DGAP-News: ERYTECH PHARMA SA: Business Update and Financial Results for the First Half of 2014


DGAP-News: ERYTECH PHARMA SA / Key word(s): Half Year Results
ERYTECH PHARMA SA: Business Update and Financial Results for the First
Half of 2014

02.09.2014 / 18:00

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ERYTECH Business Update and Financial Results for the First Half of 2014 

  - Clinical trials on track and two new studies started

  - Shareholder base further internationalized

  - Solid cash balance 
 

Lyon (France), September 2nd, 2014 - ERYTECH (Euronext Paris: FR0011471135
- ERYP), the French biopharmaceutical company that develops innovative
'tumor starvation' treatments for acute leukemia and other oncology
indications with unmet medical needs, provides a business update and
reports its financial results for the period ending June 30, 2014.

Business Highlights

  - Phase III clinical study in Acute Lymphoblastic Leukemia (ALL) on track
    for results early Q4

  - International sites opened in Phase IIb Acute Myeloid Leukemia (AML)
    study and positive Data Safety Monitoring Board (DSMB) assessment after
    first 60 patients

  - Phase II study launched in pancreatic cancer; first patient enrolled

  - Phase I study in ALL launched in the USA; first patient enrolled

  - Orphan drug designation granted to ERY-ASP  in AML in the USA

  - New oncology product candidate added (ERY-MET) and preclinical
    development programs on track

  - IP portfolio reinforced

  - Board of directors strengthened with two new independent members

Financial Highlights

  - Shareholder base further internationalized after successful share
    replacement operation

  - Net loss reduced and operating costs maintained notwithstanding
    increased activity level

  - Cash balance of EUR 12.3  million on June 30, 2014 

Upcoming Milestones

  - Results of European Phase III ALL study 

  - DSMB analysis for safety and futility in Phase IIb AML study 

  - First DSMB update on Phase II pancreas cancer study 

"ERYTECH has made important progress during the first half of 2014. We have
advanced our clinical trials in acute leukemia according to plan and we
have made substantial headway in broadening our scope in solid tumors. We
are also advancing our preclinical pipeline with new products in oncology.
In addition we were able to strengthen our shareholder structure, with
additional specialized investors in the US and Europe, as well as our
board, with two new independent directors.", commented Gil Beyen, Chairman
and Chief Executive Officer of ERYTECH.

Business Update

Phase III clinical study in ALL on track for results early Q4

In August 2013, ERYTECH completed patient enrollment in its pivotal Phase
III study in Acute Lymphoblastic Leukemia (ALL). The last one-year follow
up visit took place in August. Data base cleaning is ongoing and ERYTECH
expects to communicate top-line results early Q4. The study is comparing
GRASPA(R) with native asparaginase in a randomized, controlled, multicenter
clinical trial with 80 children and adults suffering from relapsing or
refractory ALL. The study was launched in 2009 as a Phase II/III study with
an adaptive design protocol.

International sites opened in Phase IIb AML study and positive DSMB
assessment after first 60 patients

In March 2013, ERYTECH initiated a multicenter, open, randomized,
controlled Phase IIb trial evaluating the efficacy and tolerability of
GRASPA(R) in the treatment of newly diagnosed Acute Myeloid Leukemia (AML)
patients, over 65 years of age, unfit for intensive chemotherapy.

Today, more than half of a total of 123 patients have been enrolled in the
study in 15 active centers in France. The company has recently received
regulatory authorizations for this trial in Spain, Finland, Germany and
Italy, and the first 4 sites outside France have been initiated. The
opening of these European centers will internationalize the study and
further accelerate patient enrollment.

Last week the company announced that an independent Data and Safety
Monitoring Board (DSMB) completed its second safety assessment of the study
and unanimously recommended continuation of the trial without modification.
This second DSMB assessment was based on a pre-planned safety analysis on
the first 60 patients included in the study and with a minimum of 1 month
follow-up. A first DSMB assessment took place at the end of 2013 when 30
patients had been treated in the study. The next step will be another DSMB
analysis, this time for safety and futility, when 60 patients will have
experienced an event in the study. This analysis is foreseen by the end of
this year.

Phase II trial launched in pancreatic cancer; first patient enrolled 

After the completion of a Phase I study in late stage pancreas cancer, in
which the tolerability of ERY-ASP was found acceptable in this fragile
patient population, ERYTECH launched a Phase II study in 2014 in second
line treatment of patients with progressive metastatic pancreas cancer.
Clinical trial authorization was received in April by the ANSM, the French
authority for drug safety. The first patient was enrolled in July 2014.

The study is planned for 90 patients whereby ERY-ASP in addition to the
standard of care will be compared to the standard of care alone in a 2-to-1
randomization. The primary endpoint is progression-free survival (PFS) at 4
months. Professor Pascal Hammel, gastro-enterologist specialized in
digestive oncology at Hôpital Beaujon (Clichy-Paris, France), is the
primary investigator of the study.

Phase I/II study in ALL launched in the USA; first patient enrolled 

Having received Investigational New Drug (IND) clearance from the US Food
and Drug Administration (FDA) in 2013 to start a Phase I clinical trial of
ERY-ASP in ALL, ERYTECH has launched a dose escalating study in 12 to 18
ALL patients earlier this year. Three centers are currently open for
patient recruitment (The University of Chicago, Duke University Medical
Center and Ohio State University) and the first patient was recently
enrolled and treated.

The investigational drug has been produced at ERYTECH's manufacturing
facility in Philadelphia. Through a manufacturing agreement with the
American Red Cross, this facility is operational for GMP production of
clinical batches. Professor Larson, Director of the Hematological
Malignancies Clinical Research Program at the University of Chicago is the
principal investigator of the study.

Orphan drug designation granted to ERY-ASP in AML in the USA

In March 2014, FDA granted Orphan Drug Designation (ODD) to ERY-ASP in AML.
In the USA, an ODD is generally granted to drugs or biologics intended for
treatment of rare diseases and disorders of high unmet medical need,
affecting fewer than 200,000 people. This designation contains additional
incentives to the sponsor, including seven years of US market exclusivity
for the drug after regulatory approval.

The latest ODD is the seventh for ERYTECH. GRASPA(R)/ERY-ASP now benefits
from ODD in all three of its lead indications: ALL, AML and pancreas
cancer, both in Europe and the USA.

New product candidate added and preclinical development programs on track

Progress has been made in the preclinical development in the field of
oncology:

  - The work done in the government co-funded TEDAC program to broaden the
    use of ERYTECH's encapsulation technology to other enzymes has led to
    the identification of a promising new drug candidate, ERY-MET. ERY-MET
    consists of methionine-γ-lyase (MGL) encapsulated inside red blood
    cells. Using its proprietary encapsulation technology, ERYTECH has
    succeeded the encapsulation of MGL with a good stability and an
    extended half-life. Based on these promising preclinical results, the
    company will continue with the preclinical development to the stage of
    clinical trials. The industrial scale-up of the manufacturing will be
    initiated to enable a first-in-man Phase I study by the end of 2015;

  - In view to potentially launching additional studies with ERY-ASP in
    solid tumors, different potential indications have been evaluated for
    their sensitivity to asparaginase: next to pancreas cancer,
    opportunities are being investigated in Non Hodgkin lymphoma, multiple
    myeloma, liver cancer, bladder cancer and ovarian cancer.

IP portfolio reinforced

During the first half of 2014, ERYTECH received notice of allowance from
the European Patent Office of a key patent covering its lead product
ERY-ASP for the treatment of pancreas cancer. The patent entitled
"Medicament for the Treatment of Cancer of the Pancreas" was already
granted in Australia, Israel and Singapore.

ERYTECH's core process patent was also recently granted in India. This
patent entitled "Lysis/Resealing Process for Preparing Erythrocytes" was
already granted in Europe, US, Japan, China, Hong-Kong, Australia and
South-Korea.

As of mid-2014 ERYTECH was the holder of 13 patent families, covering the
technology platform and applications thereof in and outside oncology, as
well as an exclusive license from the National Institutes of Health (USA),
covering a diagnostic method to predict the efficacy of L-asparaginase.

Board of Directors strengthened with two new independent members

At the General Shareholder's meeting in June 2014, two new independent
members have been appointed to the Board of Directors:

  - Martine George, M.D. is an experienced, US based clinical research,
    medical affairs and regulatory affairs executive, both in large and
    small oncology companies. Until recently, Dr George was Vice President
    Global Medical Affairs, Oncology at Pfizer in New York. Her previous
    functions before Pfizer included Chief Medical Officer at GPC Biotech
    in Princeton and Head of oncology at Johnson & Johnson in New Jersey.
    Martine is a board certified Medical Oncologist and Gynecologist,
    trained in France and Montréal. She started her career as a clinician
    as Service Chief at Institut Gustave Roussy in France and as Visiting
    Professor at Memorial Sloan Kettering Cancer Center in New York.

  - Hilde Windels has over 20 years' experience in corporate finance,
    capital markets and strategic initiatives. She is the Chief Financial
    officer of Biocartis, a molecular diagnostics and immunodiagnostics
    company based in Belgium and Switzerland. Before Biocartis, Hilde was
    Devgen's CFO (Euronext: DEVG) from 1999 until the end of 2008 and
    member of Devgen's board from 2001 until the end of 2008. From early
    2009 to mid 2011, she worked as independent CFO for a few private
    biotechnology companies, and she was on the board of MDX Health
    (Euronext: MDXH) from June 2010 until end of August 2011.

Kurma Life Science Ventures, represented by Mrs Vanessa Malier and
representing Idinvest on the ERYTECH board has resigned from the Board. The
Board of Directors wish to thank Idinvest, Kurma Life Sciences and Vanessa
Malier for their contributions to the company.

Financial Update

Shareholder base further internationalized after successful share
replacement operation

In February 2014, certain of the historical institutional investors of
ERYTECH have sold part of their holdings to new investors in a successful
share replacement operation. Under the deal, 17.5% of its capital initially
held by these shareholders was placed with new specialized life sciences
investors based in the USA and Europe. The USA represented more than 35% of
the placement.

Net loss reduced and operating expenses stable notwithstanding increased
activity level

The net loss for the first half of 2014 amounted to EUR3.2 million,
compared to EUR 4.1 million for the same period the year before. This
decrease of EUR0.9 million is essentially the result of a reduction of
financial charges related to loans that have been converted at the time of
the IPO in May 2013, by EUR1.1 million. This decrease was, partly
compensated by somewhat lower grants income and higher operational charges
(each by approx. EUR0.1 million).

The slight increase in operational expenses is caused by a decrease in
total Research & Development (R&D) and Clinical trial costs by EUR0.4
million and an increase in General & Administration (G&A) costs with EUR0.5
million.

  - The decrease in R&D costs (by EUR0.2 million) is related to reduced
    development activity on GRASPA(R) and focalization on the TEDAC and
    ERY-MET programs;

  - Lower clinical trial costs (also by approximately EUR0.2 million) are
    related to the completion of the Phase III ALL study enrollment and to
    the fact that the costs of the largest trial, the AML Phase II study,
    are carried by our partner Orphan Europe (Recordati Group);

  - The increase in G&A costs are mainly related to the development of our
    activities in the USA and the increased communication and investor
    relations activities following our Initial Public Offering (IPO) in May
    2013.

Solid cash balance of EUR 12.3 million 

ERYTECH has a strong balance sheet with cash and cash equivalents of
EUR12.3 million at end of June 2014, compared with EUR15.1 million on
December 31, 2013.

Total cash consumption for the period has been EUR2.8 million, approx.
EUR0.5 million per month.

ERYTECH's key financial figures for the first half of 2014 compared with
the same period the previous year are summarized below:

Key figures (in thousands of euros):

                                  1H 2014                           1H 2013
Sales                                   0                                 0
Other income (grants)                 722                               858
Operating income                      722                               858
Research & Development               -941                            -1,157
Clinical trials                      -767                              -992
Intellectual property                -207                              -198
General & Admin                     -1991                            -1,450
Total operating costs              -3,905                            -3,797
Operating result                   -3,183                            -2.939
Financial result                        4                            -1,123
Taxes                                  -4                                 6
Net result                         -3,184                            -4,056


The financial report for the semester ending June 30, 2014, approved by the
Board of Directors on August 29, 2014, is available on ERYTECH's website
(www.erytech.com). The report has been subject to a limited review
procedure by the company's statutory auditors.

Next financial updates:

  - Financial highlights for the 3rd quarter of 2014: Tuesday, 4 November
    2014 (after market close)

Upcoming participations at investor conferences:

  - SG Société Générale Healthcare & Biotechnology Conference, September
    24, Paris

  - CF&B Large & Midcap Event, October 2-3 in Paris

  - BioEurope, November 3-5 in Frankfurt

  - Jefferies Global Healthcare Conference, November 19-20 in London

  - Salon Actionaria, November 21-22 in Paris

  - German Equity Forum, November 25-26 in Frankfurt 

About ERYTECH: www.erytech.com

Created in Lyon in 2004, ERYTECH is a French biopharmaceutical company
providing new prospects for cancer patients, particularly those with acute
leukemia and selected solid tumors.

By encapsulating the asparaginase enzyme in red blood cells, ERYTECH has
developed ERY-ASP/GRASPA(R), an original treatment that targets cancer
cells through "tumor starvation" while significantly reducing the side
effects for patients. ERY-ASP/GRASPA(R) is currently completing Phase III
clinical development in Acute Lymphoblastic Leukemia (ALL) and is in Phase
IIb clinical trial in Acute Myeloid Leukemia (AML) in Europe. The product
is also in Phase I/II clinical development in ALL in the USA.

Every year about 50,000 patients are diagnosed with Acute Lymphoblastic
Leukemia (ALL) or Acute Myeloid Leukemia (AML), the two forms of acute
leukemia. Today, for about 80% of these patients, mainly adults and
relapsing patients, current forms of asparaginase cannot be used due to
their toxicity. With a presumed improved safety profile, ERY-ASP is being
developed to allow all leukemia patients to be treated, even the most
fragile ones, representing a market opportunity of more than EUR 1 billion.

The company is also developing other indications in solid tumors and
certain orphan indications outside oncology. The company is currently
launching a Phase II study in pancreas cancer and it exploring other solid
tumor indications.

ERYTECH has obtained orphan drug designations for ERY-ASP/GRASPA in ALL,
AML and pancreas cancer, both in Europe and the USA, and has its own
GMP-approved and operational manufacturing site in Lyon (France), and a
site for clinical production in Philadelphia (USA).

The company has concluded licensing and distribution partnership agreements
for ALL and AML in Europe with Orphan Europe (Recordati Group), and for ALL
with TEVA in Israel.

ERYTECH is listed on Euronext regulated market in Paris. (ISIN code:
FR0011471135, ticker: ERYP) and is part of the CAC Healthcare, CAC Pharm. &
Bio and Next Biotech indexes.

Forward-looking information

This document may contain forward-looking statements and estimates with
respect to the financial situation, the results of operations, the
strategy, the project and to the anticipated future performance of ERYTECH
and of the market in which it operates. Certain of these statements,
forecasts and estimates can be recognized by the use of words such as,
without limitation, "believes", "anticipates", "expects", "intends",
"plans", "seeks", "estimates", "may", "will" and "continue" and similar
expressions. They include all matters that are not historical facts. Such
statements, forecasts and estimates are based on various assumptions and
assessments of known and unknown risks, uncertainties and other factors,
which were deemed reasonable when made but may or may not prove to be
correct. Actual events are difficult to predict and may depend upon factors
that are beyond the Company's control. Therefore, actual results, the
financial condition, performance or achievements of ERYTECH, or industry
results, may turn out to be materially different from any future results,
performance or achievements expressed or implied by such statements,
forecasts and estimates. Documents filed by ERYTECH Pharma with the French
Autorité des Marchés Financiers (www.amf-france.org), also available on our
website (www.erytech.com) describe such risks and uncertainties. Given
these uncertainties, no representations are made as to the accuracy or
fairness of such forward-looking statements, forecasts and estimates.
Furthermore, forward-looking statements, forecasts and estimates only speak
as of the date of the publication of this document. ERYTECH disclaims any
obligation to update any such forward-looking statement, forecast or
estimates to reflect any change in the Company's expectations with regard
thereto, or any change in events, conditions or circumstances on which any
such statement, forecast or estimate is based, except to the extent
required by French law.

CONTACTS

ERYTECH                          NewCap.                                
Gil Beyen                        Julien Perez / Emmanuel Huynh
Chairman and CEO                 Investor and press relations
Pierre-Olivier Goineau           Tel: +33 1 44 71 98 52
Vice President and COO           erytech@newcap.fr
Tel: +33 4 78 74 44 38
investors@erytech.com



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