 New interim data from Phase 2 ACCURACY study of AL101 for the treatment of RM ACC to be presented at ESMO 2020 On track to initiate patient dosing in Phase 2 TENACITY study of AL101 for the treatment of TNBC in 2020 REHOVOT, Israel and WILMINGTON, Del., Aug. 13, 2020 GLOBE NEWSWIRE -- Ayala Pharmaceuticals, Inc. Nasdaq: AYLA the Company or Ayala, a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, primarily in genetically defined patient populations, today reported financial results for the second quarter ended June 30, 2020 and highlighted recent progress and upcoming milestones for its pipeline programs.Our successful IPO in the second quarter represents an important step for Ayala as we work to make meaningful strides across our exciting programs. With a well-capitalized foundation on which to further develop our novel pipeline of therapies for genetically defined cancers, we are poised to execute across multiple milestones in the remainder of 2020 and through the first half of 2021, said Roni Mamluk, Ph.D., Chief Executive Officer of Ayala. We are looking forward to presenting new interim data from our Phase 2 ACCURACY study of AL101 for the treatment of ACC in September 2020, while also continuing to dose patients in the 6mg dose cohort of the study. Now more than ever, the need for innovation and drug development is evident and we are pleased by the additional clinical progress we have made to-date. This quarter our IND was accepted for our Phase 2 TENACITY study of AL101 monotherapy in patients with recurrent or metastatic triple negative breast cancer who have undergone up to three prior lines of therapy and we are on track to begin dosing patients this year.Key Business and Clinical Highlights Phase 2 TENACITY Study of AL101 For Treatment of Triple Negative Breast Cancer: In April 2020, the U.S. Food and Drug Administration FDA accepted the investigational new drug application IND for the Phase 2 TENACITY study of AL101 for the treatment of Triple Negative Breast Cancer TNBC. The FDA approved the dosing to commence at 6mg in a monotherapy study to evaluate TNBC patients bearing Notch activating mutations who have undergone 3 or fewer prior lines of therapy. Ayala has opened its first U.S. clinical site for the study. Upcoming Milestones New Interim Data from Phase 2 ACCURACY Study of AL101 for the Treatment of RecurrentMetastatic Adenoid Cystic Carcinoma to be Presented at European Society for Medical Oncology ESMO Virtual Congress 2020: Ayala will provide an oral presentation of new interim data from its ongoing Phase 2 ACCURACY study of AL101 for the treatment of recurrentmetastatic adenoid cystic carcinoma RM ACC harboring Notch activating mutations at the upcoming ESMO Virtual Congress 2020 on September 18, 2020, at 03:55 CEST. On Track to Begin Patient Dosing in Phase 2 TENACITY Study of AL101 for the Treatment of TNBC: Ayala expects to initiate patient dosing before year-end 2020 in the Phase 2 TENACITY study of AL101 for the treatment of TNBC harboring Notch activating mutations. On Track to Initiate Two Phase 2 Clinical Trials in 2021: Phase 2 Study of AL102 for the Treatment of Desmoid Tumors: Ayala expects to initiate a Phase 2 study of AL102, a potent, selective, oral gamma secretase inhibitor, in patients with desmoid tumors, a category of rare, disfiguring and often debilitating soft tissue tumors, in the first half of 2021. Phase 2 Study of AL101 for the Treatment of Relapsed or Refractory T-cell Acute Lymphoblastic Leukemia: Based on findings from Ayalas Phase 1 study of AL101 and supporting data from its preclinical studies, Ayala expects to initiate a Phase 2 study of AL101 for the treatment of relapsed or refractory T-cell acute lymphoblastic leukemia RR T-ALL, an aggressive and rare form of T-cell specific leukemia, in the first half of 2021.Second Quarter 2020 Financial Results Cash Position: Cash and cash equivalents were 57.4 million as of June 30, 2020, as compared to 16.7 million as of December 31, 2019. Ayala expects its existing cash balance to fund operations through multiple potential key clinical and development milestones into the second half of 2022. Collaboration Revenue: Collaboration revenue was 1.0 million for the second quarter of 2020 compared to 0.9 million for the same period in 2019. The increase in revenue was attributed to the advancement of Ayalas collaboration with Novartis for the development of AL102 in combination with Novartis anti-B-cell maturation antigen agent. RD Expenses: Research and development expenses were 5.1 million for the second quarter of 2020, compared to 3.4 million for the same period in 2019. The increase was primarily driven by additional costs in connection with the advancement of AL101 trials and other preclinical development. GA Expenses: General and administrative expenses were 1.5 million for the second quarter of 2020, compared to 1.0 million for the same period in 2019. The increase was primarily related to higher professional services and personnel costs to support the growth of the Company. Net IncomeLoss: Net loss was 6.7 million, or 0.74 loss per share, for the second quarter of 2020, compared to 3.8 million, or 0.76 loss per share, for the same period in 2019, mainly attributable to the advancement of the clinical trials and other preclinical development.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, primarily in genetically defined patient populations. Ayalas 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. Ayalas lead product candidate, 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. For more information, visit Investors: Julie Seidel Stern Investor Relations, Inc. 1-212-362-1200 Ayala Pharmaceuticals: 1-857-444-0553 Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements relating to our development of AL101 and AL102, the promise and potential impact of our preclinical or clinical trial data, the timing of and plans to initiate additional clinical trials of AL101 and AL102, upcoming milestones, including without limitation the timing and results of any clinical trials or readouts, the sufficiency of cash to fund operations, and upcoming events and presentations. These forward-looking statements are based on managements current expectations. The words may, will, should, expect, plan, anticipate, could, intend, target, project, estimate, believe, predict, potential or continue or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 