Ayala Pharmaceuticals, Inc. (NASDAQ: AYLA), a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, today announced that it has entered into a definitive agreement for the sale of its equity securities in a private placement to institutional investors, including Redmile Group and SIO Capital Management.

"We are very excited to have obtained additional funding enabling us to execute on our strategic priorities and support business growth from high quality US healthcare dedicated funds, which we also expect will extend our cash runway into 2023,” said Roni Mamluk, Ph.D., Chief Executive Officer of Ayala. “Ayala is well capitalized as we approach several key milestones planned for the remainder of 2021. We look forward to initiating our pivotal Phase 2/3 study of AL102 for the treatment of desmoid tumors in the first half of this year and presenting data from our Phase 2 study of AL101 for the treatment of recurrent/metastatic adenoid cystic carcinoma and triple negative breast cancer later this year.”

The agreement provides for the sale of an aggregate of 1,666,666 units at a price of $15 per unit. Each unit consists of one share of Ayala’s common stock and a warrant to purchase 0.35 of a share of common stock at an exercise price of $18.10 (the “Warrant”). One institutional investor has elected to receive pre-funded warrants to purchase common stock in lieu of its common stock. The Warrants are exercisable at any time during the period beginning on the closing date of the private placement and ending on the third anniversary of the closing. The gross proceeds from the sales of common stock are expected to be approximately $25 million, before deducting placement agent fees and offering expenses. The private placement is expected to close on or about February 23, 2021, subject to the satisfaction of customary closing conditions.

Jefferies LLC is acting as the exclusive placement agent for the private placement.

Based on Ayala’s current plans, it believes that its existing cash and cash equivalents and short-term restricted bank deposits, with the expected net proceeds from the private placement, will be sufficient to fund its operating expenses and capital expenditure requirements through multiple expected catalysts into 2023.

The securities to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (Securities Act), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Ayala Pharmaceuticals

Ayala Pharmaceuticals, Inc. is a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers. Ayala’s approach is focused on predicating, identifying and addressing tumorigenic drivers of cancer through a combination of its bioinformatics platform and next-generation sequencing to deliver targeted therapies to underserved patient populations. The company has two product candidates under development, AL101 and AL102, targeting the aberrant activation of the Notch pathway with gamma secretase inhibitors to treat a variety of tumors including Adenoid Cystic Carcinoma, Triple Negative Breast Cancer (TNBC), T-cell Acute Lymphoblastic Leukemia (T-ALL), Desmoid Tumors and Multiple Myeloma (MM) (in collaboration with Novartis). AL101 has received Fast Track Designation and Orphan Drug Designation from the U.S. FDA and is currently in a Phase 2 clinical trial for patients with ACC (ACCURACY) bearing Notch activating mutations and in a Phase 2 clinical trial for patients with TNBC (TENACITY) bearing Notch activating mutations and other gene rearrangements. AL102 is currently being advanced to a Phase 2/3 clinical trials for patients with desmoid tumors (RINGSIDE). For more information, visit www.ayalapharma.com.