ERYTECH Pharma S.A.

Thank you, Cindy. And good afternoon, good morning, everybody.

Thank you for joining us for our third quarter earnings call. We announced our Q3 financials and business update yesterday evening, and you can access the press release, also our earnings presentation, on the investor relations page of our website.

With me here is Eric Soyer, our Chief Financial and Chief Operating Officer; and Iman El-Hariry, our Chief Medical Officer. She's connected by phone.

I will, switching to Page 2, draw your attention on the disclaimer, the forward-looking statements, and switch immediately to Page 3 with the agenda. It's really following our quarterly routine.

I will start with the business update for the third quarter and year-to-date. Eric will take over for the financial update of the third quarter and year-to-date, and then we will have - Eric will continue with a summary of the news flow and the milestones, and then we'll open up for Q&A where the three of us will be available to respond to your questions.

Now before starting the update, I switch to Slide 4. It's good to remind who we are, show the essentials of the company.

Slide 4 presents them in a slightly different form than what you may be used to. We're still the red cell company, very focused on cancer metabolism with late stage trials in second line pancreatic cancer, the Phase 3, as you know, triple-negative breast cancer, Phase 2, and IST in second line acute lymphoblast leukemia.

To the right of the slide, we now have two operational manufacturing sides: one in Leon, serving the needs for patients in Europe; and the second one in Princeton for the U.S. As we produce our public candidates from matched donor red cells, we clearly have established strong partnerships with blood banks in Europe and in the U.S.

On the next slide, Slide 5, you will see the pipeline, essentially what I said already. The clinical pipeline very focused on the Eryaspase product, the asparaginase in red blood cells, and I have explained the different trials.

Maybe the fourth arrow is not going there. Just trial that we have not started, but that we are gearing up if we're to launch first half next year is again in pancreatic cancer, but a Phase 1 study in first line pancreatic cancer in - or Eryaspase in combination with FOLFIRINOX.

On the pre-clinical pipeline, we have the methionase, essentially the same as with the asparaginase but with other enzyme and targeting the methionine-dependent tumors. Our ERYMMUNE, this was not last quarter, was the quarter before, is now in partnership with Squeeze Biotechnologies to advance this into immune colonization activities.

And we also still have work ongoing in metabolic diseases, working on therapeutic enzymes. Given that we are late stage Phase 3, Phase 2 with the lead program, it's probably clear that the real focus is more and more on the late stage programs, and the earlier programs get for the time being less attention and focus.

Moving to Slide 6 is a summary of the recent business highlights. They're in fact all related to the TRYbeCA1, the Phase 3 trial, in Eryaspase in second line pancreatic cancer.

I'll come back to them in the next slides. There's obviously also the manufacturing facility, but that's also related to TRYbeCA1 and then they leave the cash position.

Given the importance of the focus on this pancreatic cancer, I thought it was good to remind of it why are we doing this. Pancreatic cancer - so I'm on Slide 7.

It’s large unmet medical need. It's one of the leading causes of cancer that is currently the fourth, but moving up to rapidly being the second important indication.

It's we estimate about 185,000 people being diagnosed every year with pancreatic cancer. So Europe, U.S.

- this is Europe, U.S. combined.

The prognosis is small, less than 10%, 5-year survival. We are specifically working in second line pancreatic cancer for the time being.

So it is estimated at about 50% of patients diagnosed with pancreatic cancer will evolve and will be eligible to second line treatment. In first and second line, there are still very limited treatment options and there's also little activity in progress.

So if you go to Slide 8, you'll see that chemotherapy remains today the main treatment option, both in first and in second line. There are two principle treatment regimens in first line, or gemcitabine-based treatments; gemcitabine most often together with Abraxane; sometimes in monotherapy for worst performance stages, [indiscernible] for the histamine cooperative group performance status, so the 02 is worse than the 01.

And the other group is the fluoropyrimidine-based, typically FOLFIRINOX, a cocktail of four different chemotherapies. And then when patients progress to second line, they will receive similar treatments and variations on the same things, but crossed over; so patients will progress after gemcitabine-based treatments will go onto drugs like FOLFIRI or cocktails like FOLFORI, which is [indiscernible] irinotecan, in which the irinotecan can be modified; the nanoliposomal irinotecan, or FOLFIRINOX, which is [indiscernible] and oxaliplatin, or for the worst performance, they use fluoropyrimidine alone of best supportive care.

Patients who progress after FOLFIRINOX will typically be treated with gemcitabine-based treatments, gemcitabine alone or in combination with Abraxane or best supportive care. So there is little - more so, these drugs have been - Abraxane was approved I think in 2012, so there has been little movement.

The Onivyde was approved more recently, and the small subset of patients, the dermine bracka mutations, they're with the polo trial. There is - the part inhibitors seem to be at a positive single in first line therapy - in maintenance after first line therapy.

Essentially, these are the treatment options. Probably also good to quickly remind our Phase 2 study, which was in the second line, so in combination with gemcitabine or FOLFOX.

Where you see it here, we can say that we had probably the strongest - to our knowledge, the strongest Phase 2 survival benefit that has been seen so far in second line pancreatic cancer with a hazard risk of 0.6. You see the survival here, hazard risk of 0.6, which means a 40% reduction in risk of death rate.

Very significant. And the only other reference is the NAPOLI trial, which see there the left, the modified where the hazard risk was 0.67 and this was the basis for the approval.

So it's promising in Phase 2, which then led us to design Phase 3 study, TRYbeCA1 randomized Phase 3, studying Eryaspase in combination with chemotherapy versus alone again in the second line treatment. So it's a trial with approximately 500 patients to be enrolled, patients - adults, Stage 3 or 4 pancreatic cancer, and they have received one prior systemic chemotherapy at measurable disease, and it's in the performance status 01.

Randomized 1:1 and it's different with the previous trial where we had 2:1 randomizaiton, but it is indeed Eryaspase with chemotherapy, which in this here is gemcitabine plus Abraxane or FOLFIRI. And then versus chemotherapy alone.

Primary endpoint, overall survival, and then the entire metric of secondary endpoints, as you see on this slide. So now to the highlights.

We announced most of them are very recent. On Monday, we announced that we had a beta safety data review of the first 150 patients in the trial by the IBMC of the trail.

No safety issues were identified and the recommendation was simply to continue the trial as planned. Obviously important as we are combining this Eryaspase product with - combined with significant toxicity, so that's - we knew we had a good safety profile.

We've seen that in all our other trials. Still, it's always good and reassuring to see that confirmed.

Then the other big news of the week I can say is that we opened the trial for enrollment in the United States. We have our Princeton manufacturing site now fully ready to manufacture clinical batches, and indeed, we will now concentrate - all the patients in the U.S.

will - the products for these patients will be produced from the Princeton facility. And in parallel, we have activated the first clinical sites.

We are targeting approximately 30 clinical sites in the U.S. So basically, the trial is on track for the enrollment and Europe stays perfectly on track.

And so we remain on track for full enrollment and coinciding roughly around the same time, the interim analysis, which is for seeing when 2/3 of the events will have happened in interim analysis for superiority only, so no futility analogies and this we expect in - continue to expect in the third quarter of next year. That's the main update for the quarter and year-to-date.

On the next slide, we zoom in on our U.S. manufacturing facilities in a tremendous effort to get this ready on time.

It was an existing building in which we equipped about 3,000 square meter, 30,000 square feet of the manufacturing facility. We have 16 clean rooms eventually there, in fact we have 16 [indiscernible] there, of which we now have four fully equipped and validated, qualified to start producing.

We will gradually increase that number, so have completed the necessary comparability studies, and indeed, the facility is ready to manufacture any time after the first U.S. patient will come into the study.

That concludes the business update. I hand over to Eric to take us through the financials for the quarter.

Thank you, Gil. Good morning, everyone.

We're now reviewing the key financial highlights for the first nine months of 2019, and we're starting with the P&L information. We're on Page 13 of this presentation.

As you can see, the net loss for the first nine months of the year was €43.3 million, which is an increase of €13.6 million over the same period of last year, which is mostly, or I should say entirely driven by the increase in operating loss, to increase €13.2 million to in the operating loss of €46.8 million, and that is comprised of an increase in pre-clinical and mostly clinical development activities, an increase by €11.3 million, which is of course mostly, mainly really to our Phase 3 trial, the TRYbeCA1 trial in pancreatic cancer. But also, the Phase 2 trial in triple-negative breast cancer, the TRYbeCA2 trial, and the NOPHO trial in leukemia.

In the same time, we had an increase in G&A, an increase of €3.2 million, of which a good part of it, more than half of it, €1.9 million, was actually related to the launch related activities of our U.S. production facility in Princeton, which is now GMP ready for clinical batches.

And finally, we had €1.2 million increase in other income. As you know, this other income is mostly comprised of grants and research tax credit from the French government, but the increase of the same period of last year was actually mostly related to the upfront milestone payments, which was upon the agreement of the Squeeze Biotech licensing deal in immune oncology, which we closed in June this year.

With that, I will then turn to the cash flow information on Page 14. As you can see, the net cash variation for the first nine months of the year was €52.4 million, which is indeed a net cash utilization for operating, investing and financing activities of €55.6 million.

And that was - as you can see, that was quite heavily impacted by our investing activities CapEx for the production increase activities we had earlier this year in Leon for the expansion of the Leon facility. And of course, in Princeton for the build and launch of our U.S.

production facility. So you may recall that we had a peak in cash utilization in the first quarter of this year, and now I should say that cash utilization is thought of back to normal with €16 million in the second quarter and now €12.5 million in the third quarter, which leads us to a total cash position at the end of September this year of €81.9 million, which is approximately $89.2 million.

This is perfectly in line with our expectations and also perfectly in line with the earlier cash guidance we have given of cash runway until the end of 2020. And I should say that we're also working on cost prioritization and cost saving initiatives to help us further stretch this cash runway into '21.

And now, turning to the wrap-up of this presentation with key milestones expected over the next 12 months. We are on Page 15 of this presentation.

You may recall that we started the year with the objective of having our GMP production ready at Princeton. So this is done.

We were also foreseeing the safety review by the end of the year for the TRYbeCA1 Phase 3 trial, and that is also done with the first 150 patients of the trial. Ahead of us now, we have the first U.S.

patients enrolled and treated in the TRybeCA1 U.S. arm, the Phase 3, and I should say this should be eminent now.

And then towards the first part of next year, 2020, we will have the initiation of the Phase 1 trial in first line pancreatic cancer. This is an ISD and investigator sponsored trial.

In the first part of the year also, we should see the interim results of the Phase 2, also an ISD trial, and this one is in acute lymphoblastic leukemia. That's what we call the NOPHO trial in the northern countries of Europe.

And finally, as Gil mentioned, towards Q3 next year, we're expecting the interim analysis in the TRYbeCA1 trial. That interim analysis is for superiority.

With that, I will turn the call over to the operator. I would like to remind you that for those of you who would like to ask questions in French, please of course feel free to do so.

[Foreign Language] And I would like to thank you for your attention. And now turning the call over to Cindy for the Q&A session.

Cindy, over to you.

Hi, this is Justin Walsh on for Rene. Congrats on the progress.

And my French is a little rusty, so I'll stick with English. The first question: as your enrollment has progressed, have you gotten a sense of the mix of patients who are taking gemcitabine versus FOLFIRI in the front line?

And do you still expect about the 60% of patients by the end of the trial to have taken gemcitabine?

I'll hand this over to Iman. I hope Iman - if you can answer this.

Yes. Hi, Justin and Rene.

Yes, we do expect that 2/3 of the patients approximately will have received gemcitabine in the second line setting. We just need also to remember right now, our most highly enrolling countries in Europe are; France always being in front of course, FOLFIRINOX is very prevalent [indiscernible]], and therefore, we have a predominance of gemcitabine in the second line setting.

But we do believe that that trait will continue to dominate as the trial reaches its final stage of completing enrollment.

Got it. Thank you.

And then one more question: will your Princeton and Leon facilities be sufficient to supply all of the clinical trials that you plan to initiate? And do you anticipate needing to add on any more facilities following a potential approval and launch?

Good question, Justin. So for the clinical trials, yes, we foresee that - given that both sites have - are also early commercial sites, I would say we clearly can cope with significant additional clinical trials if we would - during other indications.

Both sites are foreseen to be therefore the early commercial. And as commercial activity will be top, the plan is that indeed both in Europe and U.S., additional site will most likely be necessary.

We hope, in any case. And then the plan would be given also to sort of optimize logistics, et cetera.

For example, in the U.S., next site most likely more sort of West Coast based, and in Europe, a second site most likely the north of Europe based. This is still early days.

We have shown that we can equip and start a trial in a short period of time. So as soon as we see the commercial activity picking up, we will obviously make sure that we are ready so that we have lined up the options, and then that we can trigger them quickly for additional capacity.

Great. Thank you.

Congrats again.

Thank you.

Good morning and thank you for taking my questions. I was wondering: could you maybe share with us why do you expect the interim results of your rate of high opening for the [indiscernible]?

Good morning, Ingrid. I'm not sure I fully understood the question.

Can you repeat?

Yes, sure. So I was just wondering if you have estimated what is your rate of opening the U.S.

you are expecting to see? Maybe let's say for the next six months, how many sites do you expect to have open?

Yes. Okay.

Good question. So we target approximately 30 sites, and the plan is that that would be completed in the first quarter next year.

So in roughly six months to get them all open.

All right. Great.

Thank you.

Hi there, a couple of questions, if I could please. So first of all, just in terms of the number of sites in the U.S., I think you said previously that you were looking at around sort of 100 more sites in total for the trials.

So I'm just wondering now why we're already looking at 30 sites in the U.S. And then my second question for Eric: you mentioned looking at cost prioritization and savings to extend the cash runway.

What sort of things are you considering when you're looking at that, please? Thank you.

The first part of your question I will transfer to Iman again.

Yes, hi. Actually, we have been always getting guidance that we are looking at hundreds of importers in both Europe and United States, and the number we also expect to have maybe 70/30 or 60/40, but now coming down to the modern list of 70/30 split between Europe and the U.S.

So that has been that plan from that time initiated [ph].

So can I just ask though - are you going to open additional sites in Europe still? Because I think you're currently at about 50 sites in Europe.

We are actually going through the initiation and activation of getting meaning sites in Europe. So this process we've done.

We've completed our feasibility over a year and a half ago, and want to go through all the approval. Just waiting for the approval from different countries and the ethics committee.

And so now we are going through the initiation and activation process in Europe. So yes, we are operating approximately around 50 sites, but we expect to complete again the activation of all sites in Europe towards end of the year.

Okay. Thank you.

Hi Philippa, this is Eric. For your second question - so indeed, we are - well this is a work in progress, I should say.

But it's quite obvious that the two main focus of the company right now are A) execution - I should say perfect execution of our TRYbeCA1 study in the Phase 3 study, of course, and the second focus is to be very disciplined on cash to make sure that we keep the cash runway at least until the end of 2020 and possible into '21. So we are reviewing our portfolio of projects and activities in light of these two priorities and two focuses.

And so that will help us to make sure that we are spending our cash wisely and indeed, absolutely in line with these two major priorities.

Great. Thank you.

Thank you, Philippa.

Thank you. I want to thank everyone for your participation and attention, and obviously for your continued support and interest - supportive of Erytech and interest in Erytech.

We look forward to keeping you updated on the progress through the remainder of this year and next year. Our next appointment is somewhere in March for the full-year quarterly update.

So thanks for joining. I wish you a great day and weekend also that's approaching.

So thanks again.

Bye-bye.