On August 6, 2019 Cellectis (Paris:ALCLS) (NASDAQ:CLLS) (Euronext Growth: ALCLS; Nasdaq: CLLS), a clinical-stage biopharmaceutical company focused on developing immunotherapies based on allogeneic gene-edited CAR T-cells (UCART), reported its results for the three-month and six-month periods ended June 30, 2019 (Press release, Cellectis, AUG 6, 2019, View Source [SID1234538224]).
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"The first half of 2019 has seen continued execution of our strategy, with the approval of the Investigational New Drug (IND) application for our wholly-owned product candidate, UCARTCS1, targeting the validated target CS1/SLAMF7 in multiple myeloma. Building on our success with UCART19, an ALL target licensed to Servier and Allogene, this is the third wholly-owned Cellectis UCART product candidate to get clearance from the FDA to enroll patients in a Phase 1 clinical trial, after UCART123 in acute myeloid leukemia (AML) and UCART22 in B-cell acute lymphoblastic leukemia (B-ALL). Each of these three UCART product candidates has a differentiated target and we are eager to bring these therapies to patients," said Dr. André Choulika, Chairman and CEO of Cellectis. "We have a robust manufacturing process to produce consistently high-quality cell doses and our entire team at Cellectis is excited to see these efforts bear fruit. Cellectis is laser-focused on pushing forward its pipeline and accelerating its momentum over the second half of this year."
1 Cash position includes cash, cash equivalent, current financial assets and restricted cash
Second Quarter and First Six Months 2019 Highlights
Wholly-Owned Pipeline Updates
The Phase 1 dose-escalation clinical trial for UCART123 targeting acute myeloid leukemia (AML), will be conducted at Weill Cornell Medical Center (New York, USA), MD Anderson Cancer Center (Texas, USA), H. Lee Moffitt Cancer Center (Florida, USA) and Dana Farber Cancer Institute (Massachusetts, USA).
The Phase 1 dose-escalation clinical trial for UCART22 targeting B-cell acute lymphoblastic leukemia (B-ALL), will be conducted at MD Anderson Cancer Center (Texas, USA) and The University of Chicago Medicine Comprehensive Cancer Center (Illinois, USA).
The Phase 1 dose-escalation for UCARTCS1 targeting multiple myeloma, will be conducted at MD Anderson Cancer Center (Texas, USA) and Hackensack Meridian Health John Theurer Cancer Center (New Jersey, USA).
Partnered Pipeline Updates
In June 2019, Allogene announced the IND clearance for ALLO-715, our partnered allogeneic CAR T-cell program targeting B-cell maturation antigen (BCMA), in relapsed/refractory MM. The Phase 1 portion of this study, which will include the Allogene’s anti-CD52 antibody ALLO-647 as part of the lymphodepletion regimen, is expected to be initiated in the second half of 2019.
In April 2019, Allogene announced results from a preclinical study of our partnered allogeneic CART (AlloCAR T) program targeting CD70, a cancer target that is expressed on both hematologic and solid tumor cells. The Anti-CD70 AlloCAR T could be optimized to eliminate both CD70 low and high expressing target cells, and manufactured in a large-scale process.
In January 2019, Allogene and Servier announced the IND clearance of ALLO-501 in patients with relapsed/refractory non-Hodgkin lymphoma (NHL). Allogene is the sponsor of the ALLO-501 program. UCART19 and ALLO-501 are being developed under a joint clinical development collaboration between Servier and Allogene, and are exclusively licensed to Servier from Cellectis. UCART19 and ALLO-501 utilize the TALEN gene-editing technology pioneered and owned by Cellectis. ALLO-501 and UCART19 feature the same construct and editing but are manufactured using a different process. The UCART19 clinical program for the treatment of relapsed/refractory acute lymphoblastic leukemia (ALL) is sponsored by Servier. Allogene has exclusive rights to UCART19 and ALLO-501 in the United States, while Servier retains exclusive rights for all other countries.
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 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’ 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.
General Meeting
On June 25, 2019, we held our Combined Shareholders Meetings at our headquarters in Paris, France. During this meeting, where more than 68% of voting rights were exercised, Resolutions 1 through 18, 23 and 24 were adopted. Resolutions 19 through 22 and Resolution 25 were rejected. For detailed results of the vote and resolutions, please visit our website.
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 Q2 2019 and First Half 2019 financial results press release.
Second Quarter and First Half 2019 Financial Results
Cash: As of June 30, 2019, Cellectis, including Calyxt had $401 million in consolidated cash, cash equivalents, current financial assets and restricted cash of which $323 million are attributable to Cellectis on a stand-alone basis. This compares to (i) $425 million in consolidated cash, cash equivalents, current financial assets and restricted cash as of March 31,2019 of which $340 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 $52 million for the six-month period ended June 30, 2019 primarily reflects $44 million in net cash flows used by operating activities, of which $28 million are attributable to Cellectis, and $5 million in acquisitions of property, plant and equipment. We believe that the consolidated cash, cash equivalents, current financial assets and restricted cash position as of June 30, 2019 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 June 30, 2019 compared to $8 million for the three months ended June 30, 2018. Consolidated revenues and other income were $6 million for the six months ended June 30, 2019 compared to $16 million for the six months ended June 30, 2018. 89% of consolidated revenues and other income was attributable to Cellectis in the first half of 2019. This decrease of $10 million between the six months ended June 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 the therapeutic collaborations, and other income. That was partially offset by higher Calyxt revenues due to the commercialization of their first products, High Oleic Soybean Oil and High Oleic Soybean Meal.
R&D Expenses: Consolidated R&D expenses were $25 million for the three months ended June 30, 2019 compared to $18 million for the three months ended June 30, 2018. Consolidated R&D expenses were $40 million for the six months ended June 30, 2019 compared to $36 million for the six months ended June 30, 2018. 87% of consolidated R&D expenses was attributed to Cellectis in the first half of 2019. The $4 million increase between the six months ended June 30, 2019 and 2018 was primarily attributed to higher employee expenses by $2 million, higher social charges on stock option grants by $1 million, higher purchases and external by $3 million and higher other expenses by $3 million. This increase was partially offset by the reductions of non-cash stock-based compensation expenses by $5 million.
SG&A Expenses: Consolidated SG&A expenses were $12 million for the three months ended June 30, 2019 compared to $11 million for the three months ended June 30, 2018. Consolidated SG&A expenses were $23 million for the six months ended June 30, 2019 compared to $25 million for the six months ended June 30, 2018. 46% of consolidated SG&A expenses was attributed to Cellectis in the first half of 2019. The $2 million decrease between the six months ended June 30, 2019 and 2018 was primarily attributed to the reductions of non-cash stock-based compensation expenses by $4 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 $33 million (or $0.79 per share) for the three months ended June 30, 2019, of which $27 million was attributed to Cellectis, compared to $7 million (or $0.17 per share) for the three months ended June 30, 2018, of which $4 million was attributed to Cellectis. The consolidated net loss attributable to Shareholders of Cellectis was $49 million (or $1.15 per share) for the six months ended June 30, 2019, of which $37 million was attributed to Cellectis, compared to $32 million (or $0.83 per share) for the six months ended June 30, 2018, of which $24 million was attributed to Cellectis. This $16 million increase in net loss between the first half of 2019 and the corresponding prior-year period 2018 was primarily driven by a increase in operating losses of $10 million, of which $7 million was attributed to Cellectis, and a decrease in net financial gains of $6 million.
Adjusted Net Loss Attributable to Shareholders of Cellectis: The consolidated adjusted net loss attributable to shareholders of Cellectis was $28 million (or $0.65 per share) for the three months ended June 30, 2019, of which $23 million is attributed to Cellectis, compared to a net income of $1 million (or $0.03 per share) for the three months ended June 30, 2018, of which $4 million was attributed to Cellectis. The consolidated adjusted net loss attributable to shareholders of Cellectis was $39 million (or $0.91 per share) for the six months ended June 30, 2019, of which $31 million is attributed to Cellectis, compared to $13 million (or $0.32 per share) for the six months ended June 30, 2018, of which $7 million was attributed to Cellectis. Please see "Note Regarding Use of Non-GAAP Financial Measures" for reconciliation of GAAP net income (loss) attributable to shareholders of Cellectis to adjusted net income (loss) attributable to shareholders of Cellectis.
We currently foresee focusing on our cash spending at Cellectis for the remainder of 2019 in the following areas:
Supporting the development of our deep pipeline of product candidates, including the manufacturing and clinical trials expenses of UCART123, UCART22 and UCARTCS1;
Building our state-of-the-art manufacturing capabilities (IMPACT and SMART); and
Strengthening our manufacturing and clinical departments, including hiring talented personnel.
Calyxt plans to focus its cash spending for the remainder of 2019 in the following areas:
Continuing to drive the commercialization of its High Oleic Soybean products, including Calyno High Oleic Soybean Oil and High Oleic Soybean Meal;
Supporting its innovative products pipeline; and
Strengthening its commercial and general administrative support.
When we have adjusted net loss, in accordance with IFRS, we use the Weighted average number of outstanding shares, basic to compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/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)