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ANNUAL REPORT 2016 Bringing breakthrough pioneering therapies to patients with life-threatening diseases www.celyad.com CELYAD ANNUAL REPORT 2016 Table of contents Letter of the Chairman . 04 Letter of the CEO . 06 Our Mission . 08 Key figures 2016 . 09 2016 Key milestones . 10 Cancer: a collection of more than 200 different individual diseases . 12 Key facts & figures about cancer worldwide . 13 Celyad’s lead oncology drug candidate: the CAR-T NKR-2 cellular immunotherapy . 16 CAR-T NKR-2: a safe immunotherapy . 18 Reaching the effective dose-level of CAR-T NKR-2 cells with the THINK study . 20 A robust immuno-oncology pipeline . 22 Our partners in immuno-oncology . 24 Celyad’s intellectual property portfolio immunotherapy . .. 26 Cardiology: How to best prepare for CHART-2? . 28 Cardiology: partners & IP portfolio . 29 Making the Impossible Possible . 30 Celyad’s Key HR facts & figures . 31 Celyad’s team is all about passion . 32 Corporate governance . 34 Our senior leadership team . 35 Information for shareholders . 36 Finance / Analyst coverage & contacts & glossary . .. 37 Letter of the Chairman Dear Shareholders, 2016 has been transformational for your company which, in only a year, has positioned itself as a serious international player in the CAR-T field, one of the most promising approaches for cancer treatment. Beginning of 2015, we felt important to diversify our clinical portfolio, building on our core expertise in cell therapy to explore new therapeutic areas for major unmet medical needs, such as cancer. Michel Lussier Celyad thus started to scout in the US, searching for the hidden gem that would — CHAIRMAN OF THE BOARD allow the company to make a difference in the immuno-oncology field. We acquired a technology invented by Prof. Charles Sentman at Dartmouth College, a CAR-T therapy based on a unique construct using the NKG2D receptor. This is now a breakthrough asset for the company and a major promise for the patients. While having a fully integrated know-how and equipment, highly skilled people, a very disruptive technology and a strong intellectual property, we needed then to raise sufficient financial resources to undertake rapidly our clinical program and build our presence in the USA, the CAR-T homeland. And that is exactly what we did. In 18 months, we raised more than $130 million, introduced Celyad on NASDAQ, we have opened an office and built a seasoned team in the Boston area, we have launched and successfully completed a Phase Ia trial and we have signed strategic collaborations with world-class academic and industrial partners. Last but not the least, we have initiated the THINK Phase I trial, taking a global lead in CAR-T for solid tumors. 04 CELYAD • ANNUAL REPORT 2016 “We made the right decisions at the right time, moving on to the next chapter of our company history. 2017 will be a very exciting year for Celyad, which is now running one of the largest CAR-T clinical trial worldwide...” During spring 2016, we decided to focus going forward on We are very confident that our immuno-oncology product the development of our immuno-oncology platform and to candidates will bring groundbreaking treatment options to find a strategic partner to further develop and commercialize cancer patients and we are looking forward to our clinical C-Cure® . data to reflect on the company value, rewarding the hard work of our team but also the trust and support that you, Our CHART-1 Phase III European trial has been saluted Dear Shareholders, have shown for all these years. by leaders in the field as a significant milestone in the understanding of the heart failure disease and also in the Michel Lussier, identification of a well-defined patient population that could Chairman of the Board benefit from C-Cure®. Based on the key learning of this study, the US pivotal trial CHART-2 will incorporate optimized dosing regimens as well as a new FDA-agreed primary endpoint. This new Phase III study is ready to be initiated and Celyad is actively looking for partners to further develop and commercialize C-Cure®, one of the most advanced reparative cell therapy for heart failure worldwide. Yes, we have faced ups and downs – which company doesn’t? – but most importantly, we made the right decisions at the right time, moving on to the next chapter of our company history . 2017 will be a very exciting year for Celyad, which is now running one of the largest CAR-T clinical trials worldwide, targeting more indications than any of its competitors ever did so far. CELYAD • ANNUAL REPORT 2016 05 Letter of the CEO Dear Shareholders, 2016 has been a year in which our CAR-T portfolio matured, where we have increased our expertise in the field of immuno-oncology, and in which we transitioned from being focused on cardiology to being one of the most promising companies in the field of CAR-T cells. The portfolio acquired beginning of 2015 from Dartmouth College’s Prof. Charles Sentman, is one of the most elegant approaches to targeting cancers using CAR-T cells as Prof. Sentman combines the breadth of innate immunity with the potency of T cell mediated activity. Christian Homsy — CHIEF EXECUTIVE OFFICER As many great ideas, the concept is simple, but its power has far reaching implications: One single product candidate, potentially targeting 80% of all cancers, an approach that can be compared to checkpoint inhibitors. Even in challenging animal models, our pre-clinical testing yielded remarkable antitumor activity with the long-term survival of treated animals despite aggressive hematological and solid tumor cancers. This work has uncovered multiple modes of actions in those models, from direct cytotoxicity to adaptive immunity including anti-neoangiogenesis, and immune system modulation. Our Target Product Profile (TPP) is unique. We can highlight two differentiating attributes amongst many others: First, instead of injecting cells that proliferate 06 CELYAD • ANNUAL REPORT 2016 “We are also the only company that has both a lower risk autologous approach, and a higher reward allogeneic development. Should allogeneic yield results similar to what we are seeing in autologous, Celyad will then have an approach to target large indications more cost effectively. Should autologous prevail, we have incredibly creative solutions that reduce the cost of goods to levels unseen before.” in the patient in an uncontrolled way, and attempting to deal We have completed a Phase Ia trial in Acute Myeloid Leukemia with the consequences by inserting control mechanisms, we (AML) and Multiple Myeloma (MM) at the Dana Farber Cancer prefer to use a known pre-defined dose, injected multiple Institute. Top line data were reported last November at ASH. times to provide sufficient persistence. Second, instead of In all doses tested, no targeting of healthy tissues occurred. severely lymphodepleting the patients, we use and leverage Despite the low doses tested, some patients unexpectedly the patient’s own immune system. showed first clinical responses, targeting AML and MM makes us pioneers in these two very severe malignancies. We are also the only company that has both a lower risk autologous approach, and a higher reward allogeneic To conclude the year, we initiated the THINK trial where we development. Should allogeneic yield results similar to what are testing our CAR-T NKR-2 in 7 different indications (two we will be seeing in autologous, Celyad will then have an hematological cancers, AML and MM, and five solid tumors), approach to target large indications more cost effectively. in up to 112 patients, making it one of the largest and most Should autologous prevail, we have incredibly creative comprehensive Phase I programs in the industry! solutions that reduce the cost of goods to levels unseen before. I would like to conclude by thanking first the Celyad employees, who managed to re-orient themselves and On the intellectual property side, our space is clean with demonstrated their capacity to adapt. Perseverance is what no competing technologies. In the allogeneic CAR-T field, differentiates good teams from great teams. I am honored to we hold a patent that, until now, and despite having been serve them as their CEO. I would also like to thank you, our challenged at numerous occasions, grant us broad and shareholders, that, despite the challenges faced in 2016 have robust position in this field. maintained their confidence in your company and its team. The road to breakthrough therapies is made of bumps, but, Our allogeneic technology was vetted by a partnership with for the sake of our patients, we will prevail. one of the pioneers of immuno-oncology, the Japanese Christian Homsy, company ONO Pharmaceuticals, which is at the forefront of Chief Executive Officer of Celyad checkpoint inhibitors invention. CELYAD • ANNUAL REPORT 2016 07 Our Mission Bringing breakthrough pioneering therapies to patients with life- threatening diseases. Celyad is a clinical-stage biopharmaceutical company, focused on the development of specialized cell-based therapies. We are using our expertise in cell engineering to translate landmark technologies into drug candidates aimed at treating severe diseases with signifi- cant unmet needs. 08 CELYAD • ANNUAL REPORT 2016 Key figures 2016 Celyad was founded in 2007 and is based in Mont-Saint- 3 2 Guibert, Belgium, and Boston, Massachusetts stock listings on Euronext technological platforms in Brussels, Paris and NASDAQ immuno-oncology (autologous & allogeneic) 3 1 7 study assets in pre-clinical and Phase I trial completed in cancer indications covered clinical development (CAR-T the US for our CAR-T NKR-2 by our ongoing multinational NKR-2, CAR-T NKR-3 and immuno-oncology program in Phase I THINK trial (bladder, CAR-T B7H6) patients with AML and MM. No colorectal, pancreas, breast, safety issue reported ovarian, AML, MM) 3 CHART-1 international collaborations the European Phase III clinical trial evaluating the with Dartmouth College (USA), efficacy of C-Cure®, our lead cardiology candidate, has Institut Curie (France) and ONO been completed.