On May 7, 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 period ended March 31, 2019 (Press release, Cellectis, MAY 7, 2019, View Source [SID1234535820]).
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"We have been executing against our 2019 plans, securing premises for our in-house manufacturing facilities in the United States and in France as well as receiving IND approval by the FDA for UCARTCS1A, our fourth UCART product candidate," said Dr. André Choulika, Chairman and CEO of Cellectis. "This year, Cellectis is planning to enroll patients in three separate Phase 1 clinical trials covering three major hematologic diseases, Acute Myeloid Leukemia, Acute Lymphoblastic Leukemia and Multiple Myeloma, with our proprietary allogeneic CAR T-cell product candidates. In 2019, Cellectis and its partners will continue to extend their first-mover advantage in the field of gene editing and allogeneic, off-the-shelf CAR-T, with the goal of accelerating our ability to bring our pioneering cell therapies to patients."
Q1 Corporate Highlights
Scientific Publication
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 an innovative engineering strategy that potentially paves the way for developing safer UCART products.
This publication was significant because Cellectis’ engineering strategy could circumvent toxic side effects such as CRS and neurotoxicity, thereby aiming to the development of safer, yet equally potent, UCART product candidates in an effort to improve patients’ quality of life during treatment.
Manufacturing
In March 2019, we entered into a 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 potential regulatory approval. The facility is planned to be operational by 2021.
In addition to IMPACT, Cellectis started 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, and when combined with IMPACT, will allow Cellectis to gain autonomy in its manufacturing operations and consolidate its competitive leadership in the gene-editing field.
Regulatory
In April 2019, Cellectis announced that the U.S. Food and Drug Administration (FDA) approved the Company’s Investigational New Drug (IND) application to initiate a Phase 1 clinical trial with UCARTCS1A in Multiple Myeloma (MM). Cellectis is the sponsor of the UCARTCS1A clinical study.
Conference
At the American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) Annual Meeting, Cellectis presented data from its Universal CAR T-cell programs in an oral presentation and poster session.
The oral presentation presented data regarding the potential of UCARTCS1A as a treatment approach for patients with Multiple Myeloma, and followed the recent clearance of the UCARTCS1A IND by the FDA. The poster presentation showcased Cellectis’ allogeneic CAR T-cell manufacturing expertise, with a focus on a novel, straightforward and efficient strategy to generate Universal CAR T-cells. This exemplifies opportunities for Cellectis’ cutting-edge gene-editing and cell engineering capabilities to be leveraged to improve key features of our product candidates.
Further presentations were given by Julianne Smith, Ph.D., Vice President of Translational Sciences and Philippe Duchateau, Ph.D., Chief Scientific Officer at Cellectis. Dr. Smith participated in a corporate review session at the Gene Editing Workshop prior to the official start of the conference, while also presenting a talk entitled "Allogeneic Gene-Edited CAR T-Cells: From Preclinical to Clinical Proof of Concept" during the Scientific Symposium "Towards the Holy Grail of Cancer Gene Therapies: Universal Cells, Targeted Vectors and Solid Tumor CART Efficacy". Dr. Duchateau participated in the Scientific Symposium "Innovation in First Time in Human Study Clinical Studies" with a presentation titled "Universal Gene-Edited CAR T-Cell Immunotherapy".
In April 2019, at ASGCT (Free ASGCT Whitepaper) Annual Meeting, we presented a novel method of manufacturing ultrapure TCR-negative allogeneic CAR T-cells. With transient expression of an anti-CD3 CAR in addition to the stably expressed "therapeutic CAR" in the donor T-cells, we programed the cells to self-eliminate the TCR+ cell population and obtained an ultrapure TCR-negative population (99%-99.9%) at the end of CAR-T production. The fitness of the produced cells was not affected by the transient expression of the anti-CD3 CAR, nor did we see a significant impact in the CAR T-cell growth rate, T-cell differentiation or exhaustion level as compared to the non-CD3 CAR counterpart.
Both in vitro and in vivo T-cell killing assay results suggest that the CD3-CAR treatment did not affect the CAR T-cell killing function.
This novel procedure has the potential to remove a tedious purification step in TCR-negative CAR T-cell manufacturing.
Financial Results
The interim condensed consolidated financial statements of Cellectis, which consolidate the results of Calyxt, Inc. of which Cellectis is a 69.5% 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 Q1 2019 financial results press release.
First quarter 2019 Financial Results
Cash: As of March 31, 2019, Cellectis, including Calyxt had $425 million in consolidated cash, cash equivalents, current financial assets and restricted cash of which $340 million are attributable to Cellectis on a stand-alone basis. This compares to $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. This net decrease of $28 million primarily reflects $22 million in net cash flows used by operating activities in the first quarter of 2019, of which $13 million are attributable to Cellectis. We believe that the consolidated cash, cash equivalents, current financial assets and restricted cash position as of March 31, 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 March 31, 2019 compared to $8 million for the three months ended March 31, 2018. 94% of consolidated revenues and other income was attributable to Cellectis in the first quarter of 2019. This decrease between 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.
R&D Expenses: Consolidated R&D expenses were $14 million for the year ended March 31, 2019 compared to $18 million for the year ended March 31, 2018. 86% of consolidated R&D expenses was attributed to Cellectis in the first quarter of 2019. The $4 million decrease between 2019 and 2018 was primarily attributed to the reductions of non-cash stock-based compensation expenses by $4 million and purchases and external and other expenses by $1 million. This decrease was partially offset by higher employee expenses and other by $1 million.
SG&A Expenses: Consolidated SG&A expenses were $12 million for the three months ended March 31, 2019 compared to $14 million for the three months ended March 31, 2018. 47% of consolidated SG&A expenses was attributed to Cellectis in the first quarter 2019. The $2 million decrease was primarily attributable by decreased non-cash stock-based compensation expenses by $ 3 million which was partially offset by an increase in purchases and external expenses and other by $1 million.
Net Loss Attributable to Shareholders of Cellectis: The consolidated Net loss attributable to Shareholders of Cellectis was $15 million (or $0.36 per share) for the three months ended March 31, 2019, of which $10 million was attributed to Cellectis, compared to $25 million (or $0.71 per share) for the three months ended March 31, 2018, of which $20 million was attributed to Cellectis. This $10 million decrease in net loss between 2019 and 2018 was primarily driven by a significant increase in net financial gains of $8 million and by a decrease in operating losses of $2 million which was attributed to Cellectis.
Adjusted Net Loss Attributable to Shareholders of Cellectis: The consolidated Adjusted net loss attributable to Shareholders of Cellectis was $11 million (or $0.26 per share) for the three months ended March 31, 2019, of which $7 million is attributed to Cellectis, compared to $14 million (or $0.39 per share) for the three months ended March 31, 2018, of which $11 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 on Cellectis for 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 UCARTCS1A;
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.