Cellectis Reports Financial Results for Third Quarter and First Nine Months 2019

• First patient dosed with UCARTCS1 in MELANI-01 Phase 1 dose-escalation clinical trial for Relapsed/Refractory Multiple Myeloma
• Patient screening ongoing with UCART22 in BALLI-01 Phase 1 dose-escalation clinical trial for Relapsed/Refractory B-cell Acute Lymphoblastic Leukemia
• Grant of a new IND for UCART123 following a change in production process and site initiation ongoing for AMELI-01 Phase 1 dose-escalation clinical trial for Relapsed/Refractory Acute Myeloid Leukemia
• Francisco Esteva, M.D., Ph.D., joined team as Vice President, Clinical Development
• Milestone payment related to ALLO-715 (BCMA target) clinical development
• Cash position^[1] of $367 million as of September 30, 2019

 

November 6, 2019 – New York – Cellectis (Euronext Growth: ALCLS; Nasdaq: CLLS), a clinical-stage biopharmaceutical company focused on developing immunotherapies based on allogeneic gene-edited CAR T-cells (UCART), today announced its results for the three-month and nine-month periods ended September 30, 2019.

“The third quarter of 2019 has been essential for our execution strategy, as we achieved a series of important key milestones that enable us to move our proprietary allogeneic UCART product candidates into Phase 1 clinical trials,” said Dr. André Choulika, Chairman and CEO, Cellectis. “We are pleased to announce the first patient dosing in our MELANI-01 clinical trial for UCARTCS1, our UCART product candidate in relapsed/refractory multiple myeloma. We are also building out our clinical leadership team with the core addition of oncology veteran Dr. Francisco Esteva, M.D., Ph.D., as VP, Clinical Development. Following Novartis’ acquisition of CellforCure, our first CMO partner, at the beginning of 2019, we strengthened our manufacturing capabilities with the addition of our new CMO partner, Lonza, in addition to our existing partner MolMed S.p.A., while we remain on track with the construction of our in-house manufacturing facilities SMART and IMPACT. With three partnered and three stand-alone clinical development programs ongoing in hematology, Cellectis continues to be best-positioned to find new cures for cancers leveraging its core proprietary technologies.”

Cellectis will hold a conference call for investors on Thursday, November 7, 2019 at 8:00 AM EST / 2:00 PM CET. The call will discuss the Company’s third quarter results, as well as an update on business activities for the first nine months of 2019.

The live dial-in information for the conference call is:

US & Canada only: 877-407-3104

International: 201-493-6792

In addition, a replay of the call will be available until November 21, 2019 by calling 877-660-6853 (Toll Free US & Canada); 201-612-7415 (Toll Free International), Conference ID: 13688263

Third Quarter and First Nine Months 2019 Highlights

Wholly Owned Pipeline Updates

• MELANI-01: The Phase 1 dose-escalation clinical trial for UCARTCS1 targeting relapsed/refractory multiple myeloma has dosed its first patient and officially commenced at the University of Texas MD Anderson Cancer Center (Texas, USA). The clinical trial is also enrolling at Hackensack University Medical Center (New Jersey, USA) and a third site is planned to open at Weill Cornell Medicine (New York, USA).
• BALLI-01: The Phase 1 dose-escalation clinical trial for UCART22 targeting relapsed/refractory B-cell acute lymphoblastic leukemia (B-ALL) is ready to enroll patients at the University of Texas MD Anderson Cancer Center (Texas, USA), The University of Chicago Medicine Comprehensive Cancer Center (Illinois, USA) and Weill Cornell Medicine (New York, USA)
• AMELI-01: We obtained a new IND number from the FDA in July 2019 for a new production process for UCART123. We are currently initiating sites for the Phase 1 dose-escalation clinical trial targeting relapsed/refractory acute myeloid leukemia (AML) at Weill Cornell Medicine (New York, USA), the University of Texas MD Anderson Cancer Center (Texas, USA), H. Lee Moffitt Cancer Center (Florida, USA) and Dana Farber Cancer Institute (Massachusetts, USA).

Scientific Publications

In February 2019, we announced the publication of a study in The Journal of Biological Chemistry, identifying Granulocyte Macrophage Colony Stimulating Factor (GMCSF) secreted by Chimeric Antigen Receptor (CAR) T-cells as a key factor in promoting cytokine release syndrome (CRS). The report leverages these findings to elaborate on an innovative engineering strategy that potentially paves the way for developing safer UCART products.

This publication is significant because Cellectis’ engineering strategy could circumvent toxic side effects such as CRS and neurotoxicity, thereby aiming to develop safer, yet equally potent, UCART product candidates in an effort to improve patients’ safety and quality of life during treatment.

On July 8, 2019, we announced the publication of a study in BMC Biotechnology, a Springer Nature journal, which described and evaluated the development of the SWIFF-CAR, a CAR construct with an embedded on/off-switch, which enables tight control of the CAR surface presentation and subsequent cytolytic functions using a small molecule drug.

This publication represents a promising approach to further mitigate the potential toxicities that are associated with CAR T-cell administration in clinical settings and to improve the process of CAR T-cell production for specific target antigens.

New Appointment

Francisco Esteva, M.D., Ph.D., joined Cellectis as Vice President, Clinical Development. He is responsible for overseeing U.S. medical activities and works with the Clinical Operations team to supervise and ensure the safety of clinical trials. Dr. Esteva currently serves as Adjunct Professor at NYU School of Medicine. He was most recently Director of Breast Medical Oncology and Associate Director of Clinical Investigation at NYU Langone Health’s Perlmutter Cancer Center, and Professor of Medicine at NYU School of Medicine. Prior to this, he was Professor of Medicine (Oncology) at The University of Texas MD Anderson Cancer Center, where he developed a successful program in translational and clinical research focused on HER2 targeted therapy. His training included MD/PhD degrees from the University of Zaragoza (Spain), a Residency in Internal Medicine at Cooper University Hospital (Camden, NJ) and a Fellowship in Medical Oncology at Georgetown University Medical Center (Washington DC). Dr. Esteva is an international thought leader for innovation in cancer care and clinical research. He is an elected member of the American Society of Clinical Investigation and a Fellow of the American College of Physicians. His research and clinical achievements have contributed to the approval of life-saving therapies in breast cancer.

Manufacturing

In March 2019, Cellectis announced its lease agreement for an 82,000 square foot commercial-scale manufacturing facility, called IMPACT, which stands for “Innovative Manufacturing Plant for Allogeneic Cellular Therapies”. This new site, located in Raleigh, North Carolina, is being designed to provide GMP manufacturing for clinical supplies and commercial manufacturing upon regulatory approval. The facility is planned to be operational by 2021.

In addition to IMPACT, Cellectis is building a 14,000 square foot manufacturing facility in Paris, France, named SMART, which stands for “Starting Material Realization for CAR-T Products”. This facility is designed to produce Cellectis’ critical starting material supplies for UCART clinical studies and commercial products.

Following Novartis’ acquisition of CellforCure, our first CMO partner, at the beginning of 2019, Cellectis announced, in October 2019, its new cGMP Manufacturing Service Agreement with Lonza for implementing Cellectis’ manufacturing processes in a way that meets the highest quality and safety standards outlined by the FDA and European counterparts. This contract complements not only the Company’s in-house work that is planned for IMPACT and SMART projects, but also the efforts of MolMed, Cellectis’ other contract manufacturing partner.

Patents

Over 2019, Cellectis has been granted the highest number of patents since the Company’s inception in 1999, in particular patents relevant to UCART19 (Japan), UCART123 (Europe), UCARTCS1 (Europe), UCART33 (Europe), UCARTBCMA (USA), UCART Alemtuzumab resistant (USA, Japan), Drug Resistant UCART (Europe), TALEN^® technology (USA), Mega-TAL TCR (Europe and Japan).

Additional US patents have been granted with respect to Cellectis’ exclusive licenses on CAR CS1 (US 10,227,409 and US 10,358,494 from the Ohio State University) and 7^th patent on the TALEN^® technology (US 10,358,494 from the University of Minnesota).

Partnered Pipeline Updates

UCART19/ALLO-501 product candidate, initially developed by Cellectis and exclusively licensed by Cellectis to Servier, is being clinically tested under a joint clinical development collaboration between Servier and Allogene Therapeutics. UCART19/ALLO-501 product candidate utilizes the TALEN^® gene-editing technology pioneered and owned by Cellectis. Allogene has exclusive rights to UCART19/ALLO-501 in the U.S. while Servier retains exclusive rights for all other countries. The development of UCART19 product candidate for the treatment of relapsed/refractory acute lymphoblastic leukemia (ALL) is sponsored by Servier. The development of ALLO-501 product candidate for the treatment of relapsed/refractory non-Hodgkin lymphoma (NHL) is sponsored by Allogene.

In April 2019, our licensee, Allogene presented preclinical data demonstrating the potential for allogeneic CAR-T therapy in renal cell carcinoma (RCC) at the 2019 AACR annual meeting. CD70, which is expressed on both hematologic malignancies and solid tumors, may bridge the gap toward unlocking the potential of allogeneic CAR-T therapy in solid tumors. The anti-CD70 product candidate is licensed exclusively from Cellectis to Allogene. Allogene holds global development and commercial rights to the anti-CD70 product candidate.

Based on the terms of the agreement, Cellectis is entitled to receive a $5 million milestone payment associated with the initiation of the study of ALLO-715 product candidate, an allogeneic CAR-T therapy targeting B-cell maturation antigen (BCMA) in relapsed/refractory multiple myeloma. As a reminder, each of the 15 targets licensed to Allogene by Cellectis carries $185 million in pre-commercial development milestones per target as well as high single-digit royalties on worldwide sales payable to Cellectis.

Financial Results

The interim condensed consolidated financial statements of Cellectis, which consolidate the results of Calyxt, Inc. of which Cellectis is a 69.1% stockholder, have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board (“GAAP”).

We present certain financial metrics broken out between our two reportable segments – Therapeutics and Plants – in the appendices of this Q3 2019 and First Nine Months 2019 financial results press release.

Third Quarter and First Nine Months 2019 Financial Results

Cash: As of September 30, 2019, Cellectis, including Calyxt had $367 million in consolidated cash, cash equivalents, current financial assets and restricted cash of which $299 million are attributable to Cellectis on a stand-alone basis. This compares to (i) $401 million in consolidated cash, cash equivalents, current financial assets and restricted cash as of June 30, 2019 of which $323 million was attributable to Cellectis on a stand-alone basis and (ii) $453 million in consolidated cash, cash equivalents, current financial assets and restricted cash as of December 31, 2018, of which $358 million were attributable to Cellectis on a stand-alone basis. This net decrease of $86 million for the nine-month period ended September 30, 2019 primarily reflects $66 million in net cash flows used by operating activities, of which $42 million are attributable to Cellectis, and $10 million in acquisitions of property, plant and equipment. We believe that the cash, cash equivalents, current financial assets and restricted cash position of Calyxt will be sufficient to fund their operations to mid-2021 while Cellectis only as of September 30, 2019 will be sufficient to fund operations into 2022.

Revenues and Other Income: Consolidated revenues and other income were $10 million for the three months ended September 30, 2019 compared to $2 million for the three months ended September 30, 2018. Consolidated revenues and other income were $17 million for the nine months ended September 30, 2019 compared to $18 million for the nine months ended September 30, 2018. 79% of consolidated revenues and other income was attributable to Cellectis in the first nine months of 2019. This decrease of $1 million between the nine months ended September 30, 2019 and 2018 was mainly attributable to a decrease in recognition of upfront payments already received and R&D cost reimbursements in relation to our therapeutic collaborations, and other income. That was partially offset by a $5 million milestone associated with the initiation of the study of ALLO-715, which became payable and was recognized by Cellectis, and $3.3 million increase in Calyxt revenues due to higher sales volumes of its High Oleic Soybean Oil and High Oleic Soybean Meal.

R&D Expenses: Consolidated R&D expenses were $22 million for the three months ended September 30, 2019 compared to $19 million for the three months ended September 30, 2018. Consolidated R&D expenses were $62 million for the nine months ended September 30, 2019 compared to $55 million for the nine months ended September 30, 2018. 86% of consolidated R&D expenses was attributed to Cellectis in the first nine months of 2019. The $7 million increase between the nine months ended September 30, 2019 and 2018 was primarily attributed to higher employee expenses by $4 million, higher social charges on stock option grants by $1 million, higher purchases and external expenses by $3 million and higher other expenses by $4 million. This increase was partially offset by the reduction of non-cash stock-based compensation expenses by $5 million.

SG&A Expenses: Consolidated SG&A expenses were $11 million for the three months ended September 30, 2019 compared to $12 million for the three months ended September 30, 2018. Consolidated SG&A expenses were $34 million for the nine months ended September 30, 2019 compared to $37 million for the nine months ended September 30, 2018. 44% of consolidated SG&A expenses was attributed to Cellectis in the first nine months of 2019. The $3 million decrease between the nine months ended September 30, 2019 and 2018 was primarily attributed to the reduction of non-cash stock-based compensation expenses by $4 million and to lower purchases and external expenses by $1 million. This decrease was partially offset by higher employee expenses and higher social charges on stock option grants by $2 million.

Net Loss Attributable to Shareholders of Cellectis: The consolidated net loss attributable to shareholders of Cellectis was $16 million (or $0.38 per share) for the three months ended September 30, 2019, of which $9 million was attributed to Cellectis, compared to $23 million (or $0.54 per share) for the three months ended September 30, 2018, of which $18 million was attributed to Cellectis. The consolidated net loss attributable to Shareholders of Cellectis was $65 million (or $1.52 per share) for the nine months ended September 30, 2019, of which $46 million was attributed to Cellectis, compared to $55 million (or $1.38 per share) for the nine months ended September 30, 2018, of which $42 million was attributed to Cellectis. This $9 million increase in net loss between the first nine months of 2019 and the corresponding prior-year period 2018 was primarily driven by an increase in operating losses of $9 million, of which $8 million was attributed to Calyxt.

Adjusted Net Loss Attributable to Shareholders of Cellectis: The consolidated adjusted net loss attributable to shareholders of Cellectis was $10 million (or $0.23 per share) for the three months ended September 30, 2019, of which $4 million is attributed to Cellectis, compared to $15 million (or $0.36 per share) for the three months ended September 30, 2018, of which $12 million was attributed to Cellectis. The consolidated adjusted net loss attributable to shareholders of Cellectis was $48 million (or $1.12 per share) for the nine months ended September 30, 2019, of which $35 million is attributed to Cellectis, compared to $28 million (or $0.70 per share) for the nine months ended September 30, 2018, of which $19 million was attributed to Cellectis. Please see "Note Regarding Use of Non-GAAP Financial Measures" for reconciliation of GAAP net income (loss) attributable to shareholders of Cellectis to adjusted net income (loss) attributable to shareholders of Cellectis.

We currently foresee focusing on our cash spending at Cellectis for the remainder of 2019 in the following areas:

• Supporting the development of our deep pipeline of product candidates, including the manufacturing and clinical trials expenses of UCART123, UCART22 and UCARTCS1;
• Building our state-of-the-art manufacturing capabilities (IMPACT and SMART); and
• Strengthening our manufacturing and clinical departments, including hiring talented personnel.

Calyxt plans to focus its cash spending for the remainder of 2019 in the following areas:

• Continuing to drive the commercialization of its High-Oleic Soybean products, including Calyno™ High-Oleic Soybean Oil and High-Oleic Soybean Meal;
• Supporting its innovative products pipeline; and
• Strengthening its commercial and general and administrative support.