On March 11, 2019 Seres Therapeutics, Inc. (Nasdaq: MCRB) reported a three-year research collaboration with AstraZeneca (Press release, Seres Therapeutics, MAR 11, 2019, View Source [SID1234534207]). The collaboration will focus on advancing mechanistic understanding of the microbiome in augmenting the efficacy of cancer immunotherapy, including potential synergy with AstraZeneca compounds.

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Under the collaboration, research will evaluate microbiome-based approaches as a predictor for which patients may respond best to certain cancer immunotherapies. Additionally, SER-401, an investigational microbiome therapeutic, may be studied in combination with AstraZeneca compounds targeting various cancers. The collaboration will apply Seres’ microbiome drug discovery and manufacturing expertise with AstraZeneca’s extensive oncology experience to evaluate the potential for microbiome therapy to improve clinical response when used in conjunction with adjunctive pharmaceutical approaches.

"We are very pleased to be collaborating with AstraZeneca, a global leader in oncology, to advance the development of potential microbiome-based therapies for cancer. Through the activities under this collaboration and in our SER-401 Phase 1b clinical study in metastatic melanoma, we hope to meaningfully advance our understanding of the potential for microbiome therapeutics to magnify the impact of cancer immunotherapy," said Eric Shaff, President and Chief Executive Officer of Seres Therapeutics.

"Our new collaboration with Seres Therapeutics represents an important opportunity to advance our understanding of the relationship between the microbiome and the immune system’s ability to respond to cancer therapy," said Jean-Charles Soria, M.D., Ph.D., Senior Vice President, Research & Development Oncology at AstraZeneca. "Despite progress in the field of immunotherapy, we are only at the tip of the iceberg. Too many patients are still unable to benefit from existing therapies, so we must continue following the science in pursuit of new and innovative solutions."

Under the terms of the exclusive collaboration, AstraZeneca will provide Seres with $20 million in three equal installments over two years, with the first payment due at the start of the agreement. In addition, AstraZeneca will also reimburse Seres for research activity related to the collaboration. Seres will maintain rights to oncology targeted microbiome therapeutic candidates, and AstraZeneca will obtain the option to negotiate for rights to those programs and other inventions arising out of the collaboration.

On March 11, 2019 Enzo Biochem, Inc. (NYSE:ENZ), an integrated diagnostics and therapeutics company reported results for the fiscal quarter and first half ended January 31, 2019 along with providing more detail on its investments in the development of novel diagnostic system and centralized clinical services (Press release, Enzo Biochem, MAR 11, 2019, View Source [SID1234534203]).

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Recent Developments

The Company is rapidly implementing its strategic plan to build a comprehensive menu of reagents, automated systems, and related consumables on several independent platforms and systems. This effort started with research and development activity, which was initiated several years ago, adaptation and validation of products to automated systems and has extended into GMP manufacturing. These automated systems are in the process of clinical trial for submission to obtain LDT, CE Mark and FDA approvals where appropriate. Enzo’s business development efforts are ongoing with potential partners that would accelerate market access and penetration to provide much needed margin relief to small and midsize clinical and hospital laboratories.
To accelerate and accommodate the manufacturing and commercial needs of all of its components of automated platforms and systems, the Company closed on its acquisition of a 36,000-square-foot commercial facility in Farmingdale, NY, and architectural design and construction development is underway. In connection with the acquisition of the new facility, the Company has Town of Babylon Industrial Development Agency (IDA) commitments that will provide Enzo with significant multi-year tax abatements and additional incentives with respect to its entire Farmingdale campus. The investment will enhance the infrastructure of the Company’s Long Island campus aimed at facilitating production and distribution of Enzo’s expanded high value and lower cost, open diagnostic platforms
The Company extended its product and platform development strategy to address rapidly declining reimbursement and high cost of goods affecting all clinical and hospital outreach laboratories. Development work is on track to expand the Company’s menu of high volume and high value tests to be used in connection with Enzo’s proprietary and affordable open system platforms capable of high throughput to improve the financial results of clinical laboratories. The systems are targeted to make available highly efficient and lower cost solutions for diagnostic testing, with a focus on molecular diagnostics, immunohistochemistry and ELISA platforms.
Progress continues in transforming Enzo Clinical Labs to an efficient centralized service provider to other laboratories as a new market for Enzo. The Company is adopting Enzo’s platforms and products to be able to offer services for a high value menu of tests to other clinical laboratories (not only to patients and physicians) at prices that will provide marginal return to the customer laboratory. Enzo has invested in the clinical laboratory in its translational capabilities, validation capabilities and its performance of Enzo test platforms. Enzo has expanded on marketing and sales activities to address the market opportunities which includes a broad range of diagnostic testing including FISH, immunohistochemistry, and molecular diagnostics.
The clinical laboratory market dynamics of lower reimbursement and high operating costs imposes a challenging future to the clinical laboratory industry. These market conditions present Enzo with an opportunity to address the industry needs in the form of reference services at a lower cost and provide products and systems at a lower cost than competitors.
Enzo’s progress towards achieving this strategic goal is the result of Enzo’s vertically integrated operating structure to provide both for products and services, and its extensive intellectual property estate, the Company is better positioned in the industry than most to address these needs. The Company has stepped up its investment activities to capitalize on its unique capabilities to address these industry challenges by offering highly efficient and lower cost systems that address valuable components of diagnostic testing. Enzo also continues to invest to grow our core business to drive efficiencies and growth in revenue per test and to improve gross margins. The Company continues to aggressively grow its business around its strategic plan by making investments in all aspects of product development, validation, clinical trial and sales and marketing to reach new markets for Enzo’s platforms and products and reference services. Over the last several quarters Enzo estimates that it has invested approximately ten percent of costs in these areas.
Continuous efforts are being made to improve efficiencies in operations while expanding marketing and sales to drive revenue growth, while taking costs out of core operations. During the quarter, the Company realigned client facing groups such as client services and other support functions to eliminate costs while maintaining high quality services. In addition, Enzo continues to recruit new senior sales professionals to further penetrate U.S. market, including the Northeast markets.
Enzo is nearing completion of GMP manufacturing operations to support future LDT, CE Mark and FDA diagnostic submissions. The Company anticipates regulatory submissions on a number of products and platforms. In addition, the Company continues to invest in capital projects that support business growth.
On February 5, 2019, the Company entered into a legal settlement agreement in a New York case resulting in a payment to the Company of $21 million. The agreement does not affect other infringement proceedings underway against the defendant in federal district court in Wilmington, Delaware.
Barry Weiner, President, Comments

"We continue to focus relentlessly on our strategic program to provide lower cost, highly efficient and effective platforms and reagents to offset today’s reimbursement challenges facing independent and institutional clinical diagnostic laboratories. Our financial results thus far this year, and for the second fiscal quarter we are reporting today, have been directly impacted by lower reimbursement from governmental and commercial payors and a notable shift away from high margin esoteric molecular diagnostics testing to lower cost routine core tests. On balance, volume of accessions have remained constant but price per accession has decreased impacting both revenues and profitability.

"Enzo’s position as the leading independent clinical laboratory serving the important metropolitan New York-New Jersey-Connecticut market, which we now have extended into the New England states and as far south as Pennsylvania, remains intact. Enzo’s growing advanced testing menu, and especially our comprehensive women’s health panel using AMPIPROBE multiplex real-time PCR assays featuring detection of infectious disease tests for a total of 16 organisms from a single vaginal swab specimen, continues to put our expertise at the forefront of quality, cost effective, high performance diagnostic technology.

"The challenges from reduced diagnostic reimbursements, which have been instituted without regard to the serious harm it has done to independent and hospital clinical labs profit margins, is a development Enzo foresaw early on in embarking on our strategic program. Moreover, private healthcare insurers are implementing tightened standards for approving tests and determining medical necessity is further evidence of more critical adverse reimbursement policies. All this has made Enzo’s developmental program to provide testing platforms and reagents easily adaptable to existing open systems more valuable. Our program to establish Enzo as a nationwide reference laboratory providing overnight services utilizing our technology also is aimed at shoring up independent operating margins for those for whom investing in new platforms is uneconomic.

"Our efforts currently are directed at developing a well-rounded offering of wide-ranging tests for approval by both the FDA and New York State Department of Health. In the meantime, while Enzo continues to be financially strong and highly liquid, our operating results are reflective of the cross currents now affecting the diagnostic laboratory industry. Despite the revenue shortfall, we are diligently working to invest behind our strategic program while we also focus on expense reductions and even more heightened efficiencies. When completed, our advanced Farmingdale campus will be important in that regard and we plan to continue to invest in our strategic plan. We also are taking steps to aggressively expand marketing and sales to reach a wider customer base, to maintain the high service standards for which we are known, and to control those aspects of our business that are within our reach to achieve improved results. We are confident that our efforts to do so and achieve our goals on the development front will pay off."

Second Quarter Operating Results

Total revenues were $19.3 million, compared to $26.1 million in the prior year, a decrease of $6.8 million. Clinical services revenues were $12.0 million, compared to $18.7 million in the prior year, a decrease of $6.7 million, largely due to reduced insurance reimbursement payments that were reimbursed at higher rates in the prior year, increased competition and testing denials and changes to medical and procedural requirements for genetic testing by payors. In addition, the Company recorded over $1.2 million of reserves offsetting revenues due to slow paying commercial payers and claims made by a commercial payor for overpayments Enzo received in prior periods. Total diagnostic testing volume, measured by the number of accessions, decreased 3% year over year, again due to lower high-value testing, partially offset by an increase in esoteric testing, including Enzo’s AMPIPROBE woman’s health panel which has increased in volume each quarter since its launch last fiscal year. Product and royalty revenue was $7.3 million compared to $7.4 million in the prior year. The decrease year over year was the result of the elimination of product royalties due to expiration of the agreement in April 2018 offset by higher product volume in the U.S. market.
Clinical services revenues for the three months ended January 31, 2018, the prior year period, have been restated to reflect adoption of new revenue recognition rules on a full retrospective basis. Under the new rules, Enzo reports uncollectible balances associated with patient responsibility as a reduction in net revenues; historically these amounts were separately classified in operating expenses as a provision for uncollectible accounts receivable, and amount to $0.6 million and $0.8 million in the three months ended January 31, 2019 and 2018, respectively.
Consolidated gross margins were 24% compared with 40% in the prior year. Clinical services gross margins were 8% compared to 37% a year ago. Gross margins in the current year were negatively impacted by lower reimbursement revenue from Clinical Services, as noted above. Products gross margin was 49% compared to 46% in the prior year period.
Operating expenses totaled $28.2 million, compared to $29.2 million a year ago, a decrease of $1 million or 3%. Total legal expenses were $1.1 million compared to $1.7 million in the prior year. Selling and general administrative expenses (SG&A) as well as research and development (R&D) expenses were slightly higher year over year in support of the Company’s growth strategies.
The GAAP and non-GAAP net loss was $8.4 million or $0.18 per share compared to a GAAP net loss of $0.9 million or $0.02 per share and a non-GAAP net loss of $2.0 million or $0.04 per share a year ago. EBITDA and adjusted EBITDA was a loss of $7.9 million compared to a loss of $1.4 million, a year ago.
Total cash, cash equivalents and restricted cash at January 31, 2019 were $42.7 million compared to $60.0 million at July 31, 2018. This amount does not include the net proceeds of the $21 million settlement paid in February as a result of the legal settlement noted above. Cash used in operations was $8.6 million during the second quarter of fiscal 2019 and cash used in investing activities, principally due to the purchase of our new facility and capital expenditures, was $6.0 million. Working capital at January 31, 2019 was over $47.0 million.

First Half Operating Results

Total revenues were $40.6 million compared to $53.0 million in the prior year, a decline of $12.4 million or 23% lower than prior year. Gross profit totaled $11.6 million, compared to $22.0 million a year ago, with gross margins of 29% and 41%, respectively. SG&A of $22.5 million decreased $0.5 million. Legal expenses increased to $2.4 million, from $2.1 million a year ago. The GAAP and Non-GAAP net loss totaled $14.4 million, or $0.30 per share, compared to $1.5 million and $2.6 million or $0.03 and $0.06 per share, respectively. EBITDA and adjusted EBITDA was a loss of $13.4 million compared to losses of $1.4 million, a year ago.

Conference Call

The Company will conduct a conference call Tuesday, March 12, 2019 at 8:30 AM ET. The call can be accessed by dialing (888) 459-5609. International callers can dial (973) 321-1024. Please reference PIN number 2037608.

Interested parties may also listen over the Internet at: View Source

To listen to the live call, individuals should go to the website at least 15 minutes early to register, download and install any necessary audio software. Any pop up blocker installed on your PC should be disabled while accessing the webcast. A rebroadcast of the call will be available starting approximately two hours after the conference call ends, through March 26, 2019. The replay of the conference call can be accessed by dialing (855)-859-2056. International callers can dial (404) 537-3406), and when prompted, used the same PIN number 2037608.

Adjusted Financial Measures

To comply with Regulation G promulgated pursuant to the Sarbanes-Oxley Act, Enzo Biochem attached to this news release and will post to the Company’s investor relations web site (www.enzo.com) any reconciliation of differences between GAAP and Adjusted financial information that may be required in connection with issuing the Company’s quarterly financial results.

The Company uses EBITDA as a measure of performance to demonstrate earnings exclusive of interest, taxes, depreciation and amortization. Adjustments to EBITDA are for items of a non-recurring nature and are reconciled on the table provided. The Company manages its business based on its operating cash flows. The Company, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes its decisions based on cash flows, not on the amortization of assets obtained through historical activities. The Company, in managing its current and future affairs, cannot affect the amortization of the intangible assets to any material degree, and therefore uses EBITDA as its primary management guide. Since an outside investor may base its evaluation of the Company’s performance based on the Company’s net loss not its cash flows, there is a limitation to the EBITDA measurement. EBITDA is not, and should not be considered, an alternative to net loss, loss from operations, or any other measure for determining operating performance of liquidity, as determined under accounting principles generally accepted in the United States (GAAP). The most directly comparable GAAP reference in the Company’s case is the removal of interest, taxes, depreciation and amortization.

We refer you to the tables attached to this press release which includes reconciliation tables of GAAP to Adjusted net income (loss) and EBITDA to Adjusted EBITDA.

On March 11, 2019 with an estimated 1.8 million new cancer cases a year in India expected by 20251, Tata Trusts and Varian (NYSE: VAR) reported the signing of a framework agreement intended to increase patient access to advanced radiation therapy treatments in the country (Press release, Varian Medical Systems, MAR 11, 2019, View Source [SID1234534202]). The three-year agreement is focused on world-class cancer care delivery through the installation of radiation therapy treatment systems across India where Varian has been selected as the preferred supplier by Tata Trusts.

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The agreement is part of a program undertaken by Tata Trusts with the goal of creating patient-centric cancer institutions to deliver standardized and affordable care closer to patients’ homes in different regions in India, including rural areas where many patients do not have the financial means to access existing care options. Included in the scope of the agreement, is the creation of a significant number of new cancer centers, as well as the installation of advanced radiotherapy equipment in already existing centers in these areas. At its culmination, the program is targeted to bring world-class cancer care to an estimated quarter million patients per year that previously did not have easy or affordable access to treatment options.

In addition to the installation of the radiation therapy treatment systems, the Varian ARIA oncology information system and Eclipse treatment planning system will be implemented in a secure network hosted on a private cloud, to assist in elevating the level of care across India. The first systems are estimated to begin installation later in 2019.

"We are delighted to work together with Tata Trusts to achieve innovative, sustainable and world class standards of cancer care, while making a real difference in communities across India, beginning with the initial installations of systems over the coming months," said Dow Wilson, president and chief executive officer of Varian. "Working with Tata Trusts on this project is perfectly aligned with our core strategy of increasing access to high-quality care and creating a world without fear of cancer. We are proud that the Tata Trusts have put their faith in our solutions with this commitment to both our hardware and software platforms."

On March 11, 2019 TG Therapeutics, Inc. (NASDAQ: TGTX), reported that Michael S. Weiss, the Company’s Executive Chairman and Chief Executive Officer, will present at the 39th Annual Cowen Health Care Conference, being held at the Boston Marriott Copley Place (Press release, TG Therapeutics, MAR 11, 2019, http://ir.tgtherapeutics.com/news-releases/news-release-details/tg-therapeutics-present-cowen-39th-annual-health-care-conference [SID1234534201]). The presentation is scheduled to take place on Wednesday, March 13, 2019 at 11:20 AM ET.

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A live webcast of this presentation will be available on the Events page, located within the Investors & Media section, of the Company’s website at View Source

On March 11, 2019 Cellectis S.A. (Paris:ALCLS) (NASDAQ:CLLS) (Euronext Growth: ALCLS – Nasdaq: CLLS), a clinical-stage biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic CAR T-cells (UCART), reported its results for the fourth quarter 2018 and full year ended December 31, 2018 (Press release, Cellectis, MAR 11, 2019, View Source [SID1234534206]).

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Earnings Call Details

Cellectis to hold a conference call for investors on March 12, 2019 at 7:30 a.m. EDT – 12:30 p.m. Central European Time (CET). The call will include the Company’s fourth quarter 2018 and year-end financial results.

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 for 6 months following the conference by calling 877-660-6853 (Toll Free US & Canada); 201-612-7415 (Toll Free International).
1 Cash position includes cash, cash equivalents and current financial assets

Fourth Quarter 2018 and Recent Highlights

Proprietary Development Programs

GMP Manufacturing
Over the course of 2018, we have conducted GMP manufacturing runs for two of our leading proprietary development programs UCART123 and UCART22. Manufacturing is currently performed at two contract manufacturing organizations, MolMed and CellForCure.

We have initiated the establishment of a 14,000 square foot in-house manufacturing facility in Paris, France called the SMART facility, which stands for "Starting MAterial Realization for CAR-T products". This facility is designed to supply our raw material for our clinical studies. Internalizing this supply would significantly reduce our manufacturing cycle time and improve our flexibility during clinical development of our product candidates. This facility is planned to go-live in 2020. We also anticipate that the SMART facility will have the potential to supply commercial starting material for our CAR T-cell products following potential FDA approval.

In March 2019, we entered into a lease agreement for an 82,000 square foot commercial-scale manufacturing facility, called the IMPACT site, which stands for "Innovative Manufacturing Plant for Allogeneic Cellular Therapies". The IMPACT facility is located in Raleigh, North Carolina. The new manufacturing facility is being designed to provide GMP manufacturing for clinical supply and commercial production upon potential regulatory approval. The facility is planned to be operational by 2021.

UCART123 in AML patients
The Phase 1 dose escalation clinical studies for UCART123 in acute myeloid leukemia (AML) patients at MD Anderson Cancer Center and Weill Cornell Medical Center remains ongoing. In August 2018, we entered into new clinical study agreements with Dana Farber Cancer Institute and H. Lee Moffitt Cancer Center in order to expand the performance of the UCART123 clinical study in AML to these sites.

For the AML clinical trial, the current dose level of 2.5×105 UCART123 cells per kilogram will be followed by dose levels 2 and 3 with 6.25×105 and 5.05×106 UCART123 cells per kilogram. We are expecting to dose 2-4 patients per dose cohort, with a treatment follow-up period of 4 weeks per patient as well as an option to re-dose responding patients.

UCART22 in B-ALL patients
The FDA approved our IND for the UCART22 Phase 1 clinical study which is designed to assess the safety and tolerability at increasing dose levels in B-cell acute lymphoblastic leukemia (B-ALL) adult patients.

UCART22 is designed for the treatment of CD22-expressing cancer cells. Like CD19, CD22 is a cell surface antigen expressed from the pre-B-cell stage of development through mature B-cells and is expressed in more than 90% of patients with B-ALL. Approximately 85% of ALL cases involve precursor B-cells (B-ALL). The clinical study for UCART22 will be led by Dr. Nitin Jain, Assistant Professor at The University of Texas MD Anderson Cancer Center in Houston, and Dr. Hagop Kantarjian, Professor and Chair in the Department of Leukemia and University Chair in Cancer Medicine at The University of Texas MD Anderson Cancer Center in Houston.

UCARTCS1 in Multiple Myeloma patients
We have chosen CS1 (also known as SLAMF7) as the targeted antigen for multiple myeloma (MM), based on the high levels of expression of CS1 in MM patients on malignant cells relative to the low level of expression on non-malignant cells as well as on the results of third parties’ proof of concept for this high value target achieved with the elotuzumab monoclonal antibody in MM patients. We expect to start a clinical study with UCARTCS1 in 2019.

UCART19 (exclusively licensed to Servier, and under collaboration between Servier and Allogene) in ALL adult and pediatric patients
At the 60th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, our partners Servier and Allogene presented updated data on UCART19, showing the continued progress of UCART19 Phase 1 clinical trials for both pediatric and adult ALL patients.

After UCART19 infusion, 82% (14/17) of patients who received a lymphodepletion regimen (consisting of fludarabine, cyclophosphamide and alemtuzumab, an anti-CD52 monoclonal antibody) achieved complete remission, or "CR", or complete remission with incomplete blood cell recovery (or "Cri") by day 28 or day 42 after infusion. Within responder patients, 71% (10/14) of them were ‘minimum residual disease’ (MRD) negative (MRD- stands for less than 1 leukemic cell among 10E4 normal cells) assessed by flow or qPCR. When considering all treated patients, 67% (14/21) of them did achieve CR/CRi. Regarding safety considerations, there was no serious adverse events (grade ≥3) for graft versus host disease (GvHD) and neurological events. Grade 3-4 toxicities did only regard events of cytokine release syndrome (14%, 3/21), prolonged cytopenia (29%, 6/21) and viral infections (24%, 5/21).

We are pleased to see continued progress for UCART19 under the direction of our partners Servier and Allogene. Under our license, development and commercialization agreement with Servier, Cellectis is entitled to receive clinical and commercial milestone payments as well as tiered royalties in the high single digits on worldwide sales.

ALLO-715 (BCMA) and ALLO-819 (Flt3) (exclusively licensed to Allogene Therapeutic, Inc.)
In addition, Allogene presented at ASH (Free ASH Whitepaper) 2018 pre-clinical research on ALLO-715, an allogeneic BCMA CAR T therapy possessing an off-switch for the treatment of Multiple Myeloma, and a poster presentation for ALLO-819, an allogeneic Flt3 CAR T therapy possessing an off-switch for the treatment of acute myeloid leukemia (AML).

ALLO-715 and ALLO-819 were progressed under a joint research collaboration between Allogene and Cellectis, and are directed to targets that are licensed exclusively from Cellectis. Allogene holds the exclusive global development and commercial rights for these product candidates.

Pursuant to our license agreement with Allogene, we are entitled to receive development and sales milestone payments of up to $2.8 billion, or $185 million per target for 15 targets. We are eligible to receive tiered royalties in the high single digits on worldwide sales of any products that are developed by Allogene.

Corporate

On March 13, 2018, Elsy Boglioli was named Chief Operating Officer, to succeed to Dr. Mathieu Simon who retired. Dr. Mathieu Simon also resigned from his board member position.

On September 19, 2018, Stephan A. Grupp, MD, Ph.D., a leading pediatric oncologist at Children’s Hospital of Philadelphia and Chief of the Section of Cellular Therapy and Transplant at the Children’s Hospital of Philadelphia (CHOP) joined the Company’s Clinical Advisory Board.

On December 10, 2018, Bill Monteith was appointed to the role of Senior Vice President U.S. Manufacturing. This appointment followed Cellectis’ plan to establish commercial manufacturing capabilities in the U.S., which is Bill Monteith’s responsibility, notably through the deployment of IMPACT. Bill Monteith joined Cellectis from Hitachi Chemical Advanced Therapeutics Solutions, where he was the Chief Operating Officer and Site General Manager for three manufacturing facilities.

Financial Results

The consolidated financial statements of Cellectis and Calyxt, of which Cellectis is a 69.5% shareholder, have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board ("GAAP").

The breakdown of these consolidated financials between Cellectis and Calyxt is in the appendices of this Q4 2018 financial results press release.

Fourth Quarter and Full year 2018 Financial Results

Cash: As of December 31, 2018, Cellectis and Calyxt together had $452 million in consolidated cash, cash equivalents, current financial assets, of which $358 million was attributable to Cellectis. This compares to $297 million in consolidated cash as of December 31, 2017, of which $240 million was attributable to Cellectis. This net increase of $155 million primarily reflects $227 million in net cash proceeds provided by two separate follow-on offerings completed by Cellectis and Calyxt in 2018. Net cash flows used by operating activities in 2018 were $68 million, of which $48 million attributable to Cellectis. We believe that the consolidated cash, cash equivalents and current financial assets attributed as of December 31, 2018 will be sufficient to fund operations through 2021.

Revenues and Other Income: Consolidated revenues and other income were $3 million for the three months ended December 31, 2018 compared to $7 million for the three months ended December 31, 2017. Consolidated revenues and other income were $21 million for the year ended December 31, 2018 compared to $34 million for the year ended December 31, 2017. 98% of consolidated revenues and other income was attributed to Cellectis in 2018. This decrease between 2018 and 2017 was mainly attributable to a decrease in recognition of upfront payments already received and R&D cost reimbursements in relation to the therapeutic collaborations.

R&D Expenses: Consolidated R&D expenses remained stable $21 million for the three months ended December 31, 2018 and 2017. Consolidated R&D expenses were $77 million for the year ended December 31, 2018 compared to $79 million for the year ended December 31, 2017. 89% of consolidated R&D expenses was attributed to Cellectis in 2018. The $2 million decrease between 2018 and 2017 was primarily attributed to the reduction of non-cash stock-based compensation expenses by $6 million and social charges on stock option grants by $1 million. This decrease was partially offset by higher employee expenses by $4 million, notably due to more R&D headcount, and higher purchases and external and other expenses by $1 million.

SG&A Expenses: Consolidated SG&A expenses were $11 million for the three months ended December 31, 2018 compared to $13 million for the three months ended December 31, 2017. The decrease was primarily attributable to decreased non-cash stock-based compensation expenses and social charges on stock option grants. Consolidated SG&A expenses were $47 million for the year ended December 31, 2018 compared to $45 million for the year ended December 31, 2017. 55% of consolidated SG&A expenses was attributed to Cellectis in 2018. The $2 million increase between 2018 and 2017 was primarily driven by the increase in wages and purchases at Calyxt of $8 million in relation to the ramp-up of its commercialization capabilities and to its expenses associated with being a public company. This increase was partially offset by lower non-cash stock-based compensation of $7 million.

Net Loss Attributable to Shareholders of Cellectis: The consolidated Net loss attributable to Shareholders of Cellectis was $23 million (or $0.53 per share) for the three months ended December 31, 2018 compared to $27 million (or $0.76 per share) for the three months ended December 31, 2017. The consolidated Net loss attributable to Shareholders of Cellectis was $79 million (or $1.93 per share) for the year ended December 31, 2018, of which $60 million was attributed to Cellectis, compared to $99 million (or $2.78 per share) for the year ended December 31, 2017, of which $85 million was attributed to Cellectis. This $20 million decrease in net loss between 2018 and 2017 was primarily driven by a significant increase in net financial gains of $28 million and partially offset by an increase in operating losses of $12 million, of which $11 million was attributed to Calyxt.

Adjusted Net Loss Attributable to Shareholders of Cellectis: The consolidated Adjusted net loss attributable to Shareholders of Cellectis was $16 million (or $0.37 per share) for the three months ended December 31, 2018 compared to $16 million (or $0.46 per share) for the three months ended December 31, 2017. The consolidated adjusted net loss attributable to Shareholders of Cellectis, which excludes the non-cash stock-based compensation expenses, was $44 million (or $1.08 per share) for the year ended December 31, 2018, of which $31 million is attributed to Cellectis, compared to $50 million (or $1.41 per share) for the year ended December 31, 2017, of which $42 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 foresee focusing on our cash spending on Cellectis for 2019 in the following areas:

Supporting our rich product candidates pipeline including manufacturing and clinical trials expenses of UCART123, UCART22 and UCARTCS1,
Building state-of-the-art manufacturing capabilities, and
Strengthening our manufacturing and clinical departments, including hiring talented personnel.
Calyxt plans to focus its cash spending for 2019 in the following areas:

Launching their High-Oleic Soybean products, including their Calyno High-Oleic Soybean Oil and Soybean Meal,
Supporting its rich innovative product pipeline, and
Strengthening its commercial and general and administration support.
CELLECTIS S.A.

STATEMENT OF CONSOLIDATED FINANCIAL POSITION

($ in thousands)

As of
December 31, 2017 as restated (*) December 31, 2018

ASSETS
Non-current assets
Intangible assets 1 431 1 268
Property, plant, and equipment 7 226 10 041
Other non-current financial assets 1 004 1 891
Total non-current assets 9 661 13 199

Current assets
Inventories 250 275
Trade receivables 2 753 2 971
Subsidies receivables 9 524 17 173
Other current assets 13 713 15 333
Cash and cash equivalent and Current financial assets 296 982 451 889
Total current assets 323 221 487 641
TOTAL ASSETS 332 882 500 840

LIABILITIES
Shareholders’ equity
Share capital 2 367 2 765
Premiums related to the share capital 614 037 828 525
Treasury share reserve (297) 0
Currency translation adjustment 1 834 (16 668)
Retained earnings (253 702) (326 628)
Net income (loss) (99 368) (78 693)
Total shareholders’ equity – Group Share 264 872 409 301
Non-controlling interests 19 113 40 970
Total shareholders’ equity 283 985 450 272

Non-current liabilities
Non-current financial liabilities 13 1 018
Non-current provisions 3 430 2 681
Total non-current liabilities 3 443 3 699

Current liabilities
Current financial liabilities 21 333
Trade payables 9 460 15 883
Deferred revenues and deferred income 27 975 20 754
Current provisions 1 427 1 530
Other current liabilities 6 570 8 369
Total current liabilities 45 453 46 869
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 332 882 500 840
(*) 2018 consolidated financial statements have been restated for the purpose of IFRS15 application. Reconciliation between interim consolidated financial statements presented in previous periods and 2018 consolidated financial statements is available in Note 2.3 of the consolidated financial statements, available in our annual report on Form 20-F for the year ended December 31, 2018.

CELLECTIS S.A.

STATEMENT OF CONSOLIDATED OPERATIONS – Fourth quarter

(unaudited)

($ in thousands, except per share data)

For the three-month periods ended December 31,
2017 2018

Revenues and other income
Revenues 5 725 968
Other income 1 185 2 108
Total revenues and other income 6 910 3 077
Operating expenses
Royalty expenses (883) (720)
Research and development expenses (20 704) (21 266)
Selling, general and administrative expenses (12 992) (10 517)
Other operating income (expenses) (94) 162
Total operating expenses (34 672) (32 341)

Operating income (loss) (27 762) (29 265)

Financial gain (loss) (958) 3 200

Net income (loss) (28 721) (26 065)
Attributable to shareholders of Cellectis (27 171) (23 075)
Attributable to non-controlling interests (1 550) (2 990)

Basic net income (loss) attributable to shareholders of Cellectis per share ($/share) (0,76) (0,53)

Diluted net income (loss) attributable to shareholders of Cellectis per share ($/share) (0,76) (0,53)
CELLECTIS S.A.

STATEMENT OF CONSOLIDATED OPERATIONS – Full year

($ in thousands, except per share data)

For the years ended December 31,
2017 2018

Revenues and other income
Revenues 25 188 12 731
Other income 8 528 8 701
Total revenues and other income 33 715 21 432
Operating expenses
Royalty expenses (2 620) (2 739)
Research and development expenses (79 227) (76 567)
Selling, general and administrative expenses (44 750) (47 248)
Other operating income (expenses) 232 31
Total operating expenses (126 366) (126 523)

Operating income (loss) (92 650) (105 091)

Financial gain (loss) (11 032) 16 758

Net income (loss) (103 683) (88 333)
Attributable to shareholders of Cellectis (99 368) (78 693)
Attributable to non-controlling interests (4 315) (9 640)

Basic net income (loss) attributable to shareholders of Cellectis per share ($/share) (2,78) (1,93)

Diluted net income (loss) attributable to shareholders of Cellectis per share ($/share) (2,78) (1,93)
CELLECTIS S.A.

DETAILS OF KEY PERFORMANCE INDICATORS BY REPORTABLE SEGMENTS – Fourth Quarter

(unaudited) – ($ in thousands)

For the quarter ended December 31, 2017 For the quarter ended December 31, 2018
Plants Therapeutics Total reportable segments Plants Therapeutics Total reportable segments

External revenues 190 5 535 5 725 4 964 968
External other income 50 1 135 1 185 172 1 937 2 108
External revenues and other income 240 6 670 6 910 176 2 901 3 077
Royalty expenses (348) (535) (883) (240) (481) (720)
Research and development expenses (1 856) (18 848) (20 704) (2 725) (18 541) (21 266)
Selling, general and administrative expenses (4 969) (8 023) (12 992) (6 436) (4 081) (10 517)
Other operating income and expenses 35 (129) (94) (68) 230 162
Total operating expenses (7 138) (27 534) (34 672) (9 469) (22 873) (32 341)
Operating income (loss) before tax (6 898) (20 865) (27 762) (9 293) (19 971) (29 265)
Financial gain (loss) 139 (1 096) (958) 418 2 782 3 200
Net income (loss) (6 759) (21 962) (28 721) (8 875) (17 189) (26 065)
Non controlling interests 1 550 - 1 550 2 990 - 2 990
Net income (loss) attributable to shareholders of Cellectis (5 209) (21 962) (27 171) (5 886) (17 189) (23 075)
R&D non-cash stock-based expense attributable to shareholder of Cellectis 570 4 196 4 766 153 4 388 4 541
SG&A non-cash stock-based expense attributable to shareholder of Cellectis 1 732 4 299 6 031 1 767 911 2 678
Adjustment of share-based compensation attributable to shareholders of Cellectis 2 302 8 494 10 796 1 920 5 299 7 219
Adjusted net income (loss) attributable to shareholders of Cellectis (2 907) (13 468) (16 374) (3 966) (11 890) (15 856)

Net cash used in operating activities (6 817) (2 696) (9 513) (6 652) (13 950) (20 602)
CELLECTIS S.A.

DETAILS OF KEY PERFORMANCE INDICATORS BY REPORTABLE SEGMENTS – Full Year

($ in thousands)

For the year ended December 31, 2017 For the year ended December 31, 2018
Plants Therapeutics Total reportable segments Plants Therapeutics Total reportable segments

External revenues 508 24 680 25 188 236 12 495 12 731
External other income 239 8 290 8 528 178 8 523 8 701
External revenues and other income 747 32 969 33 715 414 21 018 21 432
Royalty expenses (390) (2 230) (2 620) (595) (2 144) (2 739)
Research and development expenses (6 057) (73 170) (79 227) (8 638) (67 929) (76 567)
Selling, general and administrative expenses (13 143) (31 607) (44 750) (21 067) (26 180) (47 248)
Other operating income and expenses 6 225 232 (50) 81 31
Total operating expenses (19 584) (106 782) (126 366) (30 351) (96 172) (126 523)
Operating income (loss) before tax (18 837) (73 813) (92 650) (29 937) (75 154) (105 091)
Financial gain (loss) 0 (11 032) (11 032) 1 420 15 339 16 758
Net income (loss) (18 837) (84 846) (103 683) (28 517) (59 816) (88 333)
Non controlling interests 4 315 - 4 315 9 640 - 9 640
Net income (loss) attributable to shareholders of Cellectis (14 522) (84 846) (99 368) (18 877) (59 816) (78 693)
R&D non-cash stock-based expense attributable to shareholder of Cellectis 967 22 623 23 590 838 16 852 17 689
SG&A non-cash stock-based expense attributable to shareholder of Cellectis 4 990 20 345 25 335 5 218 11 655 16 873
Adjustment of share-based compensation attributable to shareholders of Cellectis 5 957 42 968 48 925 6 056 28 507 34 563
Adjusted net income (loss) attributable to shareholders of Cellectis (8 565) (41 877) (50 443) (12 821) (31 309) (44 130)

Net cash used in operating activities (12 785) (39 542) (52 327) (20 252) (47 885) (68 137)
Note Regarding Use of Non-GAAP Financial Measures

Cellectis S.A. presents adjusted net income (loss) attributable to shareholders of Cellectis in this press release. Adjusted net 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, which is the most directly comparable financial measure calculated in accordance with IFRS. Because adjusted net 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 Cellectis’ 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 net 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 net 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 net income (loss) attributable to shareholders of Cellectis alongside our IFRS financial results, including net income (loss) attributable to shareholders of Cellectis.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME – Fourth quarter

(unaudited)

($ in thousands, except per share data)

For the three-month periods ended December 31,
2017 2018

Net income (loss) attributable to shareholders of Cellectis (27 171) (23 075)
Adjustment:
Non-cash stock-based compensation expense attributable to shareholders of Cellectis 10 796 7 219
Adjusted net income (loss) attributable to shareholders of Cellectis (16 374) (15 856)

Basic Adjusted net income (loss) attributable to shareholders of Cellectis ($/share) (0,46) (0,37)

Weighted average number of outstanding shares, basic (units) (1) 35 949 421 42 430 040

Diluted Adjusted net income (loss) attributable to shareholders of Cellectis ($/share) (1) (0,46) (0,37)

Weighted average number of outstanding shares, diluted (units) (1) 36 128 350 42 560 947
(1) When we have adjusted net loss, in accordance with IFRS, we use the Weighted average number of outstanding shares, basic to compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share). When we have adjusted net income, in accordance with IFRS, we use the Weighted average number of outstanding shares, diluted to compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share)

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME – Full Year

(unaudited)

($ in thousands, except per share data)

For the years ended December 31,
2017 2018

Net income (loss) attributable to shareholders of Cellectis (99 368) (78 693)
Adjustment:
Non-cash stock-based compensation expense attributable to shareholders of Cellectis 48 925 34 563
Adjusted net income (loss) attributable to shareholders of Cellectis (50 443) (44 130)

Basic Adjusted net income (loss) attributable to shareholders of Cellectis ($/share) (1,41) (1,08)

Weighted average number of outstanding shares, basic (units) (1) 35 690 636 40 774 197

Diluted Adjusted net income (loss) attributable to shareholders of Cellectis ($/share) (1) (1,41) (1,08)

Weighted average number of outstanding shares, diluted (units) (1) 35 715 321 41 285 578
When we have adjusted net loss, in accordance with IFRS, we use the Weighted average number of outstanding shares, basic to compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share). When we have adjusted net income, in accordance with IFRS, we use the Weighted average number of outstanding shares, diluted to compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share).