Cellectis Reports Latest Financial Results

NEW YORK–(BUSINESS WIRE)–Regulatory News:
Cellectis S.A. (Paris:ALCLS) (NASDAQ:CLLS) (Alternext: ALCLS – Nasdaq:
CLLS), a biopharmaceutical company focused on developing immunotherapies
based on gene edited CAR T-cells (UCART), today announced its results
for the three-month period ended June 30, 2016 and for the six-month
period ended June 30, 2016.
Recent Corporate Highlights
Cellectis

• A Phase I study of UCART19 in pediatric acute B lymphoblastic leukemia
  (B-ALL) was initiated at the University College of London (UCL), with
  the first dose administered to a patient in June 2016. This UCART19
  clinical trial is sponsored by Servier in close collaboration with
  Pfizer.

• Cellectis employees presented important scientific presentations:
  • An intrinsic safeguard Chimeric Antigen Receptor architecture for
    T-cell immunotherapy, presented by Julien Valton at ASCO, Chicago;
  • Allogeneic TCRα/CD38 double knockout T-cells bearing an anti-CD38
    Chimeric Antigen Receptor (CAR): an improved immunotherapy for the
    treatment of T-cell acute lymphoblastic leukemia (T-ALL) and
    multiple myeloma (MM), presented by Mathilde Dusseaux at EHA,
    Copenhagen, Denmark.
• The MIT Technology Review has named the Company on its Annual
  List of 50 Smartest Companies for the second year in a row.
• Cellectis has been selected as a 2016 World
  Economic Forum Technology Pioneer, a credential that is awarded
  annually to the most innovative and impactful companies developing new
  technologies around the world.

¹ Euro-US Dollar exchange rate as of June 30, 2016: 1.1102
²
Euro-US Dollar average exchange rate for the 2^nd quarter
2016: 1.1293
³ See the section related to the
reconciliation of gaap to non-gaap net income. GAAP Net Loss
attributable to shareholders amounts to $7 million (€6 million) in the 2^nd
quarter of 2016
Calyxt – Cellectis’ plant science subsidiary

• Appointment of former Monsanto Corporation executive Federico A.
  Tripodi to the role of Chief Executive Officer, a key hire for the
  execution of the commercial business plan and market launch of lead
  programs.
• Completed the expansion of its high-oleic / no-trans-fat (HO) soybean
  variety in Argentina, as part of its counter-season seed production.
  Thirty tons of HO soybean seeds have been shipped to production sites
  in the United States for further expansion, in preparation for an
  initial commercial launch expected in 2018.
• Calyxt hosted an R&D Day in New York City on May 26. Speakers reviewed
  advancements made in the plant science community with a focus on
  Calyxt’s plant engineering platform. Additionally, management provided
  an overview of Calyxt’s crop programs.

Financial Results
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”).
Second Quarter 2016 Financial Results
Cash: As of June 30, 2016 Cellectis had €269.7 million in total
cash, cash equivalents and current financial assets compared to €276.5
million as of March 31, 2016. This decrease of €6.8 million notably
reflects (i) the net cash flows used in operating activities of €7.6
million and (ii) fixed assets expenditure of €2.4 million. The change
was also attributable to the unrealized positive translation effect of
exchange rate fluctuations on our U.S. dollar cash, cash equivalents and
current financial assets of €5.8 million.
Revenues and Other Income: During the quarters ended June 30,
2015 and 2016, we recorded €8.0 million and €18.1 million, respectively,
in revenues and other income. This is mainly due to the increase of (i)
€8.6 million in collaboration revenues, notably due to the achievement
of two milestones under our collaboration agreement with Servier and
(ii) €1.5 million in research tax credit.
Total Operating Expenses and Other Operating Income: Total
operating expenses and other operating income for the second quarter of
2016 were €28.2 million, compared to €20.1 million for the second
quarter of 2015. The non-cash stock-based compensation expenses included
in these amounts were €14.4 million and €7.1 million, respectively.
R&D Expenses: For the quarters ended June 30, 2015 and 2016,
research and development expenses increased by €6.7 million from €12.8
million in 2015 to €19.5 million in 2016.Personnel expenses increased by
€2.4 million from €9.3 million in 2015 to €11.6 million in 2016, notably
due to a €0.5 million increase in wages and salaries, and a €4.5 million
increase in non-cash stock based compensation expense, partly offset by
a €2.6 million decrease in social charges on stock options and free
share grants. Purchases and external expenses increased by €4.3 million
from €3.2 million in 2015 to €7.5 million in 2016, due to increased
expenses related to innovation and platform development, including
payments to third parties participating in product development,
purchases of biological raw materials and expenses associated with the
use of laboratories and other facilities.
SG&A Expenses: During the quarters ended June 30, 2015 and
2016, we recorded €6.9 million and €8.6 million, respectively, of
selling, general and administrative expenses. The increase of €1.7
million primarily reflects (i) an increase of €1.9 million in personnel
expenses from €4.6 million to €6.5 million, attributable, among other
things, to an increase of €2.7 million of non-cash stock-based
compensation expense, partly offset by a decrease of €0.9 million of
social charges on stock options and free share grants, and (ii) a
decrease of €0.3 million in purchases and external expenses.
Financial Gain (Loss): The financial loss was €10.0 million for
the second quarter of 2015 compared with a financial gain of €3.8
million for the second quarter of 2016. The change in financial result
was primarily attributable to the effect of exchange rate fluctuations
on our U.S. dollar cash and cash equivalent accounts.
Net Income (Loss) Attributable to Shareholders of Cellectis:
During the three months ended June 30, 2015 and 2016, we recorded a net
loss of €22.2 million (or €0.63 per share on both a basic and a diluted
basis) and net loss of €6.3 million (or €0.18 per share on both a basic
and a diluted basis), respectively. Adjusted income attributable to
shareholders of Cellectis for the second quarter of 2016 was €8.1
million (€0.23 per share on both a basic and a diluted basis) compared
to Adjusted loss attributable to shareholders of Cellectis of €15.0
million (€0.43 per share on both a basic and a diluted basis), for the
second quarter of 2015. Adjusted income (loss) attributable to
shareholders of Cellectis for the second quarter of 2016 and 2015
excludes non-cash stock-based compensation expense of €14.4 million and
€7.2 million, respectively. Please see “Note Regarding Use of Non-GAAP
Financial Measures” for reconciliation of GAAP net income (loss)
attributable to shareholders of Cellectis to Adjusted income (loss)
attributable to shareholders of Cellectis.
First Half Year 2016 Financial Results
Cash: As of June 30, 2016 Cellectis had €269.7 million in total
cash, cash equivalents and current financial assets compared to €314.2
million as of December 31, 2015. This decrease of €44.5 million was
primarily driven by (i) €27.2 million of cash used in operating
activities in connection with the initiation of industrial Good
Manufacturing Practice (“GMP”) production of UCART123, increased
expenses in materials required of GMP production and a payment of €7.2
million of value added taxes related to proceeds received in the fourth
quarter of 2015 from Servier, and (ii) €10.8 million of cash used in
investment activities, primarily through Calyxt’s land acquisition and
greenhouse construction in an aggregate amount of €8.9 million. The
decrease was also partially attributable to the negative unrealized
translation effect of exchange rate fluctuations on our U.S. dollar
cash, cash equivalents and current financial assets accounts of €5.8
million.
Cellectis expects that its cash, cash equivalents and Current financial
assets of €269.7 million as of June 30, 2016 will be sufficient to fund
its current operations through the end of 2018.
Revenues and Other Income: During the six months ended June 30,
2015 and 2016, we recorded €17.2 million and €27.6 million,
respectively, in revenues and other income. This is mainly due to the
increase of (i) €7.1 million in collaboration revenues notably due to
the achievement of two milestones under our collaboration agreement with
Servier and (ii) €3.4 million in research tax credit.
Total Operating Expenses and Other Operating Income: Total
operating expenses and other operating income for the first half of 2016
were €58.1 million, compared to €32.9 million for the first half of
2015. The non-cash stock-based compensation expenses included in these
amounts were €27.8 million and €8.0 million, respectively.
R&D Expenses: For the six months ended June 30, 2015 and
2016, research and development expenses increased by €18.2 million from
€20.2 million in 2015 to €38.4 million in 2016. Personnel expenses
increased by €9.5 million from €13.9 million in 2015 to €23.5 million in
2016, notably due to a€1.4 million increase in wages and salaries, and a
€11.6 million increase in non-cash stock based compensation expense,
partly offset by a €3.5 million decrease in social charges on stock
options and free share grants. Purchases and external expenses increased
by €8.5 million from €5.7 million in 2015 to €14.2 million in 2016, due
to increased expenses related to innovation and platform development,
including payments to third parties participating in product
development, purchases of biological raw materials and expenses
associated with the use of laboratories and other facilities.
SG&A Expenses: During the six months ended June 30, 2015 and
2016, we recorded €12.2 million and €19.2 million, respectively, of
selling, general and administrative expenses. The increase of
€6.9 million primarily reflects (i) an increase of €6.5 million in
personnel expenses from €8.3 million to €14.8 million, attributable,
among other things, to an increase of €8.2 million of non-cash
stock-based compensation expense, partly offset by a decrease of
€2.0 million of social charges on stock options and free share grants,
and (ii) an increase of €0.4 million in purchases and external expenses.
Financial Gain (Loss): The financial loss was €0.2 million for
the first half year of 2015 compared with financial loss of €5.3 million
for the first half year of 2016. The change in financial result was
primarily attributable to the effect of exchange rate fluctuations on
our U.S. dollar cash and cash equivalent accounts.
Net Income (Loss) Attributable to Shareholders of Cellectis:
During the six months ended June 30, 2015 and 2016, we recorded a net
loss of €16.0 million (or €0.48 per share on both a basic and a diluted
basis) and a net loss of €35.7 million (or €1.01 per share on both a
basic and diluted basis), respectively. Adjusted loss attributable to
shareholders of Cellectis for the first half of 2016 was €7.9 million
(€0.22 per share on both a basic and a diluted basis) compared to
Adjusted income attributable to shareholders of Cellectis of €8.0
million (€0.24 per share on both a basic and a diluted basis), for the
first half of 2015. Adjusted loss attributable to shareholders of
Cellectis for the first half of 2016 and 2015 excludes a non-cash
stock-based compensation expense of €27.8 million and €8.0 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.

__________________
(1) Cellectis reclassified certain expenses related to the year ended
December 31, 2015 from SG&A expenses to R&D expenses in the fourth
quarter of 2015. This reclassification is effective starting in 2015,
and is due to the increased level of efforts towards our R&D activities
in order to develop product candidates and work toward clinical phases.
Starting in 2015, we classify personnel and other costs related to
information technology, human resources, business development, legal,
intellectual property and general management in Research and development
expense based on the time that employees spent contributing to research
and development activities versus general and administrative activities.
We approved the reclassification in Q4 2015 and assess the performance
of the consolidated company based on this new classification.

___________________
(1) Cellectis reclassified certain expenses related to the year ended
December 31, 2015 from SG&A expenses to R&D expenses in the fourth
quarter of 2015. This reclassification is effective starting in 2015,
and is due to the increased level of efforts towards our R&D activities
in order to develop product candidates and work toward clinical phases.
Starting in 2015, we classify personnel and other costs related to
information technology, human resources, business development, legal,
intellectual property and general management in Research and development
expense based on the time that employees spent contributing to research
and development activities versus general and administrative activities.
We approved the reclassification in Q4 2015 and assess the performance
of the consolidated company based on this new classification.
Note Regarding Use of Non-GAAP Financial Measures
Cellectis S.A. presents Adjusted Income (Loss) attributable to
shareholders of Cellectis in this press release. Adjusted Income (Loss)
attributable to shareholders of Cellectis is not a measure calculated in
accordance with IFRS. We have included in this press release a
reconciliation of this figure to Net Income (Loss) attributable to
shareholders of Cellectis, the most directly comparable financial
measure calculated in accordance with IFRS. Because Adjusted Income
(Loss) attributable to shareholders of Cellectis excludes Non-cash
stock-based compensation expense—a non-cash expense, we believe that
this financial measure, when considered together with our IFRS financial
statements, can enhance an overall understanding of Cellectis’ financial
performance. Moreover, our management views the Company’s operations,
and manages its business, based, in part, on this financial measure. In
particular, we believe that the elimination of Non-cash stock-based
expenses from Net Income (Loss) attributable to shareholders of
Cellectis can provide a useful measure for period-to-period comparisons
of our core businesses. Our use of Adjusted Income (Loss) attributable
to shareholders of Cellectis has limitations as an analytical tool, and
you should not consider it in isolation or as a substitute for analysis
of our financial results as reported under IFRS. Some of these
limitations are: (a) other companies, including companies in our
industry which use similar stock-based compensation, may address the
impact of Non-cash stock-based compensation expense differently; and (b)
other companies may report Adjusted Income (Loss) attributable to
shareholders or similarly titled measures but calculate them
differently, which reduces their usefulness as a comparative measure.
Because of these and other limitations, you should consider Adjusted
Income (Loss) attributable to shareholders of Cellectis alongside our
IFRS financial results, including Net Income (Loss) attributable to
shareholders of Cellectis.

As a foreign private issuer, we are not required under the Exchange Act
to file periodic reports and financial statements with the SEC as
frequently or as promptly as United States companies whose securities
are registered under the Exchange Act. Notwithstanding the foregoing, we
currently provide quarterly interim consolidated financial data to the
SEC, and commencing with our first quarter interim report for the 2017
fiscal year, we intend to file our periodic reports within the deadlines
applicable to domestic reporting companies.
About Cellectis
Cellectis is a biopharmaceutical company focused on developing
immunotherapies based on gene edited CAR T-cells (UCART). The company’s
mission is to develop a new generation of cancer therapies based on
engineered T-cells. Cellectis capitalizes on its 16 years of expertise
in genome engineering – based on its flagship TALEN^® products
and meganucleases and pioneering electroporation PulseAgile technology –
to create a new generation of immunotherapies. CAR technologies are
designed to target surface antigens expressed on cells. Using its
life-science-focused, pioneering genome-engineering technologies,
Cellectis’ goal is to create innovative products in multiple fields and
with various target markets. Cellectis is listed on the Nasdaq market
(ticker: CLLS) and on the NYSE Alternext market (ticker: ALCLS). To find
out more about us, visit our website: www.cellectis.com
Talking about gene editing? We do it.
TALEN^® is a
registered trademark owned by the Cellectis Group.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain “forward – looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by words such as
“anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,”
“is designed to,” “may,” “might,” “plan,” “potential,” “predict,”
“objective,” “should,” or the negative of these and similar expressions
and include, but are not limited to, statements regarding the outlook
for Cellectis’ future business and financial performance.
Forward-looking statements are based on management’s current
expectations and assumptions, which are subject to inherent
uncertainties, risks and changes in circumstances, many of which are
beyond Cellectis’ control. Actual outcomes and results may differ
materially due to global political, economic, business, competitive,
market, regulatory and other factors and risks. Cellectis expressly
disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in its views or expectations, or otherwise.