CYAD - Celyad slumps ~30% as board to put proposal to continue activities on vote at shareholders' meet

2023-03-15 05:33:18 ET

Celyad Oncology ( NASDAQ: CYAD ) said it will recognize a non-cash impairment of its goodwill and intangible oncology assets; and that its board plans to submit for a vote its business plan, including a proposal to continue the company's activities at the shareholders' meeting.

The impairment was due to company’s strategic shift, which it calls Celyad 2.0 strategy: Under the strategy, the Belgium-based company is shifting from its focus on clinical development to prioritize R&D discovery and monetize its intellectual property (IP) portfolio through partnerships and license agreements.

Celyad, however, noted that till date, no effective sublicence contract nor collaboration contract was completed and uncertainty remains on the timing and amount of the deal flow and linked short, medium and long term revenues.

The company said that due to this this uncertainty, and as per accounting standards, it will recognize a full impairment loss on the remaining value of goodwill, in Process Research and Development, and Horizon Discovery's shRNA platform. This will result in a non-cash impairment of €20.5M on a statutory basis and €35.1M on a consolidated basis for the year ended Dec. 31, 2022.

Celyad noted that its net assets as of Dec. 31, 2022, on a BE-GAAP non-consolidated basis, have fallen below half of the company's capital. Due to this, the board plans to submit for a vote, at its May 5 shareholders' meeting, its business plan including a proposal to continue the company's activities.

The board will publish a report regarding the proposal by April 3, alongwith the convocation with proposed resolutions for the shareholders' meeting, the company added.

Celyad said it will provide the conclusion of the impairment analysis and more details when it reports its full year 2022 results on or around March 23.

CYAD -29.25% to $0.70 premarket March 15

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