Represented Represented Represented Represented Represented Represented Represented Represented
Represented Present
Present
Present
Present
Represented Present
Present
Present
Board
Members
C. Buyse
S. Goblet
M. Koehler
F. Petti
D. Piscitelli
M. Udier
H. Windels
RAD
Lifesciences
BV Mel
Management
SRL
The Nomination and Remuneration Committee held 8 meetings by telephone or videoconference:
Remuneration and Nomination
Committee
F. Petti
D. Piscitelli
H. Windels
2021
18 Jan
17 Feb
22 Feb
3 Mar
21 Mar
9 Nov
24 Dec
28 Dec
Present
Present
Present
Present
Present
Present
N/A
N/A
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
BV Mel Management SRL
Present
Present
Present
Present
Present
Present
Present
Present
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2021 Annual Report
The Audit Committee held 5 meetings by telephone or videoconference.
Audit Committee
C. Buyse
D. Piscitelli
H. Windels
22 Mar
Present
Present
Present
26 May
Present
Present
Present
2021
2 Aug
Present
Absent
Present
23 Nov
1 Dec
Present
Present
Present
Present
Present
Present
2.3
Executive Committee
The Board of Directors has established an Executive Committee. The terms of service of the Executive
Committee have been determined by the Board of Directors and are set out in the Company’s Charter.
The Executive Committee consists of the Chief Executive Officer, or CEO (who is the chairman of the
Executive Committee), the Chief Financial Officer, or CFO, currently Filippo Petti ad interim, the Chief
Scientific Officer, the Chief Medical Officer, the Chief Legal Officer and the Vice President Clinical
Development and Medical Affairs, the Chief Business Officer, and the Chief Human Resources Officer.
The Executive Committee discusses and consults with the Board of Directors and advises the Board of
Directors on the day-to-day management of the Company in accordance with the Company's values,
strategy, general policy and budget, as determined by the Board of Directors.
Each member of the Executive Committee has been made individually responsible for certain aspects of the
day-to-day management of the Company and its business (in the case of the CEO, by way of delegation by
the Board of Directors; in the case of the other member of the Executive Committee, by way of delegation
by the CEO). The further tasks for which the Executive Committee is responsible are described in greater
detail in the sections referencing the Executive Committee, as set out in the Company’s Charter.
The members of the Executive Committee are appointed and may be dismissed by the Board of Directors
at any time. The Board of Directors appoints them following the recommendation of the Nomination and
Remuneration Committee, which shall also assist the Board of Directors on the remuneration policy of the
members of the Executive Committee, and their individual remunerations.
The remuneration, duration and conditions of dismissal of Executive Committee members is governed by
the contract entered into between the Company and each member of the Executive Committee with respect
to their function within the Company.
In principle, the Executive Committee meets every month. Additional meetings may be convened at any time
by the Chairman of the Executive Committee or at the request of two of its members. The Executive
Committee will constitute a quorum when all members have been invited and the majority of the members
are present or represented at the meeting. Absent members may grant a power of attorney to another
member of the Executive Committee. Members may attend the meeting physically or by telephone or video
conference. The absent members must be notified of the discussions in their absence by the Chairman (or
the Company Secretary, if the Executive Committee has appointed a Company Secretary from among its
members).
The members of the Executive Committee must provide the Board of Directors with information in a timely
manner, if possible, in writing, on all facts and developments concerning the Company that the Board of
Directors may need in order to function as required and to properly carry out its duties. The CEO (or, in the
event that the CEO is not able to attend the Board of Directors' meeting, the CFO or, in the event that the
CFO is not able to attend the Board of Directors' meeting, another representative of the Executive
Committee) must report at every ordinary meeting of the Board of Directors on the material deliberations of
the previous meeting(s) of the Executive Committee.
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2021 Annual Report
The following table sets forth the members of the Executive Committee who have performed during 2021.
Name
Filippo Petti
Charles Morris
Function
Chief Executive Officer and Chief Financial Officer
Chief Medical Officer
NandaDevi SRL, represented by Philippe Dechamps
Chief Legal Officer and Corporate Secretary
MC Consult SRL, represented by Philippe Nobels
Chief Human Resources Officer
ImXense SRL, represented by Frederic Lehmann
Vice President Clinical Development & Medical Affairs
Stephen Rubino
David Gilham
Chief Business Officer
Chief Scientific Officer
Year of
birth
1976
1965
1970
1966
1964
1958
1965
The following paragraphs contain brief biographies of each of the current members of the Executive
Committee or in case of legal entities being a member of the Executive Committee or key manager, their
permanent representatives.
Filippo Petti, CEO and CFO ad interim – reference is made to section “2.2.1. Composition of the Board of
Directors”.
Philippe Dechamps (representative of NandaDevi SRL) serves as Chief Legal Officer of the Company
and Secretary to the Board of Directors. Philippe started his legal career as an associate in Brussels with
the law firm Linklaters De Bandt from 1994 to 1998. Until 2003, he then served as a Legal manager at Solvay
Group to assist the company in its turnaround through several M&A operations in Europe, India and Far-
East Asia. In 2003, he took over the position of Legal Director at Guidant, the United States company
formerly active in the medical devices business before its acquisition by Boston Scientific and Abbott
Laboratories in 2005. At Abbott, Philippe was leading the legal affairs of Abbott Vascular International outside
of the United States. In 2008, Philippe joined Delhaize Group to lead the legal and government affairs in
Europe and Asia, before becoming Group General Counsel and Secretary to the Board of Directors in 2015.
In this position, he piloted the legal strategy to merge Delhaize Group with Royal Ahold in July 2016. Since
December 2018, Philippe is also member of the Board of Directors of Petserco SA, the holding company of
the Tom&Co group. Philippe holds law degrees from the Université Catholique de Louvain (UCL) and Vrije
Universiteit Brussel (VUB), and a Master of Law (LL.M) from Harvard Law School.
Philippe Nobels (representative of MC Consult SRL) serves as Vice President of Human Resources of
the Company. He started his career at Price Waterhouse (now PricewaterhouseCoopers) as auditor in 1989.
He also went in rotational assignment in Congo during 2 years on consulting missions for the World Bank.
In 1995, he joined Fourcroy as plant controller. Then, he joined Dow Corning in 1997 where he held different
positions in Finance and Human Resources. He led the HR operations in Europe, became the HR manager
for Dow Corning in Belgium, and HR Business Partner for the sales and marketing functions globally. As a
member of the sales and marketing Leadership teams, he contributed to Dow Corning’s major transformation
initiatives to increase organizational effectiveness, employees’ engagement & performance as well as
Business results. Mr. Nobels holds a Master’s Degree in Economics from the University of Namur.
Frédéric Lehmann (representative of ImXense SRL) serves as Vice President Clinical Development &
Medical Affairs of the Company. Dr. Lehmann is a physician by training, specialized in hematology and
oncology. Dr. Lehmann has extensive experience in oncology drug development spanning early to late
phase, including clinical trial design, translational research, regulatory interactions, and clinical risk
management. He started his academic career at the Ludwig Institute for Cancer Research in Brussels,
followed by a position at the Institute Jules Bordet. He then moved to the European Organization for
Research and Treatment of Cancer (EORTC) as Medical Advisor. Dr. Lehmann began his corporate career
at GlaxoSmithKline, where he led the early worldwide clinical development program for the Company’s
cancer vaccines and went on
for cancer
immunotherapeutics.
the research and development
incubator
lead
to
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2021 Annual Report
David Gilham serves the Company as Chief Scientific Officer. Dr. Gilham obtained his Ph.D from the
University of Dundee, UK under the supervision of Professor Roland Wolf OBE working on cytochrome
P4502D6 and Parkinson’s disease. In 1996, Dr. Gilham was recruited to work with Professor Robert Hawkins
at the University of Bristol, UK to work on chimeric antigen receptor (CAR) T cells as a part of the Chimeric
Eurocell European Programme lead by Prof Zelig Eshhar. In 1998, the group moved to the Paterson Institute
for Cancer Research, University of Manchester. The group maintained a strong translational focus delivering
several clinical trials of CAR T (including the first such trial to be initiated in the UK) while developing a strong
basic research core activity including the ATTACK European Programme that drew together colleagues
working in T cell therapy across Europe. Along with achieving academic independence and promotion to
Senior Fellow, Dr. Gilham took over the leadership of the laboratory group in 2009. The group moved to the
Institute of Cancer Sciences, University of Manchester based within the Manchester Cancer Research
Centre in 2015 and Dr. Gilham was appointed Reader in 2016. In September 2016, Dr. Gilham moved to
the role of Vice President at Celyad to continue working upon immune based therapies for cancer and
appointed to Chief Scientific Officer in May 2020.
Stephen Rubino, Ph.D., serves the Company as Chief Business Officer. Dr. Rubino brings over 30 years
of pharmaceutical leadership experience to the role of Chief Business Officer, with emphasis in the areas of
business development and licensing, new product development, commercial operations, pharmaceutical
strategy and investor relations. Dr. Rubino currently serves as an independent board member of Sermonix
Pharmaceuticals and Viracta Therapeutics. Dr. Rubino has also served Novartis Pharmaceuticals in a wide
range of roles and therapeutic areas, the last of which was as Global Head of Business Development and
New Product Marketing, responsible for developing and building the product pipeline for Novartis’ Cell &
Gene Therapies Unit. Prior to Novartis, Dr. Rubino worked for Schering–Plough (Merck) where his last role
was head of the Global Solid Tumor Oncology & Autoimmune Business Unit responsible for the licensing
and launch of Remicade, as well as the launch and commercialization of several global oncology brands. Dr
Rubino has also previously served as Chief Business & Strategy Officer at Omega Therapeutics and
Entrepreneur in Residence at Fortress Biotech. He has also previously served as a Director at Canada-
based Ilkos Therapeutics Inc. between 2017 and 2020 and U.S.-based Sermonix Pharmaceutical Inc.
between 2019 and 2021. Dr. Rubino received his Ph.D. from Weill Cornell University (New York) and his
Master of Business Association from Baruch University (New York).
Charles Morris, Ph.D., serves the Company as Chief Medical Officer. Dr. Morris is a medical oncologist
with over 20 years of oncology drug development experience in the international biotech and pharmaceutical
space. Prior to joining Celyad Oncology, Dr. Morris served as Chief Medical Officer of Radius Health and
held leadership positions at PsiOxus Therapeutics, ImmunoGen Inc and Allos Therapeutics, where he
contributed to all phases of development for solid and hematological tumor indications, as well as life-cycle
management development activities for FOLOTYN (pralatrexate) while at Allos. Before serving in these
positions, he was Vice President of Worldwide Clinical Research at Cephalon, Inc., where he helped the
company achieve its first oncology drug approval for Treanda® (bendamustine). He spent the early years of
his career in various roles at AstraZeneca, where he significantly contributed to the worldwide development
of Faslodex (fulvestrant), co-authored multiple publications regarding fulvestrant and breast cancer, and
supported early clinical development activities for Iressa® (gefitinib). Dr. Morris holds a Bachelor of Medicine,
Bachelor of Surgery and Bachelor of Medical Science in Clinical Pharmacology and Therapeutics degree
from Sheffield University Medical School in the UK and is a Member of the Royal College of Physicians of
London.
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2021 Annual Report
2.4
Conflict of Interest of Directors and members of the Executive Committee
and transactions with affiliated companies
2.4.1. General
Each Director and member of the Executive Committee is encouraged to arrange his or her personal and
business affairs so as to avoid direct and indirect conflicts of interest with the Company. The Company's
Charter contains specific procedures to deal with potential conflicts.
2.4.2. Conflicts of interest of Directors
The Article 7:96 of the CCA provides for a special procedure within the Board of Directors in the event of a
possible personal financial conflict of interest of one or more directors with one or more decisions or
transactions to be adopted by the Board of Directors. In the event of a conflict of interest, the director
concerned must inform his or her fellow directors of his or her conflict of interest before the Board of Directors
deliberates and takes a decision in the matter concerned. Furthermore, the conflicted director may not
participate in the deliberation and voting by the Board of Directors on the matter that gives rise to the potential
conflict of interest. The minutes of the meeting of the Board of Directors must contain the relevant statements
made by the conflicted director, as well as a description by the Board of Directors of the conflicting interests
and the nature of the relevant decision or transaction to be adopted. The minutes must also contain a
justification by the Board of Directors for the decision or transaction adopted, and a description of the
financial consequences thereof for the Company. The relevant minutes must be included in the (statutory)
annual report of the Board of Directors.
The Company must notify the Statutory Auditor of the conflict. The Statutory Auditor must describe in its
statutory annual audit report the financial consequences of the decision or transaction that gave rise to the
potential conflict.
This procedure does not apply to decisions or transactions in the ordinary course of business at customary
market conditions.
2.4.3. Existing conflicts of interest of members of the Board of Directors
Except as reported hereinafter, as far as the Company is aware, none of the Directors have a conflict of
interest within the meaning of Article 7:96 of the CCA which has not been disclosed to the Board of Directors.
Other than potential conflicts arising in respect of compensation-related matters, the Company does not
foresee any other potential conflicts of interest in the near future.
In 2021, certain members of the Board declared a conflict of interest. The following declaration were made
in that respect:
Excerpt from the minutes of the Board meeting of January 23, 2020:
“The article 7:96 of the BCAC provides that “if a director has, directly or indirectly, a conflicting financial
interest in a decision or operation to be decided by the board of directors, he has to inform the other directors
before the deliberation of the board of directors. His declaration, including the reasons for his conflicting
financial interest, must be recorded in the minutes of the board meeting that will take the decision. The
auditor must also be informed. The concerned directors cannot deliberate nor vote on the concerned
decisions”.
Maria Koehler informed the other directors that he has a conflicting financial interest in the proposed decision
on her remuneration. This declaration will be communicated to the statutory auditor of the Company and
inserted in the annual report 2021 in accordance with the article 7:96 of the Belgian Code of the Companies
and Associations. Maria Koehler left the videoconference, and the Board unanimously approved the
payment of 5,000 EUR to Maria Koehler in compensation of her significant scientific and consulting services
rendered to the CEO and to the Company in addition to her Board duties.
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2021 Annual Report
Maria Koehler then came back to the videoconference.”
“The Board discussed the allocation of warrants to Board members:
- Michel Lussier (10,000 warrants);
- Hilde Windels (10,000 warrants);
- Maria Koehler (10,000 warrants);
-
Serge Goblet (10,000 warrants);
- Chris Buyse (10,000 warrants);
- Rudy Dekeyser (10,000 warrants);
- Dominic Piscitelli (10,000 warrants);
- Marina Udier Blagovic (10,000 warrants).
The warrants will be offered under the Warrants Plan 2019. Each warrant will give the right to its owner to
acquire one new share of the Company. The exercise price will be equal to the fair market value of the
Company’s shares at the time of the offer, this value corresponding to the closing price of the share on the
day before the date of the offer.
The article 7:96 of the BCAC provides that “if a director has, directly or indirectly, a conflicting financial
interest in a decision or operation to be decided by the Board of Directors, he has to inform the other directors
before the deliberation of the Board of Directors. His declaration, including the reasons for his conflicting
financial interest, must be recorded in the minutes of the board meeting that will take [...] the decision. The
auditor must also be informed. The concerned directors cannot deliberate nor vote on the concerned
decisions”.
Michel Lussier informed the other directors that he has a conflicting financial interest in the decision
proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in the
annual report 2021 in accordance with the article 7:96 of the BCAC. Michel Lussier left the meeting room
and the Board unanimously approved the allocation of 10,000 warrants to Michel Lussier. Michel Lussier
then came back in the meeting room.
Serge Goblet informed the other directors that he has a conflicting financial interest in the decision proposed.
The Chairman thanked Serge Goblet for his declaration. This declaration will be communicated to the
statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article 7:96
of the BCAC. Serge Goblet left the meeting room and the Board unanimously approved the allocation of
10,000 warrants to Serge Goblet. Serge Goblet then came back in the meeting room.
Chris Buyse informed the other directors that he has a conflicting financial interest in the decision proposed.
The Chairman thanked Chris Buyse for his declaration. This declaration will be communicated to the
statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article 7:96
of the BCAC. Chris Buyse left the meeting room and the Board unanimously approved the allocation of
10,000 warrants to Chris Buyse. Chris Buyse then came back in the meeting room.
Rudy Dekeyser informed the other directors that he has a conflicting financial interest in the decision
proposed. The Chairman thanked Rudy Dekeyser for his declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Rudy Dekeyser left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Rudy Dekeyser. Rudy Dekeyser then came back in the meeting room.
Hilde Windels informed the other directors that she has a conflicting financial interest in the decision
proposed. The Chairman thanked Hilde Windels for her declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Hilde Windels left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Hilde Windels. Hilde Windels then came back in the meeting room.
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2021 Annual Report
Maria Koehler informed the other directors that she has a conflicting financial interest in the decision
proposed. The Chairman thanked Maria Koehler for her declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Maria Koehler left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Maria Koehler. Maria Koehler then came back in the meeting room.
Dominic Piscitelli informed the other directors that he has a conflicting financial interest in the decision
proposed. The Chairman thanked Dominic Piscitelli for his declaration. This declaration will be
communicated to the statutory auditor of the Company and inserted in the annual report 2021 in accordance
with the article 7:96 of the BCAC. Domonic Piscitelli left the meeting room and the Board unanimously
approved the allocation of 10,000 warrants to Dominic Piscitelli. Dominic Piscitelli then came back in the
meeting room.
Marina Udier informed the other directors that she has a conflicting financial interest in the decision
proposed. The Chairman thanked Marina Udier for her declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Marina Udier left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Marina Udier. Marina Udier then came back in the meeting room.”
Excerpt from the minutes of the Board meeting of August 4, 2021:
“The Board acknowledged the resignation of Maria Koehler as member of the Board with effective date as
of August 5, 2021.
The Board discussed the warrants allocated to Maria Koehler.
The article 7:96 of the BCAC (Belgian Company Code of Companies and Associations) provides that “if a
director has, directly or indirectly, a conflicting financial interest in a decision or operation to be decided by
the board of directors, he has to inform the other directors before the deliberation of the board of directors.
His declaration, including the reasons for his conflicting financial interest, must be recorded in the minutes
of the board meeting that will take [...] the decision. The auditor must also be informed. The concerned
directors cannot deliberate nor vote on the concerned decisions”.
Maria Koehler informed the other directors that he has a conflicting financial interest in the decision proposed
since it is envisaged to waive the condition of presence imposed by the warrants plans of the Company in
favor of Mrs. Koehler. This waiver would concern the warrants that have been allocated to Mrs. Koehler and
that are not already vested. This declaration will be communicated to the statutory auditor of the Company
and inserted in the annual report 2021 in accordance with the article 7:96 of the BCAC. Maria Koehler left
the videoconference.
The Board expressly waived the condition of presence imposed by the warrants plans of the Company in
favor of Maria Koehler, meaning that Maria Koehler will be allowed to exercise all her warrants during the
exercise periods provided by the plans, even if she stopped his professional activities in favor of the
Company on August 5, 2021, and even if her warrants have not been fully vested.
The Board decided to grant power of attorney to Adrien Lanotte and/or to any other attorney from the law
firm Harvest, located at 100 Boulevard du Souverain, 1170 Brussels, each with authorization to act on his
own and with power to sub-delegate, to sign and fill in all documents and to take all necessary steps
regarding public administration and third parties, with a view to proceeding to all required formalities for the
implementation of the above-adopted resolutions and their publishing in the annexes to the Belgian Official
Journal as well as for the revisions with Crossroads Bank for Enterprises and other public bodies.
Maria Koehler comes back to the videoconference.”
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2021 Annual Report
Excerpt from the minutes of the Board meeting of October 7, 2021:
“The Board discussed the allocation of warrants to Board members:
- Michel Lussier (10,000 warrants);
- Hilde Windels (10,000 warrants);
-
Serge Goblet (10,000 warrants);
- Chris Buyse (10,000 warrants);
- Rudy Dekeyser (10,000 warrants);
- Dominic Piscitelli (10,000 warrants);
- Marina Udier (10,000 warrants).
The warrants will be offered under the 2021 Warrants Plan. Each warrant will give the right to its owner to
acquire one new share of the Company. The exercise price will be equal to the fair market value of the
Company’s shares at the time of the offer, this value corresponding to the closing price of the share on the
day before the date of the offer.
The article 7:96 of the BCAC provides that “if a director has, directly or indirectly, a conflicting financial
interest in a decision or operation to be decided by the board of directors, he has to inform the other directors
before the deliberation of the board of directors. His declaration, including the reasons for his conflicting
financial interest, must be recorded in the minutes of the board meeting that will take [...] the decision. The
auditor must also be informed. The concerned directors cannot deliberate nor vote on the concerned
decisions”.
Michel Lussier informed the other directors that he has a conflicting financial interest in the decision
proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in the
annual report 2021 in accordance with the article 7:96 of the BCAC. Michel Lussier left the meeting room
and the Board unanimously approved the allocation of 10,000 warrants to Michel Lussier. Michel Lussier
then came back in the meeting room.
Serge Goblet informed the other directors that he has a conflicting financial interest in the decision proposed.
The Chairman thanked Serge Goblet for his declaration. This declaration will be communicated to the
statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article 7:96
of the BCAC. Serge Goblet left the meeting room and the Board unanimously approved the allocation of
10,000 warrants to Serge Goblet. Serge Goblet then came back in the meeting room.
Chris Buyse informed the other directors that he has a conflicting financial interest in the decision proposed.
The Chairman thanked Chris Buyse for his declaration. This declaration will be communicated to the
statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article 7:96
of the BCAC. Chris Buyse left the meeting room and the Board unanimously approved the allocation of
10,000 warrants to Chris Buyse. Chris Buyse then came back in the meeting room.
Rudy Dekeyser informed the other directors that he has a conflicting financial interest in the decision
proposed. The Chairman thanked Rudy Dekeyser for his declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Rudy Dekeyser left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Rudy Dekeyser. Rudy Dekeyser then came back in the meeting room.
Hilde Windels informed the other directors that she has a conflicting financial interest in the decision
proposed. The Chairman thanked Hilde Windels for her declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Hilde Windels left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Hilde Windels. Hilde Windels then came back in the meeting room.
Dominic Piscitelli informed the other directors that he has a conflicting financial interest in the decision
proposed. The Chairman thanked Dominic Piscitelli for his declaration. This declaration will be
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2021 Annual Report
communicated to the statutory auditor of the Company and inserted in the annual report 2021 in accordance
with the article 7:96 of the BCAC. Dominic Piscitelli left the meeting room and the Board unanimously
approved the allocation of 10,000 warrants to Dominic Piscitelli. Dominic Piscitelli then came back in the
meeting room.
Marina Udier informed the other directors that she has a conflicting financial interest in the decision
proposed. The Chairman thanked Marina Udier for her declaration. This declaration will be communicated
to the statutory auditor of the Company and inserted in the annual report 2021 in accordance with the article
7:96 of the BCAC. Marina Udier left the meeting room and the Board unanimously approved the allocation
of 10,000 warrants to Marina Udier. Marina Udier then came back in the meeting room.”
2.4.4. Related Party Transactions
To date, no related party transaction involving the Company’s Directors, or the members of the Executive
Committee, except section 2.4.3 above, has been disclosed to the Company.
2.4.5.
Transactions with affiliates
The Article 7:97 of the CCA provides for a special procedure that applies to intra-group or related party
transactions with affiliates. The procedure will apply to decisions or transactions between the Company and
affiliates of the Company that are not a subsidiary of the Company. It will also apply to decisions or
transactions between any of the Company’s subsidiaries and such subsidiaries’ affiliates that are not a
subsidiary of the Company.
Prior to any such decision or transaction, the Board of Directors of the Company must appoint a special
committee consisting of three independent directors, assisted by one or more independent experts. This
committee provides the Board of Directors with a written report giving the motives for the decision of the
envisaged operation, addressing at least the following elements: the nature of the decision or the operation,
a description and an estimation of the equity consequences, a description of the eventual other
consequences, the advantages and inconvenient resulting therefrom for the Company, as the case maybe.
The committee puts the proposed decision or operation in the context of the strategy of the Company and
determines if it causes any prejudice to the Company, if it is compensated by other elements of that strategy,
or if it is manifestly abusive. The remarks of the expert are integrated in the opinion of the committee.
The Board of Directors must then take a decision, taking into account the opinion of the committee. Any
deviation from the committee’s advice must be explained. Directors who have a conflict of interest are not
entitled to participate in the deliberation and vote. The committee’s advice and the decision of the Board of
Directors must be communicated to the Company’s Statutory Auditor, who must render a separate opinion.
The conclusion of the committee, an excerpt from the minutes of the Board of Directors and the opinion by
the Statutory Auditor must be included in the (statutory) annual report of the Board of Directors.
The procedure does not apply to decisions or transactions in the ordinary course of business at customary
market conditions, and transactions or decisions with a value of less than 1% of the consolidated net assets
of the Company.
2.4.6. Code of Business Conduct and Ethics
2018.
In 2015, the Company adopted a Code of Business Conduct and Ethics, or the Code of Conduct, applicable
to all of its employees, members of its Executive Committee and directors. It has been updated on October
5,
at
https://www.celyad.com/en/investors/corporate-governance. The Audit Committee is responsible for
overseeing the Code of Conduct and is required to approve any waivers of the Code of Conduct for
employees, members of its Executive Committee and directors.
the Company’s website
of Conduct
The Code
available
on
is
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2021 Annual Report
2.4.7. Market abuse regulations
On June 17, 2013, the Board of the Company defined specific rules to prevent the illegal use of inside
information by board members, shareholders, managers and employees or the appearance of such use
(“the Market Abuse Policy”). The Market Abuse Policy is regularly reviewed and updated by the Board of
Directors and is available on the Company’s website.
The Policy applies to all holders of inside information. An insider can be given access to inside information
within the scope of the normal performance of his or her duties. The insider has the strict obligation to treat
this information confidentially and is not allowed to trade financial instruments of the Company to which this
inside information relates.
In accordance with art 25bis §1 of the law of August 2, 2002 and the EU Regulation 596/2014 of April 16,
2014 on market abuse (the “MAR”), the Company has established a list of persons in the Company who,
based on an employment or service agreement, have contracted with the Company and have during the
course of their duties access to inside information directly or indirectly. This list is updated regularly and
remains at the disposal of the FSMA for a period of 5 years.
2.5
Corporate Governance Code
The Company's Board of Directors complies with the principles of the CCG. However, the Company deviates
from the following principles:
• Remuneration in company’s shares (principle 7.6): as per applicable laws, the Company does not
meet the legal requirements to proceed with a shares buy-back and, consequently does not own
treasury shares, and therefore, is not able to grant a portion of non-executive directors’
remuneration in company’s shares;
• No grant of stock options to independent directors (principle 7.6): since the Company is not able to
offer treasury shares, independent directors may be allocated a fixed number of subscription rights
(warrants). This allocation of warrants is not related to any performance criteria. As further detailed
in the Company’s Remuneration Policy, this allocation is aimed at attracting highly skilled non-
executive directors in a highly dynamic and competitive market;
• Absence of minimum detention of shares (principle 7.9): the Company has not fixed any minimum
threshold for the detention of shares by the members of the Executive Committee, since the
Company does not own treasury shares and does not have the possibility to offer shares for free.
However, the members of the Executive Committee hold subscription rights (warrants) on the
Company’s shares as described in the Remuneration Report;
• No clawback (principle 7.12): at the date of this report, the Company has not adopted any clawback
provision to claim variable remuneration from the Executive Committee members, given the
practice of the industry in which the Company operates and the difficulties to recruit in this
competitive environment.
The Company has not adopted a diversity policy. The talents market is particularly tense and dynamic in the
biopharmaceutical industry and developing a diversity policy adjusted to this fast-changing environment was
not deemed to be the best instrument to meet the Company’s challenges in human resources. Over the past
years, the Company has successfully achieved a broad degree of diversity from a gender, citizenship,
expertise and educational background perspective at the Company’s Board of Directors, Executive
Committee, Management and staff levels. The Company has attracted talents from various countries which
reflects the Company’s international footprint to support the Company’s strategy.
At the Board of Directors, the Company complies with Belgian laws on gender with at least one third of the
members who are from a different gender. One Board member is Canadian, three are Americans, one is
Americano-Croatian, and four are Belgians.
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2021 Annual Report
At the Executive Committee, two members are Americans, one is English, and three are from Belgium. The
Company will pursue its efforts to increase the female presence at the Executive Committee.
The Management team is composed of 16 members, where the Company counts 43.7 % (7) of female and
56.3% (9) of male. Those managers or directors have different nationalities (from Belgium, Mexico, and the
US).
Regarding the employees not included above the Company records 53% female employees and 47% male
employees.
In accordance with the CCG, the Board of Directors of the Company will review its Charter from time to time
and make such changes as it deems necessary and appropriate. The Charter, together with the Company’s
articles of association, is available on the Company's website (www.celyad.com) and can be obtained free
of charge at the registered office of the Company.
2.6
Remuneration Policy
2.6.1.
Introduction
The remuneration policy of the Company (the “Policy”) has been approved at the shareholders meeting of
May 5, 2021.
The Policy is established to be competitive in the (employment) markets in which the Company operates,
mainly the United States and Europe. The approach taken by the Company is to apply a remuneration policy
which is overall balanced and allows tailoring individual remuneration packages to ensure a fair and
competitive remuneration for the (job)market in which our key persons operate. The Company believes this
adds to the long-term value creation for all our stakeholders.
testing and eventually commercializing
As a clinical-stage biotechnology company, the Company aims at achieving a strategy involving discovering,
developing,
(potential) product candidates. Successful
implementation of this strategy requires an intense long-term effort of highly qualified persons. As such, this
Policy is aimed at attracting and retaining highly qualified persons for executive and non-executive positions
on our Board of Directors as well as executive management and to motivate them to contribute to our long-
term goals and strategy.
2.6.2. Remuneration of the Board of Directors
2.6.2.1
Principles
The Policy is aimed at attracting non-executive directors with the most relevant skills, knowledge and
expertise in a highly competitive and quickly evolving industry. The Policy will help the Company attract and
retain a diverse and international team of non-executive directors, striking a balance between scientific,
financial, operational and strategic contributions, promoting an open, fair, sustainable and equitable
company culture, driven by success.
The remuneration of the non-executive Directors is determined by the Shareholders’ Meeting upon proposal
of the Board of Directors based on a recommendation from the Nomination and Remuneration Committee.
The Nomination and Remuneration Committee benchmarks non-executive Directors' compensation against
peer companies to ensure that it remains fair and competitive. The Directors’ remunerations are therefore
market driven.
2.6.2.2
Components
The Policy is based on the following fixed components:
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2021 Annual Report
(a) A fixed fee, consisting of a base fee and an additional fee if the non-executive director is the
Chairman of the Board or any of its Committees or if the non-executive Director is a member of a
Board Committee;
(b) Warrants.
The remuneration of non-executive Directors does not contain any variable part and is not based on any
performance conditions.
As the Company has no distributable reserves, it does not meet the legal requirements to proceed to a
shares buy-back, therefore does not own treasury shares and is then currently unable to grant shares to the
non-executive directors as part of their remuneration. This is a deviation from principle 7.6 of the CCG.
Fixed fee
The fixed fee of non-executive directors consists of:
(a) A fixed annual fee (retainer) of 18,000 EUR (36,000 EUR for the Chairman of the Board), including
the four annual, ordinary Board meetings;
(b) A supplemental fixed fee of 3,000 EUR (5,000 EUR for the Chairman of the Board) for the
participation to extraordinary Board meetings of more than 2 hours, and 1,500 EUR (2,500 for the
Chairman of the Board) for the participation to extraordinary Board meetings of less than 2 hours;
(c) A supplemental fixed annual fee (retainer) of 15,000 EUR for membership of each Committee of
the Board of Directors, increased by 5,000 EUR for the Chairmanship of such Committee;
(d) An extraordinary fee of €3,000 for specific assignments to a non-executive director, on request of
the CEO and with prior approval of the Board of Directors.
The Board fees are paid in quarterly installments at the end of each subsequent calendar quarter.
The Company will also reimburse out-of-pocket expenses (such as, without limitation, travel, meals and
lodging expenses) incurred by directors in direct relation with their Board duties.
Warrants
In deviation from the principle 7.6 of the CCG, the Board has determined that the grant of warrants to non-
executive or independent directors is in the best interest of the Company to attract and retain highly skilled
directors in a very dynamic and competitive environment. The grant of warrants is a commonly used
remuneration instrument in the sector in which the Company operates, in particular in the United States
where the Company is active. In addition, the Company is not entitled to own treasury shares (see above)
and is currently unable to offer any remuneration in shares. Finally, the grant of warrants provides an
attractive additional remuneration without impacting the Company’s cash. Without this possibility, the
Company would be subject to a considerable disadvantage compared to competitors offering warrants to
their non-executive directors.
The grant of warrants is not linked or subject to any performance conditions and consequently, does not
qualify as variable remuneration.
The warrants are usually issued by decision of the Board of Directors within the framework of the authorized
capital (but can also be issued by decision of the Shareholders’ Meeting). The warrants are then offered to
non-executive directors by decision of the Board of Directors upon recommendation of the Nomination and
Remuneration Committee. Conflict of interest procedure applies to such decision of the Board. Each warrant
gives its holder the right (but not the obligation) to subscribe, under the exercise conditions, during the
exercise periods and against payment of the exercise price, to one Company’s share.
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2021 Annual Report
Company’s warrants are granted for a limited term. This term is determined by the Board of Directors, in
compliance with the CCA, with a maximum of ten years. The warrants have a vesting period of minimum
three (3) years and may be exercised to the extent vested. Shares obtained through the exercise of warrants
are freely transferrable.
The exercise price is equal to the fair market value of the Company's shares at the time of the offer. This
value is determined by the Board of Directors and corresponds to either the closing price of the Company's
share on the day before the date of the offer or the average of the thirty (30) calendar days preceding the
date of the offer of the closing price of the Company's Share.
The warrants can be immediately exercised by the beneficiaries in the following situations:
(a) Share capital increase in cash without suspension of the preferential rights of the existing
shareholders;
(b) Takeover bid on the shares of the company as of the announcement of the public offer by the
FSMA;
(c) Change of control on the company;
(d) Conclusion of a “strategic partnership” with an important industrial actor, active in the life-science
sector, and if the “strategic partnership” is qualified as such by the board of directors.
For further details on the terms and conditions of our warrants plans, we refer to the plans available on our
website and as may be amended from time to time.
2.6.2.3
Contract terms and conditions
The directors' mandate may be terminated "ad nutum" (at any time) without any form of compensation.
There is no specific agreement between the Company and non-executive directors which waives or restrains
the right of the Company to terminate “ad nutum” (at any time) the mandates of the directors.
The Company has signed with its directors an engagement letter consistent with the terms of this Policy.
2.6.3. Remuneration of the Executive Committee
2.6.3.1
Principles
The Company’s remuneration Policy for the members of its Executive Committee is aimed at attracting,
motivating, and retaining top talents in a very competitive and international environment to deliver our
strategic and operational objectives. The Company’s aim is therefore to be competitive against peer
companies in its markets, to incentivize performance and not to discriminate on any manner.
The remuneration Policy is driven by the employees’ and the Company’s performance. The remunerations
are based on market benchmarks.
The remuneration of the members of the Executive Committee is determined by the Board of Directors based
on recommendations made by the Nomination and Remuneration Committee, further to a recommendation
made by the CEO to the Nomination and Remuneration Committee (except where his own remuneration is
concerned).
The Nomination and Remuneration Committee takes into consideration the employment conditions of
employees and ensures that the remuneration of the Executive Committee remains proportionate to the
remuneration of the employees, taking into consideration the degree of responsibility of the Executive
Committee. Both the members of Executive Committee and employees’ remunerations are market driven.
For employees, the Company’s remuneration is based on an independent benchmark done by a reputed
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2021 Annual Report
international firm. The benchmark includes data points from biotech, medium and large pharmaceutical
companies and is performed on an annual basis.
2.6.3.2
Components
The remuneration of the Executive Committee is based on the following fixed and variable components:
(a) Base fixed remuneration ;
(b) Variable annual cash remuneration;
(c) Pension;
(d) Fringe benefits; and
(e) Warrants.
The structure of the remuneration of Executive Committee members consists in an appropriate balance
between fixed and variable remuneration. The nature and magnitude of the variable remuneration is
structured to align the interests of the Executive Committee members with the sustainable value-creation
objectives of the Company. Pension and other fringe benefits complete the remuneration package in line
with market practice. The actual relative weights of the components of the remuneration package depends
on the achievement of the performance criteria, the role and the location of each Executive Committee
member as specified below, and aims at ensuring remuneration packages that are competitive and in line
with market practice.
Base Fixed Remuneration
Each member of the Executive Committee is entitled to a base fixed remuneration designed to fit
responsibilities, relevant experience, and competences, in line with market rates for equivalent positions.
Variable Annual Cash Remuneration
The base amount of the variable remuneration is based on the Company’s performance and the individual
performance of the Executive Committee members measured against the individual and Company’s
objectives.
For the CEO, the variable remuneration is based on 75% of the Company performance and 25% of individual
performance. For the other members of the Executive Committee, the variable remuneration is based on
50% of Company performance and 50% of individual performance.
The variable compensation represents 30% of the fixed compensation at target for non-US members, 35%
to 40% of the fixed compensation at target for US-based members and 45% of the fixed compensation at
target for the CEO. Those target percentages may be multiplied by a factor from 0% to 200%, depending on
the individual performance.
The Variable Annual Cash Remuneration is therefore subject to an absolute cap of 200% of the fixed
compensation, in line with principle 7.10 of the CCG.
The Company objectives are determined annually by the Board of Directors, ultimately at the start of the
period in which the incentive may be earned.
The individual performance of each member of the Executive Committee is determined by an annual
assessment between the individual and the CEO (or, for the CEO, between the CEO and the Chairman of
the Board). It consists of SMART (Specific, Measurable, Actionable, Realistic, Time driven) and challenging
objectives. Those individual objectives are aligned and consistent with the Company’s strategic objectives.
The performance assessment leads to a score that will define the overall individual performance and is
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2021 Annual Report
determined by the Board of Directors upon recommendation of the Nomination and Remuneration
Committee.
The Company’s objectives are aligned with the Mission and the Vison of the Company and contribute to the
Company’s strategy, the enhancing of patients’ well-being and life and shareholders value creation, while
maintaining a solid cash position. The Company’s objectives are typically based on a combination of various
elements:
• Clinical Product Testing and Development
- Clinical trial activity (operational and medical)
- Regulatory
- Manufacturing
-
Translational Analysis
• Pre-Clinical Product Development
- Clinical (Protocol Development)
- Regulatory (IND/CTA submission)
- Manufacturing (Clinical Process Development)
- Quality Assessment and Quality Control (CMC)
• R&D Engine
- Pre-clinical Product and Platform Development
-
-
Target identification and validation
Intellectual property creation
• External Visibility
- Peer reviewed and corporate publications
-
-
Invited presentations
Investors relations/media
• Company funding, cash runway and the efficient use of financial and non-financial resources
against budget
• External partnership development and collaboration
The Company’s and the individual’s performances are assessed in the first quarter of each calendar year by
the Board of Directors. The variable compensation is paid to the members of the Executive Committee in
the first quarter of the following year upon decision of the Board of Directors.
In deviation from principle 7.12 of the CCG, there is no possibility for the Company to reclaim the variable
remuneration.
Pension
Each member of the Executive Committee who is an employee of the Company is entitled to the participation
to pension plans with defined contributions.
For Belgium-based members of the Executive Committee, defined contributions pensions are paid in a
Group Insurance plan which also includes a health insurance and a life insurance.
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2021 Annual Report
US-based members of the Executive Committee participate to an employer-sponsored defined-contribution
pension account defined in subsection 401(k) of the Internal Revenue Code disability insurance and life
insurance.
The members of the Executive Committee who are engaged through services or consulting agreements are
not entitled to a group insurance plan, or to an employer-sponsored defined-contribution pension account
defined in subsection 401(k) of the US Internal Revenue Code, or to a health insurance plan.
Fringe benefits
Each member of the Executive Committee is entitled to several fringe benefits which may include:
(a) A company car;
(b) A lump-sum expense allowance;
(c) If required by their specific social or tax status, a housing allowance, tax advisory services,
relocation allowances, schooling allowances;
(d) The reimbursement of other expenses related to their responsibilities in the company.
On an exceptional basis and depending on the employment market conditions, a sign on bonus may be
granted when a member of the Executive Committee is hired. The sign on bonus is approved by the Board
of Directors based on recommendations made by the Nomination and Remuneration Committee.
Warrants
The Company may from time to time offer to the members of the Executive Committee to participate to a
warrants plan at the discretion of the Board of Directors. The warrants are usually issued by decision of the
Board of Directors within the framework of the authorized capital (but could also be issued by decision of the
Shareholders’ Meeting). The warrants are then offered to each member of the Executive Committee by
decision of the Board of Directors upon recommendation of the Nomination and Remuneration Committee.
Each warrant gives its holder the right (but not the obligation) to subscribe, under the exercise conditions,
during the exercise periods and against payment of the exercise price, to one Company’s share.
The number of warrants offered to each of the beneficiaries is freely determined by the Board of Directors,
acting upon the recommendation of the Nomination and Remuneration Committee. The number of warrants
is based on a benchmarking exercise regularly performed to ensure that the grants are competitive and in
line with market practice.
When the offer of warrants is based on the individual performance of the member of the Executive
Committee, the performance scores range from 1 (underperforming) to 5 (exceeding performance):
(a) If the performance score is 1, the number of warrants is zero;
(b) If the performance score is 2, the number of warrants is multiplied by a factor between 50% to 90%;
(c) If the performance score is 3, the number of warrants is multiplied by a factor of 100%;
(d) If the performance score is 4, the number of warrants is multiplied by a factor between 100% and
125%;
(e) If the performance score is 5, the number of warrants is multiplied by a factor between 125% and
150%.
In principle, the performance score is based on an assessment of the individual performance over one year.
Yet, the vesting period of minimum three (3) years applied on the warrants, whose value is notably impacted
by the performance of the Executive Committee, implies that the Company complies with a long term view
for a major portion of the variable remuneration of the members of the Executive Committee.
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2021 Annual Report
Under our incentive plans, warrants are granted for a limited term. This term is determined by the Board of
Directors, in compliance with the provisions of the CCA with a maximum of ten years. The warrants have a
vesting period of minimum three (3) years and may be exercised to the extent vested. Shares obtained
through the exercise of warrants are freely transferrable.
The exercise price is equal to the fair market value of the Company's shares at the time of the offer. This
value is determined by the Board of Directors and corresponds to either the closing price of the Company's
share on the day before the date of the offer or the average of the thirty (30) calendar days preceding the
date of the offer of the closing price of the Company's Share.
The warrants can be immediately exercised by the beneficiaries in the following situations:
(a) Share capital increase in cash without suspension of the preferential rights of the existing
shareholders;
(b) Takeover bid on the shares of the company as of the announcement of the public offer by the
FSMA;
(c) Change of control on the company;
(d) Conclusion of a “strategic partnership” with an important industrial actor, active in the life-science
sector, and if the “strategic partnership” is qualified as such by the board of directors.
For further details on the terms and conditions of our warrants plans, we refer to the plans available on our
website and as may be amended from time to time.
In deviation from the principle 7.9 of the CCG, the Company has not fixed any minimum threshold for the
detention of shares by the members of the Executive Committee. However, the members of the Executive
Committee hold subscription rights (warrants) on the Company’s shares as described in above in this
Remuneration Policy, enabling them to hold shares in the Company.
2.6.3.3
Contract terms and conditions
The members of the Executive Committee are engaged based on a services agreement or an employment
contract.
Labour law applies to the contractual arrangements with the members of the Executive Management
engaged on an employment contract.
When the member of the Executive Committee is engaged on a services agreement, it generally provides
for a notice period of six months and for the possibility to terminate the agreement with cause and without
indemnity.
No specific severance clauses are agreed as a rule, except when duly justified after recommendation of the
Nomination and Remuneration Committee.
There is no specific additional individual plan regarding supplementary pension or early retirement schemes
put in place for the members of the Executive Committee.
2.6.4. Deviations from this Policy
The Board has the authority to temporarily deviate from this Policy in case of exceptional circumstances,
primarily those in which deviation is necessary to serve the long-term interests and sustainability of the
company or to guarantee the viability of the company. Should there be a need to deviate from this
remuneration Policy, the CEO will bring substantiated arguments to the Nomination and Remuneration
Committee for recommendations and approval by the Board of Directors. Any deviations from this policy will
be described in the Remuneration report.
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2021 Annual Report
2.7
Remuneration report
2.7.1.
Introduction
In 2021, the remuneration of the Board of Directors was based on a fixed remuneration and a fixed grant of
warrants, whereas the remuneration of the Executive Committee members was based on a base fixed
remuneration, a variable annual cash remuneration, fringe benefits and long-term share-based incentives
(warrants).
The variable remuneration of the Executive Committee members was calculated based on the Company
and the individual’s performance. The Company’s performance was measured against the Company’s
objectives, and the Executive Committee members’ performance, against their individual objectives.
The Company’s objectives have been determined by the Board of Directors at the beginning of the year. For
2021, the Board of Directors has decided to establish the Company’s performance at 90%, reflecting the
level of achievement of the Company’s objectives based on the execution of our CYAD-02, CYAD-101 and
CYAD-211 clinical programs, the building of our long-term shRNA pipeline, our licensing and business
development, and the financing of the Company, taking once again into consideration the challenging
sanitary conditions faced in 2021 with the pandemic of COVID-19.
The individual performance of each member of the Executive Committee has been determined by an
individual assessment between the Executive Committee member and the CEO (or, for the CEO, between
the CEO and the Chairman of the Board). The assessment of the Executive Committee member and the
CEO was reviewed by the Nomination and Remuneration Committee which made a recommendation to the
Board of Directors for final decision. The CEO did not participate to any decision regarding his own individual
performance.
For the CEO, the variable remuneration is based on 75% of the Company performance and 25% of individual
performance. For the other members of the Executive Committee, the variable remuneration is based on
50% of Company performance and 50% of individual performance.
The variable compensation represents 30% of the fixed compensation at target for non-US members, 35%
or 40% of the fixed compensation at target for US-based members and 45% of the fixed compensation at
target for the CEO. Those target percentages may be multiplied by a factor from 0% to 200%, depending on
the individual performance.
Therefore, the following formula has been used to calculate the amount of the variable remuneration:
(Annual salary/fee x % contractual bonus x % Company performance x ratio Company performance%)
PLUS
(Annual compensation/fee x % contractual bonus x % linked with the individual performance x ratio Individual
performance).
In 2021, the Board of Directors, upon recommendation of the Nomination and Remuneration Committee,
has also decided to offer to the members of the Executive Committee the opportunity to participate to a
warrants plan.
Reference is made to the section 2.5 of this Annual Report regarding the deviations from certain principles
of the CCG relative to the remuneration of the Board of Directors and the Executive Committee.
In the wave of the shareholders’ rights reform, the company complied with the new standardized
remuneration report as presented by the EU Commission currently as a draft (Draft Guidelines on the
standardized presentation of the remuneration report under Directive 2007/36/EC, as amended by Directive
(E1U) 2017/828, as regards the encouragement of long-term shareholder engagement).
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2021 Annual Report
The Company seeks to improve permanently the quality and transparency of its remuneration to the Board
and to the Executive Committee and to take into account the observations of its shareholders or proxies.
The remuneration Policy and this remuneration report provide for a greater degree of disclosure and
transparency on all the components of the remuneration of the Board and the Executive Committee, and the
link between the remuneration and the performance of the Company.
The total remuneration of the Board of Directors, the CEO and the Executive Committee members is detailed
hereinafter.
2.7.2.
Total Remuneration
In this Section, the Total Remuneration Tables are structured as follows:
Table 1 - Total Remuneration (1)
1. Fixed Remuneration
2. Variable Remuneration
Name,
Position (2)
Fixed
Fees
Board
Fees
Others
Benefits
(3)
One Year
Variale
(4)
Multi Year Variable
(5)
3. Extraordinary
items
(6)
4. Pension
Expense
(7)
5. Total
remuneration
6. Proportion of
fixed & Variable
Remuneration
(8)
(1) All components of remuneration are reported in gross amounts
(2) If the officer has not been in service for the entire year of the report, the start date and/or the date of the end of his
contract must be informed
(3) This component includes death and disability benefits, medical expenses and other additional benefits
(4) The amount reported is equal to the monetary value of the variable remuneration acquired during the year reported
(2021)
(5) Benefit in kind on granted warrants – according to the Belgian Act of 26 March 1999.
(6) Extraordinary items paid in 2021: the grants of warrants are reported under this section, considered as extraordinary,
fixed items of the remuneration.
(7) The reported amount contains all contributions that were actually paid by the employer during the year to pension
plans.
(8) Relative share of fixed remuneration = [Fixed remuneration + cost of pension] / [Total remuneration]
Relative share of variable remuneration = [Variable remuneration] / [Total remuneration]
2.7.2.1
Total Remuneration of the Board of Directors
Table1 - Total remuneration (1)
2. Variable
remuneration
3. Extraordinary
items awarded in
Name, Position
(2)
1. Fixed remuneration
Base
salary
Board
fees
Other
benefits
(3)
One year
variable
(4)
Multi-
year
variable
(5)
Mel Management
(permanent
representative
Lussier Michel)
Buyse Chris
R.A.D Life
Sciences
(permanent
€ 81 000
€ 46 500
€ 33 000
4.
Pension
expense
(7)
2021 (6)1
a) BIK on fixed
grants warrants
5.
Total
Remuneration
6. Proportion of fixed
and variable
remuneration (8)
b) Warrants
awarded
a)
€ 16 970
b)
30 000
a)
b)
a)
b)
€ 16 970
30 000
€ 6 730
10.000 (1)
€ 97 970
€ 63 470
€ 39 730
Fixe
100%
Variable
0%
Fixe
Variable
Fixe
Variable
100%
0%
100%
0%
Page 62 | 180
representative :
Dekeyser Rudy)
Windels Hilde
€ 63 000
Goblet Serge
€ 33 000
Koelher Maria
(out 5 Aug 2021)
€ 18 000
Piscitelli Dominic
€ 65 000
Udier Marina
€ 33 000
Patel Ami (In 08-
Dec-21)
€ 0
Grand Total
€ 372 500
2021 Annual Report
Fixe
Variable
Fixe
Variable
Fixe
Variable
Fixe
Variable
Fixe
Variable
Fixe
Variable
€ 63 000
€ 43 480
€ 18 000
€ 65 000
€ 33 000
€ 423 650
100%
0%
100%
0%
100%
0%
100%
0%
100%
0%
0%
0%
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
(2)
€ 10 480
20.000'(3)
20 000
30 000
30 000
(4)
€ 51 150
(1) 30.000 warrants were awarded during 2021 but 20.000 declined by the board member in 2021
(2) 30.000 warrants were awarded during 2021 but declined by the board member in 2021
(3) 30.000 warrants were awarded during 2021 but 10.000 warrants declined by the board member in 2021
(4) not applicable – non eligible
In 2021, each Director, including non-executive Directors, have been offered fixed grants of 10,000 warrants.
The grants were not related to any performance condition. The reasons for the variation in the number of
warrants awarded (disclosed under b) are specified under footnotes (1) and (2). No taxable benefit in kind
is disclosed under (a) for Directors with tax residence outside of Belgium (who are not in scope for the tax
valuation under Belgian law).
The details on the warrants (including the number of warrants granted, vested, and exercised, and the
exercise price, can be found in the Share-Based Remuneration section below:
2.7.2.2
Total remuneration of the CEO
1. Fixed remuneration
2. Variable remuneration
Table1 - Total remuneration (1)
Name,
Position
(2)
Petti
Filippo
-
Executive,
CEO
Base
salary
Board
fees
Other
benefits
(3) '(1)
One year
variable
(4)
€ 396 567
€ 44 021
€ 176 054
(1) Others benefits such as health insurance, …
Multi-year variable
on warrants
granted during
2021(5)
3.
Extraordi
nary
items (6)
a) Benefit in kind
b) Number of
warrants
c) Target value at
the offer date
a)
b)
c)
€ 4 565
60 000
€ 307 200
4.
Pension
expense
(7)
5.
Total
Remuneration
6.
Proportion of fixed
and variable
remuneration (8)
€ 12 260
€ 633 467
Variable
Fixe
71%
29%
The multi-year variable consists in the grant of warrants. The target value at the offer date may vary,
depending on the share price.
For the proportion between the fixed and the variable remuneration, the amount of the benefit in kind
according to the Belgian Act of 26 March 1999 is taken into consideration.
Page 63 | 180
2021 Annual Report
2.7.2.3
Total Remuneration of the Executive Committee (excl.-CEO)
Table1 - Total remuneration (1)
1. Fixed remuneration
2. Variable remuneration
Name,
Position
(2)
Executive
Committee
(1)
Base
salary
Board
fees
Other
benefits (3)
(2)'(2)
One year
variable
(4)
€ 1 660 773
€ 170 430
€ 529 675
Multi-year variable
on warrants granted
during 2021(5)
a) Benefit in kind
b) Number of
warrants
c) Target value at the
offer date
a)
b)
c)
€ 79 635
175 000
€ 990 550
3.
Extraordinary
items (6)
4.
Pension
expense
(7)
5. Total
Remuneration
6. Proportion of
fixed and
variable
remuneration
(8)
€ 31 566
€ 2 472 080
Variable
25%
Fixe
75%
(1) Three Executive Committee members are legal entities engaged through services agreements with the Company and three Executive Committee members are natural persons.
(2) Other fringe benefits are attributed to natural persons only, such as pension plan, health insurance, company car, representation allowances.
The table above contains aggregate amounts for the 6 members of the Executive Committee.
The multi-year variable consists in the grant of warrants. The target value at the offer date may vary
depending on the share price.
For the proportion between the fixed and the variable remuneration, the amount of the benefit in kind
according to the Belgian Act of 26 March 1999 is taken into consideration.
2.7.2.4
Performance of Executives in the reported financial year
The performance criteria, their relative weighting and the actual outcome in 2021 can be summarized as
follows.
The amount of the variable remuneration is based on the Company’s performance and the individual
performance of the executive committee members measured against the individual and Company’s
objectives. For the CEO, the variable remuneration is based on 75% of the Company performance and 25%
of individual performance. For the other members of the Executive Committee, the variable remuneration is
based on 50% of Company performance and 50% of individual performance.
Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors has decided
to grant the following variable remuneration and warrants to the CEO and the members of the Executive
Committee:
Name, position
1.
2.
3.
Performance criteria
Relative
weighting of the
performance
criteria
a) Measured performance
b) Actual award outcome (cash
and warrants)
Company
Clinical Programs
shRNA platform
45%
10%
a) 90%
b) N/A
a) 75%
Page 64 | 180
CEO
CEO
6 Members of the executive committee
Business
Development
15%
Financing
25%
Corporate / Other
5%
Company performance
75%
Individual
Performance
Company
Performance
25%
50%
2021 Annual Report
b) N/A
a) 50%
b) N/A
a) 100%
b) N/A
a) 200%
b) N/A
a) 90%
b) 128 472€
a) 100%
b) 47 582 EUR + 70 000 warrants
a) 90%
b) 244 432EUR
Individual performance
50%
a) 105% in average
b) 285 244 EUR +190 000
warrants
2.7.3. Share-based Remuneration
The Share-Based Remuneration Tables are structured as follows:
Table 2 - remuneration in Warrants
The Main conditions of Warrant Plans
Name of
Director,
position
1.
Specification
of plan
2.
Award
date
3.
Vesting
date
4.
End of
retention
period
5.
Exercice
period
6.
Exercice
price
Opening
Balance
7.
Warrants held
at the
beginning of
the year
Information regarding the reported financial year
During the year (*)
Closing Balance
8.
a) Warrants
awarded
b) Price of the
underlying shares
@ date of the offer
date
9.
a) Warrants exercised
b) Price of the underlying
shares @date of
acquisition
c) Pricer @ Exercice price
d) Added value @date of
acquisition
10.
Warrants awarded
and unexercised
2.7.3.1
Board of Directors
In deviation from the principle 7.6 of the CCG, the Board has determined that the grant of warrants to non-
executive or independent directors is in the best interest of the Company to attract and retain highly skilled
directors in a very dynamic and competitive environment. The grant of warrants is a commonly used
remuneration instrument in the sector in which the Company operates, in particular in the United States
where the Company is active. In addition, the Company is not entitled to own treasury shares and is currently
unable to offer any remuneration in shares. Finally, the grant of warrants provides an attractive additional
remuneration without impacting the Company’s cash. Without this possibility, the Company would be subject
to a considerable disadvantage compared to competitors offering warrants to their non-executive directors.
The grant of warrants is not linked or subject to any performance conditions and consequently, does not
qualify as variable remuneration.
Page 65 | 180
2021 Annual Report
Table 2 - Remuneration in warrants
Name of
Director,
position
Michel
Lussier,
Chairman
The main conditions of warrant plans
Information regarding the reported financial
year
During the year (*)
Opening
Closing
1.
2.
3.
4.
5.
6.
7.
WP
2021
WP
2020
WP
2020
WP
2019
WP
2019
WP
2018
WP
2017
26/10/21
26/02/21
11/12/20
28/07/20
26/10/24
N/A
26/02/24
N/A
11/12/23
N/A
28/07/23
N/A
24/10/19
24/10/22
N/A
22/01/19
22/01/22
N/A
02/08/17
02/08/20
N/A
01/01/25-
31/12/28
01/01/24-
31/12/28
01/01/24-
31/12/27
01/01/24-
31/12/25
01/01/23-
31/12/24
01/01/23-
31/12/24
01/01/21-
31/07/22
€ 3,75
€ 6,49
€ 6,73
€ 8,80
€ 8,16
10 000
10 000
€ 22,04
10 000
€ 32,26
10 000
Total:
40 000
8.
10 000
37 500
10 000
64 900
10 000
67 300
30 000
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
169 700
9.
10.
10 000
10 000
10 000
10 000
10 000
10 000
10 000
70 000
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director
,
position
Chris
Buyse,
Board
Member
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*)
Closin
g
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
WP202
1
26/10/21
26/10/24
WP
2020
WP
2020
WP
2019
WP
2019
WP
2018
WP
2017
26/02/21
26/02/24
11/12/20
11/12/23
24/03/20
24/03/23
24/10/19
24/10/22
22/01/19
22/01/22
02/08/17
02/08/20
N/
A
N/
A
N/
A
N/
A
N/
A
N/
A
N/
A
01/01/25
-
31/12/28
01/01/25
-
31/12/28
01/01/24
-
31/12/27
01/01/24
-
31/12/25
01/01/23
-
31/12/24
01/01/23
-
31/12/24
01/01/21
-
31/07/22
€ 3,75
€ 6,49
10 000
€ 6,73
€ 5,97
10 000
€ 8,16
€
22,04
10 000
10 000
€
32,26
10 000
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
10 000
37 500
10 000
64 900
20 000
Total:
50 000
b)
102 400
10 000
10 000
10 000
10 000
10 000
10 000
10 000
70 000
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Page 66 | 180
2021 Annual Report
Table 2 - Remuneration in warrants
Name of
Director,
position
Rudy De
Keyser,
Board
Member
The main conditions of warrant plans
Information regarding the reported financial
year
During the year (*)
Opening
Closing
1.
2.
3.
4.
5.
6.
7.
WP
2020
WP
2019
WP
2019
WP
2018
WP
2017
11/12/20
24/03/20
11/12/23
N/A
24/03/23
N/A
24/10/19
24/10/22
N/A
22/01/19
22/01/22
N/A
02/08/17
02/08/20
N/A
01/01/24-
31/12/27
01/01/24-
31/12/25
01/01/23-
31/12/24
01/01/23-
31/12/24
01/01/21-
31/07/22
€ 6,73
€ 5,97
10 000
€ 8,16
10 000
€ 22,04
10 000
€ 32,26
10 000
8.
10 000
67 300
10 000
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
Total:
40 000
b)
67 300
9.
10.
10 000
10 000
10 000
10 000
10 000
50 000
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Serge
Goblet,
Board
Member
The main conditions of warrant plans
Information regarding the reported financial year
Table 2 - Remuneration in warrants
1.
2.
26/10/21
3.
26/10/24
11/12/20
11/12/23
24/03/20
24/03/23
24/10/19
24/10/22
22/01/22
22/01/19
02/08/17
02/08/20
WP
2021
WP
2020
WP
2019
WP
2019
WP
2018
WP
2017
4.
5.
N/A 01/01/21-
31/12/28
N/A 01/01/24-
31/12/27
N/A 01/01/24-
31/12/25
N/A 01/01/23-
31/12/24
N/A 01/01/23-
31/12/24
N/A 01/01/21-
31/07/22
Opening
7.
6.
€ 3,75
€ 6,73
€ 5,97
10 000
€ 8,16
10 000
€ 22,04
10 000
€ 32,26
10 000
Total:
40 000
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
During the year (*)
Closing
8.
10 000
37 500
10 000
67 300
20 000 a)
104 800 b)
c)
d)
9.
10.
10 000
10 000
10 000
10 000
10 000
10 000
60 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Hilde Windels,
Board Member
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported
financial year
Opening During the year (*) Closing
8.
1.
2.
3.
4.
5.
6.
7.
9.
10.
WP 2019
24/10/19
24/10/22
WP 2018
26/10/18
26/10/21
N/A 01/01/23-
31/12/24
N/A 01/01/22-
31/12/23
€ 8,16
€ 22,04
10 000
10 000
Total:
20 000
a)
b)
a)
b)
a) 0
b) 0
10 000
10 000
20 000
a)
b)
c)
d)
Page 67 | 180
2021 Annual Report
(*) During the year, no warrants were exercised, and no warrants expired due to the expiration of the warrant plan
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
8.
1.
2.
3.
4.
5.
6.
7.
9.
10.
Name of
Director,
position
WP 2020
Dominic
Piscitelli, Board
Member
In : May-20
WP 2019
WP 2020
26/10/21
WP 2020
26/02/21
26/10/24 N/A 01/01/25-
31/12/28
26/02/24 N/A 01/01/25-
31/12/28
11/12/20
11/12/23 N/A 01/01/24-
31/12/27
€ 3,75
€ 6,49
€ 6,73
20/05/20
20/05/23 N/A 01/01/24-
31/12/25
€ 7,93 10 000
Total:
10 000
a) 10 000
b) 37 500
a) 10 000
b) 64 900
a) 10 000
b) 67 300
a)
b)
a) 30 000
a)
b) 169 700 b)
c)
d)
10 000
10 000
10 000
10 000
40 000
(*) During the year, no warrants were exercised, and no warrants expired due to the expiration of the warrant plan
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
Name of
Director,
position
1.
2.
3.
4.
5.
6.
7.
WP 2021
26/10/21
26/10/24
N/A
WP 2020
26/02/21
26/02/24
N/A
Marina Udier,
Board Member
WP 2020
17/12/20
17/12/23
N/A
01/01/25-
31/12/28
01/01/25-
31/12/28
01/01/24-
31/12/27
€ 3,75
€ 6,49
€ 6,81
Total:
0
8.
a) 10 000
b) 37 500
a) 10 000
b) 64 900
a) 10 000
b) 68 100
a) 30 000
a)
b) 170 500 b)
c)
d)
9.
10.
10 000
10 000
10 000
30 000
(*) During the year, no warrants were exercised, and no warrants expired due to the expiration of the warrant plan
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Total:
a)
b)
a)
b)
0
0
a)
b)
c)
d)
of
Name
Director,
position
Ami Patel (In 08-
Dec-21) *
(*) Not applicable
NB: Filippo Petti is not remunerated as Executive Director
Page 68 | 180
2021 Annual Report
2.7.3.2
Board of Directors – Former members
Name of
Director,
position
Margo Roberts,
Board Member
(01/08/18-
06/05/19
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
WP 2019
10/02/20
10/02/23
N/A
WP 2018
22/01/19
22/01/22
N/A
WP 2018
26/10/18
26/10/21
N/A
01/01/24-
31/12/25
01/01/23-
31/12/24
01/01/22-
31/12/23
€ 9,84
10 000
€ 22,04 10 000
€ 22,04
10 000
Total:
30 000
a)
b)
a)
b)
a)
b)
a) 0
b) 0
a)
b)
c)
d)
10 000
10 000
10 000
30 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Roychowdhury
Debasish,
Board Member
(21/08/15-
06/05/19)
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
WP 2018
22/01/2019
22/01/2022
N/A
01/01/23-
31/12/24
€ 22,04 10.000
WP 2017
20/07/2017 20/07/2020
N/A
01/01/21-
31/07/22
€ 32,26 10.000
Total:
20.000
a)
b)
a)
b)
a) 0
b) 0
a)
b)
c)
d)
10.000
10.000
20 000
(*) During the year, no warrants were exercised, and no warrants expired due to the expiration of the warrant plan
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
8.
1.
2.
3.
4.
5.
6.
7.
9.
10.
WP 2017
20/07/2017 20/07/2020
N/A
01/01/21-
31/07/22
€ 32,26 10.000
Total:
10.000
a)
b)
a) 0
b) 0
a)
b)
c)
d)
10.000
10 000
Name of
Director,
position
Hanspeter Spek,
Board Member
(05/05/14-
07/05/18)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Page 69 | 180
2021 Annual Report
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of
Director,
position
WP 2020
26/02/21
26/02/24
N/A
WP 2020
11/12/20
11/12/23
N/A
Maria Koehler,
Board Member
In : Mar-20
Out: Aug-21
WP 2019
24/03/20
24/03/23
N/A
01/01/25-
31/12/28
01/01/24-
31/12/27
01/01/24-
31/12/25
€ 6,49
€ 6,73
10.000
€ 5,97
10.000
Total:
20.000
a) 10.000
b) 64.900
a)
b)
a)
b)
a) 10.000
b) 64.900
a)
b)
c)
d)
10.000
10.000
10.000
30 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
2.7.3.3
Executive Committee
In deviation from the principle 7.9 of the CCG, the Company has not fixed any minimum threshold for the
detention of shares by the members of the Executive Committee. However, the members of the Executive
Committee hold subscription rights (warrants) on the Company’s shares as further described hereinafter.
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of
Director,
position
WP 2021
26/10/21
26/10/24
WP 2020
26/02/21
26/02/24
N/A
01/01/25-
31/12/28
€ 3,75
N/A
01/01/25-
31/12/28
€ 6,49
0
0
a) 30.000
b) 112.500
a)
30.000
b)
194.700
WP 2020
11/12/20
11/12/23
WP 2019
24/03/20
24/03/23
Filippo Petti
Executive
Director,
CEO and CFO
WP 2019
24/10/19
24/10/22
WP 2018
19/09/19
19/09/22
WP 2018
22/01/19
22/01/22
WP 2018
26/10/18
26/10/21
N/A
1/01/24-
31/12/27
N/A 1/01/24-
31/12/25
N/A 1/01/23-
31/12/24
N/A 1/01/23-
31/12/24
N/A 1/01/23-
31/12/24
N/A
1/01/22-
31/12/23
€ 6,73
30.000
a)
b)
€ 5,97
30.000
€ 8,16
30.000
€ 9,36
20.000
€ 18,82 25.000
€ 21,16 20.000
Total:
155 000
a) 60 000
a)
b) 307 200 b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
30.000
30.000
30.000
30.000
30.000
20.000
25.000
20.000
215 000
Page 70 | 180
2021 Annual Report
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of
Director,
position
WP 2021
26/10/21
26/10/23
WP 2020
11/12/20
24/03/23
WP 2019
24/03/20
24/03/23
David Gilham,
Chief Scientific
Officer
WP 2019
24/10/19
24/10/22
WP 2018
22/01/19
22/01/22
WP 2017
20/07/17
20/07/20
WP 2015
02/11/16
02/11/19
N/A
01/01/24-
31/12/28
N/A
01/01/24-
31/12/27
N/A
01/01/24-
31/12/25
N/A 01/01/23-
31/12/24
N/A 01/01/23-
31/12/24
N/A 01/01/21-
31/07/22
N/A
01/01/20-
05/11/25
€ 3,75
0
€ 6,73
0
€ 5,97
25 000
€ 8,16
20 000
€ 18,82 25 000
€ 31,34 6 000
€ 15,90 10 000
Total:
86 000
a) 20 000
b) 75 000
a)
20 000
b)
134 600
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
a) 40 000
a)
b) 209 600 b)
c)
d)
20 000
20 000
25 000
20 000
25 000
6 000
10 000
126 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
The main conditions of warrant plans
Table 2 - Remuneration in warrants
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
WP 2021 26/10/21
3.
26/10/24
4.
5.
N/A 01/01/25-
31/12/28
6.
7.
€ 3,75
WP 2020 26/02/21
26/02/24
N/A 01/01/25-
31/12/28
€ 6,49
Stephen
Rubino, Chief
Business
Officer
In : Feb-20
WP 2020 11/12/20
WP 2019 24/03/20
11/12/23
N/A 01/01/24-
31/12/27
€ 6,73
20 000
24/03/23
N/A 01/01/24-
31/12/25
€ 5,97
50 000
Total:
70 000
8.
a) 20 000
b) 75 000
a) 15 000
b) 97 350
a)
b)
a)
b)
9.
10.
20 000
15 000
20 000
50 000
a) 35 000
b) 172 350
a)
b)
c)
d)
105 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Table 2 - Remuneration in warrants
Name of
Director,
position
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
WP 2021 26/10/21
26/10/24
N/A
€ 3,75
a) 20 000
20 000
Page 71 | 180
WP 2020 16/04/21
Charles Morris,
Chief Medical
Officer
16/04/24
Total:
01/01/25-
31/12/28
N/A 01/01/25-
31/12/28
€ 5,42
2021 Annual Report
b) 75 000
a) 125 000
b) 677 500
a) 145 000
b) 752 500
125 000
145 000
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
Name of
Director,
position
1.
2.
3.
4.
5.
6.
7.
WP 2021 26/10/21
26/10/24
WP 2020 11/12/20
11/12/23
WP 2019 24/03/20
24/03/23
Frederic
Lehman, VP
Clin Dev &
Medical Affairs
WP 2019 24/10/19
24/10/22
WP 2018 26/10/18
26/10/21
WP 2017 20/07/17
20/07/20
N/A 01/01/25-
31/12/28
N/A 01/01/24-
31/12/27
N/A 01/01/24-
31/12/25
N/A 01/01/23-
31/12/24
N/A 01/01/22-
31/12/23
N/A 01/01/21-
31/07/22
€ 3,75
0
€ 6,73
0
€ 5,97
20 000
€ 8,16
20 000
€ 22,04
10 000
€ 36,11
20 000
Total:
70 000
8.
a) 20 000
b) 75 000
a) 20 000
b) 134 600
a)
b)
a)
b)
a)
b)
a)
b)
9.
10.
20 000
20 000
20 000
20 000
10 000
20 000
a) 40 000
b) 209 600
a)
b)
c)
d)
110 000
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*) Closing
1.
2.
3.
4.
5.
6.
7.
WP 2021 26/10/21
26/10/24
WP 2020 26/02/21
26/02/24
WP 2019 24/03/20
24/03/23
Philippe
Nobels, VP
Human
Resources
WP 2019 24/10/19
24/10/22
WP 2018 22/01/19
22/01/22
WP 2017 20/07/17
20/07/20
WP 2016 13/12/16
13/12/19
N/A 01/01/25-
31/12/28
N/A 01/01/25-
31/12/28
N/A 01/01/24-
31/12/25
N/A 01/01/23-
31/12/24
N/A 01/01/23-
31/12/24
N/A 01/01/21-
31/07/22
N/A 01/01/20-
08/12/21
€ 3,75
0
€ 6,49
0
€ 5,97
20 000
€ 8,16
20 000
€ 22,04
10 000
€ 36,11
20 000
€ 17,60
10 000
8.
a) 20 000
b) 75 000
a) 10 000
b) 64 900
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
9.
10.
20 000
10 000
20 000
20 000
10 000
20 000
0
Total:
80 000
a) 30 000
b) 139 900
a)
b)
c)
100 000
Page 72 | 180
(*) During the year, no warrants were exercised but 10,000 warrants were forfeited in accordance with the warrant plan
2016
2021 Annual Report
d)
Name of
Director,
position
The main conditions of warrant plans
Table 2 - Remuneration in warrants
Information regarding the reported financial
year
During the year (*) Closing
1.
2.
3.
WP 2021 26/10/21
26/10/24
WP 2020 26/02/21
26/02/24
WP 2019 24/03/20
24/03/23
Philippe
Dechamps,
Chief Legal
Officer
WP 2019 24/10/19
24/10/22
WP 2018 22/01/19
22/01/22
WP 2017 20/07/17
20/07/20
WP 2016 13/12/16
13/12/19
Opening
7.
4.
5.
N/A 01/01/25-
31/12/28
6.
€ 3,75
N/A
01/01/25-
31/12/28
€ 6,49
8.
a) 20 000
b) 75 000
a) 25 000
b) 162 250
N/A 01/01/24-
31/12/25
N/A 01/01/23-
31/12/24
N/A 01/01/23-
31/12/24
N/A 01/01/21-
31/07/22
N/A 01/01/20-
08/12/21
€ 5,97
25 000
€ 8,16
20 000
€ 22,04
10 000
€ 36,11
20 000
€ 17,60
20 000
a)
b)
a)
b)
a)
b)
a)
b)
a)
b)
9.
10.
20 000
25 000
25 000
20 000
10 000
20 000
0
Total:
95 000
a) 45 000
b) 237 250
a)
b)
c)
d)
120 000
(*) During the year, no warrants were exercised but 20,000 warrants were forfeited in accordance with the warrant plan
2016
2.7.3.4 Executive Committee – former members
Name of
Director,
position
Christian
Homsy,
CEO
Jul-
07>Apr-
19
1.
WP
2018
WP
2016
Table 2 - Remuneration in warrants
Information regarding the reported financial year
The main conditions of warrant plans
Opening
During the year (*)
Closing
8.
9.
10.
2.
3.
4.
5.
22/01/2019
22/01/2022 N/A
20/07/2017
20/07/2020 N/A
01/01/23-
31/12/24
01/01/21-
31/07/22
6.
€
22,04
€
36,11
7.
40.000
40.000
Total:
80.000
a)
b)
0
0
a)
b)
c)
d)
(*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan
40.000
40.000
80.000
Page 73 | 180
2021 Annual Report
Name of
Director,
position
Patrick
Jeanmart
, CFO
Sep-
07>Aug-
18
1.
WP
201
7
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*)
Closin
g
2.
3.
4.
5.
6.
7.
8.
9.
10.
20/07/201
7
20/07/202
0
N/
A
01/01/21
-
31/07/22
€
36,11
20.000
Total:
20.000
20.000
20.000
a)
b)
0
0
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Table 2 - Remuneration in warrants
Information regarding the reported financial year
Name of
Director
,
position
1.
WP
2018
The main conditions of warrant plans
2.
3.
4.
5.
22/01/201
9
22/01/202
2
WP
2016
20/07/201
7
20/07/202
0
N/
A
N/
A
01/01/23
-
31/12/24
01/01/21
-
31/07/22
Jean-
Pierre
Latere,
COO
Jan-
16>May-
20
Openin
g
7.
3.333
2.000
6.
€
22,04
€
36,11
a)
b)
a)
b)
a)
b)
During the year (*)
Closing
8.
9.
10.
3.333
2.000
5.333
0
0
a)
b)
c)
d)
Total:
5.333
(*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Georges
Rawadi,
VP
Business
Develop
ment
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
Opening
During the year (*)
Closing
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
WP
2017
WP
2015
WP
2014
20/07/2017
06/11/2015
20/07/2020 N/A
06/11/2018 N/A
16/09/2014
16/09/2017
N/A
01/01/21-
31/07/22
01/01/19-
05/11/25
01/01/18-
16/09/24
€ 31,34
6.667
€ 34,65
10.000
€ 39,22
7.500
Total:
24.167
a)
b)
a)
b)
a)
b)
a)
b)
0
0
6.667
10.000
7.500
24.167
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Page 74 | 180
2021 Annual Report
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial year
Opening
During the year (*)
Closing
2.
3.
4.
5.
6.
7.
8.
9.
10.
01/03/201
9
01/03/2022 N/A
€ 18,10
6.667
01/01/23-
31/12/24
Total:
a)
b)
a)
b)
0
0
6.667
6.667
a)
b)
c)
d)
1.
WP
201
8
Name of
Director,
position
Anne
Moore,
VP
Corporat
e
Strategy
Mar-
19>Oct-
19
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
Name of
Director,
position
Table 2 - Remuneration in warrants
The main conditions of warrant plans
Information regarding the reported financial
year
During the year (*)
Opening
Closing
5.
6.
7.
8.
9.
10.
1.
2.
3.
WP
2015
06/11/2015
06/11/2018
4.
N/A
08/01/2018 N/A
01/01/19-
05/11/25
01/01/19-
15/05/24
€ 34,65
3.333
€ 33,49
3.333
08/01/2015
WP
2014
Dieter
Hauwaerts,
VP
Operations
Jan-
15>May-17
Total:
6.666
3.333
3.333
6.666
a)
0
b)
0
a)
b)
c)
d)
(*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan
2.7.4.
Termination Indemnities
No termination indemnity was paid to any Executive Committee member in 2021.
2.7.5. Use of the possibility to reclaim the variable remuneration
The Company has not provided for the possibility to reclaim the variable remuneration and did not reclaim
any variable remuneration during the reported year.
2.7.6. Deviations from the Remuneration Policy
This Remuneration Report does not deviate from the 2021 remuneration Policy, which can be found on the
Company’s website.
2.7.7. Evolution of the remuneration and the performance of the company and ratio
2.7.7.1
Comparative information
Annual change
Director's average remuneration
Board Members (in€'000)
Executive Committee (in€'000)
Company’s performance
Loss for the period (in€'000)
2019
2020
2021
76
409
55
412
55
463
(28 632)
(17 204)
(26 502)
Page 75 | 180
2021 Annual Report
Treasury position at year end (in€'000)
39 338
17 234
39 338
Performance KPI's determining the company performance
Clinical Programs
shRNA platform
Business Development
Financing
Corporate / others
95%
38%
33%
25%
Average remuneration on a full-time equivalent basis of employees
Employees of the company- Celyad Oncology (in€'000)
Employees of the company - Celyad Inc (in€'000)
64
150
65
170
90%
40%
8%
8%
25%
10%
64
173
This table includes the 2019 and the 2020 data for comparison with 2021 and will be completed during the
next three years to comply with the requirement on the five years evolution.
In addition to the losses and the treasury position at year end, the table includes the performance criteria
which determined the variable remuneration. These might differ from one year to another, in accordance
with the Remuneration Policy.
For 2021, the Board of Directors has decided to establish the Company’s performance at 90%, reflecting the
level of achievement of the Company’s objectives based on the execution of our CYAD-02, CYAD-101 and
CYAD-211 clinical programs, the building of our long-term shRNA pipeline, our licensing and business
development, and the financing of the Company, taking once again into consideration the challenging
sanitary conditions faced in 2021 with the pandemic of COVID-19.For the calculation of the average
remuneration for the employees, the company has taken into consideration the fixed and the variable parts
of the remuneration as well as the other benefits paid to employees (such as group insurance, representation
allowance, company car, or health insurance).
2.7.7.2
Ratio
The ratio between the lowest salary for the employees and the highest salary of the Executive Committee is
15.
For the calculation of the remuneration, the Company has taken into consideration the fixed gross salary.
2.7.8.
Taking into consideration of the vote of the shareholders
On May 5, 2021, the shareholders have approved the 2020 remuneration report at 97.88%.
Regarding the vesting period of the warrants, the Company’s warrants vest gradually during a three-year
period (1/3 per year). The approved warrants plan provides for an accelerated vesting in case for instance
of a change of control or a public offering on the shares of the Company. The Company believes that this
accelerated vesting in a limited number of circumstances is market practice and does not prejudice the
shareholders’ interests.
2.7.9. Statutory Auditor
SRL EY Bedrijfsrevisoren – Réviseurs d’Entreprises, having its registered office at De Kleetlaan 2, B – 1831
Diegem, Belgium, duly represented by Carlo-Sébastien d’Addario, is the statutory auditor of the Company.
Carlo-Sébastien d’Addario is a member of the Belgian Institute of Certified Auditors ("Institut des Réviseurs
d'Entreprises ").
The annual remuneration of the auditor for the performance of its three-year mandate for the audit of its
financial statements (including the statutory financial statements) amounts to €202,000 for the year 2021
(excluding VAT).
Page 76 | 180
2021 Annual Report
2.8
Description of the principal risks associated to the activities of the Group
2.8.1. Risk Management
Risk management is embedded in the strategy of the Company and is of crucial importance for achieving
the objectives set by the Board of Directors. The Board is responsible for assessing the risks associated
with the activities of the Company and for evaluating the internal audit systems. The Board relies partially
on the Executive Committee to perform this assessment.
The internal audit systems play a central role in managing the risks and the activities of the Company. To
safeguard the proper implementation and execution of the strategies defined by the Board, the Company
has set up internal risk management and control systems. The internal audit system is based on the following
pillars:
•
•
•
The compliance with and the training on the internal policies of the Company, including but not
limited to the Code of Business Conduct, Standard Operating Procedures, or policies related to
areas such as data protection, information systems, contract lifecycle, conflict of interest, gifts and
gratuities, crisis management;
The values of the Company;
The monitoring of the legal environment with the support of external attorneys;
• Ongoing risk analysis;
• Audit activities performed by Quality Assurance and Finance departments;
• Controls, supervision and corrective actions and measures.
The purpose of these systems is to manage in an effective and efficient manner the significant risks to which
the Company is exposed. They are designed to ensure:
•
•
The careful monitoring of the effectiveness of the Company’s short term and long-term strategy;
The Company’s sustainability by a constant evaluation of its performance (operations and cash).
2.8.2. Organization and values
The Company’s organization and values as well as the legal environment surrounding the activities of the
Company constitute the basis of all the internal audit components. It is determined by a composition of formal
and informal rules on which the functioning of the Company relies.
The organization encompasses the following elements:
• Company’s Mission: “Developing innovative cell therapies against cancer”;
•
•
The Company’s values: Passion. Respect. Innovation. Determination. Excellence;
The Company’s vision: “Eliminate cancer. Improve life”;
• Employees and consultants: the Company has been able to attract and retain motivated and
dedicated qualified employees. Passion, pro-activity, open-mindness, commitment, trust and
integrity are the essential traits of character of the Company’s team. All the Company’s employees
and consultants are required to manage the Company’s resources with due diligence, integrity and
to act with the necessary common sense;
• A Board of Directors, including the Remuneration and Nomination Committee and the Audit
Committee. See section 5 for further information on the functioning of the Board and its Committees;
•
Independent non-executive directors: the Company is supported by several independent directors.
Their expertise and experience contribute to the Company’s effective management;
Page 77 | 180
2021 Annual Report
• A Chief Executive Officer, in charge of the day-to-day management, supported by the other member
of the Executive Committee;
• An internal set of procedures: the Company set up a Code of Business Conduct and Ethics and
adopted internal rules and procedures which regulate the activities within the Company;
•
The external environment: the Company operates in a highly regulated environment (GMP, GCP,
etc.). Compliance with all these external rules and guidelines is of critical importance to the
Company.
The evaluation of the Company’s organization, values and compliance with legal environment is made
regularly for the supervising bodies.
2.8.3. Risks analysis
The Board of Directors determines the Company’s strategy, the risk appetite and the main Company’s
policies. It is the task of the Board of Directors to strive for long-term success by procuring proper risk
assessment. The Executive Committee is responsible for the development of systems that identify, evaluate
and monitor risks.
Risk identification consists in examining the factors that could influence the Company’s strategy and
objectives:
•
Internal factors: those are closely related to the internal organization and could have several causes
(e.g., change in the group structure, staff, ERP system);
• External factors: those can be the result of changes in the economic climate, regulations or
competition.
Besides the common risks associated to all industrial companies, the Executive Committee has identified
the following specific risk factors which are described hereafter.
2.8.4. Risks related to the Company’s financial position and capital requirements
The Company may need substantial additional funding, which may not be available on acceptable
terms when needed, if at all.
The Company’s operations have required substantial amounts of cash since inception. The Company
expects to continue to spend substantial amounts to continue the clinical development of its product
candidates, including its ongoing and planned clinical trials for CYAD-211, CYAD-101 and CYAD-02 (the
“Product Candidates”) or any future product candidates, including but not limited to CYAD-203, CYAD-221
and CYAD-231. If approved, the Company will require significant additional amounts in order to launch and
commercialize its Product Candidates.
As of December 31, 2021, the Company had cash and cash equivalents of €30.0 million and no short-term
investments. On January 8, 2021, we entered into a committed equity purchase agreement (“Purchase
Agreement”) over a 24-month term for up to $40.0 million with Lincoln Park Capital Fund, LLC (“LPC”),
pursuant to which LPC’s purchases are subject to certain conditions, including that the Company may only
deliver a Regular Purchase Notice (as that term is defined in the Purchase Agreement) of its ADSs so long
as the adjusted price of its ADSs exceeds $1.00. Over the remaining lifetime of the Purchase Agreement,
we will have the right to direct LPC to purchase up to an aggregate amount of $28.0 million ADSs, each of
which represents one of our ordinary shares. As of December 31, 2021, the remaining amount of $28.0
million of this equity purchase agreement is expected to strengthen the Company’s current statement of
financial position while also providing the Company with access to future capital on an as needed basis and
to ensure sufficient funding to cover its operations for the next 12 months from the date the financial
statements are issued.
Page 78 | 180
2021 Annual Report
Based on its current scope of activities, the Company estimates that its cash and cash equivalents as of
December 31, 2021 combined with the remaining access to the equity purchase agreement established with
Lincoln Park Capital Fund, LLC (remaining amount of $28.0 million as of December 31, 2021) should be
sufficient to fund operating expenses and capital expenditure requirements until mid-2023.
However, changing circumstances may cause it to increase its spending significantly faster than it currently
anticipates, and the Company may need to spend more money than currently expected because of
circumstances beyond its control. The Company may require additional capital for the further development
and commercialization of its Product Candidates and may need to raise additional funds sooner if the
Company chooses to expand more rapidly than it presently anticipates.
The achievement of milestones (R&D, scientific, clinical, regulatory, business) will trigger payment
obligations towards Celdara, Dartmouth and Horizon, which will negatively impact the Company’s profitability
and may require material additional funding. These commitments are detailed in the note 5.34.
The Company contracted over the past year numerous funding agreements with the Walloon Region to
partially finance its research and development programs. Under the terms of the agreements, the Company
would need to obtain the consent of the Walloon Region for any out-licensing agreement or sale to a third
party of any or all of its products, prototypes or installations which may reduce the Company’s ability to
partner or sell part or all of its products. Furthermore, when the research and development programs partially
financed by the Company enter in “exploitation phase”, the Company has to start reimbursing the funding
received. For more information on the potential financial consequences of these exploitation decisions in
terms of potential reimbursements and sales percentage fees to be paid to the Walloon Region, refer to note
5.16.
The Company may not be able to reimburse such funding under the terms of the agreements or such
reimbursement may jeopardize the funding of its clinical and scientific activities.
The Company’s ability to raise additional funds will depend on financial, economic and market conditions
and other factors, over which it may have no or limited control, including the current geopolitical tension and
military conflict between Russia and Ukraine, and the Company cannot guarantee that additional funds will
be available to it when necessary, on commercially acceptable terms, if at all. If the necessary funds are not
available, the Company may need to seek funds through collaborations and licensing arrangements, which
may require it to reduce or relinquish significant rights to its research programs and product candidates, to
grant licenses on its technologies to partners or third parties or enter into new collaboration agreements, the
terms could be less favorable to the Company than those it might have obtained in a different context. If
adequate funds are not available on commercially acceptable terms when needed, the Company may be
forced to delay, reduce or terminate the development or commercialization of all or part of its research
programs or product candidates or it may be unable to take advantage of future business opportunities.
The Company has incurred net losses in each period since its inception and anticipate that the
Company will continue to incur net losses in the future.
The Company is not profitable and has incurred losses in each period since its inception. For the years
ended December 31, 2021, 2020 and 2019, the Company incurred a loss for the year of €26.5 million, €17.2
million and €28.6 million, respectively. As of December 31, 2021, the Company had an accumulated deficit
of €309.0 million. The Company expects these losses to increase as it continues to incur significant research
and development and other expenses related to its ongoing operations, continues to advance its Product
Candidates through preclinical studies and clinical trials, seek regulatory approvals for its Product
Candidates, scale-up manufacturing capabilities and hire additional personnel to support the development
of its Product Candidates and to enhance its operational, financial and information management systems.
Even if the Company succeeds in commercializing one or more of its Product Candidates, it will continue to
incur losses for the foreseeable future relating to its substantial research and development expenditures to
develop its technologies.
Page 79 | 180
2021 Annual Report
The Company may encounter unforeseen expenses, difficulties, complications, delays and other unknown
factors that may adversely affect its business. The size of its future net losses will depend, in part, on the
rate of future growth of its expenses and its ability to generate revenue.
Its prior losses and expected future losses have had and will continue to have an adverse effect on its
shareholders’ equity and working capital. Further, the net losses the Company incurs may fluctuate
significantly from quarter to quarter and year to year, such that a period to period comparison of its results
of operations may not be a good indication of its future performance.
2.8.5. Risks related to Company’s business activities and industry
The Company’s Product Candidates are a new approach to cancer treatment that presents
significant challenges.
The Company has concentrated its research and development efforts on cell-based immunotherapy
technology, and its future success is highly dependent on the successful development of cell-based
immunotherapies in general and in particular its approach using the NKG2D receptor, an activating receptor
of NK cells, to target stress ligands. Currently, two of the Company’s clinical Product Candidates, CYAD-
101 and CYAD-02, use the NKG2D receptor. The Company cannot be sure that its T-cell immunotherapy
technologies will yield satisfactory products that are safe and effective, scalable or profitable.
Its approach to cancer immunotherapy and cancer treatment generally poses a number of challenges,
including:
• Developing and deploying consistent and reliable processes for engineering a patient’s T cells ex
vivo and infusing the engineered T-cells back into the patient;
• Educating medical personnel regarding the potential side effect profile of each of its Product
Candidates, such as the potential adverse side effects related to cytokine release or neurotoxicity;
• Developing processes for the safe administration of these Product Candidates, including long-term
follow-up for all patients who receive its Product Candidates;
• Developing therapies for types of cancers beyond those addressed by its current Product
Candidates.
Additionally, because its technology involves the genetic modification of patient cells ex vivo using a virus,
the Company is subject to many of the challenges and risks that gene therapies face, including:
• Regulatory requirements governing gene and cell therapy products have changed frequently and
may continue to change in the future;
• Although its viral vectors are not able to replicate, there is a risk with the use of retroviral or lentiviral
vectors that they could lead to new or reactivated pathogenic strains of virus or other infectious
diseases;
•
The FDA recommends a 15-year follow-up observation period for all patients who receive treatment
using certain gene therapies, and the Company may need to adopt such an observation period for
its Product Candidates.
Moreover, public perception of therapy safety issues, including adoption of new therapeutics or novel
approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials,
or if approved, of physicians to subscribe to the novel treatment. Physicians may not be willing to undergo
training to adopt this novel and personalized therapy, may decide the therapy is too complex to adopt without
appropriate training and may choose not to administer the therapy. Based on these and other factors,
hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs.
Its Product Candidates are biologics, which are complex to manufacture, and the Company may
encounter difficulties in production.
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Its Product Candidates are biologics and the process of manufacturing its products is complex, highly-
regulated and subject to multiple risks. The manufacture of its Product Candidates involves complex
processes, including harvesting cells from patients, selecting and expanding certain cell types, engineering
or reprogramming the cells in a certain manner to create CAR T-cells, expanding the cell population to obtain
the desired dose, and ultimately infusing the cells back into a patient’s body. As a result of the complexities,
the cost to manufacture its Product Candidates, is higher than traditional small molecule chemical
compounds, and the manufacturing process is less reliable and is more difficult to reproduce. Even minor
deviations from normal manufacturing processes could result in reduced production yields, product defects,
and other supply disruptions.
Although the Company is working, or will be working, to develop commercially viable processes for the
manufacture of its Product Candidates, doing so is a difficult and uncertain task, and there are risks
associated with scaling to the level required for later-stage clinical trials and commercialization, including,
among others, cost overruns, potential problems with process scale-out, process reproducibility, stability
issues, lot consistency, and timely availability of reagents or raw materials. The Company may ultimately be
unable to reduce the cost of goods for its Product Candidates to levels that will allow for an attractive return
on investment if and when those Product Candidates are commercialized
In addition, the manufacturing process that the Company develops for its Product Candidates is subject to
regulatory authorities’ approval process, and the Company will need to make sure that the Company or its
contract manufacturers, or CMO’s, if any, are able to meet all regulatory authorities requirements on an
ongoing basis. If the Company or its CMO’s are unable to reliably produce Product Candidates to
specifications acceptable to the regulatory authorities, the Company may not obtain or maintain the
approvals the Company needs to commercialize such Product Candidates. Even if the Company obtains
regulatory approval for any of its Product Candidates, there is no assurance that either the Company or its
CMO’s will be able to manufacture the approved product to specifications acceptable to the regulatory
authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the
product, or to meet potential future demand. . Similarly, changes in our contact manufacturers, or CMOs,
may require us to conduct additional comparability studies. Any of these challenges could have an adverse
effect on its business, financial condition, results of operations and growth prospects.
The future commercial success of the Company’s Product Candidates will depend on the degree of
market acceptance among physicians, patients, hospitals and others in the medical community.
The Company’s Product Candidates are at varying stages of development and the Company may never
have a product that is commercially successful.
The Company does not expect to be able to market any of its products for a number of years. Furthermore,
when available on the market physicians may not prescribe the Company's products, which would prevent
the Company from generating significant revenues or becoming profitable. Market acceptance of the
Company's future products by physicians, patients and healthcare payers will depend on a number of factors,
many of which are beyond the Company's control, including, but not limited to:
• Acceptance by physicians, patients and healthcare payers of each product as safe, effective and
cost-effective;
• Relative convenience, ease of use, ease of administration and other perceived advantages over
alternative products;
• Prevalence and severity of adverse events;
•
The extent to which products are approved for inclusion and reimbursed on formularies of hospitals
and managed care organizations.
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The Company may face significant competition and technological change which could limit or
eliminate the market opportunity for its product candidates.
The market for pharmaceutical products is highly competitive. The Company’s competitors include many
established pharmaceutical, biotechnology, universities and other research or commercial institutions, many
of which have substantially greater financial, research and development resources than the Company. The
fields in which the Company operates are characterized by rapid technological change and innovation. There
can be no assurance that competitors of the Company are not currently developing or will not in the future
develop technologies and products that are equally or more effective and/or are more economical as any
current or future technology or product of the Company. Competing products may gain faster or greater
market acceptance than the Company’s products and medical advances or rapid technological development
by competitors may result in the Company’s product candidates becoming non-competitive or obsolete
before the Company is able to recover its research and development and commercialization expenses. If
the Company or its product candidates do not compete effectively, it may have a material adverse effect on
the Company’s business.
2.8.6. Risks related to clinical development
The Company may encounter substantial delays in its clinical trials or may fail to demonstrate safety
and efficacy to the satisfaction of applicable regulatory authorities.
Before obtaining regulatory approval or marketing authorization from regulatory authorities for the sale of its
Product Candidates, if at all, the Company must conduct extensive clinical trials to demonstrate the safety
and efficacy of the Product Candidates in humans. Pre-clinical tests and Clinical testing are expensive, time-
consuming and uncertain as to outcome. The Company cannot guarantee that any pre-clinical and clinical
trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials
can occur at any stage of testing. Events that may prevent successful or timely completion of clinical
development include:
• Delays in obtaining required Investigational Review Board, or IRB, or Ethics Committee approval
at each clinical trial site;
•
•
Imposition of a clinical hold by regulatory agencies, after an inspection of its clinical trial operations
or trial sites;
Failure by its CRO’s, other third parties or the Company to adhere to clinical trial requirements;
• Delays in the testing, validation, manufacturing and delivery of its Product Candidates to the clinical
sites;
• Occurrence of serious adverse events associated with the product candidate that are viewed to
outweigh its potential benefits;
•
Failure to perform in accordance with FDA’s good practices, or GCP’s, or applicable regulatory
guidelines in other countries.
Furthermore, the timely completion of clinical trials in accordance with their protocols depends, among other
things, on its ability to enroll a sufficient number of patients who remain in the trial until its conclusion. The
Company may experience difficulties in patient enrolment in its clinical trials for a variety of reasons,
including:
•
•
The patient eligibility criteria defined in the protocol;
Its ability to recruit clinical trial investigators with the appropriate competencies and experience;
• Competing clinical trials for similar therapies;
•
The risk that patients enrolled in clinical trials will not complete a clinical trial.
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Any inability to successfully complete preclinical and clinical development could result in additional costs to
the Company or impair its ability to generate revenues from product sales, regulatory and commercialization
milestones and royalties. Clinical trial delays could also shorten any periods during which the Company may
have the exclusive right to commercialize its Product Candidates or allow its competitors to bring products
to market before the Company does, which could impair its ability to successfully commercialize its Product
Candidates and may harm its business and results of operations.
Its Product Candidates could potentially cause other adverse events that have not yet been predicted. As
described above, any of these events could prevent the Company from achieving or maintaining market
acceptance of its Product Candidates and impair its ability to commercialize its products if they are ultimately
approved by applicable regulatory authorities.
In previous clinical trials involving T-cell based immunotherapies, some patients experienced
serious adverse events. The Company’s Product Candidates may demonstrate a similar effect.
In previous and ongoing clinical trials involving CAR-T cell products by other companies or academic
researchers, many patients experienced side effects such as neurotoxicity and CRS, which have in some
cases resulted in clinical holds in ongoing clinical trials of CAR-T Product Candidates. There have been life
threatening events related to severe neurotoxicity and CRS, requiring intense medical intervention such as
intubation or pressor support, and in several cases, resulted in death. Severe neurotoxicity is a condition
that is currently defined clinically by cerebral edema, confusion, drowsiness, speech impairment, tremors,
seizures, or other central nervous system side effects, when such side effects are serious enough to lead to
intensive care. In some cases, severe neurotoxicity was thought to be associated with the use of certain
lymphodepletion preconditioning regimens used prior to the administration of the CAR-T cell products and
product candidates.
Undesirable side effects caused by its Product Candidates, or other T-cell based immunotherapy product
candidates, could cause the Company or regulatory authorities to interrupt, delay or halt clinical trials and
could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other
comparable foreign regulatory authorities. Results of its trials could reveal a high and unacceptable severity
and prevalence of side effects or unexpected characteristics. Treatment-related side effects could also affect
patient recruitment or the ability of enrolled patients to complete the trials or result in potential product liability
claims. In addition, these side effects may not be appropriately recognized or managed by the treating
medical staff, as toxicities resulting from T-cell based immunotherapies are not normally encountered in the
general patient population and by medical personnel. The Company expects to have to train medical
personnel regarding its T-cell based immunotherapy Product Candidates to understand their side effects for
both its planned clinical trials and upon any commercialization of any T-cell based immunotherapy Product
Candidates. Inadequate training in recognizing or managing the potential side effects of T-cell based
immunotherapy Product Candidates could result in patient deaths. Any of these occurrences could have a
material adverse effect on its business, financial condition and prospects.
For example, on February 28, 2022, the Company announced its decision to voluntarily pause its Phase 1b
KEYNOTE-B79 trial evaluating CYAD-101 administered concurrently with FOLFOX chemotherapy followed
by MSD’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in patients with refractory metastatic colorectal
cancer following reports of two fatalities that presented with similar pulmonary findings. The Company is
currently investigating these reports and evaluating any similar events in additional patients treated on study.
On March 1, 2022, the Company was informed via-email communication from the FDA that the KEYNOTE-
B79 trial has been placed on clinical hold due to insufficient information to assess risk to study subjects.
The Company’s clinical trials are ongoing and not complete. Initial success in its ongoing clinical
trials may not be indicative of results obtained when these trials is completed.
Trial designs and results from previous or ongoing trials are not necessarily predictive of future clinical trial
results, and initial or interim results may not continue or be confirmed upon completion of the trial.
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There are limited data concerning long-term safety and efficacy following treatment with CYAD-02, CYAD-
101 and CYAD-211. Our Product Candidates may fail to show the desired safety and efficacy in later stages
of clinical development despite having successfully advanced through initial clinical trials. There can be no
assurance that any of these trials will ultimately be successful or support further clinical advancement or
regulatory approval of Product Candidates.
In December 2017, the Company made the strategic decision to discontinue the development of its first-
generation autologous NKG2D CAR T candidate CYAD-01 for the treatment of relapsed / refractory acute
myeloid leukemia (AML) and myelodysplastic syndromes (MDS) based on data from the Phase 1 THINK
and DEPLETHINK trials which did not achieve the necessary internal clinical activity threshold set for the
program.
The Company may be adversely affected by natural disasters and/or global health pandemics, and
its business, financial conditions and results of operations could be adversely affected.
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. Throughout 2020 and
2021, Belgium and the United States, where the Company operates, have been impacted by temporary
closures. 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.
Timely enrollment in clinical trials is reliant on clinical trial sites which may be adversely affected by global
health matters, including, among other things, the ongoing COVID-19 pandemic and the emerging variants,
such as Delta and Omicron. With regards to our clinical programs, CYAD-02, CYAD-101 and CYAD-211
were slightly impacted by the coronavirus pandemic throughout 2020. Enrollment in the respective trials for
these assets is ongoing without any major disruption, partially due to the staggered enrollment associated
with the dose-escalation trials for CYAD-02 and CYAD-211, respectively, and the expansion segment of the
CYAD-101 trial which began in late 2020. However, certain clinical sites and institutions have not been able
to receive visits from us or our representatives, which has delayed our data monitoring activities and delayed
our ability to lock the databases for completed studies. 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.
In addition, after enrollment in these trials, if patients contract COVID-19 during participation in the
Company’s trials or are subject to isolation or shelter-in-place restrictions, they may drop out of the trials,
miss scheduled follow-up visits or otherwise fail to follow trial protocols. If patients are unable to follow the
trial protocols or if the Company’s trial results are otherwise disputed due to the effects of the COVID-19
pandemic or actions taken to mitigate its spread, the integrity of data from the trials may be compromised or
not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the
applicable program. Celyad has not experiences such issues to date regarding COVID-19.
Some factors from the COVID-19 pandemic that the Company believes may adversely affect enrollment in
our trials include:
•
The diversion of healthcare resources away from the conduct of clinical trial matters to focus on
pandemic concerns, including the attention of physicians serving as the Company’s clinical trial
investigators, hospitals serving as the clinical trial sites and hospital staff supporting the conduct of
the clinical trials;
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• Some patients who would otherwise be candidates for enrollment in the Company’s clinical trials
are at increased risk of severe effects of the coronavirus, which may lead to the death of some
patients and render others too ill to participate, limiting the available pool of participants for the
trials;
•
•
•
The fact that there can be no guarantee that any proposed changes to our protocols, if necessary,
would be acceptable to regulators;
Limitations on travel that interrupt key trial activities, such as clinical trial site initiations and
monitoring; and
Interruption in global shipping affecting the transport of clinical trial materials being used in our
trials.
Except as mentioned above, Celyad has not experienced such issues to date regarding COVID-19.
These and other factors arising from the COVID-19 pandemic could worsen in countries that are already
afflicted with the virus or could continue to spread to additional countries, each of which may further
adversely impact the Company’s clinical trials. The global outbreak of the COVID-19 pandemic continues to
evolve, and the conduct of the Company’s trials may continue to be adversely affected, despite efforts to
mitigate this impact.
Even if we are able to enroll a sufficient number of patients in our clinical trials, delays in patient enrollment
may result in increased costs or may affect the timing or outcome of the Company’s clinical trials, which
could prevent completion of these trials and adversely affect our ability to advance the development of the
Company’s product candidates.
2.8.7. Risks related to legal and regulatory risks
The Company is heavily dependent on the regulatory approval of its Product Candidates in the
United States and Europe.
The Company is a clinical-stage biopharmaceutical company with no products approved by regulatory
authorities or available for commercial sale. The Company may be unable to develop or commercialize a
product, product candidate or research program, or may cease some of its operations, which may have a
material adverse effect on the Company’s business.
The Company has generated limited revenue to date and does not expect to generate any revenue from
product sales for the foreseeable future. The Company’s ability to generate revenues in the near term will
depend on its ability to obtain regulatory approval and successfully commercialize Product Candidates in
the United States, the first country in which the Company intends to seek approval for these candidates. The
Company may experience delays in obtaining regulatory approval in the United States for these Product
Candidates, if it is approved at all, and the price of its ordinary shares and/or ADSs may be negatively
impacted. Even if the Company receives regulatory approval, the timing of the commercial launch of the
Product Candidates in the United States is dependent upon a number of factors, including, but not limited
to, hiring sales and marketing personnel, pricing and reimbursement timelines, the production of sufficient
quantities of commercial drug product and implementation of marketing and distribution infrastructure.
Nearly all aspects of the Company’s activities are subject to substantial regulation. No assurance
can be given that any of the Company’s product candidates will fulfill regulatory compliance.
The international pharmaceutical and medical technology industry is highly regulated by government bodies
(hereinafter the “Competent Authorities”) that impose substantial requirements covering nearly all aspects
of the Company’s activities notably on research and development, manufacturing, preclinical tests, clinical
trials, labelling, marketing, sales, storage, record keeping, promotion and pricing of its research programs
and product candidates. Compliance with standards laid down by local Competent Authorities is required in
each country where the Company, or any of its partners or licensees, conducts said activities in whole or in
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part. The Competent Authorities notably include the European Medicine Agency (“EMA”) in the European
Union and the Food and Drug Administration (“FDA”) in the United States.
There can be no assurance that product candidates of the Company will fulfill the criteria required to obtain
necessary regulatory authorization to access the market. Also, at this time, the Company cannot guarantee
or know the exact nature, precise timing and detailed costs of the efforts that will be necessary to complete
the remainder of the development of its research programs and product candidates.
The specific regulations and laws, as well as the time required to obtain Competent Authorities approvals,
may vary from country to country, but the general regulatory procedures are similar in the European Union
and the United States. At any time, Competent Authorities may require discontinuation or holding of clinical
trials or require additional data prior to completing their review or may issue restricted authorization or
authorize products for clinical trials or marketing for narrower indications than requested or require further
data or studies be conducted and submitted for their review. There can be no guarantee that such additional
data or studies, if required, will corroborate earlier data.
2.8.8. Risks related to intellectual property
The Company could be unsuccessful in obtaining or maintaining adequate patent protection for one
or more of its Product Candidates.
The patent application process is expensive and time-consuming, and the Company and its current or future
licensors and licensees may not be able to apply for or prosecute patents on certain aspects of its Product
Candidates or deliver technologies at a reasonable cost, in a timely fashion, or at all. It is also possible that
the Company or its current licensors, or any future licensors or licensees, will fail to identify patentable
aspects of inventions made in the course of development and commercialization activities before it is too
late to obtain patent protection on them. Therefore, its patents and applications may not be prosecuted and
enforced in a manner consistent with the best interests of its business. It is possible that defects of form in
the preparation or filing of its patents or patent applications may exist, or may arise in the future, such as
with respect to proper priority claims, inventorship, claim scope or patent term adjustments. Under its existing
license agreements with the Trustees of Dartmouth College, the Company has the right, but not the
obligation, to enforce its licensed patents. If its current licensors, or any future licensors or licensees, are not
fully cooperative or disagree with the Company as to the prosecution, maintenance or enforcement of any
patent rights, such patent rights could be compromised and the Company might not be able to prevent third
parties from making, using, and selling competing products. If there are material defects in the form or
preparation of its patents or patent applications, such patents or applications may be invalid and
unenforceable
The Company currently has issued patents and patent applications directed to its Product Candidates and
medical devices, and the Company anticipates that it will file additional patent applications in several
jurisdictions, including several European Union countries and the United States, as appropriate.
The Company cannot be certain, however, that the claims in its pending patent applications will be
considered patentable by patent offices in various countries, or that the claims in any of its issued patents
will be considered valid and enforceable by local courts.
The strength of patents in the biotechnology and pharmaceutical field can be uncertain and evaluating the
scope of such patents involves complex legal and scientific analyses. The patent applications that the
Company owns, or in-licenses may fail to result in issued patents with claims that cover its Product
Candidates or uses thereof in the European Union, in the United States or in other jurisdictions. Even if the
patents do successfully issue, third parties may challenge the validity, enforceability, or scope thereof, which
may result in such patents being narrowed, invalidated, or held unenforceable. Furthermore, even if they are
unchallenged, its patents and patent applications may not adequately protect its intellectual property or
prevent others from designing their products to avoid being covered by its claims. If the breadth or strength
of protection provided by the patent applications the Company holds with respect to its Product Candidates
is threatened, this could dissuade companies from collaborating with the Company to develop, and could
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threaten its ability to commercialize, its Product Candidates. Further, because patent applications in most
countries are confidential for a period of time after filing, the Company cannot be certain that the Company
was the first to file any patent application related to its Product Candidates.
Patents have a limited lifespan. Various extensions may be available; however, the life of a patent, and the
protection it affords, is limited. Further, the extensive period of time between patent filing and regulatory
approval for a product candidate limits the time during which the Company can market a product candidate
under patent protection, which may particularly affect the profitability of its early-stage Product Candidates.
If the Company encounters delays in its clinical trials, the period of time during which the Company could
market its Product Candidates under patent protection would be reduced. Without patent protection for its
Product Candidates, the Company may be open to competition from biosimilar versions of its Product
Candidates.
Filing, prosecuting and defending patents on product candidates in all countries throughout the world would
be prohibitively expensive. In addition, the laws of some foreign countries do not protect intellectual property
rights to the same extent as laws in the European Union or the United States. Consequently, the Company
may not be able to prevent third parties from practicing its inventions in all countries, or from selling or
importing products made using its inventions in and into other jurisdictions.
The Company’s patents and other intellectual property rights portfolio is relatively young and may
not adequately protect its research programs and product candidates.
The Company’s success will depend in part on the ability of the Company to obtain, maintain and enforce
its patents and other intellectual property rights. The Company’s research programs, and product candidates
are covered by several patent application families, which are either licensed to the Company or owned by
the Company. Out of the numerous patent applications controlled by the Company, fifteen national patents
have been granted in the US relating to the field of immuno-oncology. The Company cannot guarantee that
it will be in a position in the future to develop new patentable inventions or that the Company or its licensors
will be able to obtain or maintain these patent rights against challenges to their validity, scope and/or
enforceability. Moreover, the Company may have little or no control over its licensors’ abilities to prevent the
infringement of their patents or the misappropriation of their intellectual property. There can be no assurance
that the technologies used in the Company’s research programs and product candidates are patentable If
the Company or its licensors do not obtain meaningful patents on their technologies or if the patents of the
Company or its licensors are invalidated, third parties may use the technologies without payment to the
Company. A third party’s ability to use unpatented technologies is enhanced by the fact that the published
patent application contains a detailed description of the relevant technology.
The Company cannot guarantee that third parties, contract parties or employees will not claim ownership
rights over the patents or other intellectual property rights owned or held by the Company.
The Company also relies on proprietary know-how to protect its research programs and product candidates.
Know-how is difficult to maintain and protect. The Company uses reasonable efforts to maintain its know-
how, but it cannot assure that its partners, employees, consultants, advisors or other third parties will not
willfully or unintentionally disclose proprietary information to competitors.
As far as the Company is aware, its intellectual property has not been challenged otherwise than by patent
offices in the normal course of examination of its patent applications or misappropriated.
The Company depends on intellectual property licensed from third parties and termination of any of
these licenses could result in the loss of significant rights, which would harm its business.
The Company is dependent on patents, know-how, and proprietary technology, both its own and licensed
from others. The Company’s licenses technology from the Trustees of Dartmouth College, or Dartmouth
College. Dartmouth College may terminate the Company’s license, if the Company fails to meet a milestone
within the specified time period, unless the Company pays the corresponding milestone payment. Dartmouth
College may terminate either the license in the event the Company defaults or breach any of the provisions
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of the applicable license, subject to 30 days’ prior notice and opportunity to cure. In addition, the license
automatically terminates in the event the Company becomes insolvent, make an assignment for the benefit
of creditors or file, or have filed against us, a petition in bankruptcy. Furthermore, Dartmouth College may
terminate the Company’s license, after April 30, 2024, if the Company fails to meet the specified minimum
net sales obligations for any year (USD 10 million during first year of sales, USD 40 million during the second
year of sales and USD 100 million during the third year of sales and every year of sales thereafter), unless
the Company pays to Dartmouth College the royalty the Company would otherwise be obligated to pay had
the Company met such minimum net sales obligation.
Since 2018, the Company also licenses technology from Horizon Discovery Limited (recently acquired by
Perkin Elmer) (“Horizon/PKI”) through research and development collaboration and license agreements.
Horizon/PKI may terminate the Company’s license in case of insolvency, material breach or force majeure.
Any termination of these licenses or any of the Company’s other licenses could result in the loss of significant
rights and could harm its ability to commercialize its Product Candidates. On February 18, 2021, Horizon
Discovery Group plc / PerkinElmer, Inc. (Horizon/PKI) informed Celyad they believe Celyad is in material
breach of those agreements as a result of certain disclosures Celyad has made in connection with its
obligations as a publicly traded company in the United States and Belgium. Horizon/PKI recently informed
Celyad that unless Celyad is able to reach agreement regarding the purported material breach, they may
elect to serve Celyad a notice of termination. We believe any such assertion of material breach would be
without merit and we would expect to vigorously defend any such notice of material breach. Any dispute
under these agreements would be subject to arbitration in The Hague under the International Chamber of
Commerce Rules. We are currently in discussions with Horizon/PKI to settle this matter. Of note, we have
filed patent applications which, if issued, would cover other aspects of the product candidates described
above as well as products developed by third parties that deploy similar technology and targets. These
patent applications encompass the downregulation of one or more of the targets covered under the Horizon
/PKI agreements, the use of shRNA to downregulate such targets in immune cells and the combination of
shRNAs with a chimeric antigen receptor in immune cells. We are also developing a second generation
shRNA platform that does not incorporate any of the Horizon/PKI technology described above. Our lead
allogeneic CAR T product candidate, CYAD-101, does not incorporate any of the Horizon/PKI technology
described above. Currently CYAD-211 and CYAD-203 (next generation NKG2D) use the HD/PKI shRNA
scaffold. We believe that CYAD-211 could be impacted by a potential termination. We believe the timeline
associated with the clinical development and potential commercialization of the preclinical asset may fall
after the IP exclusivity of the HD/PKI shRNA scaffold. However, the emerging data from the program is likely
to have an impact on the future prospects of the asset. For CYAD-203, we believe the timeline associated
with the clinical development and potential commercialization of the preclinical asset are likely to fall after
the IP exclusivity of the HD/PKI shRNA scaffold. As such, would have less of a material impact on the asset.
Disputes may also arise between the Company and its licensors regarding intellectual property subject to a
license agreement, including those relating to:
•
The scope of rights granted under the license agreement and other interpretation-related issues;
• Whether and the extent to which its technology and processes infringe on intellectual property of
the licensor that is not subject to the license agreement;
•
•
Its right to sublicense patent and other rights to third parties under collaborative development
relationships;
The amount and timing of milestone and royalty payments;
• Whether the company is complying with its diligence obligations with respect to the use of the
licensed technology in relation to its development and commercialization of its product candidates;
•
The allocation of ownership of inventions and know-how resulting from the joint creation or use of
intellectual property by the company and its partners and by its licensors.
If disputes over intellectual property that the Company has licensed prevent or impair its ability to maintain
its current licensing arrangements on acceptable terms, the Company may be unable to successfully develop
and commercialize the affected Product Candidates. The Company is generally also subject to all of the
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same risks with respect to protection of intellectual property that the Company licenses as it is for intellectual
property that the Company owns, which are described below. If the Company or its licensors fail to
adequately protect this intellectual property, the Company’s ability to commercialize its products could suffer.
The licenses of the Company may be terminated if it is unable to meet the payment obligations under the
agreements (notably if the Company is unable to obtain additional financing).
The Company may infringe on the patents or intellectual property rights of others and may face
patent litigation, which may be costly and time consuming.
The Company’s success will depend in part on its ability to operate without infringing on or misappropriating
the intellectual property rights of others. The Company cannot guarantee that its activities will not infringe
on the patents or other intellectual property rights owned by others. The Company may expend significant
time and effort and may incur substantial costs in litigation if it is required to defend against patent or other
intellectual property right suits brought against the Company regardless of whether the claims have any
merit. Additionally, the Company cannot predict whether it or its licensors will be successful in any litigation.
If the Company or its licensors are found to infringe on the patents or other intellectual property rights of
others, it may be subject to substantial claims for damages, which could materially impact the Company’s
cash flow and financial position. The Company may also be required to cease development, use or sale of
the relevant research program, product candidate or process or it may be required to obtain a license on the
disputed rights, which may not be available on commercially reasonable terms, if at all.
There can be no assurance that the Company is even aware of third-party rights that may be alleged to be
relevant to any particular product candidate, method, process or technology.
The Company may spend significant time and effort and may incur substantial costs if required to defend
against any infringement claims or to assert its intellectual property rights against third parties. The risk of
such a claim by a third party may be increased by the Company’s public announcement regarding its
research programs and product candidates. The Company may not be successful in defending its rights
against such procedures or claims and may incur as a consequence thereof significant losses, costs or
delays in its intended commercialization plans as a result thereof.
2.8.9. Post-authorisation risks
The Company has not yet finalized its clinical development program for CYAD-02 for the treatment
of patients with relapsed / refractory AML and MDS or for CYAD-101, the allogeneic NKG2D CAR-T
for the treatment of mCRC or CYAD-211, the allogeneic BCMA CAR-T for the treatment of r/r multiple
myeloma (MM). Regulators may not agree with its proposed protocols for these clinical trials, which
could result in delays.
The Company is still considering the clinical development program for CYAD-02 in relapsed / refractory AML
and MDS, CYAD-101 for mCRC and CYAD-211 for relapsed / refractory MM. Prior to initiating new clinical
trials for its Product Candidates, the Company is required to submit clinical trial protocols for these trials to
the FDA and comparable foreign regulators in other jurisdictions where the Company plans to undertake
clinical trials. The Company may not reach agreement with these regulators, or there may be a delay in
reaching agreement. These regulators may want to see additional clinical or preclinical data regarding its
Product Candidates before the Company initiates new clinical trials. Any of these decisions could have a
material adverse effect on its expected clinical and regulatory timelines, business, prospects, financial
condition and results of operations.
2.8.10. Risks linked to the Company’s reliance on third parties
Cell-based therapies rely on the availability of specialty raw materials, which may not be available to
the Company on acceptable terms or at all.
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Engineered-cell therapies require many specialty raw materials, some of which are manufactured by small
companies with limited resources and experience to support a commercial product. The suppliers may be
ill-equipped to support the Company’s needs, especially in non-routine circumstances like an FDA inspection
or medical crisis, such as widespread contamination. The Company also does not have contracts with many
of these suppliers and may not be able to contract with them on acceptable terms or at all. Accordingly, the
Company may experience delays in receiving key raw materials to support clinical or commercial
manufacturing.
In addition, some raw materials are currently available from a single supplier, or a small number of suppliers.
The Company cannot be sure that these suppliers will remain in business, or that they will not be purchased
by one of its competitors or another Company that is not interested in continuing to produce these materials
for its intended purpose.
Since the beginning of the COVID-19 pandemic, three vaccines for COVID-19 were granted Emergency
Use Authorization by the FDA, and more are likely to be authorized in the coming months. The resultant
demand for vaccines and potential for manufacturing facilities and materials to be commandeered under the
Defense Production Act of 1950, or equivalent foreign legislation, may make it more difficult to obtain
materials or manufacturing slots for the products needed for the Company’s clinical trials, which could lead
to delays in these trials. However, for the time being, Celyad has not experienced such issue.
If third parties conducting clinical trials do not successfully carry out their contractual duties, the
Company may not be able to obtain regulatory approval for or commercialize its Product Candidates.
The Company relies on clinical research organizations, or CROs, clinical investigators and clinical trial sites
to ensure its clinical trials are conducted properly and on time. While the Company will have agreements
governing their activities, the Company will have limited influence over their actual performance. The
Company will control only certain aspects of its CRO’s activities. Nevertheless, the Company will be
responsible for ensuring that each of its clinical trials is conducted in accordance with the applicable protocol,
legal, and regulatory requirements and scientific standards, and its reliance on these third parties does not
relieve the Company of its regulatory responsibilities.
The Company and these third parties are required to comply with the GCP’s (from both FDA and EMA) for
conducting, recording and reporting the results of clinical trials to assure that the data and reported results
are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are
protected. If the Company or its CROs fail to comply with applicable GCP’s, the clinical data generated in its
future clinical trials may be deemed unreliable and the FDA, the EMA, or other foreign regulatory authorities
may require the Company to perform additional clinical trials before approving any marketing applications.
Upon inspection, the FDA or the EMA may determine that its clinical trials did not comply with GCP’s. In
addition, its future clinical trials will require a sufficient number of test subjects to evaluate the safety and
effectiveness of its Product Candidates. Accordingly, if its CRO’s fail to comply with these regulations or fail
to recruit a sufficient number of patients, the Company may be required to repeat such clinical trials, which
would delay the regulatory approval process.
Its CRO’s are not the Company’s employees, and the Company is therefore unable to directly monitor
whether or not they devote sufficient time and resources to its clinical and preclinical programs. These third
parties may also have relationships with other commercial entities, including its competitors, for whom they
may also be conducting clinical trials or other product development activities that could harm the Company’s
competitive position. If these third parties do not successfully carry out their contractual duties or obligations,
fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised
due to the failure to adhere to the Company’s clinical protocols or regulatory requirements, or for any other
reasons, the Company’s clinical trials may be extended, delayed or terminated, and the Company may not
be able to obtain regulatory approval for, or successfully commercialize, its Product Candidates. If any such
event were to occur, the Company’s financial results and the commercial prospects for its Product
Candidates would be harmed, its costs could increase, and its ability to generate revenues could be delayed.
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If any of the Company’s relationships with these third-party CRO’s terminate, the Company may not be able
to enter into arrangements with alternative CRO’s or to do so on commercially reasonable terms. Further,
switching or adding additional CRO’s involves additional costs and requires management time and focus. In
addition, there is a natural transition period when a new CRO commences work. As a result, delays occur,
which could materially impact its ability to meet its desired clinical development timelines. Though the
Company carefully manages its relationships with its CRO’s, there can be no assurance that the Company
will not encounter challenges or delays in the future or that these delays or challenges will not have a material
adverse impact on its business, financial condition and prospects.
The Company relies and will continue to rely on collaborative partners regarding the development
of its research programs and product candidates.
The Company is and expects to continue to be dependent on collaborations with partners relating to the
development and commercialization of its existing and future research programs and product candidates.
The Company had, has and will continue to have discussions on potential partnering opportunities with
various pharmaceutical and medical device companies. If the Company fails to enter into or maintain
collaborative agreements on reasonable terms or at all, the Company's ability to develop its existing or future
research programs and product candidates could be delayed, the commercial potential of its products could
change, and its costs of development and commercialization could increase.
The Company's dependence on collaborative partners subjects it to a number of risks, including, but not
limited to, the following:
•
•
The Company may be required to relinquish significant rights, including intellectual property,
marketing and distribution rights;
The Company relies on the information and data received from third parties regarding its research
programs and product candidates and will not have control of the process conducted by the third
party in gathering and composing such data and information. The Company may not have formal
or appropriate guarantees from its contract parties with respect to the quality and the completeness
of such data;
• A collaborative partner may develop a competing product either by itself or in collaboration with
others, including one or more of the Company's competitors;
2.8.11. Risks related to the shares
The market price of the shares may fluctuate widely in response to various factors.
A number of factors may significantly affect the market price of the Shares. The main factors are changes in
the operating results of the Company and its competitors, announcements of technological innovations or
results concerning the product candidates, changes in earnings estimates by analysts.
Other factors which could cause the price of the shares to fluctuate or could influence the reputation of the
Company include, amongst other things:
• Developments concerning intellectual property rights, including patents;
• Public information regarding actual or potential results relating to products and product candidates
under development by the company’s competitors;
• Actual or potential results relating to products and product candidates under development by the
company itself;
• Developments concerning intellectual property rights, including patents;
• Regulatory and medicine pricing and reimbursement developments in Europe, the United States
and other jurisdictions;
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• Any publicity derived from any business affairs, contingencies, litigation or other proceedings, the
company’s assets (including the imposition of any lien), its management, or its significant
shareholders or collaborative partners;
• Divergences in financial results from stock market expectations;
• Changes in the general conditions in the pharmaceutical industry and general economic, financial
market and business conditions in the countries in which the company operates; and
• Any publicity derived from data protection or cybersecurity breaches.
In addition, stock markets have from time to time experienced extreme price and volume volatility which, in
addition to general economic, financial and political conditions, could affect the market price for the Shares
regardless of the operating results or financial condition of the Company.
Future sales of substantial amounts of shares, or the perception that such sales could occur, could
adversely affect the market value of the shares
Sales of a substantial number of shares in the public markets, notably by its major shareholders (CFIP CLYD
LLC holding 28.77% and TOLEFI SA holding 10.16 % of the Shares), or the perception that such sales might
occur, might cause the market price of the shares to decline. The Company cannot make any prediction as
to the effect of any such sales or perception of potential sales on the market price of the shares.
Certain significant shareholders of the Company may have different interests from the Company and
may be able to control the outcome of shareholder votes
On the basis of the transparency notifications received by the Company as of the date of this Report, the
two main shareholders are CFIP CLYD LLC (who holds 28.77% of the shares and 26.04 % of the voting
rights) and TOLEFI SA (who holds 10.16% of the shares and 18.39 % of the voting rights). As a
consequence, the two main shareholders of the Company hold together 44.43 % of the voting rights attached
to the Shares of the Company.
The Company is not aware of shareholders of the Company that have entered into a voting agreement or
have otherwise agreed to act in concert. Nevertheless, they could, alone or together, have the ability to elect
or dismiss directors (in addition to the nomination right granted by the Company to CFIP CLYD LLC), and,
depending on how widely the Company’s shares are held and represented at shareholders’ meeting, take
certain shareholders’ decisions that require at least 50%, two thirds, 75% or 80% of the votes of the
shareholders that are present or represented at general shareholders’ meetings where such items are
submitted to voting by the shareholders. Alternatively, to the extent that these shareholders have insufficient
votes to impose certain shareholders’ decisions, they could still have the ability to block proposed
shareholders’ resolutions that require at least 50%, two thirds, 75% or 80% of the votes of the shareholders
that are present or represented at general shareholders’ meetings where such decisions are submitted to
voting by the shareholders. Any such voting by the shareholders may not be in accordance with the interests
of the Company or the other shareholders of the Company.
Sustainability of a liquid public market
The Company cannot guarantee the extent to which a liquid market for the Company’s shares will be
sustained. In the absence of such liquid market for the shares, the price of the shares could be impacted
negatively. The liquidity of the market for the shares could be affected by various causes, including the
factors identified in the next risk factor (below) or by a reduced interest of investors in biotechnology sector.
If securities or industry analysts do not publish research or publish inaccurate research or
unfavorable research about the Company’s business, the price of the shares and trading volume
could decline.
The trading market for the shares depends in part on the research and reports that securities or industry
analysts publish about the Company or its business. At the date of this report the Company is followed by
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2021 Annual Report
nine analysts (Bryan Garnier, KBC Securities, Kempen, Kepler Cheuvreux, H.C. Wainwright, Jones Trading,
Portzamparc, Wells Fargo and William Blair). If no or few securities or industry analysts cover the Company,
the trading price would be negatively impacted. If one or more of the analysts who covers the Company
downgrades the shares or publishes incorrect or unfavorable research about its business, the price of the
shares would likely decline. If one or more of these analysts eases coverage of the Company or fails to
publish reports on the Company regularly, or downgrades the shares, demand for the shares could
decrease, which could cause the price of the shares or trading volume to decline.
The Company has no present intention to pay dividends on its ordinary shares in the foreseeable
future.
The Company has no present intention to pay dividends in the foreseeable future. Any recommendation by
its Board of Directors to pay dividends will depend on many factors, including its financial condition (including
losses carried-forward), results of operations, legal requirements and other factors. Furthermore, pursuant
to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or
otherwise, must be determined on the basis of its non-consolidated statutory accounts prepared in
accordance with Belgian accounting rules. In addition, in accordance with Belgian law and its Articles of
Association, the Company must allocate each year an amount of at least 5% of its annual net profit under
its non-consolidated statutory accounts to a legal reserve until the reserve equals 10% of its share capital.
Therefore, the Company is unlikely to pay dividends or other distributions in the foreseeable future. If the
price of the shares declines before the Company pays dividends, investors will incur a loss on their
investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends.
2.8.12. Audit activities
Internal audit activities are performed by the departments of Finance, for all matters related to accounting
and financial information, and Quality Assurance for all matters related to the operational activities of the
Company.
As of the date of this report, there is not yet a dedicated internal audit function.
In order to properly manage identified risks, the Company has set up the following audit measures:
• Access and security systems at the premises and offices;
• Establishment, under the supervision of the quality assurance department, of a set of procedures
covering all activities of the company;
• Weekly modifications and updates of the existing procedures;
• Development of electronic approval system in the existing ERP system;
•
Implementation of extra controls in the existing ERP system;
• Development of a monthly financial reporting tool which allow a close monitoring of the financial
information and KPI’s;
• Updated risks and controls matrix are in place for the internal controls processes (entity level, it,
financial operations).
2.8.13. Controls, supervision and correctives actions
Controls are performed by all persons in charge of departments and services. When deviations are identified,
there are reported to, depending of their relative importance, the head of department or the Executive
Committee.
The Executive Committee supervises the implementation of internal audit and risk management, taking into
consideration the recommendations on the Audit Committee.
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The Executive Committee is also in charge of proposing the Audit Committee corrective actions when
identified.
External audit
On May 5, 2020, the shareholders meeting approved the appointment of SRL EY Bedrijfsrevisoren –
Réviseurs d’Entreprises, having its registered office at De Kleetlaan 2, B – 1831 Diegem, Belgium, duly
represented by Carlo-Sébastien d’Addario, as Statutory Auditor, for a term of 3 years, i.e. until the ordinary
general meeting approving the accounts closed on 31 December 2022. EY’s mission includes the auditing
of the statutory annual accounts, the consolidated annual accounts of the Company and its subsidiaries.
The Company is also subject to ad hoc audit performed by the competent authorities to ensure compliance
with GMP, GCP or other regulations.
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3. GROUP STRUCTURE, SHAREHOLDING AND SHARE CAPITAL
3.1
Group structure
The Company conducts its main business through Celyad Oncology SA.
In 2011, the Company incorporated Cardio3 Inc, a fully owned subsidiary, in the U.S. for the purposes of
supporting its clinical and regulatory activities of the Group in the US. Cardio3 Inc became Celyad Inc on
May 12, 2015. The growth of the activities of Celyad Inc. is associated to the development of the US clinical
and regulatory activities of the Company in the US.
On November 5, 2014, the Company acquired CorQuest Medical, Inc., a private U.S. company, for a single
cash payment of €1.5 million and on-going earn-out royalty payments based on sales milestones. CorQuest
Medical, Inc. is developing Heart-XS, a new access route to the left atrium. The development of Heart-XS
and the activities of CorQuest Medical, Inc. have been on hold following the decision of the Company to
abandon the development of its cardio business program (C Cure). On November 22, 2019, CorQuest
Medical Inc. has sold to Corquest MedTech SRL, a company established under Belgian laws, its portfolio of
patents and related rights for a consideration of €1 and the reimbursement of certain maintenance costs of
these patents. CorQuest Medical Inc. has also the right to receive royalties on the future sales and a
percentage on the capital gains in case of re-sale or change of control of Corquest MedTech SRL.
On January 21, 2015, the Company purchased OnCyte, LLC, or OnCyte, a wholly-owned subsidiary of
Celdara Medical, LLC, a privately-held U.S. biotechnology company for an upfront payment of $10.0 million,
of which, $6.0 million was paid in cash and $4.0 million was paid in the form of 93,087 of its ordinary shares.
As a result of this transaction the Company acquired its CAR-T cell Product Candidates and related
technology, including technology licensed from the Trustees of Dartmouth College. OnCyte, LLC was the
company holding the CAR-T Cell portfolio of clinical-stage immuno-oncology assets. In March 2018, the
Company has dissolved OnCyte, and all the assets and liabilities of OnCyte, have been fully distributed to
and assumed by the Company.
On May 1, 2016, the Company acquired Biological Manufacturing Services SA (BMS). BMS owns GMP
laboratories. BMS rent its laboratories to the Company since 2009 and until April 30, 2016. Until the
acquisition, BMS was considered as a related party to the Company.
On June 8, 2020, the Company announced the launch of its 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.
The Company’s ordinary shares are listed on NYSE Euronext Brussels and NYSE Euronext Paris regulated
markets and the Company’s American Depositary Shares (ADSs) are listed on the Nasdaq Global Market,
all under the ticker symbol CYAD.
The Company does not exercise any activities through a branch office.
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The consolidation perimeter of the Company is as follows:
2021 Annual Report
Name
Celyad Oncology SA
Celyad Inc
CorQuest Medical Inc
of
Country
Incorporation
and Place of
Business
Nature
Business
of
Proportion of
ordinary
shares
directly held
by parent (%)
Proportion of
ordinary
shares held by
the Company
(%)
Proportion of
ordinary
shares held by
non-
controlling
interests (%)
BE
US
US
Biopharma
Biopharma
Parent
company
100%
Medical Device
100%
100%
100%
100%
0%
0%
0%
Biological Manufacturing Services SA BE
Manufacturing
100%
3.2
Capital increase and issuance of shares
On January 1, 2021, the share capital of the Company amounted to €48,512,614,57 and was represented
by 13,942,344 shares.
The following transactions took place since January 1, 2021:
• On January 8, 2021, the Company has entered into a committed equity purchase agreement
(“Purchase Agreement”) for up to $40.0 million with Lincoln Park Capital Fund, LLC (“LPC”), a
Chicago-based institutional investor. Over the 24-month term of the Purchase Agreement, the
Company will have the right to direct LPC to purchase up to an aggregate amount of $40.0 million
American Depositary Shares (“ADSs”), each of which represents one ordinary share of the
Company. From January 8, 2021 until December 31, 2021, a total of 1,962,812 new shares have
been issued by the Company and subscribed by LPC for a cash proceed of €9.2 million. As of
December 31, 2021, there is a remaining access to the equity purchase agreement established
with LPC for an amount of $28.0 million.
• During the extraordinary shareholders meeting of May, 25 2021, the shareholders, in accordance
with Belgian Company Law, approved the absorption of approximately €43.3 million of accounting
losses into share premium. As a result, share premium has been reduced by a cumulative amount
of €43.3 million in the 12 months period ended December 31, 2021 (€234.6 million of loss
absorption has been approved and recorded from inception to December 31, 2021) against capital
reduction reserve. This transaction has no impact on the total equity, comprehensive income (loss),
assets (including cash) nor liabilities.
• On May, 21 2021 and June 14, 2021, a total of 188,800 new shares have been issued by the
Company and subscribed by Jefferies under the ATM for a cash proceed of €0.9 million.
• On December 8, 2021, 6,500,000 new shares were issued by decision of the board of directors and
subscribed for by CFIP CLYD LLC in the framework of a private placement for a global cash
proceed of €28.9 million ($32.5 million).
As of December 31, 2021, the share capital of the Company amounted to €78,584,224,33 and was
represented by 22,593,956 shares.
All shares are issued and fully paid up and are of the same class. Each share (i) entitles its holder to one
vote at the Shareholders’ Meetings (except for what is said below regarding shares with double voting rights);
(ii) represents an identical fraction of the capital and has the same rights and obligations and participates
equally in the profit of Celyad; and (iii) gives its holder a preferential subscription right to subscribe to new
shares, convertible bonds or warrants in proportion to the part of the share capital represented by the shares
already held.
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The preferential subscription right can be restricted or cancelled by a resolution approved by the
Shareholders’ Meeting, or by the Board of Directors subject to an authorization of the Shareholders’ Meeting,
in accordance with the provisions of the CCA and the Company’s articles of association.
Further to the Initial Public Offering (IPO) made on the Nasdaq on June 19, 2015, some shares of the
Company are represented in the form of American Depositary Shares (ADS). As of December 31, 2021,
there were 1,340,644 ADS outstanding.
3.3 Warrants plans
The Company has created various incentive plans under which warrants were granted to its employees,
consultants or directors (all warrants are together referred to as “Warrants”). This section provides an
overview of the outstanding warrants as of December 31, 2021.
Upon proposal of the Board of Directors, the extraordinary shareholders’ meeting approved the issuance of,
in the aggregate, warrants giving right to subscribe to shares as follows:
• On September 26, 2008, warrants giving right to 90,000 shares. Of these 90,000 Warrants, 50,000
were accepted by the beneficiaries. None are outstanding as of December 31, 2021;
• On May 5, 2010, warrants giving right to 50,000 shares. Of these 50,000 warrants (15,000 A
warrants, 5,000 B warrants and 30,000 C warrants), 12,710 A warrants, 5,000 B warrants, and
21,700 C warrants C were accepted by the beneficiaries. None are outstanding as of December
31, 2021;
• On October 29, 2010, warrants giving right to 79,500 shares. Out of the 79,500 warrants offered,
61,050 Warrants were accepted by the beneficiaries, and none are outstanding as of December
31, 2021;
• On January 31, 2013, warrants giving right to 140,000 shares. Out of the 140,000 warrants, 120,000
were granted to certain members of the Executive Committee and a pool of 20,000 warrants was
created. The warrants attributed to certain members of the Executive Committee were fully vested
at December 31, 2013 and were all exercised in January 2014 and therefore converted into ordinary
shares. The remaining 20,000 warrants were not granted and therefore lapsed;
• On May 6, 2013, 11 investor warrants are attached to each Class B Share subscribed in the capital
increase in cash, which was decided on the same date, with each investor warrant giving right to
subscribe to one ordinary share – as a result, these warrants give right to a maximum 2,433,618
ordinary shares. On May 31, 2013, warrants giving right to 2,409,176 ordinary shares were issued
and accepted, which have all been exercised as of December 31, 2021;
• On May 6, 2013, warrants giving right to 266,241 ordinary shares. Out of the 266,241 warrants
offered, 253,150 Warrants were accepted by the beneficiaries and 2,500 warrants are outstanding
as of December 31, 2021;
• On June 11, 2013, overallotment warrant giving right to a maximum number of shares equal to 15%
of the new shares issued in the context of the U.S. initial public offering, i.e., 207,225 shares). The
overallotment warrant was exercised on July 17, 2013;
• On May 5, 2014, warrants giving right to 100,000 shares; a plan of 100,000 warrants was approved.
Warrants were offered to Company’s newcomers (employees, non-employees and directors) in
several tranches. Out of the warrants offered, 94,400 warrants were accepted by the beneficiaries
and 35,698 warrants are outstanding as of December 31, 2021;
• On November 5, 2015, warrants giving right to 466,000 shares; a plan of 466,000 warrants was
approved. Warrants were offered to Company’s newcomers (employees, non-employees and
directors) in several tranches. Out of the warrants offered, 353,550 warrants were accepted by the
beneficiaries and 79,315 warrants are outstanding as of December 31, 2021;
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• On December 8, 2016, warrants giving right to 100,000 shares; a plan of 100,000 warrants was
approved. Warrants were offered to Company’s newcomers (employees, non-employees and
directors) in two tranches. Out of the warrants offered, 45,000 warrants were accepted by the
beneficiaries and 7,500 warrants are outstanding as of December 31, 2021;
• On June 29, 2017, warrants giving right to 520,000 shares; a plan of 520,000 warrants was
approved. Warrants were offered to employees, non-employees and directors in several tranches.
Out of the warrants offered, 334,400 warrants were accepted by the beneficiaries and 282,251
warrants are outstanding as of December 31, 2021;
• On October 26, 2018, warrants giving rights to 700,000 shares; 700,000 warrants have been issued
in the framework of the authorized capital. 426,050 warrants were accepted by the beneficiaries,
out of which 365,817 warrants are still outstanding as of December 31, 2021;
• On October 25, 2019, warrants giving rights to 939,500 shares; 939,500 warrants have been issued
in the framework of the authorized capital. 602,025 warrants were accepted by the beneficiaries,
out of which 549,842 warrants are still outstanding as of December 31, 2021;
• On December 11, 2020, warrants giving rights to 561,525 shares; 561,525 warrants have been
issued in the framework of the authorized capital. 555,300 warrants were accepted by the
beneficiaries, out of which 532,133 warrants are still outstanding as of December 31, 2021.
• On October 11, 2021, warrants giving rights to 777,050 shares; 777,050 warrants have been issued
in the framework of the authorized capital. 281,500 warrants were accepted by the beneficiaries,
out of which 281,500 warrants are still outstanding as of December 31, 2021.
As a result, as of December 31, 2021 there are 2,136,556 warrants outstanding which represent respectively
8.64% of the total number of all its issued and outstanding shares and 7.88% of the total voting financial
instruments. For further information and overview of the features of the various warrant plans, refer to
disclosure note 5.14.
3.4
Changes to the share capital
In accordance with the CCA, the Company may increase or decrease its capital by decision of the
Extraordinary General Shareholders’ Meeting taken with a majority of 75% of the votes cast, at a meeting
where at least 50% of the share capital of the Company is present or represented. If the attendance quorum
of 50% is not met, a new Extraordinary General Shareholders’ Meeting must be convened at which the
shareholders may decide on the agenda items, irrespective of the percentage of share capital present or
represented at such meeting. There are in this respect no conditions imposed by the Company’s articles of
association that are more stringent than those required by law.
Within the framework of the powers granted to it under the authorized capital, the Board of Directors may
also increase the Company’s capital as specified in its articles of association.
3.5 Major Shareholders
The information in the table below is based on information known to the Company or ascertained by the
Company from public filings made by the shareholders as of the date of this Annual Report.
On May 23, 2019 the Shareholders’ Meeting decided to voluntarily “opt in” and submit the Company to the
new Belgian Code of Companies and Associations. Furthermore, the Shareholders’ Meeting decided to
activate the possibility offered by Article 7:53 of the code of companies and associations and approved the
grant of double voting right to the registered shares held by a shareholder in a registered form for more than
two years.
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2021 Annual Report
As from May 3, 2021, Tolefi SA, a major shareholder of the Company, has been entitled to a double voting
right for its 2,295,701 shares.
NAME OF BENEFICIAL OWNER
SHARES BENEFICIALLY OWNED
5% Shareholders
CFIP CLYD LLC
TOLEFI SA
Directors and Members of the Executive Committee
Michel Lussier [1]
Serge Goblet
Directors and Members of the Executive Committee as a group
[1] Of which 145,150 are ordinary shares and 11,400 are ADSs.
Number
6 500 000
2 295 701
156 550
56 180
212 730
Percentage
28.77%
10.16%
0.69%
0.25%
0,94%
On the basis of the transparency notifications received by the Company as of the date of this Report, the
two main shareholders are CFIP CLYD LLC (who holds 28.77% of the shares and 26.04 % of the voting
rights) and TOLEFI SA (who holds 10.16% of the shares and 18.39 % of the voting rights). As a
consequence, the two main shareholders of the Company hold together 44.43 % of the voting rights attached
to the shares of the Company.
3.6
Anti-takeover provisions under Belgian laws
Under Belgian law, public takeover bids for all the outstanding voting securities issued by the issuer are
subject to the supervision of the FSMA. If the latter determines that a takeover violates Belgian law, it may
lead to suspension of the exercise of the rights attached to any shares that were acquired in connection with
the envisaged takeover. Pursuant to the Belgian law of April 1, 2007 on public takeovers, a mandatory
takeover bid must be made when, as a result of its own acquisition or the acquisition by persons acting in
concert with it, a person owns, directly or indirectly, more than 30% of the securities with voting rights in a
company with registered office in Belgium whose securities are admitted to trading on a regulated or
recognized market. The acquirer must offer to all other shareholders the opportunity to sell their shares at
the highest of (i) the highest price offered by the acquirer for shares of the issuer during the 12 months
preceding the announcement of the bid or (ii) the weighted average price of the shares on the most liquid
market of the last 30 calendar days prior to the date on which the obligation of the acquirer to offer the
takeover of the shares of other shareholders starts.
As required by the article 34 of the Royal Decree of 14 November 2007, the following elements must be
disclosed which may have an impact in the event of a takeover bid:
a) Celyad’s capital structure, with an indication of the different classes of shares and, for each class
of shares, the rights and obligations attached to it and the percentage of total share capital that it
represents on 31 December 2020
As from the date of this Report, the share capital of the Company amounts to 49,427,200.33 EUR,
represented by 14,205,156 shares of no-par value, fully paid up.
There are no different classes of Celyad shares.
b) Restrictions, either legal or prescribed by the articles of association, on the transfer of securities
The articles of association of the Company do not contain any restriction on the transfer of the
shares.
c) Holders of any securities with special control rights and a description of those rights
There are no such holders except specific shareholders with a double voting rights as described
above.
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2021 Annual Report
d) System of control of any employee share scheme where the control rights are not exercised directly
by the employees
There is no such system.
e) Restrictions, either legal or prescribed by the articles of association, on the exercise of voting rights
There are no such restrictions.
f) Agreements between shareholders which are known to Celyad and may result in restrictions on the
transfer of securities and/or the exercise of voting rights
The Company has no knowledge of agreements which may result in restrictions on the transfer of
its securities and/or the exercise of voting rights.
g) Rules governing the appointment and replacement of directors:
The Chairperson of the Board is in charge of the nomination procedure. The Board is responsible
for proposing members for nomination to the shareholders’ meeting, in each case based on the
recommendation of the Nomination & Remuneration Committee.
For any new appointment to the Board, the skills, knowledge and experience already present and
those needed on the Board will be evaluated and, in the light of that evaluation, a description of the
role and skills, experience and knowledge needed will be prepared (a “profile”).
When dealing with a new appointment, the Chairperson of the Board must ensure that, before
considering the candidate, the Board has received sufficient information such as the candidate’s
curriculum vitae, an assessment of the candidate based on the candidate’s initial interview, a list of
the positions the candidate currently holds, and, if applicable, the necessary information for
assessing the candidate’s independence.
If a legal entity is appointed as a director, it is obliged to appoint, in accordance with the provisions
of the CCA, a natural person as a permanent representative, who may represent the legal entity in
all its dealings with the Company. The legal entity director may not dismiss its permanent
representative without simultaneously appointing a new representative.
Any proposal for the appointment of a director by the shareholders’ meeting should include a
recommendation from the Board based on the advice of the Nomination & Remuneration
Committee. This provision also applies to shareholders’ proposals for appointment. The proposal
must specify the proposed term of the mandate, which must not exceed four years. It must be
accompanied by relevant information on the candidate’s professional qualifications together with a
list of the positions the candidate already holds. The Board will indicate whether the candidate
satisfies the independence criteria.
Until such time as the Fortress Shareholders own in the aggregate less than 10% of the then
outstanding shares (including shares underlying American Depositary Shares) for a period of more
than thirty (30) consecutive days:
(i)
(ii)
Fortress shall have the right to select two (2) individuals (the “Fortress Designees”) to be,
at Fortress’s option, (a) members of the Board, (b) non-voting observers of the Board or (c)
a combination thereof (provided that if Fortress selects both Fortress Designees to be
members of the Board, Fortress may also select a third Fortress Designee to be a non-
voting observer of the Board), and
the Board, at Fortress’s option, (a) shall recommend the confirmation or (re)appointment of
any two (2) Fortress Designees as members of the Board at any applicable general meeting
of shareholders of the Company, (b) shall appoint any two (2) Fortress Designees as non-
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2021 Annual Report
voting observers of the Board or (c) shall proceed to a combination thereof, and
(iii)
(iv)
Upon the termination of the board mandate of any Fortress Designee (for whatever cause),
at the option of Fortress, (a) the Company shall as soon as practicably possible co-opt to
the Board a replacement Fortress Designee, and shall use best efforts to cause the
confirmation of the co-optation at the next general meeting of shareholders of the Company;
or (b) the Company shall as soon as practicably possible approve the appointment of a
replacement Fortress Designee as a non-voting observer of the Board of Directors, and
the Company shall not, directly or indirectly, without the consent of recommend, directly or
indirectly, or take any action to (a) increase the size of the Board or (b) co-opt or appoint to
the Board, in place of the Fortress Designees, any individual other than a Fortress
Designee.
Outgoing directors will remain in office for as long as the shareholders’ meeting, for whatever
reason, has not filled the vacancy.
Appointments are generally made for a maximum term of four years. Outgoing directors will be
eligible for re-election. However, when an independent director has served on the Board for more
than 12 years, he is in not eligible for a fourth term as independent director of the Company. Before
proposing any director for re-election, the Board should take into account the evaluations made by
the Nomination & Remuneration Committee. The mandates of those directors who are not re-
appointed for a new term will terminate immediately after the shareholders’ meeting which decides
on any re-appointment or appointment.
The directors may be revoked by the shareholders’ meeting at any time. If at any time a vacancy is
created on the Board of Directors, the remaining directors may temporarily appoint a director to the
board to fill the vacancy. Any director so appointed will hold office for the remainder of the term of
appointment of the director that it replaces. The definitive appointment of the replacing director is
added to the agenda of the following shareholders’ meeting.
h) Rules governing the amendment of the articles of association
Pursuant to the CCA, any amendment to the articles of association such as an increase or decrease
in the capital of the Company, and certain other matters such as the approval of the dissolution,
merger or de-merger may only be authorized with the approval of at least 75% of the votes validly
cast at an Extraordinary General Shareholders’ Meeting where at least 50% of the Company’s
share capital is present or represented. If the attendance quorum of 50% is not met, a new
Extraordinary General Shareholders’ Meeting must be convened at which the shareholders may
decide on the agenda items, irrespective of the percentage of share capital present or represented
at such meeting.
i) Powers of the Board of Directors in particular to issue or buy back shares
The Board of Directors has the most extensive powers in order to perform all acts which are useful
or necessary so as to complete the Company’s corporate purpose.
The Board of Directors has the power to perform all acts which are not expressly assigned by law
or by the articles of association to the shareholders’ meeting.
However, until such time as the Fortress Shareholders own in the aggregate less than 10% of the
then outstanding shares (including shares underlying American Depositary Shares) for a period of
more than thirty (30) consecutive days, the Company shall not, directly or indirectly, without the
consent of Fortress, (a) incur or issue any indebtedness that would encumber any intellectual
property of the Company, (b) issue any Equity Securities (defined as any share and any other
security, financial instrument, certificate or other right (including options, futures, swaps and other
derivatives) representing, being exercisable, convertible or exchangeable into or for, or otherwise
providing a right to acquire, directly or indirectly, any of the securities mentioned above or any other
security or financial instrument the value of which is based on any of the foregoing) of the Company
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2021 Annual Report
that are senior to the ordinary shares with respect to the right to receive (x) dividends or other
distributions to shareholders or (y) proceeds in the event of the liquidation, dissolution or winding-
up of the Company (including for such purposes in connection with any change of control
transaction), (iii) alter, amend or change the rights, preference or privileges of the shares, including
in connection with any reclassification, recapitalization, reorganization or restructuring, (iv) make
any proposal to amend, repeal or otherwise modify any provision of the Company’s articles of
association that would be reasonably expected to adversely affect the interests of Fortress or any
Fortress Shareholder or (v) make any proposal to modify the rights of any Equity Securities of the
Company in a manner adverse to any Fortress Shareholder.
The Board of Directors has to power to establish an audit committee and other committees, the
powers of which it will determine.
On June 8, 2020, an extraordinary shareholders meeting of the Company granted to the Board of
Directors the power to increase the share capital in accordance with the articles 7:198 et sq. of the
CCA, in one or several times, for a maximum amount of €48,512,614.57 (excluding issue premium),
for a period of 5 years as of the publication of the modification to the articles of association of the
Company. Furthermore, in accordance with article 7:202 of the CCA, the Board of Directors is
empowered to proceed with a share capital increase even after receipt by the Company of a
notification by the FSMA of a takeover bid for the Company’s share, for a period of three years from
June 8, 2020.
When increasing the share capital within the limits of the authorized capital, the Board of Directors
may, in the Company’s interest, restrict or cancel the shareholders’ preferential subscription rights,
even if such restriction or cancellation is made for the benefit of one or more specific persons other
than the employees of the Company or its subsidiaries. The Board of Directors is not allowed to
buy back shares.
Regarding agreements on severance pay, reference is made to the Remuneration Report.
j) Significant agreements to which the Celyad is a party and which take effect, alter or terminate upon
a change of control of Celyad following a takeover bid, and the effects thereof, except where their
nature is such that their disclosure would be seriously prejudicial to Celyad; this exception shall not
apply where Celyad is specifically obliged to disclose such information on the basis of other legal
requirements
There are no such agreements.
k) Agreements between Celyad and its Board members or employees providing for compensation if
the Board members resign or are made redundant without valid reason or if the employment of the
employees ceases because of a takeover bid
There are no such agreements.
3.7
Financial services
Citibank N.A. is acting as depositary bank for the ADS issued by the Company.
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2021 Annual Report
4. CONSOLIDATED FINANCIAL STATEMENTS
4.1
Responsibility statement
We hereby certify that:
•
•
To the best of our knowledge, the consolidated financial statements as of December 31, 2021,
prepared in accordance with the International Financial Reporting Standards as issued by the
International Accounting Standards Board and as adopted by the European Union, and the legal
requirements applicable in Belgium, give a true and fair view of the assets, liabilities, financial
position, comprehensive loss, changes in equity and cash flows of the Company and the
undertakings included in the consolidation taken as a whole; and that
The management report includes a fair review of the development and the performance of the
business and the position of the Company and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and uncertainties that they face.
March 24, 2022 on behalf of the Board of Directors,
MEL Management SRL
Represented by Michel Lussier
Chairman
Filippo Petti
CEO
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4.2
Statutory auditor’s report to the general meeting of shareholders of Celyad
Oncology SA for the year ended December 31, 2021 (consolidated financial
statements)
2021 Annual Report
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2021 Annual Report
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2021 Annual Report
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2021 Annual Report
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4.3
Consolidated financial statements as at December 31, 2021
4.3.1. Consolidated statements of financial position
2021 Annual Report
(€’000)
NON-CURRENT ASSETS
Goodwill and Intangible assets
Property, Plant and Equipment
Non-current Trade and Other receivables
Non-current Grant receivables
Other non-current assets
CURRENT ASSETS
Trade and Other Receivables
Current Grant receivables
Other current assets
Short-term investments
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Share Capital
Share premium
Other reserves
Capital reduction reserve
Accumulated deficit
NON-CURRENT LIABILITIES
Bank loans
Lease liabilities
Recoverable Cash advances (RCAs)
Contingent consideration payable and other financial
liabilities
Post-employment benefits
Other non-current liabilities
CURRENT LIABILITIES
Bank loans
Lease liabilities
Recoverable Cash advances (RCAs)
Trade payables
Other current liabilities
TOTAL EQUITY AND LIABILITIES
Notes
December 31,
2021
December 31,
2020 (as adjusted)1
5.6
5.7
5.8
5.8
5.8
5.9
5.9
5.9
5.10
5.11
5.13
5.13
5.13, 5.22
5.2.16, 5.13
5.2.16, 5.13
5.19
5.19
5.16
5.20
5.15
5.17
5.19
5.19
5.16
5.18
5.18
45 651
36 168
3 248
2 209
3 764
262
34 292
668
1 395
2 211
46 379
36 171
4 119
2 117
3 679
293
19 705
615
145
1 711
-
-
30 018
79 943
43 639
78 585
6 317
33 172
234 562
(308 997)
22 477
-
1 730
5 851
14 679
53
164
13 827
-
902
362
6 611
5 952
79 943
17 234
66 084
30 994
48 513
43 349
30 958
191 213
(283 039)
23 256
-
2 525
4 220
15 526
614
371
11 834
37
1 076
371
4 736
5 614
66 084
(1) For information on voluntary change in accounting policy, see note 5.2.16.
The accompanying disclosure notes form an integral part of these consolidated financial statements.
Page 109 | 180
4.3.2. Consolidated statements of comprehensive loss
2021 Annual Report
(€'000)
Revenue
Cost of sales
Gross profit
Research and Development expenses
General & Administrative expenses
Change in fair value of contingent consideration
Other income
Other expenses
Operating Loss6
Financial income
Financial expenses
Loss before taxes
Income taxes
Loss for the period
Basic and diluted loss per share (in €)
5.32
Other comprehensive income/(loss)
Items that will not be reclassified to profit and loss
Remeasurements of post-employment benefit obligations, net of tax
Items that may be subsequently reclassified to profit or loss
Currency translation differences
Other comprehensive income / (loss) for the period, net of tax
Total comprehensive loss for the period
Total comprehensive loss for the period attributable to Equity Holders (1)
For the year ended December 31,
Notes
2021
2020
5.23
-
5
5.24
5.25
5.28
5.28
5.28
5.31
5.31
-
-
-
5
(20 773)
(21 522)
(9 908)
(9 315)
847
9 228
4 909
4 731
(1 466)
(26 391)
144
(255)
(114)
(16 987)
217
(434)
(26 502)
(17 204)
5.21
(10)
(26 512)
(1.70)
554
554
42
42
596
-
(17 204)
(1.23)
(197)
(197)
(5)
(5)
(202)
(25 916)
(25 916)
(17 406)
(17 406)
[1] For 2021 and 2020, the Group does not have any non-controlling interests and the losses for the year are fully
attributable to owners of the parent.
The accompanying disclosure notes form an integral part of these consolidated financial statements.
6 The operating loss arises from the Company’s loss for the period before deduction of financial income, financial expenses
and income taxes. The purpose of this measure by Management is to identify the Company’s results in connection with
its operating activities.
Page 110 | 180
4.3.3. Consolidated statements of changes in equity
2021 Annual Report
(€’000)
Balance as of January 1, 2020 (as
adjusted)1
Share-based payments
Total transactions with owners,
recognized directly in equity
Loss for the period
Currency Translation differences
Remeasurements of defined benefit
obligation
Total comprehensive loss for the
period
Balance as of December 31, 2020
(as adjusted)1
Balance as of January 1, 2021 (as
adjusted)1
Capital increase
Transaction costs associated with
capital increases
Reduction of share premium by
absorption of losses
Share-based payments
Total transactions with owners,
recognized directly in equity
Loss for the period
Currency Translation differences
Remeasurements of defined benefit
obligation
Total comprehensive loss for the
period
Balance as of December 31, 2021
Share
capital
(non-
distributabl
e)
Share
premium
(non-
distributabl
e)
Other
reserves 7
(distributab
le²)
Capital
reduction
reserve
(distributab
le²)
Accumulated
deficit
(distributable
²)
Total
Equity
48 513
43 349
28 181
191 213
(265 637)
45 619
-
-
-
-
-
-
-
-
-
-
-
-
2 782
2 782
-
(5)
-
(5)
-
-
-
-
-
-
-
-
2 782
2 782
(17 204)
-
(17 204)
(5)
(197)
(197)
(17 402)
(17 406)
48 513
43 349
30 958
191 213
(283 039)
30 994
48 513
43 349
30 958
191 213
(283 039)
30 994
30 072
8 900
(2 583)
(43 349)
-
-
-
-
-
-
-
-
43 349
-
-
38 972
-
-
-
(2 583)
-
2 172
-
2 172
30 072
(37 032)
2 172
43 349
-
38 561
-
-
-
-
-
-
-
-
-
42
-
42
-
-
-
-
(26 512)
-
(26 512)
42
554
554
(25 958)
(25 916)
78 585
6 317
33 172
234 562
(308 997)
43 639
(1) For information on voluntary change in accounting policy, see note 5.2.16.
(2) Pursuant to Belgian law (“CCA”), the calculation of amounts available for distribution to shareholders, as dividends or
otherwise, must be determined on the basis of the Company’s standalone non-consolidated statutory financial
statements of Celyad Oncology SA prepared under Belgian GAAP, and not on the basis of IFRS consolidated financial
statements. For more information, see note 5.13.
The accompanying disclosure notes form an integral part of these consolidated financial statements.
7 Other reserves includes Share-base payment reserve, Other equity reserve from conversion of convertible loan in 2013
and Currency Translation Difference.
Page 111 | 180
4.3.4. Consolidated statements of Cash flows
(€'000)
Cash Flow from operating activities
Loss for the period
Non-cash adjustments
Intangibles - Amortization and impairment
Property, plant & equipment - Depreciation
Loss on disposal of Property, plant and equipment
Gain on sales of Property, plant & equipment
Provision for onerous contract
Change in fair value of contingent consideration payable and other financial liabilities
Remeasurement of Recoverable Cash Advances (RCAs)
Grant income (RCAs and others)
Share-based payment expense
Post-employment benefits
Change in working capital
Trade receivables, other (non-)current receivables
Trade payables, other (non-)current liabilities
Net cash used in operations
Cash Flow from investing activities
Acquisition of Property, Plant & Equipment
Acquisitions of Intangible assets
Disposals of Property, Plant & Equipment
Proceeds from net investment in lease
Proceeds from short-term investments
Net cash from/(used in) investing activities
Cash Flow from financing activities
Repayments of bank borrowings
Repayments of leases
Proceeds from issuance of shares and exercise of warrants
Proceeds from RCAs & other grants
Repayment of RCAs & other grants
Net cash from/(used in) financing activities
Net cash and cash equivalents at beginning of the period
Change in Cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Net cash and cash equivalents at the end of the period
2021 Annual Report
For the year ended December 31,
Notes
2021
2020
4.3.2
(26 512)
(17 204)
5.6
5.7
5.28
5.28
217
1 303
1
197
1 635
10
-
(35)
5.17, 5.18
29
858
5.20
5.19
5.28
5.14
5.15
(847)
(9 228)
328
(933)
(4 178)
(3 089)
2 172
(561)
2 782
216
(1 559)
(1 148)
2 964
(1 726)
(26 643)
(27 665)
5.7
5.6
5.7
5.9
(331)
(150)
(62)
(169)
-
267
235
241
5.10
-
-
(126)
157
5.19
5.19
5.13
5.19
(37)
(192)
(1 099)
(1 255)
36 568
-
4 369
7 272
5.18, 5.19
(280)
(429)
39 521
17 234
5 396
39 338
5.11
12 752
(22 112)
32
30 018
8
17 234
The accompanying disclosure notes form an integral part of these consolidated financial statements.
Page 112 | 180
2021 Annual Report
5. Notes to the consolidated financial statements
5.1
General information
Celyad Oncology SA and its affiliates will be collectively referred to as “the Company”, “the Group”, “Celyad”,
“we” or “us”.
The Company is a clinical-stage biopharmaceutical company focused on the discovery and development of
chimeric antigen receptor T cell (CAR T) therapies for cancer.
Celyad Oncology SA was incorporated on July 24, 2007 under the name “Cardio3 BioSciences”. Celyad is
a limited liability company (Société Anonyme) governed by Belgian law with its registered office at Axis Parc,
Rue Edouard Belin 2, B-1435 Mont-Saint-Guibert, Belgium (company number 0891.118.115).
On June 8, 2020, the Company announced the launch of its 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.
The Company’s ordinary shares are listed on NYSE Euronext Brussels and NYSE Euronext Paris regulated
markets and the Company’s American Depositary Shares (ADSs) are listed on the Nasdaq Global Market,
all under the ticker symbol CYAD.
The Company has three fully owned subsidiaries (together, the Group) located in Belgium (Biological
Manufacturing Services SA) and in the United States (Celyad Inc. and Corquest Medical, Inc.).
These consolidated financial statements have been approved for issuance by the Company’s Board of
Directors on March 24, 2022. These statements have been audited by SRL EY Bedrijfsrevisoren-Réviseurs
d’Entreprises, the statutory auditor of the Company and independent registered public accounting firm.
The annual report is available to the public free of charge to the above-mentioned address or via the
Company’s website (https://celyad.com/investors/regulated-information/).
5.2
Basis of preparation and significant accounting policies
The consolidated financial statements of the Group for the twelve months ended December 31, 2021 and
2020 (the “year” or “the period”) include Celyad Oncology SA and its subsidiaries. The significant accounting
policies used for preparing these consolidated financial statements are explained below.
5.2.1. Basis of preparation
The consolidated financial statements have been prepared on an historical cost basis, except for:
•
Financial instruments – Fair value through profit or loss
• Contingent consideration and other financial liabilities
• Post-employment benefits liability
The policies have been consistently applied to all the years presented, unless otherwise stated.
The consolidated financial statements are presented in euro and all values are presented in thousands
(€000) except when otherwise indicated. Amounts have been rounded off to the nearest thousand and in
certain cases, this may result in minor discrepancies in the totals and sub
totals disclosed in the financial
tables.
‐
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2021 Annual Report
Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and Interpretations (collectively, IFRSs)
as issued by the International Accounting Standards Board (IASB) and as endorsed by the European Union.
The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgment in the process of applying
the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, are areas
where assumptions and estimates are significant to the financial statements. They are disclosed in note 5.4.
Going concern
The Group is pursuing a strategy to develop therapies to treat medical needs in oncology. Management has
prepared detailed budgets and cash flow forecasts for the years 2022 and 2023. These forecasts reflect the
strategy of the Group and include significant expenses and cash outflows in relation to the development of
selected research programs and product candidates, partly compensated by grants funding and tax
incentives.
As of December 31, 2021, the Company had cash and cash equivalents of €30.0 million and no short-term
investments. On January 8, 2021, the Company entered into a committed equity purchase agreement
(“Purchase Agreement”) over a 24-month term for up to $40.0 million with Lincoln Park Capital Fund, LLC
(“LPC”), pursuant to which LPC’s purchases are subject to certain conditions, including that the Company
may only deliver a Regular Purchase Notice (as that term is defined in the Purchase Agreement) of its ADSs
so long as the adjusted price of its ADSs exceeds $1.00. Over the remaining lifetime of the Purchase
Agreement, the Company will have the right to direct LPC to purchase up to an aggregate remaining amount
of $28.0 million ADSs, each of which represents one of our ordinary shares. As of December 31, 2021, the
remaining amount of $28.0 million of this equity purchase agreement is expected to strengthen the
Company’s current statement of financial position while also providing the Company with access to future
capital on an as needed basis and to ensure sufficient funding to cover its operations for the next 12 months
from the date the financial statements are issued.
Based on its current scope of activities, the Company estimates that its cash and cash equivalents as of
December 31, 2021 combined with the remaining access to the equity purchase agreement established with
Lincoln Park Capital Fund, LLC (remaining amount of $28.0 million as of December 31, 2021) should be
sufficient to fund operating expenses and capital expenditure requirements until mid-2023.
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. Throughout 2020 and
2021, Belgium and the United States, where the Company operates, were impacted by temporary closures.
While progress has been made in the fight against the ongoing COVID-19 pandemic, including the broad
dissemination and administration of vaccines in certain countries, the COVID-19 pandemic has continued to
spread globally. The length or severity of this pandemic cannot be predicted, but the Company anticipates
that there may continue to be additional impacts from a prolonged COVID-19 environment on the planned
development activities of the Company.
To date, COVID-19 has had no impact on the Group’s financial statements and corporate cash flow, and the
Group expects that its existing cash and cash equivalents combined with the remaining access to the equity
purchase agreement established with Lincoln Park Capital Fund, LLC (remaining amount of $28.0 million as
of December 31, 2021) should be sufficient, based on the current scope of activities, to fund operating
expenses and capital expenditure requirements until mid-2023. With regards to the Company’s clinical
programs, no major disruption in enrollment were experienced in the CYAD-101, CYAD-211 or CYAD-02
programs in 2021 due to the coronavirus pandemic. Enrollment in the respective trials for CYAD-101 and
CYAD-211 is ongoing without any major disruption due to the coronavirus pandemic, however future
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2021 Annual Report
disruptions may occur. However, since 2020, certain clinical sites and institutions have not been able to
receive visits from the Company or its representatives during the coronavirus pandemic, which has delayed
its data monitoring activities and delayed its ability to lock the databases for completed studies.
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 the emergence of new variants, such as Delta and
Omicron, and, among other things, additional government restrictions intended to contain COVID-19’s
effects, 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.
Changes to accounting standards and interpretations
The Group has applied the same accounting policies and methods of computation in its 2021 year-end
consolidated financial statements as compared to 2020, except for those that relate to new standards and
interpretations.
None of the new standards, interpretations and amendments, which are effective for periods beginning after
January 1, 2021 which have been issued by the IASB and the IFRIC have a material effect on the Group’s
financial statements. None of the new standards, interpretations and amendments, which will be effective
for periods beginning after January 1, 2022 and are not yet effective as of December 31, 2021 and/or not
yet adopted by the European Union as of December 31, 2021, are expected to have a material effect on the
Group's future financial statements as either they are not relevant to the Group’s activities, or they require
accounting which is consistent with the Group’s current accounting policies.
5.2.2. Consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the
date control ceases.
Inter-company transactions, balances and unrealized gains on transactions between group companies are
eliminated.
Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been
adjusted to conform with the Group’s accounting policies.
5.2.3.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”). The
consolidated financial statements are presented in Euros, which is the Group’s presentation currency.
Transactions and balances
Foreign currency transactions (mainly USD) are translated into the functional currency using the applicable
exchange rate on the transaction dates. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the presentation currency spot rate of exchange ruling at the reporting date.
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Foreign currency exchange gains and losses arising from settling foreign currency transactions and from the
retranslation of monetary assets and liabilities denominated in foreign currencies at the reporting date are
recognized in the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as of the dates of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value is determined.
Group companies
The results and financial position of all group entities that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;
•
Income and expenses for each income statement are translated at average exchange rate (unless
this average is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the rate on the dates
of the transactions); and
• All resulting translation differences are recognized in other comprehensive income.
5.2.4. Revenue
So far, the primary revenue generated by the Group relates to the sale of licenses.
Licensing revenue
The Group enters into license and/or collaboration agreements with third-party biopharmaceutical partners.
Revenue under these arrangements may include non-refundable upfront payments, product development
milestone payments, commercial milestone payments and/or sales-based royalty payments.
Upfront payments
License fees representing non-refundable payments received at the time of signature of license agreements
are recognized as revenue upon signature of the license agreements when the Group has no significant
future performance obligations and collectability of the fees is assured.
Milestone payments
Milestone payments represent amounts received from the Group’s customers or collaborators, the receipt
of which is dependent upon the achievement of certain scientific, regulatory, or commercial milestones.
Under IFRS 15, milestone payments generally represent a form of variable consideration as the payments
are likely to be contingent on the occurrence of future events. Milestone payments are estimated and
included in the transaction price based on either the expected value (probability-weighted estimate) or most
likely amount approach. The most likely amount is likely to be most predictive for milestone payments with
a binary outcome (i.e., the Group receives all or none of the milestone payment). Variable consideration is
only recognized as revenue when the related performance obligation is satisfied, and the Group determines
that it is highly probable that there will not be a significant reversal of cumulative revenue recognized in
future periods.
Royalty revenue
Royalty revenues arise from the Group’s contractual entitlement to receive a percentage of product sales
achieved by co-contracting parties. As the Group’s co-contracting partners currently have no products based
on a Celyad-technology approved for sale. The Group has not received any royalty revenue to date. Royalty
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revenues, if earned, will be recognized on an accrual basis in accordance with the terms of the contracts
with the Group’s customers when sales occur and there is reasonable assurance that the receivables from
outstanding royalties will be collected.
2021 Annual Report
5.2.5. Other income
Government Grants
The Group’s grant income reported under ‘Other income’ in the consolidated statement of comprehensive
loss is generated from: (i) recoverable cash advances (RCAs) granted by the Regional government of
Wallonia; (ii) R&D tax credits granted by the Belgian federal government; and (iii) grants received from the
European Commission under the Seventh Framework Program (“FP7”), Federal Belgian Institute for Health
Insurance (Inami) and Regional authorities.
Government grants are recognized at their fair value (calculated based on present value of future repayment
of grants) where there is reasonable assurance that the grant will be received, and the Group will comply
with all attached conditions. Once a government grant is recognized, any related contingent liability (or
contingent asset) is treated in accordance with IAS 37.
Government grants relating to costs are deferred and recognized in the consolidated statement of
comprehensive loss over the period necessary to match them with the costs that they are intended to
compensate.
Based on the nature of transactions, cash inflows received from government grants provide the entity with
financing for the designated activity. They are in substance financing cash inflows consistent with the cash
proceeds from RCAs and other grants and are disclosed in the consolidated statements of cash flows as
“Cash Flow from financing activities”.
The Group’s grant income is recognized in the consolidated statement of comprehensive loss under “Other
income/expense” and as a non-cash adjustment in “cash flows from operating activities” in the consolidated
statements of cash flows.
Recoverable cash advances (RCAs)
The Group receives grants from the Walloon Region in the form of recoverable cash advances (RCAs).
RCAs are dedicated to support specific development programs. All RCA contracts, in essence, consist of
three phases, i.e., the “research phase”, the “decision phase” and the “exploitation phase”. During the
research phase, the Group receives funds from the Region based on statements of expenses. In accordance
with IAS 20.10A and IFRS Interpretations Committee (IC)’s conclusion that contingently repayable cash
received from a government to finance a research and development (R&D) project is a financial liability
under IAS 32, ‘Financial instruments; Presentation’, the RCAs are initially recognized, concomitantly with
the occurrence of subsidized expense, as a financial liability at fair value (calculated based on present value
of future repayment of grants), determined as per IFRS 9.
The benefit (RCA grant component) consisting in the difference between the cash received (RCA proceeds)
and the above-mentioned financial liability’s fair value (RCA liability component) is treated as a government
grant in accordance with IAS 20.
The RCA grant component is recognized in profit or loss under "Other income" on a systematic basis over
the periods in which the entity recognizes the underlying R&D expenses subsidized by the RCA.
The fair market value adjustments to the RCA liability are recognized in the consolidated statement of
comprehensive loss under “Other income/expense” and as a non-cash adjustment in “cash flows from
operating activities” in the consolidated statements of cash flows.
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The RCAs liability contains two components:
•
•
The fixed part of the reimbursement of 30% is refundable based upon an agreed repayment
schedule. The initial recognition at fair value is performed using the discount rate at the date of the
convention and the assumption of exploitation until the end of repayment schedule.
The variable part (from 70% and up to 170%) is refundable to the extent of the revenue generated
within exploitation phase. The initial recognition at fair value of the variable part of the component
is based on probability-weighted discounted cash flows estimated using Key assumptions listed in
note 5.6.2.
The sales-independent reimbursements and sales-dependent reimbursements are, in the aggregate
(including the accrued interests), capped at 200% of the principal amount paid out by the Walloon Region.
The RCAs liability component (RCA financial liability) is subsequently measured at amortized cost using the
cumulative catch-up approach under which the carrying amount of the liability is adjusted to the present
value of the future estimated revenue, discounted at the liability’s original effective interest rate. The resulting
adjustment is recognized within profit or loss under “Other income/expense”.
At the end of the research phase, the Group should within a period of six months decide whether or not to
exploit the results of the research phase (decision phase). The exploitation phase may have a duration of
up to 20 years. In the event the Group decides to exploit the results under an RCA, the relevant RCA
becomes contingently refundable, and the fair value of the RCA liability adjusted accordingly, if required. For
more information on the potential financial consequences of these exploitation decisions in terms of potential
reimbursements and sales % fees to be paid to the Walloon Region, refer to note 5.16.
When the Group does not exploit (or ceases to exploit) the results of programs under an RCA, it has to notify
the Region of this decision. This decision is the sole responsibility of the Group. The related liability is then
discharged by the transfer of such results to the Region. Also, when the Group decides to renounce its rights
to patents which may result from the research, title to such patents will be transferred to the Region. In that
case, the RCA liability is extinguished and reflected in the statement of income (loss) under “Other
income/expense”.
R&D Tax credits
Since 2013, the Group applies for R&D tax credits, a tax incentive measure for European SME’s established
by the Belgian federal government. When capitalizing its R&D expenses under the tax reporting framework,
the Group may either i) get a reduction of its taxable income (at current income tax rate applicable); or ii) if
no sufficient taxable income is available, apply for the refund of the unutilized tax credits, calculated on the
R&D expenses amount for the year. Such settlement occurs at the earliest 5 financial years after the tax
credit application filed by the Group.
Considering that R&D tax credits are ultimately paid by the public authorities, the related benefit is treated
as a government grant under IAS 20 and booked into other income, in order to match the R&D expenses
subsidized by the grant.
Other government grants
The Group has received and will continue to apply for grants from European (FP7), Regional authorities and
Federal Belgian Institute for Health Insurance (Inami). These grants are dedicated to partially finance early
stage projects such as fundamental research, applied research, prototype design, etc.
To date, all grants received are not associated with any conditions. As per each grant contract, grants are
paid upon submission by the Group of a statement of eligible expenses. The Group incurs project expenses
first and asks for partial refunding according to the terms of the contracts.
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These government grants are recognized in profit or loss under "Other income" on a systematic basis over
the periods in which the entity recognizes the underlying R&D expenses subsidized.
5.2.6.
Intangible assets
The following categories of intangible assets apply to the current Group operations:
Separately acquired intangible assets
Intangible assets acquired from third parties are recognized at cost, if and only if it is probable that future
economic benefits associated with the asset will flow to the Group, and that the cost can be measured
reliably. Subsequent payments of contingent consideration are capitalized when incurred. Following initial
recognition, intangible assets are carried at cost less any accumulated amortization and accumulated
impairment losses.
The useful life of intangible assets is assessed as finite, except for Goodwill. They are amortized over the
expected useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortization period and the amortization method for an intangible
asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted
for by changing the amortization period or method, as appropriate, and are treated as changes in accounting
estimates and applied prospectively. The amortization expense on intangible assets with finite lives is
recognized in the income statement in the expense category consistent with the function of the intangible
asset.
Patents, Licenses and Trademarks
Licenses for the use of intellectual property are granted for a period corresponding to the intellectual property
of the assets licensed. Amortization is calculated on a straight-line basis over this useful life.
Patents and licenses are amortized over the period corresponding to the intellectual property (IP) protection
and are assessed for impairment whenever there is an indication these assets may be impaired. Indication
of impairment is related to the value of the patent demonstrated by the preclinical and clinical results of the
technology.
Software
Software only concerns acquired computer software licenses. Software is capitalized on the basis of the
costs incurred to acquire and bring to use the specific software. These costs are amortized over their
estimated useful lives of three to five years on a straight-line basis.
Intangible assets acquired in a business combination
Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a
business combination that are not individually identified and separately recognized. Goodwill is measured
as a residual at the acquisition date, as the excess of the fair value of the consideration transferred and the
assets and liabilities recognized (in accordance with IFRS 3).
Goodwill has an indefinite useful life and is not amortized but tested for impairment at least annually or more
frequently whenever events or changes in circumstances indicate that goodwill may be impaired, as set forth
in IAS 36 (Impairment of Assets).
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Goodwill arising from business combinations is allocated to cash generating units, which are expected to
receive future economic benefits from synergies that are most likely to arise from the acquisition. These cash
generating units form the basis of any future assessment of impairment of the carrying value of the acquired
goodwill.
In-process research and development costs
The In-process research and development costs (“IPR&D”) acquired as part of a business combination are
measured at fair value at the date of acquisition. Subsequent to initial recognition, it is reported at cost and
is subject to annual impairment testing until the date the projects are available for use and from that moment,
the IPR&D will be amortized over its remaining useful economic life.
Subsequent R&D expenditure can be capitalized as part of the IPR&D only to the extent that IPR&D is in
development stage, i.e., when such expenditure meets the recognition criteria of IAS 38. In line with biotech
industry practice, the Group determines that ‘development stage’ under IAS 38 is reached when the product
candidate gets regulatory approval (upon Phase III completion). Therefore, any R&D expenditure incurred
between the acquisition date and the development stage should be treated as part of research phase and
expensed periodically in the income statement.
Internally generated intangible assets
Except qualifying development expenditure (discussed below), internally generated intangible assets are not
capitalized. Expenditure is reflected in the income statement in the year in which the expenditure is incurred.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are
recognized as an intangible asset when the Group can demonstrate:
(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
(b) Its intention to complete the intangible asset and use or sell it.
(c) Its ability to use or sell the intangible asset.
(d) How the intangible asset will generate probable future economic benefits. Among other things, the
entity can demonstrate the existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
(e) The availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset.
(f)
Its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
For the industry in which the Group operates, the life science industry, criteria a) and d) tend to be the most
difficult to achieve. Experience shows that in the Biotechnology sector technical feasibility of completing the
project is met when such project completes successfully Phase III of its development. For medical devices
this is usually met at the moment of CE marking.
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring
the asset to be carried at cost less any accumulated amortization and accumulated impairment losses.
Amortization of the asset begins when development has been completed and the asset is available for use.
It is amortized over the period of expected future benefit. Amortization is recorded in Research &
Development expenses. During the period of development, the asset is tested for impairment annually, or
earlier when an impairment indicator occurs. As of statement of financial position dates, only the
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2021 Annual Report
development costs of C-Cathez have been capitalized and are being amortized over a period of 17 years
which corresponds to the period over which the intellectual property is protected.
5.2.7. Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated
impairment losses, if any. Repair and maintenance costs are recognized in the income statement as
incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:
•
Land and buildings: 15 to 20 years
• Plant and equipment: 5 to 15 years
•
Laboratory equipment: 3 to 5 years
• Office furniture: 3 to 10 years
•
Leasehold improvements: based on remaining duration of office building lease
• Right-of-use assets: over lease term
An item of property, plant and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement when the asset is derecognized.
The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year
end, and adjusted prospectively, if applicable.
5.2.8.
Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets or the arrangement conveys a right to use the asset.
The Group leases various offices, facilities, cars and IT-equipment.
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Group. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated
over the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payment that are based on an index or a rate;
• Amounts expected to be payable by the lessee under residual value guarantees;
•
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
and
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
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The lease term covers the non-cancellable period for which the Group has the right to use an underlying
asset, together with both:
(a) Periods covered by an option to extend the lease if the Group is reasonably certain to exercise that
option; and
(b) Periods covered by an option to terminate the lease if the Group is reasonably certain not to
exercise that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with
similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-
line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or
less. Low-value assets primarily comprise IT-equipment.
The Group subleases some office space it leases from a head lessor. In its capacity as intermediate lessor,
the Group assesses whether the sublease is a finance or operating lease in the context of the right-of-use
asset being leased. The sublease is classified as a finance lease if it transfers substantially all the risks and
rewards incidental to ownership of the underlying right-of-use asset. It is classified as an operating lease if
it does not transfer substantially all the risks and rewards incidental to ownership of the underlying right-of-
use asset.
From time to time, the Group may enter into sale and leaseback transactions. When a sale occurs, both the
seller-lessee and the buyer-lessor account for the leaseback in the same manner as any other lease.
Specifically, the seller-lessee recognizes a lease liability and right-of-use asset for the leaseback (subject to
the optional exemptions for short-term leases and leases of low-value assets).
5.2.9.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired,
unless there are indications of impairment at other points throughout the period. If any indication exists, or
when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value
less costs to sell and its value in use and is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or group of assets. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs to sell, an appropriate valuation model is used based on the
discounted cash-flow model. For intangible assets under development (like IPR&D), only the fair value less
costs to sell reference is allowed in the impairment testing process.
Where the carrying amount of an asset or CGU exceeds its recoverable amount, an impairment loss is
immediately recognized as an expense and the asset carrying value is written down to its recoverable
amount.
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2021 Annual Report
An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such indication exists, the
Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognized. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognized for the asset in
prior years. Such reversal is recognized in the income statement unless the asset is carried at a revalued
amount, in which case the reversal is treated as a revaluation increase. An impairment loss recognized on
goodwill is however not reversed in a subsequent period.
As of the statement of financial position dates, the Group has two cash-generating units which consist of the
development and commercialization activities on:
• CYAD products candidate series based on CAR-T technology, for the immune-oncology segment;
and
• C-Cathez commercialized medical device, for the cardiology segment.
Indicators of impairment used by the Group are the preclinical and clinical results obtained with the
technology.
5.2.10. Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and
very short-term deposits with an original maturity of three months or less. Cash and cash equivalents are
carried in the statement of financial position at their nominal value.
5.2.11. Financial assets
5.2.11.1
Classification
The Group classifies its financial assets in accordance with IFRS 9 categories for measurement purposes.
The classification depends on the purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
‘Amortized cost’ measurement category refers to loans and receivables which are non-derivative financial
assets, with fixed or determinable payments that are not quoted in an active market. They are included in
current assets, except for maturities greater than 12 months after the end of the reporting period which are
classified as non-current assets. This measurement category comprises “cash and cash equivalents”, “short-
term investments”, and relevant financial assets within “(non-) current trade and other receivables”, “(non-)
current grant receivables” and “other (non-) current assets”.
5.2.11.2
Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case of a financial asset not at
fair value through profit or loss, directly attributable transaction costs.
5.2.11.3
Subsequent measurement
After initial measurement, financial assets are subsequently measured at amortized cost using the effective
interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount
or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is
included in finance income in the income statement under “Financial income”. The losses arising from
impairment are recognized in the income statement under “Other expenses”.
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2021 Annual Report
5.2.11.4
Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model. The expected
credit loss model requires the Group to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial
assets. In other words, it is no longer necessary for a credit event to have occurred before credit losses are
recognized.
Specifically, IFRS 9 requires the Group to recognize a loss allowance for expected credit losses on trade
receivables and contract assets.
In particular, IFRS 9 requires the Group to measure the loss allowance for a financial instrument at an
amount equal to the lifetime expected credit losses (ECL) if the credit risk on that financial instrument has
increased significantly since initial recognition, or if the financial instrument is a purchased or originated
credit
impaired financial asset. However, if the credit risk on a financial instrument has not increased
impaired financial asset),
significantly since initial recognition (except for a purchased or originated credit
the Group is required to measure the loss allowance for that financial instrument at an amount equal to
12
months ECL. IFRS 9 also requires a simplified approach for measuring the loss allowance at an amount
equal to lifetime ECL for trade receivables, contract assets and lease receivables in certain circumstances.
‐
‐
‐
Given the current nature and size of operations of the Group, these requirements mainly apply to the financial
assets reported under ‘non-current trade receivables’. The carrying value of these receivables (resulting
mainly from Mesoblast license agreement commented further in note 5.8) take into account a discount rate
equal to the Group’s partner’s incremental borrowing rate and, accordingly, is already credit risk-adjusted.
The Group considers there is no significant additional credit risk related to this receivable, which would not
have been captured by the discounting effect, both at inception of the receivable and at the reporting date.
As such, no additional ECL allowance has been recognized for this financial asset or any other financial
asset.
5.2.11.5
Financial assets carried at amortized cost
For financial assets carried at amortized cost the Group first assesses individually whether objective
evidence of impairment exists individually for financial assets that are individually significant, or collectively
for financial assets that are not individually significant. If the Group determines that no objective evidence of
impairment exists for an individually assessed financial asset, it includes the asset in a group of financial
assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are
individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are
not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash flows.
The present value of the estimated future cash flows is discounted at the financial assets’ original effective
interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the
current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the
loss is recognized in the income statement under “Other expenses”. Interest income continues to be accrued
on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash
flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance
income in the income statement. Loans together with the associated allowance are written off when there is
no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment
loss increases or decreases because of an event occurring after the impairment was recognized, the
previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future
write-off is later recovered, the recovery is credited to the income statement.
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5.2.12. Financial liabilities
5.2.12.1
Classification
The Group’s financial liabilities include “bank loans”, “lease liabilities”, “recoverable cash advances”,
“contingent consideration and other financial liabilities”, “trade payables” and relevant financial liabilities
within “Other (non-) current liabilities”.
The Group classifies and measures its financial liabilities at ‘amortized cost’ using the effective interest
method, except “contingent consideration and other financial liabilities” which are classified and measured
at ‘fair value through profit or loss’.
5.2.12.2
Initial recognition and measurement
Financial liabilities are initially measured at fair value. Transactions costs that are directly attributable to the
acquisition or issue of financial liabilities are added or deducted from the fair value of the financial liabilities,
as appropriate, on initial recognition.
5.2.12.3
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as explained above. In
particular:
Contingent consideration and other financial liabilities
The contingent consideration and other financial liabilities are recognized and measured at fair value at the
acquisition date. After initial recognition, contingent consideration arrangements that are classified as
liabilities are re-measured at fair value with changes in fair value recognized in profit or loss in accordance
with IFRS 3 and IFRS 9. Therefore, contingent payments will not be eligible for capitalization but will simply
reduce the contingent consideration liability.
Details regarding the valuation of the contingent consideration are disclosed in note 5.20.2.
Recoverable cash advances
Recoverable cash advances granted by the Walloon Region are subsequently measured at amortized cost
using the cumulative catch-up approach, as described in section 5.2.5 above.
Trade payables and other payables
After initial recognition, trade payables and other payables are measured at amortized cost using the
effective interest method.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost
using the effective interest rate method. Gains and losses are recognized in the income statement when the
liabilities are derecognized.
5.2.12.4
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires.
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When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as a derecognition of the original liability and the recognition of a new liability, and the difference in
the respective carrying amounts is recognized in the income statement under “Change in fair value of
contingent consideration” or “Other expenses”.
5.2.13. Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects
some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the income statement net of any reimbursement. If the effect of the time
value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to
the passage of time is recognized as a finance cost.
5.2.13.1
Employee benefits
Post-employment plan
The Group operates a pension plan which requires defined contributions (DC) to be funded by the Group
externally at a third-party insurance company. Under Belgian law, an employer must guarantee a minimum
rate of return on the Group’s contributions and thus it is treated as defined benefit plan under IAS 19.
At the statement of financial position dates, the minimum rates of return guaranteed by the Group are as
follows, in accordance with the law of 18 December 2015:
•
•
1.75% for the employer’s contributions paid as from 1 January 2016 (variable rate based on
Governmental bond OLO rates, with a minimum of 1.75% and a maximum of 3.75%);
3.25% (fixed rate) for the employer’s contributions paid until 31 December 2015.
The cost of providing benefits is determined using the projected unit credit (PUC) method, with actuarial
valuations being carried out at the end of each annual reporting period, with the assistance of an independent
actuarial firm.
The liability recognized in the statement of financial position in respect of the pension plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension
obligation.
The current service cost of the defined benefit plan, recognized in the income statement as part of the
operating costs, reflects the increase in the defined benefit obligation resulting from employee service in the
current year, benefit changes, curtailments and settlements.
Past-service costs are recognized immediately in the income statement.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in the operating costs in the income
statement.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to other comprehensive income in the period in which they arise.
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Short-term benefits
Short-term employee benefits are those expected to be settled wholly before twelve months after the end of
the annual reporting period during which employee services are rendered, but do not include termination
benefits such as wages, salaries, profit-sharing and bonuses and non-monetary benefits paid to current
employees.
The undiscounted amount of the benefits expected to be paid in respect of services rendered by employees
in an accounting period is recognized in that period. The expected cost of short-term compensated absences
is recognized as the employees render services that increase their entitlement or, in the case of non-
accumulating absences, when the absences occur, and includes any additional amounts the entity expects
to pay as a result of unused entitlements at the end of the period.
Share-based payments
Certain employees, managers and members of the Board of Directors of the Group receive remuneration,
as compensation for services rendered, in the form of share-based payments which are “equity-settled”.
Measurement
The cost of equity-settled share-based payments is measured by reference to the fair value at the date on
which they are granted. The fair value is determined by using an appropriate pricing model, further details
are given in note 5.14.
Recognition
The cost of equity-settled share-based payments is recorded as an expense, together with a corresponding
increase in equity, over the period in which the service conditions are fulfilled. The cumulative expense
recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group’s best estimate of the number of equity instruments that
will ultimately vest.
Modification
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is
the expense as if the terms had not been modified, if the original terms of the award were met. An additional
expense is recognized for any modification that increases the total fair value of the share-based payment
transaction, or is otherwise beneficial to the employee as measured at the date of modification.
The incremental fair value granted is the difference between the fair value of the modified equity instrument
and the original equity instrument, both estimated as at the date of the modification. If the modification occurs
during the vesting period, the incremental fair value granted is included in the measurement of the amount
recognized for services received over the period from the modification date until the date when the modified
equity instruments vest, in addition to the amount based on the grant date fair value of the original equity
instruments, which is recognized over the remainder of the original vesting period. If the modification occurs
after vesting date, the incremental fair value granted is recognized immediately, or over the vesting period if
the employee is required to complete an additional period of service before becoming unconditionally entitled
to those modified equity instruments.
Forfeiture
An equity-settled award can be forfeited with the departure of a beneficiary before the end of the vesting
period, or cancelled and replaced by a new equity settled award. If a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and
new awards are treated as if they were a modification of the original award, as described in the previous
paragraph.
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Cancellation
If the cancellation occurs during the vesting period, it is treated as an acceleration of vesting, and the Group
recognizes immediately the amount that would otherwise have been recognized for services received over
the remainder of the vesting period. If the cancellation occurs after the vesting period, no adjustments will
be made to the accounting.
5.2.14.
Income Taxes
Tax is recognized in the income statement, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive
income or directly in equity, respectively.
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
• Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss;
•
In respect of taxable temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses (except if the deferred tax asset arises from the initial recognition of an asset
or liability in a transaction other than a business combination and that, at the time of the transaction affects
neither accounting nor taxable profit or loss), to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is not probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to
the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current income tax liabilities and the deferred taxes relate to income taxes levied by the
same taxation authority or either the same taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
5.2.15. Earnings (loss) per share
The basic net profit/(loss) per share is calculated based on the weighted average number of shares
outstanding during the period.
The diluted net profit/(loss) per share is calculated based on the weighted average number of shares
outstanding including the dilutive effect of potentially dilutive ordinary shares such as warrants and
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2021 Annual Report
convertible debts. Potentially dilutive ordinary shares should be included in diluted earnings (loss) per share
when and only when their conversion to ordinary shares would decrease the net profit per share (or increase
net loss per share).
5.2.16. Equity
The basic net profit/(loss) per share is calculated based on the weighted average number of shares
outstanding during the period. The equity is comprised of the following (further details are given in note 5.13);
• Share capital: Share capital is comprised of the nominal amount of the parent’s ordinary shares.
This capital is not distributable in the form of dividends under Belgian Company Code.
• Share premium: Share premium is comprised of: (1) the amount received attributable to share
capital, in excess of the nominal amount of shares issued by the parent company, reduced by; (2)
issuance costs directly attributable to the capital increase; and (3) absorption of the accumulated
deficit into the share premium, as approved by the Company’s shareholders in accordance with
Belgian Company Code.
• Other reserves: Other reserves are comprised of: (1) Share-base payment reserve; (2) Other equity
reserve from conversion of convertible loan in 2013; and (3) Currency Translation differences.
• Capital reduction reserve: Capital reduction reserve is comprised of the absorption of historical
losses of the Company into the share premium, as approved by the Company’s shareholders in
accordance with Belgian Company Code.
• Accumulated deficit: Accumulated deficit is comprised of cumulative historical losses of the
Company.
Voluntary change in accounting policy:
During the year ended December 31, 2021, the Company changed its accounting policy related to the
presentation of capital reduction reserve to reflect the absorption of historical accounting losses into share
premium. Under the previous policy, the Company presented the transfer of losses into share premium as a
component of accumulated deficit. The Company changed its policy to present the amount of transfer losses
into the share premium separately from accumulated deficit on the Statements of Financial Position and
Changes in Shareholders’ Equity. The change in presentation was made to provide a more faithful
presentation of the nature of components of the Company’s shareholders’ equity. This change has no impact
on the Company’s financial position, results of operations or cash flows for any periods presented.
The Company has applied this change in accounting policy to all periods presented for comparative
purposes.
5.3
Risk Management
Financial risk factors
Interest rate risk
The interest rate risk is very limited as the Group has only a limited amount of finance leases and no
outstanding bank loans. So far, because of the immateriality of the exposure, the Group did not enter into
any interest hedging arrangements.
Credit risk
The Group has a limited amount of trade receivables due to the fact that sales to third parties are not
significant and thus the Group’s credit risk arises mainly from cash and cash equivalents and deposits with
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2021 Annual Report
banks and financial institutions. The Group only works with international reputable commercial banks and
financial institutions.
The maximum credit risk, to which the Group is theoretically exposed as at the statement of financial position
date, is the carrying amount of financial assets. Given the current nature and size of operations of the Group,
the requirement of the Group to measure the loss allowance for a financial instrument at an amount equal
to the lifetime expected credit losses (ECL), mainly apply to the financial assets reported under ‘non-current
trade receivables’. The carrying value of these receivables (resulting mainly from Mesoblast license
agreement commented further in note 5.8) take into account a discount rate equal to the Group’s partner’s
incremental borrowing rate and, accordingly, is already credit risk-adjusted. The Group considers there is
no significant additional credit risk related to this receivable, which would not have been captured by
discounting effect, both at inception of the receivable and at the reporting date. As such, no additional ECL
allowance has been recognized for this financial asset or any other financial asset.
Foreign exchange risk
The Group is exposed to foreign exchange risk as certain collaborations or supply agreements of raw
materials are denominated in USD. Moreover, the Group has also investments in foreign operations, whose
net assets are exposed to foreign currency translation risk (USD). So far, because of the immateriality of the
exposure, the Group did not enter into any currency hedging arrangements.
At December 31, 2021, the foreign exchange risk exposure exists mainly on the cash denominated in USD.
A depreciation of 1% on the USD versus EUR would translate into an unrealized foreign exchange loss of
€48k for the Group at December 31, 2021.
Liquidity risk
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of bank deposit and leases.
Refer to note 5.19 for an analysis of the Group’s non-derivative financial liabilities into relevant maturity
groupings based on the remaining period at the statement of financial position date to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
adequate structure to limit to cost of capital.
5.4
Critical accounting estimates and judgments 8
The preparation of the Group’s financial statements requires management to make judgments, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities, at the end of the reporting period.
8 The uncertainly raised by the COVID-19 pandemic is not impacting the critical accounting estimates and judgments. For
additional information on COVID-19 pandemic update, refer to note 5.2.1.
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2021 Annual Report
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in future periods.
In the process of applying the Group’s accounting policies, management has made judgments and has used
estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year
are addressed below.
Going Concern
When assessing going concern, the Board of Directors considers mainly the following factors:
•
•
•
•
The treasury available at the statement of financial position date; and,
The cash burn projected in accordance with the approved budget for next 12-month period as the
date the financial statements are issued, which are subject to judgments by management while
considering all information available at the reporting date such as significant expenses and cash
outflows in relation to – among others- the ongoing clinical trials, the continuation of research and
development projects, and the scaling-up of the Company’s manufacturing facilities;
The availability of grant funding and outcome of ongoing and future grant applications payback loan
to be received for the next 12-month period; and
The financial facilities open to the company for raising new funds by capital increase operations.
Revenue
The recognition of revenue relating to license and collaboration agreements involves management estimates
and requires judgement as to:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Classifying the license agreement (right-to-use or right-to-access license) in accordance with
‘Licensing’ Application Guidance set forth in IFRS 15;
Identifying the performance obligations comprised in the contract;
Estimating probability for (pre-)clinical development or commercial milestone achievement;
Determining the agreed variable considerations to be included in the transaction price taking
into account the constraining limit of the “highly probable” criteria;
Allocating the transaction price according to the stand-alone selling price of each of the
performance obligations; and
Estimating the finance component in the transaction price, based on the contract expected
duration and discount rate.
Management makes its judgment taking into account all information available about clinical status of the
underlying projects at the reporting date and the legal analysis of each applicable contracts. Further details
are contained in Note 5.23.
Recoverable Cash Advances received from the Walloon Region
As explained in note 5.2.5, accounting for RCAs requires initial recognition of the fair value of the loan
received to determine the benefit of the below-market rate of interest, which shall be measured as the
difference between the initial carrying value of the loan and the proceeds received. Loans granted to entities
in their early stages of operations, for which there is significant uncertainty about whether any income will
ultimately be generated and for which any income which will be generated will not arise until a number of
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2021 Annual Report
years in the future, normally have high interest rates. Judgment is required to determine a rate which may
apply to a loan granted on an open market basis and to determine projected revenue that will derive in the
future from the products that benefited from the support of the Walloon Region. The estimated projected
revenue by management is similar to the ones used for impairment of non-financial assets (see note 5.6.2).
In accordance with the RCA agreements, the following two components are assessed when calculating
estimated future cash flows:
•
30% of the initial RCA, which is repayable when the Group exploits the outcome of the research
financed; and
• A remaining amount, which is repayable based on a royalty percentage of future sales milestones,
up to a level of 170% of the initial granted amount.
After initial recognition, RCA liabilities are measured at amortized cost using the cumulative catch up method
requiring management to regularly revise its estimates of payments and to adjust the carrying amount of the
financial liability to reflect actual and revised estimated cash flows.
Measurement and impairment of non-financial assets
With the exception of goodwill and certain intangible assets for which an annual impairment test is required,
the Group is required to conduct impairment tests where there is an indication of impairment of an asset.
Measuring the fair value of non-financial assets requires judgement and estimates by management. These
estimates could change substantially over time as new facts emerge or new strategies are taken by the
Group. Further details (including sensitivity analysis) are contained in note 5.6.2.
Contingent consideration and other financial liabilities
The Group recorded a liability for the estimated fair value of contingent consideration arising from business
combinations. The estimated amounts are the expected payments and timing of such payments, determined
by considering the possible scenarios of forecast sales and other performance criteria, the amount to be
paid under each scenario, and the probability of each scenario, which is then discounted to a net present
value. The estimates could change substantially over time as new facts emerge and each scenario develops.
Further details on management’s estimations and sensitivity analysis are contained in note 5.20.2.
5.5
Operating segment information
The chief operating decision-maker (CODM), who is responsible for making strategic decisions, allocating
resources and assessing performance of the Group, has been identified as the Board of Directors.
Since the acquisition of the oncological platform in 2015, the management and the CODM have determined
that there are two operating segments, being:
•
•
the immuno-oncology segment regrouping all assets developed based on the CAR-T cell platform;
and
the cardiology segment, regrouping the Cardiopoiesis platform, C-Cathez.
Corporate segment includes costs for general and administration functions not allocated to the other
business segments.
Although the Group is currently active in Europe and in the US, no geographical financial information is
currently available given the fact that the core operations are currently still in a study phase. No
disaggregated information on product level or geographical level or any other level currently exists and hence
also not considered by the Board of Directors for assessing performance or allocating resources.
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2021 Annual Report
The CODM does not review assets by segments, hence no segment information per assets is disclosed. As
of December 31, 2021, the main Group’s non-current assets are located in Belgium.
Since 2017, the Group is fully focused on the development of its immuno-oncology platform. Therefore, for
the year ended December 31, 2021, most of the R&D expenses were incurred in the immuno-oncology
segment, in line with prior year.
€ '000
For the year ended December 31, 2021
Revenue recognized at a point in time
-
-
-
-
Revenue recognized over time
-
-
-
-
Cardiology
Immuno-oncology
Corporate
Group Total
Total Revenue
Cost of Sales
Gross Profit
-
-
-
-
-
-
-
-
-
-
-
-
Research & Development expenses
(142)
(20 631)
-
(20 773)
General & Administrative expenses
-
-
(9 908)
(9 908)
Change in fair value of contingent consideration
-
847
-
847
Net Other income/(expenses)
(108)
3 507
44
3 443
Operating Profit/(Loss)
(250)
(16 277)
(9 864)
(26 391)
Net financial income/(expenses)
107
(165)
(53)
(111)
Profit/(Loss) before taxes
Income Taxes
(143)
(16 442)
(9 917)
(26 502)
-
- (10) (10)
Profit/(Loss) for the year 2021
(143)
(16 442)
(9 927)
(26 512)
€ '000
For the year ended December 31, 2020
Revenue recognized at a point in time
5
-
-
5
Revenue recognized over time
-
-
-
-
Cardiology
Immuno-oncology
Corporate
Group Total
Total Revenue
Cost of Sales
Gross Profit
5
-
-
5
-
-
-
-
5
-
-
5
Research & Development expenses
(124)
(21 398)
-
(21 522)
General & Administrative expenses
-
-
(9 315)
(9 315)
Change in fair value of contingent consideration
-
9 228
- 9 228
Net Other income/(expenses)
Operating Profit/(Loss)
(2)
4 582
38
4 617
(121)
(7 589)
(9 277)
(16 987)
Net financial income/(expenses)
(33)
(183)
(3)
(217)
Profit/(Loss) before taxes
Income Taxes
(154)
(7 771)
(9 280)
(17 204)
-
-
-
-
Profit/(Loss) for the year 2020
(154)
(7 771)
(9 280)
(17 204)
5.6
Intangible assets
5.6.1.
Intangible assets details and balance roll forward
The change in intangible assets is broken down as follows, per class of assets:
(€'000)
Goodwill
In-process
research and
development
Development
costs
Patents,
licenses,
trademarks
Software
Total
Capitalized costs
At January 1, 2020
Additions
Divestiture
Transfer
883
33 678
1 084
12 903
179
48 726
-
-
-
-
-
-
-
-
-
168
-
-
1
-
100
169
-
100
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2021 Annual Report
At December 31, 2020
883
33 678
1 084
13 071
279
48 995
Additions
Currency translation adjustments
Divestiture
Transfer
-
-
-
-
-
-
-
-
-
-
-
-
214
-
-
-
-
-
(16)
-
214
-
(16)
-
At December 31, 2021
883
33 678
1 084
13 285
263
49 193
Accumulated amortization
At January 1, 2020
Amortization charge
Divestiture
Transfer
At December 31, 2020
Amortization charge
Divestiture
Currency translation adjustments
Transfer
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(477)
(66)
(11 938)
(114)
-
-
-
-
(543)
(67)
(12 052)
(134)
-
-
-
-
-
-
(112)
(16)
-
(100)
(229)
(16)
16
-
-
(12 527)
(197)
-
(100)
(12 824)
(217)
16
-
-
At December 31, 2021
-
-
(610)
(12 185)
(229)
(13 025)
Net book value
Capitalized costs
Accumulated amortization
883
-
33 678
-
1 084
(543)
13 071
(12 052)
279
48 995
(229)
(12 824)
At December 31, 2020
883
33 678
540
1 019
51
36 171
Capitalized costs
Accumulated amortization
883
-
33 678
-
1 084
(610)
13 285
(12 186)
263
49 193
(229)
(13 025)
At December 31, 2021
883
33 678
474
1 099
34
36 168
The capitalized development costs relate to the development of C-Cathez. Since May 2012 and the CE
marking of C-Cathez, the development costs of C-Cathez are capitalized and amortized over the estimated
residual intellectual property protection as of the CE marking (i.e., until 2029). No other development costs
have been capitalized up till now. All other programs’ (C-Cure, CYAD-01, CYAD-02, CYAD-101, CYAD-
211…) related development costs have been assessed as not being eligible for capitalization and have
therefore been recognized in the income statement as research and development expenses. Software is
amortized over a period of 3 to 5 years.
Goodwill, IPR&D, Patents, Licenses and Trademarks mainly relate to the following items:
• Goodwill and IPR&D resulted from the purchase price allocation exercise performed for the
acquisition of Oncyte LLC in 2015. As of December 31, 2021 and 2020, Goodwill and IPR&D are
not amortized but tested for impairment.
• Exclusive Agreement for Horizon Discovery’s shRNA Platform to develop next-generation allogenic
CAR-T Therapies acquired for $1.0 million at the end of December 2018. In October 2019, the
Company capitalized milestone payments for a total amount of $0.2 million related to the exercise
of the option on the Exclusive Agreement and to the first effective IND filing related to CYAD-02. In
November 2020, the Group capitalized the milestone payments for an amount of $0.2 million related
to the first effective IND, filed by the Group, relating to the product CYAD-211. At December 31,
2021, milestone payments are capitalized for a total amount of $0.4 million. This patent is amortized
over the remaining intellectual property protection of 20 years, with the first patent application filed
in 2008.
• Exclusive license from the Moffitt Cancer Center for an antibody directed to Tumor-associated
glycoprotein (TAG-72), which will form the basis of a T cell engager to be used with the shRNA
platform technology of the Company acquired for $0.1 million in January 2021.
• Exclusive license agreement signed with the University of Pennsylvania for an engager targeting
Glypican 3 (GPC3) acquired for $0.2 million in October 2021.
The Immuno-oncology cash generating unit (CGU) has a net book value of €35.7 million at December 31,
2021. This CGU is mainly composed of:
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2021 Annual Report
•
•
•
The goodwill and IPR&D resulting from the purchase price allocation exercise performed for the
acquisition of Oncyte LLC in 2015;
The Horizon Discovery’s shRNA platform;
The new licenses acquired in 2021 from the Moffitt Cancer Center and University of Pennsylvania.
The variance on the total intangible assets as of December 31, 2021, in comparison to December 31, 2020,
resulted primarily from the regular amortization of C-Cathez costs and the Group’s Patents & Licenses,
compensated by new licenses acquired in 2021 regarding an exclusive patent license agreement signed
with the University of Pennsylvania for an engager targeting Glypican 3 (GPC3) and an exclusive license
from the Moffitt Cancer Center for an antibody directed to Tumor-associated glycoprotein (TAG-72), which
both will form the basis of a T cell engager to be used with the shRNA platform technology of the Company.
5.6.2.
Impairment testing
Impairment testing is detailed below.
Immuno-oncology CGU impairment test 9
Goodwill and IPR&D exclusively relate to the acquisition of the former entity Oncyte LLC (meanwhile
liquidated into Celyad SA) which was acquired in 2015. Management performs an annual impairment test
on goodwill and on 'indefinite lived assets' that are not amortized in accordance with the accounting policies
stated in notes 5.2.6 and 5.2.9. The impairment test has been performed at the level the immuno-oncology
segment corresponding to the CGU to which the goodwill and the IPR&D belong as well as the Horizon
Discovery’s shRNA platform. The recoverable amount associated to this CGU is calculated based on the
fair value less costs to sell model using Level 3 fair value measurements for which the Group developed
unobservable inputs and requires the use of assumptions. The calculations use cash flow projections based
on business plan ending in 2040 based on probability of success of CYAD-02, CYAD-101 and CYAD-211
product candidates as well as extrapolations of projected cash flows resulting from the future expected sales
on CYAD-101 and CYAD-211 and sublicense income associated with CYAD-02. CGU recoverable value,
determined accordingly, exceeds its carrying amount. Accordingly, no impairment loss was recognized either
on goodwill, on the IPR&D, on the Horizon Discovery’s shRNA platform or other immuno-oncology licenses
at December 31,2021.
Management’s key assumptions (assumptions to which the unit’s or group of units’, recoverable amount is
most sensitive) about projected cash flows when determining fair value less costs to sell are as follows:
• Discount rate (WACC)
Management estimated the discount rate (WACC) as of December 31, 2021 to be 13.4% (14.8%
as of December 31, 2020) based on following components: the US Government Treasury bill 20-
Y, the Group’s Beta, the equity Market Risk Premium and the small firm/illiquidity premium. The
decrease of the WACC is mainly driven by a decrease of the Beta of the Group which is associated
with the volatility of the Group’s equity influenced by its ongoing clinical programs and overall
competitive landscape within the immuno-oncology field. Management corroborates its estimation
with industry standards for biotechnology companies, the WACC used by Equity Research
companies following the Group and transactions that have been sourced by the Group over the
past 24 months.
9 The uncertainly raised by the COVID-19 pandemic is not impacting impairment testing. Although there are lot of
uncertainties, it does not impact the Group’s assets valuation as of December 31, 2021. For additional information on
COVID-19 pandemic update, refer to note 5.2.1.
Page 135 | 180
2021 Annual Report
• Projected Revenue
Management estimated the projected revenue (using cash flow projections ending in 2040) based
on the following components: total market and market share, time-to-market, treatment price and
terminal value. Management based its estimation of projected revenue and related components
with the Group’s business plan, industry data for biotechnology companies, evolution of similar R&D
programs, comparable prices, expected patent expiration period. The weight of this assumption is
partially alleviated by the probability of success (PoS) presented hereunder.
• Probabilities of Success (PoS)
Management estimated the PoS based on Clinical Development Success Rates observed by
independent business intelligence consulting companies for hematological and solid tumor
diseases. Probability of the Group’s product candidates reaching the market used were updated
compared to prior year-end based on most recent Clinical Development Success Rates observed
by independent business intelligence consulting companies for hematological and solid tumor
diseases as follows:
o Probabilities of Success as of December 31, 2021:
PoS
Phase I
Phase
Phase II
I
to
Phase
Phase III
II
to
Phase
BLA
III
to
BLA
Approval
to
Cumulative
PoS
CYAD-02
CYAD-101
CYAD-211
100%
100%
100%
50%
49%
50%
28%
23%
28%
60%
43%
60%
90%
93%
90%
7.5%
4.6%
7.5%
o Probabilities of Success as of December 31, 2020:
PoS
Phase I
Phase
Phase II
I
to
Phase
Phase III
II
to
Phase
BLA
III
to
BLA
Approval
to
Cumulative
PoS
CYAD-02
CYAD-101
CYAD-211
100%
100%
100%
62%
64%
62%
29%
23%
29%
53%
34%
53%
86%
80%
86%
8.1%
4.0%
8.1%
The PoS estimates used by management as of December 31, 2020 utilized clinical development
success rates compiled by independent business intelligence consulting companies which sourced
data from clinical development programs from 2006 – 2015. The Group’s updated PoS rates for its
clinical programs as of December 31, 2021 incorporates data for clinical development success
rates from 2011 – 2020, which the Group believes is a more accurate reflection of clinical
development success rates across stage of development and in aggregate.
The sensitivity analyses are based on a change in an assumption while holding all other assumptions
constant. The following table presents the sensitivity analyses of the recoverable amount of the CGU
associated to the immuno-oncology operations:
Sensitivity analysis
Discount rate (WACC)
e
u
n
e
v
e
R
d
e
t
c
e
j
o
r
P
Impact on model value
13.4%
14.0%
14.7%
95.0%
97.5%
-9%
-2%
100.0%
Model Reference
-18%
-14%
-10%
-26%
-22%
-19%
Page 136 | 180
2021 Annual Report
Regarding the sensitivity analysis related to PoS based on a change in this assumption while holding all
other assumptions constant, a decrease by -10% or -20% to the bottom-line cumulative PoS would imply a
decrease by -10% or -20% respectively of the recoverable amount of the CGU associated to the immuno-
oncology operations. This sensitivity analyze would imply that the recoverable value of the CGU exceeds
its carrying amount at December 31, 2021.
On February 28, 2022, the Group announced its decision to voluntarily pause its Phase 1b KEYNOTE-B79
trial evaluating CYAD-101 administered concurrently with FOLFOX chemotherapy followed by MSD’s anti-
PD-1 therapy, KEYTRUDA® (pembrolizumab) in patients with refractory metastatic colorectal cancer
following reports of two fatalities that presented with similar pulmonary findings. The Group is currently
investigating these reports and evaluating any similar events in additional patients treated on study. On
March 1, 2022, the Group was informed via-email communication from the FDA that the KEYNOTE-B79 trial
has been placed on clinical hold due to insufficient information to assess risk to study subjects (see note
5.36). Given the uncertain impact of this event on the future of KEYNOTE-B79 trials at this time, the Group
is not able to assess the impact of such outcomes on the valuation of related assets and contingent liabilities
and, therefore, has not adjusted the related fair value calculations for the clinical hold.
C-Cure (Cardio) impairment test
Pursuant to 2017 strategic decision to focus all the efforts of the Group on the development of the immuno-
oncology platform and the lack of strategic business development opportunities identified for the C-Cure
(Mayo Licenses), this asset had been fully impaired as of December 31, 2017. CGU’s recoverable amounts
being confirmed to be zero at current year-end, the 100% impairment allowance has been carried forward
at December 31, 2021.
5.7
Property, plant and equipment
(€’000)
Capitalized costs
At January 1, 2020
Additions
Disposals
Property
Equipment
Furniture
Leasehold
Total
2 810
4 099
307
4 193
11 409
191
670
10
56
926
-
(932)
(67)
(372)
(1 371)
Currency translation adjustments
-
(1)
-
(17)
(18)
Transfers
-
(271)
-
171
(100)
At December 31, 2020
3 001
3 563
250
4 032
10 846
Additions
Disposals
24
388
-
10
422
-
(192)
-
-
(192)
Currency translation adjustments
-
1
-
15
16
Transfers
At December 31, 2021
Accumulated
depreciation
At January 1, 2020
Depreciation charge
Disposals
-
-
-
-
3 025
3 760
250
4 057
-
11 092
(399)
(2 967)
(205)
(2 776)
(6 347)
(428)
(691)
(46)
(470)
(1 635)
-
760
38
352
1 150
Currency translation adjustments
-
1
-
4
5
Transfers
At December 31, 2020
Depreciation charge
Disposals
-
271
-
(171)
100
(827)
(2 625)
(214)
(3 061)
(6 727)
(454)
(512)
(24)
(313)
(1 303)
-
191
-
-
191
Currency translation adjustments
-
(2)
-
(3)
(5)
Transfers
-
-
-
At December 31, 2021
(1 281)
(2 948)
(238)
-
(3 377)
-
(7 844)
Net book value
Capitalized costs
3 001
3 563
Accumulated depreciation
(827)
(2 625)
250
(214)
4 032
10 846
(3 061)
(6 727)
Page 137 | 180
2021 Annual Report
At December 31, 2020
Capitalized costs
2 174
938
3 025
3 760
36
250
971
4 119
4 057
11 092
Accumulated depreciation
(1 281)
(2 948)
(238)
(3 377)
(7 844)
At December 31, 2021
1 744
812
12
680
3 248
Property, Plant and Equipment is mainly composed of right-of-use on leased offices, facilities and equipment
(including vehicles), office furniture, leasehold improvements, and laboratory equipment.
The variance on the total tangible assets as of December 31, 2021 resulted primarily in new laboratories
equipment compensated by yearly depreciation.
The additions for the period amounting €0.4 million are mainly driven by new laboratories equipment for €0.3
million.
At December 31, 2020, the variance on the total tangible assets resulted primarily in new leased assets
compensated by yearly depreciation. The additions for the year 2020 amounting to €0.9 million were mainly
driven by the renewal of leased buildings relating to the Group’s R&D and manufacturing facilities for €0.2
million and new leased laboratories equipment for €0.5 million, see disclosure 5.30 Leases.
5.8
Non-current trade receivables and other non-current assets
(€'000)
Non-current trade receivables Mesoblast license agreement
Net investment in Lease
Total Non-current Trade and Other receivables
As at December 31,
2021
2020
2 209
-
2 209
1 923
195
2 117
In May 2018, the Group entered into an exclusive license agreement with Mesoblast, an Australian
biotechnology company, to develop and commercialize our intellectual property rights relating to C-Cathez,
an intra-myocardial injection catheter. This license agreement refers to the right to use the company’s
intellectual property as it exists at the point in time the license has been granted (May 2018) and foresees
contingent milestone payments. The related receivable is reported for its discounted value (€2.2 million)
under ‘Non-current trade receivables’. There are no corresponding contract liabilities reported at December
31, 2021, as no performance obligation was outstanding. The Group has signed an amendment of the
license agreement on January 17, 2022. For further detailed information, see disclosure 5.36.
At December 31, 2020, the non-current net investment in lease referred to the non-current receivable
recorded under IFRS16 Leases accounting standard as the Group subleases some office spaces it leases
from a head lessor. At December 31, 2021, there is no non-current net investment in lease.
(€'000)
R&D Tax credit receivable
Total Non-current Grant recevables
Deposits
Total Other non-current assets
As at December 31,
2021
2020
3 764
3 764
262
262
3 679
3 679
293
293
In 2017, the Group recognized for the first time a R&D tax credit (€1.2 million) receivable from the Federal
Government that included a one-time catch-up effect. Since 2018, further R&D tax credit receivables are
recorded on an annual basis. For the year ended December 31, 2021, the Group recorded additional R&D
tax credit of €0.7 million, taking into account all information available as of December 31, 2021. The Group
received the reimbursement from the Federal Government of €0.6 million related to the fiscal year 2016 tax
credit.
The non-current assets refer to security deposits paid to the lessors of the building leased by the Group and
a deposit to the Social Security administration.
Page 138 | 180
5.9
Trade receivables and other current assets
(€'000)
Trade receivables
Advance deposits
Net Investment in Lease
Other receivables
Total Trade and Other receivables
Current Grant receivables (RCAs)
Current Grant receivables (Others)
Total Current Grant receivables
Prepaid expenses
VAT receivable
Income and other tax receivables
Total Other current assets
Total Trade receivables, advances and other current assets
2021 Annual Report
As at December 31,
2021
2020
203
246
219
165
220
230
-
-
668
1 121
274
1 395
1 688
483
40
2 211
4 274
615
145
-
145
1 343
342
25
1 711
2 471
Impairment of receivables is assessed on an individual basis at the end of each accounting year.
At December 31, 2021 and 2020, no receivable was overdue. There were no carrying amounts for trade and
other receivables denominated in foreign currencies, except for the net investment in lease for which carrying
amount is under USD. No impairments were recorded on trade receivables and other current assets (see
note 5.3).
The current net investment in lease refers to the receivable recorded under IFRS16 Leases accounting
standard as the Group subleases some office spaces it leases from a head lessor.
As of December 31, 2021, grant receivables for a total amount of €1.4 million has been recorded due to
Walloon Region recoverable cash advances regarding CYAD-02 (numbered 8088), CYAD-101 (numbered
8212), CwalityCAR (numbered 1910028) and new grant convention signed with the Walloon Region in 2021
regarding the new engagers (numbered 8516). The increase of the current grant receivables between the
years 2020 and 2021 is mainly explained by lower cash proceeds from the Walloon Region in 2021
compared to expenses subsidized by these RCAs and other grants recognized in 2021.
The increase in prepaid expenses as of December 31, 2021 compared to December 31, 2020 for €0.3 million
is mainly driven by the increase on prepaid expenses on insurances combined with transaction costs linked
to the LPC equity facility for an amount of €0.2 million subject to capitalization and to be offset against a
future capital raise.
5.10 Short-term investments
Given the level of market interest rates for corporate deposits of short-term maturities, the Group has not
invested in short-term deposits over the years 2021 and 2020.
5.11 Cash and cash equivalents
(€'000)
Cash at bank and on hand
Total
As at December 31,
2021
2020
30 018
30 018
17 234
17 234
Page 139 | 180
2021 Annual Report
The Group’s cash and cash equivalents amounted to €30.0 million at December 31, 2021 which accounts
for an increase of €12.8 million as compared to year-end 2020, mainly as a result of cash proceeds from
capital raises during the period partly compensated by the Group’s operations expenses.
Cash at banks earn interest at floating rates based on daily bank deposit rates. For the years ended
December 31, 2021 and 2020, the earned bank interests have been insignificant.
5.12 Subsidiaries fully consolidated
The consolidation scope of the Group is as follows, for both current and comparative years presented in
these year-end financial statements:
Name
Country of
Incorporation
and Place of
Business
Nature of
Business
Proportion of
ordinary
shares
directly held
by parent (%)
Proportion of
ordinary
shares held
by the Group
(%)
Proportion of
ordinary
shares held
by non-
controlling
interests (%)
Celyad Oncology SA
Celyad Inc
CorQuest Medical Inc
Biological Manufacturing Services SA
BE
US
US
BE
Biopharma
Biopharma
Medical Device
Manufacturing
Parent
company
100%
100%
100%
100%
100%
100%
0%
0%
0%
Cardio3 Inc was incorporated in 2011 to support clinical and regulatory activities of the Group in the US.
Cardio3 Inc was renamed in Celyad Inc in 2015.
CorQuest Medical Inc was acquired on November 5, 2014. CorQuest Medical Inc. was developing Heart-
XS, a new access route to the left atrium. In November 2019, the patent rights related to Heart-XS were sold
to CorQuest MedTech SRL, a newly constituted Belgian company developing innovative cellular medicines.
The Group does not hold any ordinary shares of CorQuest MedTech SRL.
Biological Manufacturing Services SA (BMS) was acquired in May 2016. BMS owns Good Manufacturing
Practices (‘GMP’) laboratories. BMS rent its laboratories to Celyad SA since 2009 and until April 30, 2016.
5.13 Share Capital
The number of shares issued is expressed in units.
Total number of issued and outstanding shares
Total share capital (€'000)
As of December 31,
2021
2020
22 593 956
13 942 344
78 585
48 513
As of December 31, 2021, the share capital amounts to €78,585 represented by 22,593,956 fully authorized
and subscribed and paid-up shares with a nominal value of €3.48 per share. This number does not include
warrants issued by the Group and granted to certain directors, employees and non-employees of the Group.
As of December 31, 2021, the authorized capital which has been used over the period 2021 by the board of
directors amounts to €32,119. The remaining available from the authorized capital amounts to €4,773 as of
December 31, 2021.
History of the capital of the Company
The Company was incorporated on July 24, 2007 with a share capital of €62,500 by the issuance of 409,375
class A shares. On August 31, 2007, the Company issued 261,732 class A shares to Mayo Clinic by way of
Page 140 | 180
2021 Annual Report
a contribution in kind of the upfront fee that was due upon execution of the Mayo License for a total amount
of €9,500,000.
Round B Investors participated in a capital increase of the Company by way of a contribution in kind of a
convertible loan (€2,387,049) and a contribution in cash (€4,849,624 of which €1,949,624 was uncalled) on
December 23, 2008; 204,652 class B shares were issued at the occasion of that capital increase. Since
then, the capital is divided in 875,759 shares, of which 671,107 are class A shares and 204,652 are class B
shares.
On October 29, 2010, the Company closed its third financing round resulting in a capital increase totaling
€12,100,809. The capital increase can be detailed as follows:
• Capital increase in cash by certain existing investors for a total amount of €2,609,320.48 by the
issuance of 73,793 class B shares at a price of €35.36 per share;
• Capital increase in cash by certain existing investors for a total amount of €471,240 by the issuance
of 21,000 class B shares at a price of €22.44 per share;
• Capital increase in cash by certain new investors for a total amount of €399,921.60 by the issuance
of 9,048 class B shares at a price of €44.20 per share;
• Exercise of 12,300 warrants (“Warrants A”) granted to the Round C investors with total proceeds of
€276,012 and issuance of 12,300 class B shares. The exercise price was €22.44 per Warrant A;
• Contribution in kind by means of conversion of the loan C for a total amount of €3,255,524.48
(accrued interest included) by the issuance of 92,068 class B shares at a conversion price of €35.36
per share;
• Contribution in kind by means of conversion of the loan D for a total amount of €2,018,879.20
(accrued interest included) by the issuance of 57,095 class B shares at a conversion price of €35.36
per share. The loan D is a convertible loan granted by certain investors to the Company on 14
October 2010 for a nominal amount of €2,010,000.
• Contribution in kind of a payable towards Mayo Foundation for Medical Education and Research
for a total amount of €3,069,911 by the issuance of 69,455 class B shares at a price of €44.20 per
share. The payable towards Mayo Clinic was related to (i) research undertaken by Mayo Clinic in
the years 2009 and 2010, (ii) delivery of certain materials, (iii) expansion of the Mayo Clinical
Technology License Contract by way the Second Amendment dated October 18, 2010.
On May 5, 2011, pursuant the decision of the Extraordinary General Meeting, the capital was reduced by an
amount of €18,925,474 equivalent to the outstanding net loss as of December 31, 2010.
On May 31, 2013, the Company closed its fourth financing round, the ‘Round D financing’. The convertible
loans E, F, G and H previously recorded as financial debt were converted in shares which led to an increase
in equity for a total amount of €28,645k of which € 5,026k is accounted for as capital and € 6,988k as share
premium. The remainder (€ 16,631k) is accounted for as other reserves on fully settled contribution in kind
convertible loans. Furthermore, a contribution in cash by existing shareholders of the Company led to an
increase in share capital and issue premium by an amount of €7,000k.
At the Extraordinary Shareholders Meeting of June 11, 2013 all existing classes of shares of the Company
have been converted into ordinary shares. Preferred shares have been converted at a 1 for 1 ratio.
On July 5, 2013, the Company completed its Initial Public Offering. The Company issued 1,381,500 new
shares at €16.65 per shares, corresponding to a total of €23,002k.
On July 15, 2013, the over-allotment option was fully exercised for a total amount of €3,450k corresponding
to 207,225 new shares. The total IPO proceeds amounted to €26,452k and the capital and the share
premium of the Company increased accordingly. The costs relating to the capital increases performed in
2013 amounted to €2.8 million and are presented as a deduction of share premium.
Page 141 | 180
2021 Annual Report
On June 11, 2013, the Extraordinary General Shareholders’ Meeting of Celyad SA authorized the Board of
Directors to increase the share capital of the Company, in one or several times, and under certain conditions
set forth in extenso in the articles of association. This authorization is valid for a period of five years starting
on July 26, 2013 and until July 26, 2018. The Board of Directors may increase the share capital of the
Company within the framework of the authorized capital for an amount of up to €21,413k.
Over the course of 2014, the capital of the Company was increased in June 2014 by way of a capital increase
of €25,000k represented by 568,180 new shares fully subscribed by Medisun International Limited.
In 2014, the capital of the Company was also increased by way of exercise of Company warrants. Over four
different exercise periods, 139,415 warrants were exercised resulting in the issuance of 139,415 new shares.
The capital and the share premium of the Company were therefore increased respectively by €488k and
€500k.
In January 2015, the shares of Oncyte LLC were contributed to the capital of the Company, resulting in a
capital increase of €3,452k and the issuance of 93,087 new shares.
In 2015, the Company conducted two fund raisings. A private placement was closed in March resulting in a
capital increase of €31,745k represented by 713,380 new shares. The Company also completed an IPO on
Nasdaq in June, resulting in a capital increase of €87,965k represented by 1,460,000 new shares.
Also, in 2015, the capital of the Company was also increased by way of exercise of Company warrants. Over
three different exercise periods, 6,749 warrants were exercised resulting in the issuance of 6,749 new
shares. The capital and the share premium of the Company were therefore increased respectively by €23k
and €196k.
Over 2017 the capital of the Company was also increased by way of exercise of Company warrants. Over
four different exercise periods, 225,966 warrants were exercised resulting in the issuance of 225,966 new
shares. The capital of the Company was therefore increased by €625k.
In August 2017, pursuant to the amendment of the agreements with Celdara Medical LLC and Dartmouth
College, the CAR T technology inventors, the capital of the Company was increased by way of contribution
in kind of a liability owed to Celdara Medical LLC. 328,275 new shares were issued at a price of €32.35
(being Celyad share’s average market price for the 30 days preceding the transaction) and the capital and
the share premium of the Company were therefore increased respectively by €1,141k and €9,479k without
an impact on the cash and cash equivalents, explaining why such transaction is not disclosed in the
consolidated statements of cashflows.
In May 2018, the Company completed a global offering of $54.4 million (€46.1 million), resulting in cash
proceeds for an amount of €43.0 million net of bank fees and transaction costs.
In May 2019, share premium decreased as a result of the absorption of accounting losses for an amount of
€172.3 million, with a counterpart in the financial statements line item ‘Accumulated Deficit’. The absorption
of the accumulated deficit into share premium is a non-cash accounting transaction.
In September 2019, the Company completed a global offering of $20.0 million (€18.2 million), resulting in
cash proceeds for an amount of €16.4 million net of bank fees and transaction costs.
On January 8, 2021, the Company has entered into a committed equity purchase agreement (“Purchase
Agreement”) for up to $40.0 million with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based
institutional investor. Over the 24-month term of the Purchase Agreement, the Company will have the right
to direct LPC to purchase up to an aggregate amount of $40.0 million American Depositary Shares (“ADSs”),
each of which represents one ordinary share of the Company. From the inception of the Purchase Agreement
through December 31, 2021, a total of 1,962,812 new shares have been issued by the Company and
subscribed by LPC for a cash proceed of €9.2 million. As of December 31, 2021, there is a remaining access
to the Purchase Agreement established with LPC for an amount of $28.0 million.
Page 142 | 180
2021 Annual Report
During the extraordinary shareholders meeting of May, 25 2021, the shareholders, in accordance with
Belgian Company Law, approved the absorption of approximately €43.3 million of accounting losses into
share premium. As a result, share premium has been reduced by a cumulative amount of €43.3 million in
the 12 months period ended December 31, 2021 (€234.6 million of loss absorption has been approved and
recorded from inception to December 31, 2021) against capital reduction reserve. This transaction has no
impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities.
On May, 21 2021 and June 14, 2021, a total of 188,800 new shares have been issued by the Company and
subscribed by Jefferies under the ATM for a cash proceed of €0.9 million.
On December 8, 2021, 6,500,000 new shares were issued by decision of the board of directors and
subscribed for by CFIP CLYD LLC10 in the framework of a private placement for a global cash proceed of
€28.9 million.
As of December 31, 2021, all shares issued have been fully paid.
The following share issuances occurred since the incorporation of the Company:
11 June 2013 Conversion of Class A and Class B shares in ordinary shares
4 744 067
-
Category
Transaction date
Description
Class A shares
Class A shares
24 July 2007 Company incorporation
31 August 2007 Contribution in kind (upfront fee Mayo License)
Class B shares
23 December 2008 Capital increase (Round B)
Class B shares
23 December 2008 Contribution in kind (Loan B)
Class B shares
28 October 2010 Contribution in cash
Class B shares
28 October 2010 Contribution in kind (Loan C)
Class B shares
28 October 2010 Contribution in kind (Loan D)
Class B shares
28 October 2010 Contribution in cash
Class B shares
28 October 2010 Exercise of warrants
Class B shares
28 October 2010 Contribution in kind (Mayo receivable)
Class B shares
28 October 2010 Contribution in cash
Class B shares
Class B shares
Class B shares
Class B shares
Class B shares
Class B shares
Ordinary shares
Ordinary shares
Ordinary shares
31 May 2013 Contribution in kind (Loan E)
31 May 2013 Contribution in kind (Loan F)
31 May 2013 Contribution in kind (Loan G)
31 May 2013 Contribution in kind (Loan H)
31 May 2013 Contribution in cash
4 June 2013 Conversion of warrants
5 July 2013
Initial Public Offering
15 July 2013 Exercise of over-allotment option
Ordinary shares
31 January 2014 Exercise of warrants issued in September 2008
Ordinary shares
31 January 2014 Exercise of warrants issued in May 2010
Ordinary shares
31 January 2014 Exercise of warrants issued in January 2013
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
30 April 2014 Exercise of warrants issued in September 2008
16 June 2014 Capital increase
30 June 2014 Capital increase
4 August 2014 Exercise of warrants issued in September 2008
4 August 2014 Exercise of warrants issued in October 2010
Ordinary shares
3 November 2014 Exercise of warrants issued in September 2008
Ordinary shares
21 January 2015 Contribution in kind (Celdara Medical LLC)
Ordinary shares
7 February 2015 Exercise of warrant issued in May 2010
Ordinary shares
Ordinary shares
3 March 2015 Capital increase
11 May 2015 Exercise of warrant issued in May 2010
10 CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group.
# of
shares
409 375
Par
value
(in €)
0.15
261 732
36.30
137 150
35.36
67 502
35.36
21 000
22.44
92 068
35.36
57 095
35.36
73 793
35.36
12 300
22.44
69 455
44.20
9 048
44.20
118 365
38.39
56 936
38.39
654 301
4.52
75 755
30.71
219 016
31.96
2 409 176
0.01
1 381 500
16.65
207 225
16.65
5 966
22.44
333
22.44
120 000
4.52
2 366
22.44
284 090
44.00
284 090
44.00
5 000
22.44
750
35.36
5 000
22.44
93 087
37.08
333
22.44
713 380
44.50
500
22.44
Page 143 | 180
Ordinary shares
Ordinary shares
Ordinary shares
24 June 2015 Capital increase
4 August 2015 Exercise of warrant issued in May 2010
4 August 2015 Exercise of warrant issued in October 2010
Ordinary shares
1 February 2017 Exercise of warrant issued in May 2013
Ordinary shares
Ordinary shares
2 May 2017 Exercise of warrant issued in May 2013
1 August 2017 Exercise of warrant issued in May 2013
Ordinary shares
23 August 2017 Contribution in kind (Celdara Medical LLC)
Ordinary shares
9 November 2017 Exercise of warrant issued in May 2013
Ordinary shares
9 November 2017 Exercise of warrant issued in October 2010
Ordinary shares
7 February 2018 Exercise of warrant issued in May 2013
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
22 May 2018 Capital increase
16 Sept 2019 Capital increase
8 January 2021 Capital increase
29 March 2021 Capital increase
9 April 2021 Capital increase
29 April 2021 Capital increase
21 May 2021 Capital increase
14 June 2021 Capital increase
28 June 2021 Capital increase
22 July 2021 Capital increase
Ordinary shares
20 October 2021 Capital increase
Ordinary shares
8 December 2021 Capital increase
2021 Annual Report
1 460 000
60.25
666
22.44
5 250
35.36
207 250
4 900
7 950
2.64
2.64
2.64
328 275
32.35
5 000
2.64
866
35.36
4 500
2.64
2 070 000
22.29
2 000 000
262 812
200 000
300 000
300 000
182 000
6 800
300 000
300 000
300 000
6 500 000
9.08
4.94
6.19
5.83
5.23
4.58
4.98
4.46
3.46
3.38
4.44
(€000)
Nature of the transactions
Share Capital Share premium
Capital
reduction
reserve
Other
reserves
Accumulated
Deficit
Number of
shares
Balance as at January 1, 2020
(as adjusted)
Share Based Payment
Currency Translation differences
Loss for the period
Remeasurements of defined
benefit obligation
Balance as at December 31,
2020 (as adjusted)
Reduction of share premium by
absorption of losses
Capital increase
Transaction costs associated
with capital increases
Loss for the period
Share Based
Payment
Currency Translation differences
Remeasurements of defined
benefit obligation
Balance as at December 31,
2021
48 513
43 349
191 213 28 181
(265 637) 13 942 344
- -
- 2 782
- -
-
-
-
-
-
-
-
(5)
-
-
-
- (17 204)
-
(197)
-
-
-
48 513
43 349
191 213 30 958
(283 039) 13 942 344
- (43 349)
43 349
30 072
8 900
-
-
(2 583)
-
-
-
-
-
-
-
-
-
- 8 651 612
-
-
-
-
(26 512)
- -
- 2 172
-
-
-
-
-
-
-
-
42
-
-
554
-
-
78 585
6 317
234 562 33 172
(308 997)
22 593 956
The total number of shares issued and outstanding as of December 31, 2021 totals 22,593,956 ordinary
common shares
Capital reduction reserve
Pursuant to Belgian law (“CCA”), the calculation of amounts available for distribution to shareholders, as
dividends or otherwise, must be determined on the basis of our standalone non-consolidated statutory
financial statements of Celyad Oncology SA prepared under Belgian GAAP, and not on the basis of IFRS
consolidated financial statements. In addition, under the CCA, the Company may declare or pay dividends
only if, following the declaration and issuance of the dividends, the amount of the Company’s net assets on
Page 144 | 180
2021 Annual Report
the date of the closing of the last financial year according to the Company’s statutory annual accounts (i.e.,
the amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all as
prepared in accordance with Belgian accounting rules), decreased with the non-amortized costs of
incorporation and expansion and the non-amortized costs for research and development, does not fall below
the amount of the paid-up capital (or, if higher, the called capital), increased by the amount of non-
distributable reserves. Finally, prior to distributing dividends, the Company must allocate at least 5% of the
annual net profits (under the Company’s non-consolidated statutory accounts prepared in accordance with
Belgian accounting rules) to a legal reserve, until the reserve amounts to 10% of the Company’s share
capital.
In addition to the above test, the Company must also meet a liquidity test in order to be able to declare and/or
distribute dividends.
During the extraordinary shareholders meeting of May, 25 2021, the shareholders, in accordance with
Belgian Company Law, approved the absorption of approximately €43.3 million of accounting losses into
share premium. As a result, share premium has been reduced by a cumulative amount of €43.3 million in
the 12 months period ended December 31, 2021 (€234.6 million of loss absorption has been approved and
recorded from inception to December 31, 2021) against capital reduction reserve. This transaction has no
impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities.
5.14 Share-based payments
The Group operates an equity-based compensation plan, whereby warrants are granted to directors,
management and selected employees and non-employees. The warrants are accounted for as equity-settled
share-based payment plans since the Group has no legal or constructive obligation to repurchase or settle
the warrants in cash.
Each warrant gives the beneficiaries the right to subscribe to one common share of the Group. The warrants
are granted for free and have an exercise price equal to the lower of the average closing price of the Group’s
share over the 30 days prior to the offer, and the last closing price before the day of the offer, as determined
by the Board of Directors of the Group.
Changes in the number of warrants outstanding and their related weighted average exercise prices are as
follows:
Outstanding as at January 1,
Granted
Forfeited
Exercised
Expired
At December 31,
Weighted average
exercise price (in €)
17.00
5.29
4.94
-
10.23
13.06
2021
Number of
warrants
1 488 006
760 800
(77 250)
-
(35 000)
2 136 556
Weighted average
exercise price (in €)
22.56
6.33
6.35
-
22.45
17.00
2020
Number of
warrants
1 292 380
404 525
(36 466)
-
(172 433)
1 488 006
Warrants outstanding at the end of the year have the following expiry date and exercise price:
Warrant plan
issuance date
Vesting date
Expiry date
of
Number
warrants
outstanding as
at December 31,
2021
of
Number
warrants
outstanding
at
as
December 31,
2020
Average
exercise
price
share
per
06 May 2013
05 May 2014
06 May 2016
05 May 2017
06 May 2023
05 May 2024
05 November 2015
05 November 2018
05 November 2025
08 December 2016
08 December 2019
08 December 2021
2 500
35 698
79 315
7 500
2 500
35 698
79 315
42 500
29 June 2017
29 June 2020
31 July 2022
282 251
282 251
2.64
38.25
30.67
32.04
31.44
Page 145 | 180
2021 Annual Report
26 October 2018
26 October 2021
31 December 2023
25 October 2019
25 October 2022
31 December 2024
365 817
549 842
11 December 2020
11 October 2021
10 December 2023
11 October 2024
31 December 2027
31 December 2028
532 133
281 500
381 600
588 142
76 000
-
18.26
7.12
6.25
3.75
2 136 556
1 488 006
The Group has a reserve of 839,250 authorized warrants for share based compensation plan as of
December 31, 2021.
Warrants issued on May 6, 2013
At the Extraordinary Shareholders Meeting of May 6, 2013, a plan of 266,241 warrants was approved.
Warrants were offered to Group’s employees and management team. Out of the 266,241 warrants offered,
253,150 warrants were accepted by the beneficiaries and 2,500 warrants are outstanding as of December
31, 2021.
The 253,150 warrants were vested in equal tranches over a period of three years. The warrants become
100% vested after the third anniversary the issuance. The warrants that are vested can only be exercised
at the end of the third calendar year following the issuance date, thus starting on January 1, 2017. The
exercise price amounts to €2.64. Warrants not exercised within 10 years after issue become null and void.
Warrants issued on May 5, 2014
At the Extraordinary Shareholders Meeting of May 5, 2014, a plan of 100,000 warrants was approved.
Warrants were offered to Group’s employees, non-employees and directors in five different tranches. Out of
the warrants offered, 94,400 warrants were accepted by the beneficiaries and 35,698 warrants are
outstanding as of December 31, 2021.
The 100,000 warrants were vested in equal tranches over a period of three years. The warrants become
100% vested after the third anniversary the issuance. The warrants that are vested can only be exercised
at the end of the third calendar year following the issuance date, thus starting on January 1, 2018. The
exercise price of the different tranches ranges from €33.49 to €45.05. Warrants not exercised within 10 years
after issue become null and void.
Warrants issued on 5 November 2015
At the Extraordinary Shareholders Meeting of 5 November 2015, a plan of 466,000 warrants was approved.
Warrants were offered to Group’s employees, non-employees and directors in five different tranches. Out of
the warrants offered, 353,550 warrants were accepted by the beneficiaries and 79,315 warrants are
outstanding as of December 31, 2021.
These warrants vest in equal tranches over a period of three years. The warrants become 100% vested after
the third anniversary of issuance. The warrants that are vested can only be exercised as from the end of the
third calendar year following the issuance date, thus starting on January 1, 2019. The exercise price of the
different tranches ranges from €15.90 to €34.65. Warrants not exercised within 10 years after issue become
null and void.
Warrants issued on December 8, 2016
On December 8, 2016, the Board of Directors issued a new plan of 100,000 warrants. An equivalent number
of warrants were cancelled from the remaining pool of warrants of the plan of November 5, 2015. Warrants
were offered to Group’s employees and non-employees in two different tranches. Out of the warrants offered,
45,000 warrants were accepted by the beneficiaries and 7,500 warrants are outstanding as of December
31, 2021.
These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested
after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end
Page 146 | 180
2021 Annual Report
of the third calendar year following the issuance date, thus starting on January 1, 2020. The exercise price
of the different tranches ranges from €17.60 to €36.81. Warrants not exercised within 5 years after issue
become null and void.
Warrants issued on June 29, 2017
At the Extraordinary Shareholders Meeting of June 29, 2017, a plan of 520,000 warrants was approved.
Warrants were offered in different tranches to beneficiaries (employees, non-employees and directors). Out
of the warrants offered, 334,400 warrants were accepted by the beneficiaries and 282,251 warrants are
outstanding as of December 31, 2021.
These warrants will be vested in equal tranches over a period of three years. The warrants become 100%
vested after the third anniversary of issuance. The warrants that are vested can only be exercised as from
the end of the third calendar year following the issuance date, thus starting on January 1, 2021. The exercise
price of the different tranches ranges from €31.34 to €48.89. Warrants not exercised within 5 years after
issue become null and void.
Warrants issued on October 26, 2018
On October 26, 2018, the Board of Directors issued a new plan of 700,000 warrants. Warrants were offered
in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants offered,
426,050 warrants were accepted by the beneficiaries and 365,817 warrants are outstanding as of December
31, 2021.
These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested
after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end
of the third calendar year following the issuance date, thus starting on January 1, 2022. The exercise price
of the different tranches ranges from €9.36 to €22.04. Warrants not exercised within 5 years after issue
become null and void after the 31st of December of the 5th year.
Warrants issued on October 25, 2019
On October 25, 2019, the Board of Directors issued a new plan of 939,500 warrants. Warrants were offered
in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants offered,
602,025 warrants were accepted by the beneficiaries and 549,842 warrants are outstanding as of December
31, 2021. The increase in the number of warrants issued / granted in 2019 follows an update to our
benchmark analysis which now incorporates development-stage, biotechnology peers from both Europe and
the United States. In addition, the Group had a double allocation of warrants granted in 2019 (Q1:2019 and
Q4:2019, respectively). Future double allocation of warrants may be considered. Finally, over the past two
years, the Group recruited new EC members as well as new managers which are remunerated in warrants.
These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested
after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end
of the third calendar year following the issuance date, thus starting on January 1, 2023. The exercise price
of the different tranches ranges from €5.97 to €9.84. Warrants not exercised within 5 years after issue
become null and void after the 31st of December of the 5th year.
Warrants issued on December 11, 2020
On December 11, 2020, the Board of Directors issued a new plan of 561,525 warrants. Warrants were
offered in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants
offered, 555,300 warrants were accepted by the beneficiaries and 532,133 warrants are outstanding as of
December 31, 2021.
These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested
after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end
Page 147 | 180
2021 Annual Report
of the third calendar year following the issuance date, thus starting on January 1, 2024. The exercise price
of the different tranches ranges from €3.72 to €6.81. Warrants not exercised within 7 years after issue
become null and void after the 31st of December of the 7th year.
Warrants issued on October 11, 2021
On October 11, 2021, the Board of Directors issued a new plan of 777,050 warrants. Warrants were offered
in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants offered,
281,500 warrants were accepted by the beneficiaries and 281,500 warrants are outstanding as of December
31, 2021.
These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested
after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end
of the third calendar year following the issuance date, thus starting on January 1, 2025. The exercise price
of the first offer was of €3.75. Warrants not exercised within 7 years after issue become null and void after
the 31st of December of the 7th year.
As a result, as of December 31, 2021 there are 2,136,556 warrants outstanding which represent respectively
8.64% of the total number of all its issued and outstanding shares and 7.88% of the total voting financial
instruments.
The fair value of the warrants has been determined at grant date based on the Black-Scholes formula. The
variables, used in this model, are:
Warrants issued on
06 May
2013
05 May
2014
05 Nov.
2015
08 Dec.
2016
29 Jun.
2017
26 Oct.
2018
25 Oct.
2019
10 Dec.
2020
11 Oct.
2021
Total
266 241
100 000
466 000
100 000
520 000
700 000
939 500
561 525
777 050
4 649 816
253 150
94 400
353 550
45 000
334 400
426 050
602 025
555 300
281 500
3 146 425
2 500
35 698
79 315
7 500
282 251
365 817
549 842
532 133
281 500
2 136 556
2.64
38.25
30.67
32.04
31.44
18.26
7.12
6.25
3.75
13.06
39.55%
67.73%
60.53%
61.03%
60.61%
58.82%
59.14%
58.84%
56.86%
2.06%
1.09%
0.26%
-0.40%
-0.23%
-0.06%
-0.38%
-0.66%
-0.30%
12.44
25.19
20.04
16.18
15.65
8.90
3.99
3.45
2.04
6.98
1.34
2.34
3.84
(0.07)
0.49
1.82
2.81
5.94
6.95
Number of
warrants
issued
Number of
warrants
granted
Number of
warrants not
fully vested
as of 31
December
2021
Average
exercise
price (in €)
Expected
share value
volatility
Risk-free
interest rate
Average fair
value (in €)
Weighted
average
remaining
contractual
life
The total expense recognized in the income statement for the outstanding warrants totals €2.2 million for the
year 2021 (€2.8 million of expense for the prior year 2020).
Page 148 | 180
5.15 Post-employment benefits
(€’000)
Pension obligations
Total
2021 Annual Report
As at December 31,
2021
2020
53
53
614
614
The Group operates a pension plan which requires contributions to be made by the Group to an insurance
company. The pension plan is a defined contribution plan. However, because of the Belgian legislation
applicable to 2nd pillar pension plans (so-called "Law Vandenbroucke"), the Group’s defined contribution plan
is accounted under IAS 19.
At the end of each year, the Group is measuring and accounting for the potential impact of defined benefit
accounting for these pension plans with a minimum fixed guaranteed return.
The contributions to the plan are determined as a percentage of the yearly salary. There are no employee
contributions. The benefit also includes a death in service benefit.
The amounts recognized in the statement of financial position are determined as follows:
(€'000)
As at December 31,
Present value of funded obligations
Fair value of plan assets
Deficit of funded plans
Total deficit of defined benefit pension plans
Liability
position
in the statement of financial
2021
2 408
(2 355)
53
53
53
The change in the defined benefit liability over the year is as follows:
2020
2 748
(2 134)
(€'000)
At January 1, 2020
Current service cost
Interest expense/(income)
Remeasurements
- Return on plan assets, excluding amounts included in interest expense/(income)
- Actuarial (Gain)/loss due to change in actuarial assumptions
- Actuarial (Gain)/Loss due to experience
Employer contributions:
Benefits Paid
At December 31, 2020
At January 1, 2021
Current service cost
Interest expense/(income)
Remeasurements
- Return on plan assets, excluding amounts included in interest expense/(income)
- Actuarial (Gain)/loss due to change in actuarial assumptions
- Actuarial (Gain)/loss due to change in demographic assumptions
- Actuarial (Gain)/Loss due to experience
Employer contributions:
Benefits Paid
At December 31, 2021
The plan assets are 100% invested in an insurance product.
Present value
of obligation
2 330
233
30
2 593
-
187
24
212
-
(57)
2 747
2 747
206
18
2 971
-
(17)
36
(537)
(518)
-
(45)
2 408
Fair value of
plan assets
1 932
-
38
1 970
-
-
-
-
220
(57)
2 133
2 133
-
49
2 182
-
-
-
-
-
218
(45)
2 355
614
614
614
Total
398
233
(8)
623
-
187
24
212
(220)
-
614
614
206
(31)
789
-
(17)
36
(537)
(518)
(218)
-
53
Page 149 | 180
2021 Annual Report
The income statement charge included in operating profit for post-employment benefits amount to:
(€'000)
Current service cost
Interest expense on DBO
Expected return on plan assets
Net periodic pension cost
2021
2020
206
18
233
30
(13)
(24)
211
239
The re-measurements included in other comprehensive loss amount to:
(€'000)
Effect of changes in actuarial assumptions
Effect of experience adjustments
Effect of changes in demographic assumptions
(Gain)/Loss on assets for the year
Remeasurement of post-employment benefit obligations
2021
2020
(17)
(537)
36
(36)
(554)
187
24
-
(14)
197
Plan assets relate all to qualifying insurance policies. The significant actuarial assumptions as per December
31, 2021 were as follows:
Demographic assumptions (for both current and comparative years presented in these year-end financial
statements):
• Mortality tables: mortality rates-5 year for the men and 5 year for the women
• Withdrawal rate: 13.5% for age <55, 0.0% for age ≥55 (vs 15% each year at December 31, 2020)
• Retirement age: 65 years
Economic assumptions:
• Yearly inflation rate: 2.0% (vs 1.8% compared to comparative period)
• Yearly salary raise: 1.5% (above inflation), no change compared to last year
• Yearly discount rate: 1.0% (vs 0.6% last year). The discount rate reflects the yield on high quality
(AA) long-term corporate bonds (within the EURO zone) having the same duration as the duration
of the pension liabilities at the valuation date.
If the discount rate would decrease by 0.5% then, the defined benefit obligation would increase by 1.32%.
If the discount rate would increase by 0.5% then the defined benefit obligation would decrease by 0.35%.
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the
same method (present value of the defined benefit obligation calculated with the projected unit credit method
at the end of the reporting period) has been applied as when calculating the pension liability recognized
within the statement of financial position.
Through its defined benefit pension plan, the Group is exposed to several risks, the most significant of which
are detailed below:
• Changes in discount rate: a decrease in discount rate will increase plan liabilities;
•
Inflation risk: the pension obligations are linked to inflation, and higher inflation will lead to higher
liabilities. The majority of the plan’s assets are either unaffected by or loosely correlated with
inflation, meaning that an increase in inflation will also increase the deficit.
The investment positions are managed by the insurance company within an asset-liability matching
framework that has been developed to achieve long-term investments that are in line with the obligations
under the pension schemes.
Page 150 | 180
2021 Annual Report
Expected contributions to pension plans for next financial year amount to €0.2 million.
5.16 Recoverable Cash Advances
(€'000)
Non-Current portion as at January 1,
Non-Current portion as at December 31,
Current portion as at January 1,
Current portion as at December 31,
Total Recoverable Cash Advances as at January 1,
Total Recoverable Cash Advances as at December 31,
As at December 31,
2021
2020
4 220
5 851
371
362
4 590
6 213
4 139
4 220
346
371
4 484
4 590
The Group receives government support in the form of recoverable cash advances from the Walloon Region
in order to compensate the research and development costs incurred by the Group. Refer to note 5.2.5 and
note 5.19.2.
At December 31, 2021, the Group has been granted recoverable cash advances amounting to €25.8 million
related active contracts. Out of this amount: i) €19.3 million have been received to date; ii) €6.5 million should
be received in 2022 or later depending on the progress of the different programs partially funded by the
Region. In addition, the Group has received recoverable cash advances amounting to €15.3 million related
to contracts for which the exploitation has been abandoned (mainly related to the C-Cure program).
For further details, reference is made to the table below which shows, for active contracts (i) the year for
which amounts under those agreements have been received and initially recognized on the statement of
financial position for the financial liability and deferred grant income components and (ii) a description of the
specific characteristics of those recoverable cash advances including repayment schedule and information
on other outstanding advances. Underlying R&D is ongoing. In 2022 and beyond, the Group will have to
make exploitation decisions on the remaining RCAs (agreements numbered 8087, 8088, 1910028, 8212,
8436 and 8516).
(in €'000)
Amounts received for the years
ended December 31,
Id
Project
Contractual
amount
Prior
years
2020
2021
5915
C-Cathez
910
910
-
-
Cumula
ted
cashed
in
910
Amount
s to be
received
2022
and
beyond
Status
-
Exploitation
6633
C-Cathez
1 020
1 020
-
-
1 020
-
Exploitation
As at
December
31, 2021
Amount
reimbursed
(cumulative
)
670
296
7027
C-Cathez
2 500
2 500
-
-
2 500
Exploitation
7502
CAR T Cell
2 000
2 000
-
-
2 000
-
-
Exploitation
600
60
7685
8087
8088
THINK
CYAD01
Deplethink
CYAD02
Cycle1
-
-
1910028 CwalityCAR
8212
8436
8516
CYAD-101
Immunicy
New
engagers
Total
3 496
2 492
3 146
623
350
1 447
-
-
3 496
2 070
-
422
Exploitation
Research
70
-
3 538
885
615
746
2 246
1 292
Research
2 102
3 300
3 394
1 095
-
-
-
-
749
825
1 697
-
199
1 370
-
274
948
2 195
1 697
274
1 154
1 105
1 697
821
Research
Research
Research
Research
-
-
-
-
-
25 847 11 083
5 684
2 589
19 356
6 491
1 696
Regarding active contracts (in exploitation or research status):
The contract 5915 has the following specific characteristics:
Page 151 | 180
2021 Annual Report
•
Funding by the Region covers 70% of the budgeted project costs;
• Certain activities have to be performed within the Region;
•
In case of an outlicensing agreement or a sale to a third party, the Group will have to pay 10% of
the price received (excl. Of VAT) to the Region;
• Sales-independent reimbursements, sales-dependent reimbursements, and amounts due in case
of an outlicensing agreement or a sale to a third party, are, in the aggregate, capped at 100% of
the principal amount paid out by the Region;
• Sales-dependent reimbursements payable in any given year can be set-off against sales-
independent reimbursements already paid out during that year;
•
The amount of sales-independent reimbursement and sales-dependent reimbursement may
possibly be adapted in case of an outlicensing agreement, a sale to a third party or industrial use
of a prototype or pilot installation, when obtaining the consent of the Walloon Region to proceed
thereto.
The RCA liability associated to the contract 5915 amounted to €0.3 million.
The other contracts have the following specific characteristics:
•
Funding by the Region covers from 45 to 70% of the budgeted project costs;
• Certain activities have to be performed within the European Union;
• Sales-independent reimbursements represent in the aggregate 30% of the principal amount;
• Sales-independent reimbursements and sales-dependent reimbursements are, in the aggregate
(including the accrued interests), capped at 200% of the principal amount paid out by the Region;
•
•
•
Interests (at Euribor 1 year (as applicable on the first day of the month in which the decision to grant
the relevant RCA was made + 100 basis points) accrue as of the 1st day of the exploitation phase;
The amount of sales-independent reimbursement and sales-dependent reimbursement may
possibly be adapted in case of an outlicensing agreement, a sale to a third party or industrial use
of a prototype or pilot installation, when obtaining the consent of the Region to proceed thereto.
In case of bankruptcy, the research results obtained by the Group under those contracts are
expressed to be assumed by the Region by operation of law.
The RCA liability associated to the other contracts amounted to €5.9 million, which mainly incorporate the
sales-independent reimbursements for €4.4 million and the sales-dependent reimbursements for €1.5
million.
The table below summarizes, in addition to the specific characteristics described above, certain terms and
conditions for the recoverable cash advances:
Contract
number
Research
phase
Percentage
of total
project
costs
Turnover-
dependent
reimbursement
Turnover-independent
reimbursement
Interest
rate
accrual
(€’000)
5915
6633
7027
7502
01/08/08-
30/04/11
01/05/11-
30/11/12
01/11/12-
31/10/14
01/12/15-
30/11/18
70%
5.00%
€40k in 2012 and €70k each year after
N/A
60%
50%
45%
0.27%
0.33%
0.19%
From €10k to €51k starting in 2013 until
30% of advance is reached
From €25k to €125k starting in 2015
until 30% of advance is reached
From €20k to €50k starting in 2019 until
30% is reached.
Starting on
01/06/13
Starting on
01/01/15
Starting
2019
Amounts
due in
case of
licensing
(per year)
resp. Sale
10% with a
minimum of
100/Y
N/A
N/A
N/A
Page 152 | 180
2021 Annual Report
7685
8087
8088
1910028
8212
8436
8516
1/01/17-
31/12/19
01/05/19-
30/06/21
01/05/19-
31/12/21
06/06/19-
05/06/22
01/01/20-
31/12/21
01/11/20-
31/12/23
01/04/21-
31/03/23
45%
45%
45%
45%
45%
45%
45%
0.33%
0.22%
0.21%
0.01%
0.46%
0.32%
0.10%
From €35k to €70k starting in 2019 until
30% is reached.
From €25k to €75k starting in 2022 until
30% is reached
From €35k to €106k starting in 2022
until 30% is reached
From €21k to €42k starting in 2022 until
30% is reached
From €33K to €99K starting in 2022
until 30% is reached
From €34K to €102K starting in 2024
until 30% is reached
From €11K to 33K starting in 2024 until
30% is reached
Starting
2020
Starting
01/07/22
Starting
01/01/22
Starting
06/06/22
Starting
01/01/22
Starting
01/01/24
Starting
01/04/24
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.17 Other non-current liabilities
(€'000)
Onerous contracts - non-current liabilities
Other non-current liabilities
Total Other non-current liabilities
As at December 31,
2021
2020
-
371
164
-
164
371
As of December 2020, the Group recorded a provision for onerous contracts for a total amount of €0.9 million
in order to cover the contractual obligations, mainly on clinical activities follow-up and studies closing costs,
after the Group’s decision to discontinue the development of first-generation, autologous CAR T candidate
CYAD-01. There is no remaining non-current portion of this provision as of December 31, 2021. The current
portion of the provision reaches an amount of €0.4 million as of December 31, 2021 (see note 5.18).
As of December 31, 2021, the Group recorded a non-current liability of €0.2 million regarding a non-
refundable, non-creditable sublicense fee to be paid on an annual basis to Dartmouth in connection with the
December 2021 amendment agreement (see note 5.34.1).
5.18 Trade payables and other current liabilities
(€'000)
Total Trade payables
Other current liabilities
Social security
Payroll accruals
Onerous contracts - current liabilities
Other current grant liabilities
Other current liabilities
Total Other current liabilities
As at December 31,
2021
2020
6 611
332
1 798
388
1 096
2 338
5 952
4 736
319
1 653
488
1 838
1 317
5 614
Total Trade payables and other current liabilities
12 563
10 350
Trade payables
Trade payables are non-interest-bearing liabilities and are normally settled on a 90-day terms. Their
increase is mainly attributable to monthly effect in the timing of the expenses and the related payments.
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2021 Annual Report
Other current liabilities
As of December 31, 2021, the increase on social security and payroll accruals of €0.2 million compared to
December 31, 2020 is mainly related to employee movements in 2021.
As of December 31, 2020, the Group recorded a provision for onerous contracts in order to cover the
contractual obligations, mainly on clinical activities follow-up and studies closing costs, after the Group’s
decision to discontinue the development of first-generation, autologous CAR T candidate CYAD-01. As of
December 31, 2021, the remaining provision recorded to cover for contractual obligations through 2022
reaches an amount of €0.4 million.
The other non-current liabilities attached to grants is mainly explained by the excess of cash proceeds
compared to the eligible expenses subsidized by the convention numbered 8087 (CYAD-01 –
DEPLETHINK), 8436 (CYAD-211 Immunicy) and 8516 (new engagers) recognized in 2021 for €1.1 million.
The decrease compared to year-end 2020 is mainly related to the convention 8436 due to eligible expenses
subsidized by the convention recognized in 2021.
Other current liabilities increase of €1.0 million mainly explained by an accrual of €0.8 million for the
reimbursement of R&D tax credit related to tax audit on fiscal year 2015. In 2020, an accrual had been
established to cover for a €1.0 million reimbursement of R&D tax credit related to an assessment resulting
from an audit of fiscal years 2013 and 2014. The reimbursement will be required through the first quarter of
2022 even though the management plans to appeal the assessment.
No discounting was performed to the extent that the amounts do not present payments terms longer than
one year at the end of each financial year presented.
5.19 Financial liabilities
5.19.1. Maturity analysis
The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings
based on the remaining period at the statement of financial position date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows, except for advances
repayable which are presented at amortized cost. Contingent consideration liability has not been disclosed
in the table below, because as of statement of financial position date, it does not meet the definition of a
contractual obligation. Commitments relating to contingent consideration are detailed in the disclosure note
5.34.1.
Financial liabilities reported as at December 31, 2021:
(€'000)
Total
Less than one year
One to five years
More than five years
As at December 31, 2021
Bank loan
Lease liabilities (undiscounted)
Advances repayable
Trade payables
Total financial liabilities
-
2 965
6 213
6 611
15 789
-
1 057
362
6 611
8 030
-
1 908
1 356
-
3 264
-
-
4 495
-
4 495
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2021 Annual Report
Financial liabilities reported as at December 31, 2020:
(€'000)
Total
Less than one year
One to five years
More than five years
As at December 31, 2020
Bank loan
Lease liabilities (undiscounted)
Advances repayable
Trade payables
Total financial liabilities
37
4 129
4 590
4 736
13 493
37
1 306
371
4 736
6 450
-
2 732
1 022
-
3 754
-
92
3 197
-
3 289
5.19.2. Changes in liabilities arising from financing activities
The change in bank loans balances is detailed as follows:
BANK LOANS FINANCIAL LIABILITY ROLL FORWARD
(€'000)
Opening balance at January 1,
New bank loans
Payments
For the year ended
2021
2020
37
229
-
-
(37)
(192)
Closing balance at December 31,
-
37
The change in lease liability balances is detailed as follows:
LEASES FINANCIAL LIABILITY ROLL FORWARD
(€'000)
Opening balance at January 1,
New leases
Payments
For the year ended
2021
2020
3 602
4 134
129
723
(1 099)
(1 255)
Closing balance at December 31,
2 632
3 602
New leases 2021 are mainly related to new leased company cars.
The change in recoverable cash advance liability balances is detailed as follows:
RECOVERABLE CASH ADVANCE LIABILITY ROLL FORWARD
(€'000)
Opening balance at January 1,
Repayments
New Liability component
Remeasurement
Closing balance at December 31,
For the year ended
2021
2020
4 590
4 484
(280)
(246)
1 575
1 284
328
(933)
6 213
4 590
The RCAs are initially recognized as a financial liability at fair value, calculated based on present value of
future repayment of grants (using initial effective discount rates ranging between 0% and 7% for the fixed
part and between 13% to 25% for the variable part, depending on RCAs listed in note 5.16), determined as
per IFRS 9. The benefit (RCA grant component) consisting in the difference between the cash received
(RCA proceeds) and the financial liability’s fair value (RCA liability component) is treated as a government
grant in accordance with IAS 20.
The RCAs liability component (RCA financial liability) is subsequently measured at amortized cost using the
cumulative catch-up approach under which the carrying amount of the liability is adjusted to the present
value of the future estimated cash flows (future estimated cash flow are measured by the management using
same key assumptions than for the impairment testing in note 5.6.2). The resulting adjustment is recognized
within profit or loss (note 5.2.12).
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2021 Annual Report
The change in the recoverable cash advances liability at the statement of financial position date mainly
reflects both the new grants received in current year as well as the remeasurement of the liability at amortized
cost, based on the Group’s updated business plan and sales forecast for its CAR T product candidates. See
disclosure note 5.28. The year-end balance also captures the repayments of contractual turnover
independent lump sums to the Walloon Region (relating to C-Cathez agreements).
5.20 Financial instruments
5.20.1. Financial instruments not reported at fair value on statement of financial position
The carrying and fair values of financial instruments that are not reported at fair value in the consolidated
financial statements were as follows for the current and comparative periods:
(€'000)
Financial Assets (‘Amortized cost’ category) within:
As at December 31,
2021
2020
Non-current Trade receivables
2 209
2 117
Other non-current assets
262
293
Trade receivables and other current assets
668
615
Short-term investments
Cash and cash equivalents
Total
- -
30 018
17 234
33 157
20 259
For the above-mentioned financial assets, the carrying amount reported as per December 31, 2021 is a
reasonable approximation of their fair value.
(€'000)
As at December 31,
2021
2020
Financial Liabilities (‘Financial liabilities at amortized cost’ category) within:
Bank loans
Lease liabilities
RCAs liability
Trade payables
Total
-
37
2 632
3 602
6 213
4 590
6 611
4 736
15 456
12 965
For the above-mentioned financial liabilities, the carrying amount reported as per December 31, 2021 is a
reasonable approximation of their fair value.
5.20.2. Financial instruments reported at fair value on statement of financial position
Contingent consideration and other financial liabilities are reported at fair value in the statement of financial
position using Level 3 fair value measurements for which the Group developed unobservable inputs.
(€'000)
Liabilities
Level I
Level II
Level III
Total
Contingent consideration and other financial liabilities
-
-
14 679
Total Liabilities
-
-
14 679
14 679
14 679
After initial recognition, contingent consideration liabilities are re-measured at fair value with changes in fair
value recognized in profit or loss in accordance with IFRS 3. The calculations use cash flow projections
based on business plan ending in 2040 based on probability of success of CYAD-02 and CYAD-101 product
candidates (eligible for milestone payments to Dartmouth and Celdara as disclosed within note 5.34.1) as
well as extrapolations of projected cash flows resulting from the future expected sales associated with
CYAD-101 and sublicense income on CYAD-02.
Page 156 | 180
The change in the balance is detailed as follows:
(€'000)
Opening balance Contingent consideration at January 1,
Milestone payment
Fair value adjustment
2021 Annual Report
For the year ended
2021
2020
15 526
24 754
-
-
(847)
(9 228)
Closing balance Contingent consideration at December 31,
14 679
15 526
The contingent consideration and other financial liabilities refer to the acquisition of the Group’s immuno-
oncology platform and corresponds to the fair value of the potential future payments due to Celdara Medical,
LLC and Dartmouth College. The liability evolution reflects the development of the Group’s product
candidates using CAR T technology and their progress towards market approval in both autologous and
allogeneic programs, as well as the update of its underlying business plans and revenue forecast.
There has not been any change in valuation technique in 2021 compared to 2020. The valuation is prepared
by the Finance Team on a quarterly basis and reviewed by the Management. The Management’s key
assumptions about projected cash flows when determining fair value less costs to sell are the same key
assumptions than for impairment testing purposes (see note 5.6.2).
Management’s key assumptions (assumptions to which the unit’s or group of units’, recoverable amount is
most sensitive) about projected cash flows when determining fair value less costs to sell are the same key
assumptions utilized for impairment testing purposes (see note 5.6.2):
• Discount rate (WACC)
The Management has determined that the Weighted Average Cost of Capital (WACC) is the most
appropriate rate to use as it represents the risk associated with both equity and the debt. Contingent
consideration is a liability and thus the discount rate should represent debt features, but the
“contingent” nature of the liability has similar features as equity, e.g., return is not guaranteed and
thus equity risk should be considered as well. Management estimated the discount rate (WACC)
as of December 31, 2021 to be 13.4% (14.8% as of December 31, 2020) based on following
components: the US Government Treasury bill 20-Y, the Group’s Beta, the equity Market Risk
Premium and the small firm/illiquidity premium. The decrease of the WACC is mainly driven by a
decrease of the Beta of the Group which is associated with the volatility of the Group’s equity
influenced by its ongoing clinical programs and overall competitive landscape within the immuno-
oncology field. Management corroborates its estimation with industry standards for biotechnology
companies, the WACC used by Equity Research companies following the Group and transactions
that have been sourced by the Group over the past 24 months.
• Projected Revenue
Management estimated the projected revenue (using cash flow projections ending in 2040) based
on the following components: total market and market share, time-to-market, treatment price and
terminal value. Management based its estimation of projected revenue and related components
with the Group’s business plan, industry data for biotechnology companies, evolution of similar
R&D programs, comparable prices, expected patent expiration period. The weight of this
assumption is partially alleviated by the probability of success (PoS) presented hereunder.
• Probabilities of Success (PoS)
Management estimated the PoS based on Clinical Development Success Rates observed by
independent business intelligence consulting companies for hematological and solid tumor
diseases. Probability of the Group’s product candidates reaching the market used were updated
compared to prior year-end based on most recent Clinical Development Success Rates observed
by independent business intelligence consulting companies for hematological and solid tumor
diseases as follows:
Page 157 | 180
2021 Annual Report
o Probabilities of Success as of December 31, 2021:
PoS
Phase I
Phase I to
Phase II
Phase II to
Phase III
Phase III to
BLA
BLA to
Approval
Cumulative
PoS
CYAD-02
CYAD-101
100%
100%
50%
49%
28%
23%
60%
43%
90%
93%
7.5%
4.6%
o Probabilities of Success as of December 31, 2020:
PoS
Phase I
Phase I to
Phase II
Phase II to
Phase III
Phase III to
BLA
BLA to
Approval
Cumulative
PoS
CYAD-02
CYAD-101
100%
100%
62%
64%
29%
23%
53%
34%
86%
80%
8.1%
4.0%
The PoS estimates used by management as of December 31, 2020 utilized clinical development
success rates compiled by independent business intelligence consulting companies which sourced
data from clinical development programs from 2006 – 2015. The Group’s updated PoS rates for its
clinical programs as of December 31, 2021 incorporates data for clinical development success
rates from 2011 – 2020, which the Group believes is a more accurate reflection of clinical
development success rates across stage of development and in aggregate.
As of December 31, 2020, the change in fair value of the contingent consideration and other financial
liabilities was mainly driven by updated assumptions associated with the timing of the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS which had been
delayed by one year.
The liability decrease at December 31, 2021 is mainly due to:
•
•
•
•
•
The update of the assumptions associated with the timing of the potential commercialization of the
Group’s allogenic CYAD-101 CAR T program for mCRC which has been delayed by one year;
The update of the assumptions associated with the timing, development and the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS to reflect
the future development of the program through potential partnership, which has been delayed by
one year;
The update in WACC used for fair value measurement purposes at December 31, 2021;
The revaluation of the U.S. dollar against the Euro; and
The updated assumptions on Probability of Success (PoS) associated with the Group’s CAR T
programs.
The contingent consideration liability captures the commitments disclosed under note 5.34.1. It does not
include any amount for contingent consideration payable relating to any sub-licensing agreements entered
into or to be entered into by the Group for the reasons that:
• Any contingent consideration payable would be due only when the Group earns revenue from such
sub-licensing agreements, and in an amount representing a fraction of that revenue; and
•
The development of the underlying product candidates by the sub-licensees is not under the
Group’s control, making a reliable estimate of any future liability impossible.
Page 158 | 180
2021 Annual Report
Contingent consideration liability sensitivity analysis
A sensitivity analysis has been performed on the key assumptions driving the fair value of the contingent
consideration liability. The key assumptions are i) the discount rate (WACC), ii) the projected revenue and
iii) the probabilities of success (PoS) for the Group’s product candidates to get commercialized.
Cont. consideration (€ million)
Impact (%)
Cont. consideration (€ million)
Impact (%)
Discount rate (WACC)
12.0%
15.9
8%
12.7%
15.3
13.4%
14.7
4%
-
14.0%
14.7%
14.1
-4%
13.6
-7%
Projected revenue
95.0%
97.5%
100.0%
102.5%
105.0%
12.4
-3%
14.4
-2%
14.7
-
14.9
1%
15.2
4%
In order to assess the sensitivity to this driver, the Group applies here an incremental probability factor to
the bottom-line cumulative PoS disclosed below:
Probabilities of Success
-20.0%
-10.0%
PoS model
10.0%
20.0%
Cont. consideration (€ million)
11.7
13.2
Impact (%)
-20%
-10%
14.7
-
16.1
10%
17.6
20%
On February 28, 2022, the Group announced its decision to voluntarily pause our Phase 1b KEYNOTE-B79
trial evaluating CYAD-101 administered concurrently with FOLFOX chemotherapy followed by MSD’s anti-
PD-1 therapy, KEYTRUDA® (pembrolizumab) in patients with refractory metastatic colorectal cancer
following reports of two fatalities that presented with similar pulmonary findings. The Group is currently
investigating these reports and evaluating any similar events in additional patients treated on study. On
March 1, 2022, the Group was informed via-email communication from the FDA that the KEYNOTE-B79 trial
has been placed on clinical hold due to insufficient information to assess risk to study subjects (see note
5.36). Given the uncertain impact of this event on the future of KEYNOTE-B79 trials at this time, the Group
is not able to assess the impact of such outcomes on the valuation of related assets and contingent liabilities
and, therefore, has not adjusted the related fair value calculations for the clinical hold.
5.21
Income taxes
The Group reports income taxes in the income statement as detailed below:
INCOME TAX EXPENSE IN PROFIT OR LOSS
(€'000)
Current tax (expense) / income
Deferred tax (expense) / income
For the year ended December 31,
2021
2020
(10)
-
-
-
Total income tax expense in profit or loss
(10)
-
The Group has a history of losses.
The following table shows the reconciliation between the effective and theoretical income tax at the nominal
Belgian income tax rate of 25.00% for the years 2021 and 2020:
Page 159 | 180
EFFECTIVE INCOME TAX RECONCILIATION
(€'000)
Loss before tax
Permanent differences
Tax disallowed expenses
Share-based payment
Nominal tax rate
Income tax at nominal tax rate1
Deferred tax assets not recognized
Effective tax expense
Effective tax rate
2021 Annual Report
For the year ended December 31,
2021
2020
(26 502)
(17 204)
1 185
2 172
25.00%
5 786
(5 796)
(10)
1 092
2 782
25.00%
3 333
(3 333)
-
0%
0%
1 The difference in foreign tax rate in the US (25.80%) compared to the Belgian rate (25.00%) is not distinctively disclosed
in this table due to non-materiality of the operations of the Group’s subsidiary Celyad Inc.
As having not yet reached the commercialization step, the Group accumulates tax losses that are carried
forward indefinitely for offset against future taxable profits of the Group. Significant uncertainty exists
however surrounding the Group’s ability to realize taxable profits in a foreseeable future. Therefore, the
Group has not recognized any net deferred tax assets in its statements of financial position.
Deferred tax assets and liabilities are detailed below by nature of temporary differences for the current year:
DEFERRED TAX ASSETS AND LIABILITIES, PER TAX BASES
(€'000)
Intangibles assets
Tangible assets
Recoverable cash advances liability
Contingent consideration liability
Employee Benefits liability
Other temporary difference
Tax-losses carried forward
Unrecognized Gross Deferred Tax assets/(liabilities)
Netting by tax entity
Unrecognized Net Deferred Tax assets/(liabilities)
For the year ended
December 31, 2021
Assets
Liabilities
Net
-
-
1 503
3 670
13
-
72 671
77 857
(3 295)
74 562
(2 709)
-
-
-
-
(586)
-
(3 295)
3 295
-
(2 709)
-
1 503
3 670
13
(586)
72 671
74 562
-
74 562
Deferred tax assets and liabilities are detailed below by nature of temporary differences for the prior year:
DEFERRED TAX ASSETS AND LIABILITIES, PER TAX BASES
(€'000)
Intangibles assets
Tangible assets
Recoverable cash advances liability
Contingent consideration liability
Employee Benefits liability
Other temporary difference
Tax-losses carried forward
Unrecognized Gross Deferred Tax assets/(liabilities)
Netting by tax entity
Unrecognized Net Deferred Tax assets/(liabilities)
For the year ended
December 31, 2020
Assets
Liabilities
Net
-
-
1 067
3 881
154
-
63 302
68 405
(2 174)
66 231
(1 826)
(26)
-
-
-
(346)
-
(2 197)
2 174
(23)
(1 826)
(26)
1 067
3 881
154
(346)
63 302
66 208
-
66 208
The Group’s main deductible tax base relates to tax losses carried forward, which have indefinite term under
both BE and US tax regimes applicable to its subsidiaries.
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2021 Annual Report
The remaining temporary differences refer to differences between IFRS accounting policies and local tax
reporting policies.
The Group has not recognized any net deferred tax asset on its statements of financial position, for the same
reason as explained above (uncertainty relating to taxable profits in a foreseeable future).
The change in the Group’s net deferred tax asset balance is detailed below:
UNRECOGNIZED DEFERRED TAX ASSET BALANCE ROLL FORWARD
(€'000)
Opening balance at January 1,
Temporary difference creation or reversal
Change in Tax-losses carried forward
Change in US tax rate applicable
Closing balance at December 31,
For the year ended
2021
2020
66 208
61 300
(1 014)
(2 981)
8 820
8 064
548
(176)
74 562
66 208
The net increase in the balance mainly relates to the additional losses reported for the current year.
As of December 31, 2021, the Group has a total accumulated tax losses of €290.3 million, which generate
unrecognized deferred tax assets, not subject to expiration.
5.22 Other reserves
(€’000 )
based
Share
payment
reserve
equity
Other
reserve
from
conversion of
convertible loan
in 2013
Currency
Translation
Difference
Total
Balance as at January 1, 2020
Vested share-based payments
Currency Translation differences subsidiaries
Balance as at December 31, 2020
Vested share-based payments
Currency Translation differences subsidiaries
13 021
2 782
-
15 803
2 172
-
(5)
(5)
16 631
(1 472)
-
-
-
16 631
(1 476)
-
-
-
42
28 181
2 782
30 958
2 172
42
33 172
Balance as at December 31, 2021
17 975
16 631
(1 434)
The amount of €16.6 million has been accounted for as other reserves following the conversion of the loans
E, F, G and H on May 31, 2013, as a legacy IFRS adjustment on fully settled contribution-in-kind convertible
loans.
5.23 Revenue
(€'000)
Out-licensing revenue
Other revenue
Total
For the year ended December 31,
2021
-
-
2020
-
5
-
5
The Group’s license and collaboration agreements have generated no revenue for the year ended December
31, 2021 similar to the year ended December 31, 2020. The Group did not enter into any new license
agreements for the 12-month period ended December 31, 2021.
The Group does not expect to generate material revenue unless and until the Group receives regulatory
approval for one of its drug product candidates.
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2021 Annual Report
5.24 Research and Development expenses
The following table is a summary of manufacturing expenses, clinical, quality and regulatory expenses and
other research and development expenses, which are aggregated and presented as research and
development expenses in the Group’s consolidated financial statements.
(€'000)
Employee expenses
Travel & Living
Clinical study costs
Preclinical study costs
Process development and scale-up
Consulting fees
IP filing and maintenance fees
Share-based payments
Depreciation
Rent and utilities
Delivery systems
Others
Total R&D expenses
For the year ended December 31,
2021
2020
9 475
85
4 000
2 473
770
568
353
644
1 276
670
-
459
20 773
8 564
116
5 555
1 976
1 056
372
230
927
1 511
800
47
369
21 522
Research and development expenses totaled €20.8 million for the year ended December 31, 2021, which
represents a decrease of 3% compared to 2020. The Group’s R&D internal resources are allocated to the
continuous development of its immuno-oncology platform mainly in allogenic setting with its products
candidate CYAD-101, CYAD-211 and preclinical programs (such as CYAD-203). The decrease in the
Group’s R&D expenses is primarily driven by:
•
•
•
•
•
The increase of employee expenses mainly related to movement of employees through the year
ended December 31, 2021 to support the Group’s preclinical and clinical programs
The increase of preclinical activities associated with the CYAD-203 program (next-generation
NKG2D) and other next-generation CAR T candidates, compensated by;
The decrease of process development and clinical development after the Group’s decision in Q4
2020 to discontinue the development of first-generation, autologous CAR T candidate CYAD-01;
The decrease of process development associated to the transition from preclinical to clinical
development of the CYAD-211 program; and
The decrease of the expenses associated with the share-based payments (non-cash expenses)
related to the warrants plan offered to the employees, managers and directors.
5.25 General and Administrative expenses
(€'000)
Employee expenses
Share-based payments
Rent
Insurances
For the year ended December 31,
2021
2020
3 575
3 363
1 529
1 855
50
87
1 642
1 182
Communication & Marketing
434
454
Consulting fees
Travel & Living
2 254
1 747
31
91
Post-employment benefits
(7)
19
Depreciation
Other
243
320
157
197
Total General and Administration expenses
9 908
9 315
Page 162 | 180
2021 Annual Report
General and Administrative expenses increased by €0.6 million over the year ended December 31, 2021,
which represents an increase of 6.4% compared to 2020. The increase in insurances costs (D&O insurance
principally) and consulting fees associated with legal, recruitment and capital raise opportunities have been
partially compensated by the decrease of the expenses associated with the share-based payments (non-
cash expenses) related to the warrants plan offered to the employees, managers and directors
5.26 Depreciation and amortization
(€'000)
For the year ended December 31,
2021
2020
Depreciation of property, plant and equipment
1 303
1 635
Amortization of intangible assets
217
197
Total depreciation and amortization
1 520
1 832
The amortization expenses decreased compared to the year 2020 mainly due to end of depreciation of
tangible assets. The depreciation of property, plant and equipment are mainly driven by the amortization
expenses relating to right-to-use of leased assets. See disclosure notes 5.2.28 and 5.30.
5.27 Employee benefit expenses
(€'000)
Salaries, wages and fees
Executive Management team compensation
Share-based payments
Social security
Post-employment benefits
Hospitalization insurance
Other benefit expense
Total Employee expenses
For the year ended December 31,
2021
2020
7 975
3 115
2 172
1 444
251
142
116
15 215
7 139
2 773
2 782
1 487
263
146
138
14 727
Total employee expenses increased in 2021 compared to 2020. Salaries, wages and fees expenses show
a net increase year-on-year, which reflects the organic growth of the Group, in line with a total staff
headcount increased by 10.6% at December 31, 2021.
Headcount
Research & Development
General and administrative staff
Total Headcount
For the year ended December 31,
2021
2020
96.0
19.6
115.6
85.7
18.8
104.5
5.28 Change in fair value of contingent consideration, other income and other
expenses
Change in fair value of contingent consideration
(€'000)
For the year ended December 31,
2021
2020
Change in fair value of contingent consideration
847
9 228
Total Change in fair value of contingent consideration
847
9 228
Page 163 | 180
2021 Annual Report
The fair value adjustment (€0.8 million, non-cash expenses) relating to reassessment as of December 31,
2021 required by International Financial Reporting Standards (IFRS) of the contingent consideration and
other financial liabilities associated with the advancement in the Company’s NKG2D-based CAR T
candidates, is mainly driven by:
•
•
•
•
•
The update of the assumptions associated with the timing of the potential commercialization of the
Group’s allogenic CYAD-101 CAR T program for mCRC which has been delayed by one year;
The update of the assumptions associated with the timing, development and the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS to reflect
the future development of the program through potential partnership, which has been delayed by
one year;
The update in WACC used for fair value measurement purposes at December 31, 2021;
The revaluation of the U.S. dollar against the Euro; and
The updated assumptions on Probability of Success (PoS) associated with the Group’s CAR T
programs.
As of December 31, 2020, the change in fair value of the contingent consideration and other financial
liabilities was mainly driven by updated assumptions associated with the timing of the potential
commercialization of the Group’s autologous CYAD-02 CAR T program for r/r AML/MDS which had been
delayed by one year.
Other income
(€'000)
Grant income (RCAs)
Grant income (Other)
Remeasurement of RCAs
R&D tax credit
For the year ended December 31,
2021
2020
2 731
2 311
1 448
779
-
933
687
657
Gain on sales of Property, plant & equipment
-
35
Other
Total Other Income
43
17
4 909
4 731
Other income is mainly related to:
• Grant income (RCAs): additional grant income has been recognized in 2021 on grants in the form
of recoverable cash advances (RCAs) for contracts numbered 8087, 8088, 8212, 8436 and
1910028. According to IFRS standards, the Company has recognized grant income for the period
amounting to €2.7 million and a liability component of €1.6 million is accounted for as a financial
liability (see disclosure notes 5.16 and 5.19.2). The increase compared to December 31, 2020 is
mainly associated with additional grant income recognized on new conventions signed during the
last quarter of 2020 (contracts numbered 8212 and 8436) and on convention numbered 1910028,
partly compensated by the decrease on grant income recognized on conventions associated to
autologous programs (contract numbered 7685, 8087 and 8088);
• Grant income (Others): additional grant income has been recognized in 2021 on grants received
from the Federal Belgian Institute for Health Insurance Inami (€0.3 million) and from the regional
government (contracts numbered 8066 and 8516 for €1.1 million), not referring to RCAs and not
subject to reimbursement. The increase compared to December 31, 2020 is mainly due to grant
income recognized on new convention signed in the last quarter of 2021 with the regional
government (contract numbered 8516);
Page 164 | 180
2021 Annual Report
•
the remeasurement income on the recoverable cash advances (RCAs) of €0.9 million for the year
2020, which was mainly related to the Group decision to update assumptions associated with the
timing of the potential commercialization of the Group’s autologous AML/MDS CAR T program,
while the remeasurement on the recoverable cash advances (RCAs) is an expense for the year
ended December 31, 2021; and
• with respect to R&D tax credit, the current year income is predicated on a R&D tax credit recorded
(€0.7 million), which has been updated taking into account all information available at this date and
is in line with previous year.
Other expenses
(€'000)
For the year ended December 31,
2021
2020
Clinical Development milestone payment
-
69
Remeasurement of RCAs
328
-
Loss on disposals of Property, plant & equipment
1
10
Other
Total Other Expenses
1 137
35
1 466
114
For the year ended December 31, 2021, other expenses mainly refer to:
•
•
the remeasurement income on the recoverable cash advances (RCAs) of €0.3 million for the year
2021, which is mainly related to the time accretion (which reflects the development of the Group’s
product candidates using CAR T technology and their progress towards market approval in both
autologous and allogeneic programs) and the revaluation of the U.S. dollar against the Euro, refer
to disclosure note 5.16; and
the other expenses are mainly associated with the amendment fees on license agreement with
Dartmouth signed in December 2021 for €1.1 million (see note 5.34.1).
For the year ended December 31, 2020, other expenses mainly referred to clinical development milestones
for (€0.1 million) paid to Dartmouth after that the Group successfully dosed the first patient with CYAD-02 in
CYCLE-1 trial for r/r AML and MDS treatment.
5.29 Non-recurring operating income and expenses
Non-recurring operating income and expenses are defined as one-off items, not directly related to the
operational activities of the Group. No operations qualify for such a presentation for the years 2021 and
2020.
5.30 Leases
Amounts recognized in the consolidated statements of financial position
“Property, plant and equipment” comprise owned and leased assets that do not meet the definition of
investment property.
(€’000)
Property, Plant and Equipment owned (excluding right-of-use assets)
Right-of-use assets
As of December 31,
2021
2020
1 033
2 215
1 115
3 004
Page 165 | 180
2021 Annual Report
Total Property, Plant and Equipment
3 248
4 119
The statement of financial position shows the following amounts relating to leases for which the Group is a
lessee:
(€’000)
Cost
At 1 January 2020
Additions
Disposals
Transfers
At 31 December 2020
Additions
Disposals
Transfers
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Depreciation charge
Disposals
Transfers
At 31 December 2020
Depreciation charge
Disposals
Transfers
At 31 December 2021
Net book value
Cost
Accumulated depreciation
At 31 December 2020
Cost
Accumulated depreciation
At 31 December 2021
Property
Vehicles
Equipment
Total
2 810
191
-
-
3 001
24
-
-
3 025
(399)
(428)
-
-
(827)
(454)
-
-
(1 281)
3 001
(827)
2 174
3 025
(1 281)
1 744
363
105
(39)
-
429
67
(41)
-
454
(90)
(114)
39
-
(165)
(117)
41
-
(241)
429
(165)
263
454
(241)
213
1 564
470
-
(543)
1 491
-
-
(950)
541
(901)
(567)
-
543
(924)
(309)
-
950
(283)
1 491
(924)
567
541
(283)
258
4 737
765
(39)
(543)
4 920
91
(41)
(950)
4 020
(1 390)
(1 109)
39
543
(1 916)
(880)
41
950
(1 805)
4 920
(1 916)
3 004
4 020
(1 805)
2 215
Amounts recognized in the consolidated statements of comprehensive loss
The consolidated statements of comprehensive loss show the following amounts relating to leases:
(€’000)
For the 12-month period ended December 31,
Depreciation charge of right-of-use assets
Property
Vehicles
Equipment
Interest on lease liabilities (including in Financial expenses)1
Interest on sublease receivable (including in Financial income)1
2021
2020
454
76
309
217
428
75
567
259
(26)
(46)
Variable lease payments not included in the measurement of lease liabilities
-
-
Expenses relating to short-term leases and leases of low-value assets
137
166
Total expenses related to leases
1 167
1 449
1 Interests on leases are presented as operating cash flow.
Page 166 | 180
Total cash outflows for leases
(€’000)
Total cash outflow for leases
2021 Annual Report
For the 12-month period ended December 31,
2021
1 453
2020
1 681
5.31 Finance income and expenses
(€’000)
For the year ended December 31,
2021
2020
Interest finance leases
217
260
Interest on overdrafts and other finance costs
21
19
Interest on RCAs
Foreign Exchange differences
Finance expenses
17
18
-
137
255
434
Finance income on the net investment in lease
26
46
Interest income bank account
Foreign Exchange differences
Other financial income
Finance income
Net Financial result
1
5
5
-
112
166
144
217
(111)
(217)
The net financial result increased from a net financial loss of €0.2 million for the year ended December 31,
2020 to €0.1 million of net financial loss for the year ended December 31, 2021, which is mainly driven by
the decrease from €0.1 million of loss on foreign exchange differences due to the revaluation of the USD
through the year ended December 31, 2021 and its impact on the valuation of the Mesoblast receivable.
5.32 Loss per share
The loss per share is calculated by dividing loss for the year by the weighted average number of ordinary
shares outstanding during the period. As the Group is incurring net losses, outstanding warrants have an
anti-dilutive effect. As such, there is no difference between the basic and the diluted earnings per share. In
case the warrants would be included in the calculation of the loss per share, this would decrease the loss
per share.
(€’000)
As at December 31,
2021
2020
Loss of the year attributable to Equity Holders
(26 512)
(17 204)
Weighted average number of shares outstanding
15 604 014
13 942 344
Earnings per share (non-fully diluted) in €
(1.70)
(1.23)
Outstanding warrants
2 136 556
1 488 006
5.33 Contingent assets and liabilities
As described in note 5.2.5, the Group has to reimburse certain government grants received in the form of
recoverable cash advances under certain conditions. For more information on the potential financial
consequences of these exploitation decisions in terms of potential reimbursements and sales percentage
fees to be paid to the Walloon Region, refer to note 5.16.
Page 167 | 180
In 2022 and beyond, the Group will have to make exploitation decisions on the remaining RCAs (agreements
numbered 8087, 8088, 1910028, 8212, 8436 and 8516).
2021 Annual Report
5.34 Commitments
5.34.1. Celdara
Background
In January 2015, the Group entered into an agreement with Celdara Medical, LLC, or Celdara in which the
Group purchased all outstanding membership interests of OnCyte, LLC, or OnCyte. In connection with this
transaction, the Group entered into an asset purchase agreement to which Celdara sold to OnCyte certain
data, protocols, regulatory documents and intellectual property, including the rights and obligations under
two license agreements between OnCyte and The Trustees of Dartmouth College, or Dartmouth, related to
the Group’s CAR T development programs.
In March 2018, the Group dissolved the affairs of its wholly owned subsidiary OnCyte. As a result of the
dissolution of OnCyte, all the assets and liabilities of OnCyte were fully distributed to the Group including its
license agreement with Dartmouth.
Amended Asset Purchase Agreement
In August 2017, the Group entered into an amendment to the asset purchase agreement described above.
In connection with the amendment, the following payments were made to Celdara: (i) an amount in cash
equal to $10.5 million, (ii) newly issued shares of Celyad valued at $12.5 million, (iii) an amount in cash
equal to $6.0 million in full satisfaction of any payments owed to Celdara in connection with a clinical
milestone related to the Group’s CAR-T NKR-2 product candidate, (iv) an amount in cash equal to $0.6
million in full satisfaction of any payments owed to Celdara in connection with the Group’s license agreement
with Novartis International Pharmaceutical Ltd., and (v) an amount in cash equal to $0.9 million in full
satisfaction of any payments owed to Celdara in connection with the Group’s former license agreement with
Ono Pharmaceutical Co., Ltd.
Under the amended asset purchase agreement, the Group is obligated to make certain development-based
milestone payments to Celdara up to $40.0 million, certain development-based milestone payments up to
$36.5 million and certain sales-based milestone payments up to $156.0 million. The Group is required to
make tiered single-digit royalty payments to Celdara in connection with the sales of CAR-T products, subject
to reduction in countries in which there is no patent coverage for the applicable product or in the event Celyad
is required to secure licenses from third parties to commercialize the applicable product. The Group is also
required to pay Celdara a percentage of sublicense income, including royalty payments, for each sublicense
ranging from the mid-single digits to the mid-twenties, depending on which of a specified list of clinical and
regulatory milestones the applicable product has achieved at the time the sublicense is executed. The Group
is required to pay Celdara a single-digit percentage of any research and development funding received by
us, not to exceed $7.5 million for each product group. The Group can opt out of the development of any
product if the data does not meet the scientific criteria of success. The Group may also opt out of
development of any product for any other reason upon payment of a termination fee of $2.0 million to
Celdara.
The Trustees of Dartmouth College (“Dartmouth”)
As described above, as a result of the Group’s acquisition of all of the outstanding membership interests of
OnCyte and the asset purchase agreement among the Group, Celdara and OnCyte, OnCyte became the
Group’s wholly-owned subsidiary and acquired certain data, protocols, regulatory documents and intellectual
property, including the rights and obligations under two license agreements between OnCyte and Dartmouth.
The first of these two license agreements concerned patent rights related, in part, to methods for treating
cancer involving chimeric NK and NKP30 receptor targeted therapeutics and T cell receptor-deficient T cell
Page 168 | 180
2021 Annual Report
compositions in treating tumor, infection, GVHD, transplant and radiation sickness, or the CAR-T License,
and the second of these two license agreements concerned patent rights related, in part, to anti-B7-H6
antibody, fusion proteins and methods of using the same, or the B7H6 License.
In August 2017, the Group and Dartmouth entered into an amendment agreement in order to combine its
rights under B7H6 Agreement with its rights under the CAR-T License, resulting in the termination of the
B7H6 License, and in order to make certain other changes to the agreement. In connection with the
amendment, the Group paid Dartmouth a non-refundable, non-creditable amendment fee in the amount of
$2.0 million in 2017. Under the amended license agreement, Dartmouth granted the Group an exclusive,
worldwide, royalty-bearing license to certain know-how and patent rights to make, have made, use, offer for
sale, sell, import and commercialize any product or process for human therapeutics, the manufacture, use
or sale of which, is covered by such patent rights or any platform product. Dartmouth reserves the right to
use the licensed patent rights and licensed know-how, in the same field, for education and research
purposes only. The patent rights included in the amended license agreement also include the patents
previously covered by the B7H6 License. In consideration for the rights granted to the Group under the
amended license agreement, the Group is required to pay to Dartmouth an annual license fee as well as a
low single-digit royalty based on annual net sales of the licensed products by the Group, with certain
minimum net sales obligations beginning April 30, 2024 and continuing for each year of sales thereafter.
Under the amended license agreement, in lieu of royalties previously payable on sales by sublicensees, the
Group is required to pay Dartmouth a percentage of sublicense income, including royalty payments, (i) for
each product sublicense ranging from the mid-single digits to low-single digits, depending on which of a
specified list of clinical and regulatory milestones the applicable product has achieved at the time the
sublicense is executed and (ii) for each platform sublicense in the mid-single digits. Additionally, the
agreement requires that the Group exploits the licensed products, and the Group has agreed to meet certain
developmental and regulatory milestones. Upon successful completion of such milestones, the Group is
obligated to pay to Dartmouth certain clinical and regulatory milestone payments up to an aggregate amount
of $1.5 million and a commercial milestone payment in the amount of $4.0 million. The Group is responsible
for all expenses in connection with the preparation, filing, prosecution and maintenance of the patents
covered under the agreement.
As further amended in December 2021, this agreement allows Dartmouth to terminate the amended license
after April 30, 2026, extended from the prior date of April 30, 2024, in the event that Celyad fails to meet the
specified minimum net sales obligations for any year ($10 million during first year of sales, $40 million during
the second year of sales and $100 million during the third year of sales and every year of sales thereafter),
unless Celyad pays to Dartmouth the royalty Celyad would otherwise be obligated to pay had Celyad met
such minimum net sales obligation. Dartmouth may also terminate the license if Celyad fails to meet a
milestone within the specified time period, unless Celyad pays the corresponding milestone payment. In
connection with the December 2021 amendment, the Group agreed to certain protective provisions of any
sublicenses and paid Dartmouth a non-refundable, non-creditable amendment fee and an additional non-
refundable, non-creditable sublicense fee to be paid on an annual basis.
In accordance with IFRS 3, these contingencies are recognized on the statement of financial position at
year-end, on a risk-adjusted basis.
5.34.2. Horizon Discovery / PerkinElmer
In April and June 2018, the Group signed two research and development collaboration and license
agreements with Horizon Discovery Group plc, or Horizon, to evaluate the utility of Horizon’s SMART vector
shRNA reagents to reduce expression of one or more defined targets in connection with the development of
the Group’s product candidates. The first agreement was focused on targets related to Group’s autologous
CAR-T candidate, CYAD-02. The second agreement was focused on targets related to its allogenic CAR-T
product candidate CYAD-211 and one pre-clinical allogenic product candidate not yet publicly announced,
called CYAD-203.
In December 2018, the Group exercised its option to convert the second agreement into an exclusive license
agreement, in connection with which the Group paid Horizon an up-front payment of $1 million. In September
Page 169 | 180
2021 Annual Report
2019, the Group exercised its option to convert the first agreement into an exclusive license agreement, in
connection with which the Group has paid Horizon an up-front payment of $0.1 million and an additional
milestone of $0.1 million for the first IND filed by us for CYAD-02. In September 2020, the Group paid an
additional milestone of $0.2 million for the first IND filed by the Group for CYAD-211.
Under these exclusive license agreements combined, Horizon is eligible to receive additional milestone
payments in development, regulatory and commercial milestone payments, in addition to low single digit
royalties on net sales, subject to customary reductions.
In December 2020, Horizon Discovery was acquired by PerkinElmer, Inc. (Horizon/PKI).
In 2021, Horizon/PKI informed the Group they believe the Group is in material breach of these agreements
as a result of certain disclosures the Group has made in connection with its obligations as a publicly traded
company in the United States and Belgium, although they have not formally delivered to the Group a notice
of material breach or termination. The Group believes any such assertion of material breach would be without
merit and the Group would expect to vigorously defend any such notice of material breach. Any dispute
under these agreements would be subject to arbitration in The Hague under the International Chamber of
Commerce Rules. The Group is currently in discussions with Horizon about possible amendments to these
agreements in connection with which the Group would retain freedom to operate under the in-licensed
patents.
Of note, the Group has filed patent applications which, if issued, would cover other aspects of the product
candidates described above as well as products developed by third parties that deploy similar technology
and targets. These patent applications encompass the downregulation of one or more of the targets covered
under the Horizon/PKI agreements, the use of shRNA to downregulate such targets in immune cells and the
combination of shRNAs with a chimeric antigen receptor in immune cells. The Group is also developing a
second generation shRNA platform that does not incorporate any of the Horizon Discovery/Perkin Elmer,
Inc. technology described above.
The Group’s lead allogeneic CAR T product candidate, CYAD-101, does not incorporate any of the Horizon
Discovery/Perkin Elmer, Inc. technology described above.
5.34.3. Other Commitments
In 2021, the Group signed two license agreements. Under these license agreements, the licensors are
eligible to receive additional milestone payments in development, regulatory and commercial milestone
payments, in addition to low single digit royalties on net sales, subject to customary reductions, if the Group
decides to continue the exploitation of these licenses.
5.35 Related-party transactions
5.35.1. Remuneration of key management
Key management consists of the members of the Executive Committee and the entities controlled by any of
them.
Number of Executive Committee members
7
6
As at 31 December,
2021
2020
(€’000)
For the year ended 31 December
2021
2020
Short term employee benefits[1]
1 866
1 349
Page 170 | 180
2021 Annual Report
Post employee benefits
Share-based compensation
Other employment costs[2]
Management fees
Total benefits
Executive Committee outstanding fees payables (in ‘000€)
(1) Include salaries, social security, bonuses, lunch vouchers
(2) Company cars
45
928
148
1 163
4 150
844
Number of warrants granted
Number of warrants lapsed
Cumulative outstanding warrants
Exercised warrants
As at 31 December,
2021
2020
395 000
(30 000)
921 000
-
34
1 110
110
1 335
3 939
660
220 000
(20 000)
556 000
-
5.35.2. Transactions with non-executive directors
(€'000)
Share-based compensation
Management fees
Total benefits
Non-executive directors outstanding fees payables (in ‘000€)
Number of warrants granted
Number of warrants lapsed
Number of exercised warrants
Cumulative outstanding warrants
For the year ended 31 December,
2021
2020
337
373
710
93
396
366
762
94
As at 31 December,
2021
2020
150 000
80 000
-
-
30 000
-
340 000
220 000
5.35.3. Transactions with shareholders
There were no transactions with the Group’s shareholders, for 2021 or 2020.
5.36 Events after the close of the fiscal year
On January 17, 2022, the Company entered into an amendment with Mesoblast to convert the license into
non-exclusive whereby the Company agreed, (a) to settle $2,500,000 of receivable as of December 31, 2021
with $1,500,000 and; (b) extend certain milestone payments. The consideration of $1,500,000 was agreed
to be paid by Mesoblast in Mesoblast ordinary shares and the difference $1,000,000 will be recorded in the
income statement in 2022.
On February 28, 2022, the Company announced its decision to voluntarily pause our Phase 1b KEYNOTE-
B79 trial evaluating CYAD-101 administered concurrently with FOLFOX chemotherapy followed by MSD’s
anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in patients with refractory metastatic colorectal cancer
following reports of two fatalities that presented with similar pulmonary findings. The Company is currently
investigating these reports and evaluating any similar events in additional patients treated on study. On
March 1, 2022, the Company was informed via-email communication from the FDA that the KEYNOTE-B79
trial has been placed on clinical hold due to insufficient information to assess risk to study subjects.
Page 171 | 180
There were no other subsequent events that occur between 2021 year-end and the date when the financial
statements have been authorized by the Board for issue.
2021 Annual Report
5.37 Statutory accounts as of December 31, 2021 and 2020 according to Belgian
GAAP
This section contains selected financial information, consisting of the balance sheet, income statement and
certain notes, as derived from the statutory financial statements of Celyad Oncology SA as of and for the
year ended December 31, 2021 (including comparative information as of and for the year ended December
31, 2020). These financial statements were prepared in accordance with the applicable accounting
framework in Belgium and with the legal and regulatory requirements applicable to the financial statements
in Belgium and are filed with the National Bank of Belgium. These statutory financial statements are
approved by the Shareholders’ Meeting on May 5, 2022 and the statutory auditor has issued an unqualified
audit opinion with respect to these statutory financial statements. The full set of the statutory financial
statements is available on the website of the National Bank of Belgium (www.nbb.be).
5.37.1. Balance Sheet
(in €)
ASSETS
FIXED ASSETS
II. Intangible fixed assets
III. Tangible fixed assets
Land and buildings
Installations machinery and equipment
Furniture and vehicles
Leasing and similar rights
Other fixed assets
Fixed assets under construction and advance payments
IV. Financial fixed assets
CURRENT ASSETS
VI. Stocks and contracts in progress
Goods purchase for resale
VII. Amounts receivable within one year
Trade debtors
Others amounts receivable
VIII. Amounts receivable more than one year
Others amounts receivable
IX. Investment
X. Cash at bank and in hand
XI. Deferred charges and accrued income
TOTAL ASSETS
CAPITAL AND RESERVES
I. Capital
Issued capital
2021
2020
39 512 659
40 734 524
24 450 692
27 986 462
939 525
-
271 634
75 528
138 980
453 383
-
1 087 290
-
80 089
55 029
367 923
584 249
-
14 122 442
11 660 773
37 534 143
24 171 087
-
-
2 392 123
475 292
1 916 831
5 207 946
5 207 946
-
-
1 771 464
422 822
1 348 643
5 128 817
5 128 817
-
-
28 968 595
16 422 938
965 479
847 868
77 046 802
64 905 612
62 777 236
53 265 948
78 584 224
78 584 224
48 512 615
48 512 615
Page 172 | 180
Uncalled capital (-)
II. Share Premium
V. Accumulated profits (losses)
PROVISIONS AND DEFERRED TAXES
VII.A. Provisions for liabilities and charges
2021 Annual Report
-
-
13 653 439
59 599 665
(29 460 427)
(54 846 331)
-
-
-
-
PAYABELS
14 269 566
11 639 663
VIII. Amounts payable after more than one year
Credit institutions; leasing and other similar obligations
Other financial loans
Other debts
IX. Amounts payable within one year
Current portion of amounts payable after one year
Trade debts
Suppliers
Taxes; remunerations and social security costs
Taxes
Remunerations and social security costs
Other amounts payable
X. Accrued charges and deferred income
2 046 115
125 178
1 708 835
212 102
12 223 450
253 072
6 719 692
6 719 692
4 100 585
2 261 280
1 839 305
1 150 101
1
3 023 108
156 217
1 918 992
947 898
8 614 824
516 987
5 088 332
5 088 332
2 118 591
301 073
1 817 518
890 914
1 732
TOTAL LIABILITIES
77 046 802
64 905 612
5.37.2.
Income statement
(in €)
Operating income
Turnover
Capitalization of development costs
Other operating income
Non recurring operating income
Operating charges
Direct Material
Services and other goods
Remuneration; social security and pensions
Depreciation of and other amounts written off formations expenses; intangible and tangible
fixed assets (-)
Write-downs on inventories, on orders in progress and on trade receivables (appropriations
-; write-backs +)
Provisions for liabilities and charges (appropriations -; use and write-backs +)
Other operating charges (-)
Non recurring operating expenses
Operating profit (loss)
Financial income
Income from current assets
Income from financial assets
Other financial income
Financial charges (-)
Interest on financial debts
Other financial charges
Non-recurring financial charges
2021
2020
27 788 089
24 408 732
-
4 707
20 343 657
18 444 030
7 443 825
5 959 953
607
41
(56 776 393)
(50 952 881)
(3 337 391)
(3 472 216)
(18 568 543)
(14 538 134)
(9 145 602)
(9 019 398)
(24 570 724)
(22 855 773)
-
-
-
-
(1 153 961)
(1 057 583)
(172)
(9 776)
(28 988 304)
(26 544 149)
920 332
125 495
639
-
5 373
-
919 693
120 122
(239 500)
(3 113)
(236 387)
-
(965 810)
(5 465)
(960 345)
(2)
Profit (loss) on ordinary activities before taxes (-)
(28 307 472)
(27 384 464)
Page 173 | 180
2021 Annual Report
Profit (Loss) for the period before taxes (-)
Income taxes (-) (+)
-
-
(1 152 955)
622 889
Profit (loss) for the period available for appropriation
(29 460 427)
(26 761 574)
5.37.3. Notes
Statement of intangibles assets
(in €)
2021
2020
Acquisition value at the end of the preceding period
190 249 350
171 536 439
Movements during the period
Acquisitions, included produced fixed assets
Sale, transfer and withdraw
Acquisition value at the end of the period
20 556 802
15 939
210 787 212
18 712 911
0
190 249 350
Depreciation and amounts written down at end of the preceding period
162 262 888
139 984 462
Movements during the period
Recorded
Sale, transfer and withdraw
24 092 573
15 939
22 278 426
0
Depreciation and amounts written down at the end of the period
186 336 521
162 262 888
Net book value at the end of the period
24 450 691
27 986 462
Statement of tangible fixed assets
(in €)
LAND AND BUILDINGS
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Acquisition value at the end of the period
Depreciation and amounts written down at end of the preceding
period
Movements during the period
Recorded
Depreciation and amounts written down at end of the period
Net book value at the end of the period
INSTALLATIONS, MACHINERY & EQUIPMENT
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Sale, transfer and withdraw
Acquisition value at the end of the period
Depreciation and amounts written down at end of the preceding
period
Movements during the period
Recorded
Sale, transfer and withdraw
Depreciation and amounts written down at end of the period
Net book value at the end of the period
FURNITURE AND VEHICLES
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Sale, transfer and withdraw
2021
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
692 095
1 094 125
279 161
25 409
945 847
612 006
87 616
25 409
674 213
271 634
1 189 483
865 405
41 685
27 263
71 532
686 231
692 095
911 291
39 854
551 808
612 006
80 089
1 499 426
59 272
23 810
393 025
Page 174 | 180
Acquisition value at the end of the period
Depreciation and amounts written down at end of the preceding
period
Movements during the period
Recorded
Sale, transfer and withdraw
Depreciation and amounts written down at end of the period
Net book value at the end of the period
LEASING AND OTHER SIMILAR RIGHT
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Sale, transfer and withdraw
Acquisition value at the end of the period Sale, transfer and
withdraw
Depreciation and amounts written down at end of the preceding
Movements during the period Recorded
Recorded
Sale, transfer and withdraw
Depreciation and amounts written down at end of the period
Net book value at the end of the period
Whereof:
Land and buildings
Installation, machinery & equipment
Furniture and vehicles
OTHER TANGIBLE ASSETS
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Sale, transfer and withdraw
Acquisition value at the end of the period
Depreciation and amounts written down at end of the preceding
period
Movements during the period
Recorded
Sale, transfer and withdraw
Depreciation and amounts written down at end of the period
Net book value at the end of the period
FIXED ASSETS UNDER CONSTRUCTION AND ADVANCE
PAYMENTS
Acquisition value at the end of the preceding period
Movements during the period
Acquisitions, included produced fixed assets
Transfers from one heading to another
Acquisition value at the end of the period
Depreciation and amounts written down at end of the preceding
period
Movements during the period
Recorded
Depreciation and amounts written down at end of the period
Recorded
Net book value at the end of the period
2021 Annual Report
1 189 483
1 389 138
59 272
13 602
327 558
1 134 454
55 029
1 408 421
(543 016)
194 000
-
1 059 405
750 545
(543 016)
483 953
-
691 482
367 923
-
347 368
20 555
1 252 294
171 174
16 026
148 254
1 291 240
536 493
171 174
139 839
140 514
706 992
584 249
-
-
-
-
-
-
-
-
-
-
2 069 310
1 134 454
865 405
20 268
26 345
1 993 782
75 528
1 059 405
(865 405)
-
-
194 000
691 482
(865 405)
228 943
-
55 020
138 980
-
138 980
-
1 291 240
-
10 458
-
1 301 699
706 992
-
141 324
-
848 316
453 383
-
-
-
-
-
-
-
-
-
-
Other investments and deposits
(in €)
Other Investments and deposits
2021
2020
Acquisition value at the end of the preceding period
290 633
254 572
Movements during the period
Additions
-
36 061
Page 175 | 180
Reimbursements (-)
Net book value at the end of the period
(31 173)
259 460
-
290 633
2021 Annual Report
Investment and deposits
(in €)
Less than one year
More than one year
Net book value at the end of the period
Statement of capital 2021
(in €)
Issued capital
Structure of the capital
Different categories of shares
Registered
Dematerialized
Unpaid capital
Uncalled capital
Capital called, but unpaid
Shareholders having yet to pay up in full
Authorized unissued capital
Statement of capital 2020
(in €)
Issued capital
Structure of the capital
Different categories of shares
Registered
Dematerialized
Unpaid capital
Uncalled capital
Capital called, but unpaid
Shareholders having yet to pay up in full
Authorized unissued capital
2021
2020
-
-
-
-
-
-
Amounts
Number of shares
78 584 224
22 593 956
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
2 368 025
20 225 931
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
4 773 124
Amounts
Number of shares
48 512 615
13 942 344
2 368 025
11 574 319
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
36 891 844
Statement of amounts payable
(in €)
2021
2020
Analysis of amounts payable after more than one year
Current portion of amounts initially payable after more than one year
Amounts payable expiring over one year and before 5 years
Amounts payable expiring over five year
Analysis by current position of amounts initially payable after more
than one year
Leasing charges and similar
Other debts (loans)
Other debt
Tax, wage and social amounts payable
Taxes
Non expired taxes payable
Remuneration and social security
253 072
951 935
1 094 181
162 942
2 136 246
516 987
1 829 013
1 194 094
387 739
3 152 355
2 261 280
301 073
Page 176 | 180
Other amounts payable related to remuneration and social security
1 839 305
1 817 518
2021 Annual Report
Operating results
(in €)
Other operating income
2021
2020
Subsidies and recoverable cash advance received from the Walloon Region
7 111 354
5 620 796
Operating charges
Employees recorded in the personnel register
Total number at the closing date
Average number of employees calculated in full-time equivalents
Number of actual worked hours
Personnel costs
Remuneration and direct social benefits
Employer’s social security contributions
Employer’s premiums for extra statutory insurances
Other personnel costs (+)/(-)
Pensions
Impairment of trade receivables
On trade receivables
Record
Withdrawal
Provisions for risks and charges
Addition
Use of and withdrawal
Other operating charges
Taxes related to operations
Other charges
89
87
83
86
144 347
143 509
6 278 525
1 483 557
1 074 277
309 243
-
-
-
-
6 282 555
1 533 053
914 436
289 354
-
-
-
-
1 126
1 152 835
1 087
1 056 496
Hired temporary staff and persons placed at the enterprise’s disposal
Total number at the closing date
Average number calculated as full-time equivalents
Number of actual worked hours
Charges to the enterprise
-
0,3
664
32 101
Financial results
(in €)
Interest income
Other financial income
Interest charges
Foreign exchange difference
Other financial charges
Income and charge of exceptional size or incidence
(in €)
Non-recurring income
Non-recurring financial income
Non-recurring operating charges
Non-recurring financial charges
2021
2020
639
919 693
3 113
200 778
34 788
2021
2020
607
-
172
-
-
-
64
2 884
5 373
120 122
5 465
25 458
934 887
41
-
9 776
-
Page 177 | 180
Income tax
(in €)
Status of deferred taxes
2021 Annual Report
2021
2020
Accumulated tax losses deductible from future taxable profits
278 899 876
247 107 718
The total amount of value added tax and taxes borne by third parties
(in €)
2021
2020
The total amount of value added tax and taxes borne by third parties
The total amount of value added tax charged
To the enterprise (deductible)
By the enterprise
Amounts retained on behalf of third parties
Payroll withholding taxes
4 163 762
2 370 943
3 948 069
2 320 642
2 120 036
2 148 288
Financial relationship with Amount of direct and indirect remunerations and pensions,
included in the income statement, as long as this disclosure does not concern
exclusively or mainly, the situation of a single identifiable person
(in €)
To non-executive directors
2021
2020
372 500
365 750
Financial relationship with auditors
(in €)
Auditor’s fees
Auditor’s special missions fees
Fees for special missions executed by related parties to the Auditor
5.37.4. Summary of valuation rules
2020
2019
202 000
141 788
-
200 000
66 850
-
Valuation rules are determined by the Board of Directors in accordance with the Royal Decree of 30 January
2001, executing Belgian Company Code and related to the annual accounts requirements for companies.
Formation expenses are booked as intangible fixed assets and amortized over 5 years. Intangible fixed
assets acquired from a third party or acquired through a contribution in kind are recorded at the acquisition
value. Intangible fixed assets not acquired from a third party are valued at their cost of production in such a
way that they do not exceed a prudent estimation of their future economical use or their future return.
Intangible assets developed internally are capitalized when perspectives of future return are probable and
clearly identified. Clinical development expenses are capitalized when authorization to start a phase III trial
of the related program is obtained. Development expenses of a medical device are capitalized when the
device is CE marked.
These intangible fixed assets are – in principle – amortized prorate temporis over 5 years starting the year
of the first revenue generation associated with the related asset. Furniture and fixtures are depreciated over
3, 5 or 10 years depending on the economic life of the assets.
An impairment test is performed each year at year end on all tangible and intangible assets. Exceptional
depreciation or amortization expenses may result from such impairment analysis.
Page 178 | 180
2021 Annual Report
Financial fixed assets are booked at acquisition value. A write-off is accounted for when the financial fixed
asset is permanently impaired. There is no inventory.
Direct materials purchased are directly expensed taken into account their short lifetime. Amounts receivable
are booked as asset at nominal value. Amounts receivable in foreign currencies are converted in EUR at the
exchange rate at closing date. Negative exchange differences resulting from the conversion in EUR at the
exchange rate at closing date are expensed; positive exchange differences are accounted for as deferred
income. Amounts receivable are written-off when their realizable value is estimated to be lower than their
carrying value.
Bank deposits are valued at their acquisition value. Cash and cash equivalents are valued at nominal value.
When the nominal value includes interests, these latter are accounted for through the balance sheet caption
“deferred charges and accrued income”. A write-off is accounted for when their realizable value is estimated
to be lower than their carrying value. Amount payables are booked at nominal value. Amount payables in
foreign currencies are converted in EUR at the exchange rate at closing date. Negative exchange differences
resulting from the conversion in EUR at the exchange rate at closing date are expensed; positive exchange
differences are accounted for as deferred income.
Recoverable advances are recognized in operating income prorated on the associated R&D costs as soon
as there is reasonable assurance that these advances are acquired. Recoverable cash advances contracted
with the Walloon Region are subject to reimbursement plans that are both fixed (30% of the recoverable
advance) and variable. When the decision to exploit the outcome of the research and development program
partially financed by the Walloon Region is notified to the Region, the fixed part of the reimbursements is
recognized in debts. The presentation of short-term and long-term debt is based on perspectives of revenue
generation and reviewed on a yearly basis. The variable part of reimbursements, depending on turnover,
will be paid in the year of income. An off-balance sheet commitment is presented in the appendix and
corresponds to the Company’s best estimate of the amount potentially reimbursable to the Region and not
recognized in debts (including variable part).
Page 179 | 180
2021 Annual Report
FINANCIAL CALENDAR
Annual shareholders meeting
First quarter 2022 business update
First half interim results 2022
Third quarter 2022 business update
May 5, 2022
May 5, 2022
August 5, 2022
November 10, 2022
CELYAD CONTACT DETAILS
Filippo Petti
Chief Executive Officer / Chief Financial Officer
Email: investors@celyad.com
Paper copy in French and English can be obtained free of charge via the Company’s registered office.
CELYAD ONCOLOGY SA
Axis Business Park
Rue Edouard Belin 2
1435 – Mont-Saint-Guibert
Belgium
Tel: +32 10 39 41 00
RPM: Nivelles – BE0891 118 115
Email: info@celyad.com
Website: www.celyad.com
Page 180 | 180
CELYAD AND THE STOCK EXCHANGE
The Company is listed on Euronext Paris
and Brussels since July 2013 and on
Nasdaq since June 2015.
Mnemo: CYAD
ISIN:BE0974260896
PEA and PEA PME Eligibility
Total outstanding shares: 22,593,956
(as of December 8, 2021)
MORE INFORMATION ON:
www.celyad.com
MORE INFORMATION FOR
SHAREHOLDERS ON:
www.celyad.com/investors
CONTACT:
investors@celyad.com