Cellectis Reports 1st Quarter 2018 Financial Results
Published on May 07, 2018 in New York (N.Y.)
- IND filed for UCART22 clinical investigation in ALL patients
- Allogene takes over Pfizer’s rights under the Research and License Agreement with Cellectis, to accelerate development and commercialization of allogeneic off-the-shelf UCART therapies
- Harvard’s Wyss Institute partners with Cellectis to recode the human genome using TALEN® gene editing technology
- Cash position of $282 million as of March 31, 2018
- Cash position above $450 million after taking into consideration the $190.5 million total gross proceeds from its follow-on offering of ADSs
May 7, 2018 – New York (N.Y.) – Cellectis (Euronext Growth: ALCLS - Nasdaq: CLLS), a clinical-stage biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic CAR T-cells (UCART), announced today its results for the three-month period ended March 31, 2018.
“2018 is off to a strong start for Cellectis and the message is clear – off-the-shelf, gene edited CAR T-cells are the next wave of innovation in oncology. As leaders and pioneers of this space, we continue to show our excellence, notably in manufacturing, which is a critical segment of the value chain, with the completion of the production of a 3rd UCART product, UCART22, enabling the recent IND filing in ALL. We are also excited about the ongoing clinical development of UCART123 in high-risk AML and BPDCN patients, and we will aim to accelerate our clinical trial timelines. Finally, after close to 4 years of a rewarding and productive partnership with Pfizer, Cellectis is thrilled by the assumption of this partnership by Allogene Therapeutics, Inc., which is a new company that was formed by Dr. Arie Belldegrun and Dr. David Chang, former top executives of Kite Pharmaceuticals. We believe that our collaboration with Allogene opens a huge opportunity to accelerate the development of certain of our allogeneic CAR T-cells that were developed together with Pfizer and Servier,” said André Choulika, Chairman and Chief Executive Officer, Cellectis.
“Furthermore, we are humbled by our recent partnership with Prof. George Church and Harvard’s Wyss Institute, utilizing the TALEN® gene editing technology in the Genome Recode Project—a project to recode the human genome and create the first ever virus-resistant human cells. This milestone project of modern biology will influence the future of gene editing in human science in this 21st Century.”
RECENT CORPORATE HIGHLIGHTS
Cellectis - Therapeutics
IND filing for UCART22 in Acute Lymphoblastic Leukemia (ALL)
On May 2, 2018, Cellectis filed an IND with the FDA for its UCART22 product candidate to be investigated in a Phase I clinical trial in ALL patients. This submission marks the third UCART product candidate IND application.
Harvard’s Wyss Institute partnership on Human Recode Project, part of GP-Write
On May 1, 2018, Cellectis announced that the Recode Project, a part of Genome Project-Write, will use Cellectis’ TALEN® gene editing technology to seek to create the first virus-resistant human cells for manufacturing therapeutics and develop new cell-based therapies. The cell lines would be engineered to be able to carry out their normal functions while being resistant to debilitating viral infections, and could offer synthetic biologists opportunities for engineering entirely new functions. The Recode Project is led by Prof. George Church, Core Faculty member at the Wyss Institute, Professor of Genetics at Harvard Medical School (HMS) and of Health Sciences and Technology at Harvard and the Massachusetts Institute of Technology (MIT).
Strategic collaboration with Allogene Therapeutics, Inc.
On April 3, 2018, Pfizer, Inc. (“Pfizer”) and Allogene Therapeutics, Inc. (“Allogene”) entered into an asset contribution agreement, the closing of which was announced on April 9, 2018, pursuant to which Allogene purchased Pfizer’s portfolio of assets related to allogeneic CAR T-cell therapy (the “Asset Contribution Transaction”), including the Research Collaboration and License Agreement dated June 17, 2014 (as amended from time to time, the “Collaboration Agreement”) signed between Pfizer and Cellectis. Cellectis remains eligible to receive clinical and commercial milestone payments of up to $2.8 billion, or $185 million per target for 15 targets, and tiered royalties in the high single digits on net sales of any products that are commercialized by Allogene under the Collaboration Agreement. As part of the Asset Contribution Transaction, Allogene has received Pfizer’s rights to UCART19, which were sub-licensed to Pfizer by Les Laboratoires Servier (“Servier”), which has an exclusive license to UCART19 from Cellectis under the Product Development, Option, License and Commercialization Agreement between Servier and Cellectis dated as of February 17, 2014.
We believe that this alliance with Allogene’s dedicated team will lead to a strong acceleration of CAR T therapies.
$190.5 million raised in a follow-on offering
On April 10, 2018, Cellectis closed a follow-on offering of 5,646,000 American Depositary Shares, each representing one ordinary share of Cellectis (“ADS”), at a public offering price of $31.00 per ADS.
Cellectis today announced that on May 4, 2018, the underwriters partially exercised their option to purchase additional ADSs with respect to 500,000 additional ADSs (the “Option”), under the same terms and conditions as the initial offering completed on April 10, 2018 of 5,646,000
ADSs at a public offering price of $31.00 per ADS. The settlement-delivery of the Option is contemplated on May 11, 2018, subject to customary conditions.
The gross proceeds for the Option are $15.5 million, bringing the total gross proceeds for the follow-on offering, as increased by the Option, to $190.5 million, before deducting the expenses related to the offering and the underwriting discounts and commissions payable by Cellectis.
The ADSs are listed on the Nasdaq Global Market under the symbol “CLLS” and Cellectis’ ordinary shares are listed on the Euronext Growth market of Euronext in Paris under the symbol “ALCLS”.
The Company intends to use the net proceeds from this offering (i) to establish commercial capabilities, including a proprietary state-of-the-art gene-edited cell manufacturing plant for commercial supplies for its current proprietary immuno-oncology UCART product candidates, (ii) to fund the advancement of one additional UCART product candidate, (iii) to pursue new human therapeutics approaches based on its proprietary gene editing technology outside of oncology and (iv) for working capital and other general corporate purposes.
Elsy Boglioli Named Chief Operating Officer
Following the retirement of Dr. Mathieu Simon as Executive Vice President and Chief Operating Officer, Elsy Boglioli was named Chief Operating Officer in March 2018. Prior to assuming the COO role, Ms. Boglioli served as Executive Vice President, Strategy and Corporate Development. Ms. Boglioli joined Cellectis in December 2017 from The Boston Consulting Group (BCG), where she served as Partner and Managing Director, and leader of BCG’s biotech-focused business in Europe.
American Association for Cancer Research (AACR) 2018 Annual Meeting
Cellectis and its academic partners presented at the AACR Annual Meeting held in Chicago in April 2018 three posters showcasing the Company’s allogeneic, off-the-shelf, CAR-T product candidates:
- Repurposing endogenous immune pathways to improve chimeric antigen receptor T-cells potency;
- Preclinical efficacy of allogeneic anti-CD123 CAR T-cells for the therapy of blastic plasmacytoid dendritic cell neoplasm (BPDCN); and
- Prediction of immunotherapy outcome by multimodal assessment of minimal residual disease and persistence of allogeneic anti-CD123 CAR T-cells (UCART123) in pre-clinical models of acute myeloid leukemia.
European society for Blood and Marrow Transplantation (EBMT) 2018 Annual Meeting
Preliminary data from the UCART19 clinical trials were presented at the 44th EBMT Annual Meeting in March 2018 in Lisbon, Portugal. UCART19, which is exclusively licensed to Servier, is an investigational allogeneic anti-CD19 CAR T-cell product, being studied in adult and pediatric patients with relapsed or refractory (R/R) CD19-positive B-cell acute lymphoblastic leukemia (B-ALL). Servier is the sponsor of both clinical trials.
Calyxt, Inc. – Cellectis’ plant science subsidiary
As of March 31, 2018, Cellectis owned approximately 79.1% of Calyxt, Inc.’s outstanding common stock. Calyxt’s common stock is listed on the Nasdaq market under the ticker symbol “CLXT”. Please refer to Calyxt’s Q1 2018 Earnings Press Release and its quarterly report on Form 10-Q for the period ended March 31, 2018 for further information.
Cellectis’ consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board (“GAAP”).
First quarter 2018 Financial Results
Cash: As of March 31, 2018 Cellectis had $282.1 million in total cash, cash equivalents and current financial assets compared to $ 297.0 million as of December 31, 2017. This decrease of $14.9 million primarily reflects (i) the net cash flows used by operating activities of $20.0 million, (ii) the net cash flows provided by investing activities of $0.6 million, partially offset by (iii) the net cash flows provided by financing activities of $3.5 million due to the exercise of Cellectis and Calyxt stock options during the period and (iv) the unrealized positive translation effect of exchange rate fluctuations on U.S. dollar cash and cash equivalents and current financial assets of $2.2 million.
We believe that our cash, cash equivalents and current financial assets, together with the net proceeds from our follow-on offering will be sufficient to fund our operations through 2021.
Revenues and Other Income: During the three-month periods ended March 31, 2017 and 2018, we recorded $10.3 million and $8.1 million, respectively, in revenues and other income. This decrease of $2.2 million is mainly due to (i) a $0.8 million decrease in revenues under our collaboration agreements, of which a $1.1 million decrease relates to lower research and development cost reimbursements, partially offset by a $0.3 million increase in recognition of upfront fees already paid to Cellectis, (ii) a $0.1 million increase in other licenses revenue, and (iii) a $1.5 million decrease in research tax credits due to lower research and development purchases and external expenses during the period that are eligible for the tax credit.
Total Operating Expenses: Total operating expenses for the three-month period ended March 31, 2018 were $33.0 million, compared to $30.0 million for the three-month period ended March 31, 2017. The non-cash stock-based compensation expenses included in these amounts were $12.0 million and $13.6 million, respectively.
R&D Expenses: For the three-month periods ended March 31, 2017 and 2018, research and development expenses decreased by $1.2 million from $19.6 million in 2017 to $18.4 million in 2018. Personnel expenses decreased by $1.8 million from $10.4 million in 2017 to $8.7 million in 2018, primarily due to a $2.7 million decrease in non-cash stock based compensation expense, partly offset by a $0.9 million increase in wages and salaries. Purchases and external expenses increased by $0.2 million from $8.7 million in 2017 to $8.9 million in 2018, mainly due to increased expenses related to payments to third parties participating in product development, purchases of biological raw materials, process development and expenses associated with the use of laboratories and other facilities. Other expenses relate to continuing leasing and other commitments by $0.4 million.
SG&A Expenses: During the three-month periods ended March 31, 2017 and 2018, we recorded $9.7 million and $14.0 million, respectively, of selling, general and administrative expenses. The increase of $4.3 million primarily reflects (i) an increase of $2.5 million in personnel expenses from $7.7 million to $10.2 million, attributable to a $1.4 million increase in wages and salaries, a $1.1 million increase in non-cash stock based compensation expense, (ii) a $1.6 million increase in purchases and external expenses and (iii) a $0.2 million increase of other expenses relate to taxes, various depreciation and amortization and other commitments.
Financial Gain (Loss): The financial loss was de minimis for the three-month period ended March 31, 2017 compared with financial loss of $2.1 million for the three-month period ended March 31, 2018. The change in financial result was mainly attributable to (i) the decrease in net foreign exchange gain ($1.0 million), and (ii) the decrease of foreign exchange derivatives fair value ($1.1 million).
Net Income (Loss) Attributable to Shareholders of Cellectis: During the three-month periods ended March 31, 2017 and 2018, we recorded a net loss attributable to shareholders of Cellectis of $19.8 million (or $0.56 per share) and a net loss attributable to shareholders of Cellectis of $25.4 million (or $0.71 per share), respectively. Adjusted net loss attributable to shareholders of Cellectis for the three-month period ended March 31, 2018 was $14.2 million ($0.39 per share) compared to adjusted net loss attributable to shareholders of Cellectis of $6.2 million ($0.17 per share), for the three-month period ended March 31, 2017. Adjusted loss attributable to shareholders of Cellectis for the three-month periods ended March 31, 2018 and 2017 excludes a non-cash stock-based compensation expense of $11.3 million and $13.6 million, respectively. Please see "Note Regarding Use of Non-GAAP Financial Measures" for a reconciliation of GAAP net income (loss) attributable to shareholders of Cellectis to Adjusted income (loss) attributable to shareholders of Cellectis.
 Cash position includes cash, cash equivalent and current financial assets.