Cellectis Reports 4th Quarter and Full Year 2016 Financial Results

NEW YORK–(BUSINESS WIRE)– class= »bwalignl »>
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 December 31, 2016 and for the year
ended December 31, 2016.

Earnings Call Details

Cellectis will host an earnings call on March 7, 2017 at 8:00am Eastern
Time to discuss its financial results and provide a general business
update.

Dial-In Numbers:
Live PARTICIPANT
Dial-In (Toll-Free US & Canada): 877-407-3104
Live PARTICIPANT
Dial-In (International): +1 201-493-6792

Replay Information:
Conference ID #:
13625168
Replay Dial-In (Toll Free US & Canada): 877-660-6853
Replay
Dial-In (International): +1 201-612-7415
Expiration Date: 3/21/17

Webcast URL (Archived for 12 months): http://cellectis.equisolvewebcast.com/q4-2016

RECENT CORPORATE HIGHLIGHTS

Cellectis – Therapeutics

UCART123 – Cellectis’ most advanced, wholly owned TALEN®
gene-edited product candidate

• Pre-clinical data presented at the 2016 American Society of Hematology
  (ASH) annual meeting by Dr. Monica Guzman, MD, Weill Cornell, showed
  long-lasting molecular remission in mice, using UCART123, compared to
  Cytarabine alone.
• Successful National Institutes of Health’s (NIH) Recombinant DNA
  Advisory Committee’s (RAC) meeting with unanimous approval of Phase I
  clinical trials for UCART123 in acute myeloid leukemia (AML) and
  blastic plasmacytoid dendritic cell neoplasm (BPDCN).
• Investigational New Drug (IND) approval received from the U.S. Food
  and Drug Administration (FDA) to conduct Phase I clinical trials in
  patients with AML and BPDCN.
• First clinical trial approval by the FDA for an allogeneic,
  “off-the-shelf” gene-edited CAR T-cell product candidate.
• AML clinical program to be led, at Weill Cornell, by Gail J. Roboz,
  MD, Director of the Clinical and Translational Leukemia Programs and
  Professor of Medicine.
• BPDCN clinical program to be led, at MD Anderson Cancer Center, by
  Naveen Pemmaraju, MD, Assistant Professor, and Hagop Kantarjian, MD,
  Professor and Department Chair, Department of Leukemia, Division of
  Cancer Medicine.
• Successful cGMP manufacturing runs of UCART123 at large scale, to
  provide doses for initiating planned Phase I clinical trials in AML
  and BPDCN patients.

UCART19, exclusively licensed to Servier

• Phase I clinical trials in pediatric and adult ALL patients are
  ongoing at University College London (UCL) and Kings College London
  (KCL), UK, sponsored by Servier. Additional sites in other European
  countries are planned to be opened subject to approval of concerned
  regulatory bodies.
• Partial data presented on first 7 patients treated with UCART19 at
  NIH’s Recombinant DNA Advisory Committee (RAC) meeting in December
  2016.
• Pfizer, in collaboration with Servier, plans to open sites in the U.S.
  for the ongoing Phase I clinical trials in adult ALL patients, as
  presented at the RAC meeting in December 2016.

Scientific Publications

• Publication of a study in Scientific Reports, a Nature Publishing
  Group journal, describing a novel approach to a CAR design with an
  integrated environmental signal utilizing oxygen concentration to
  manipulate the CAR T-cell response.

Clinical Advisory Board

• Formation of a Clinical Advisory Board (CAB) comprising leading
  experts in the hematologic malignancies / stem cell transplant,
  immunotherapy and hematology-oncology clinical research fields to
  serve as a strategic resource to Cellectis in connection with the
  clinical development of UCART123.

Calyxt – Cellectis’ plant science subsidiary

• Publication of a study in BMC Plant Biology describing the use of
  genome editing technology to modulate soybean oil composition for
  increased shelf-life, higher frying stability and improved nutritional
  characteristics.
• Calyxt completed an expansion of its high-oleic/no trans-fat soybean
  variety (CAL1501) in the U.S. with a production of 1,200 tons of
  soybeans.

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 (“IASB”). The
audit procedures have been carried out by the independent auditors and
their audit report relating to the certification of the financials is in
the process of being issued. The audited report for Cellectis’
consolidated financial statements will be included in the Company’s
annual report.

Fourth quarter 2016 Financial Results

Cash: As of December 31, 2016 Cellectis had €276.2 million in
total cash, cash equivalents and current financial assets compared to
€264.0 million as of September 30, 2016. This increase of €12.2 million
notably reflects (i) the receipt of R&D tax credits of €9.2 million,
(ii) proceeds of €7.0 million related to the supply agreement with
Servier, (iii) the unrealized positive translation effect of exchange
rate fluctuations on our U.S. dollar cash, cash equivalents and current
financial assets of €12.1 million, partially offset by (iv) other net
cash flows used by operating activities of €15.0 million and (v) fixed
assets expenditures of €1.1 million.

Revenues and Other Income: During the quarters ended December 31,
2015 and 2016, we recorded €29.2 million and €12.1 million,
respectively, in revenues and other income. This decrease is mainly due
to the decrease of €20.0 million in collaboration revenues, notably due
to the €18.8 million revenue recorded in 2015 in relation to early
exercise by Servier of its option to acquire the exclusive worldwide
rights to further develop and commercialize UCART19, partially offset by
increases of €1.0 million in research tax credit and €1.3 million in
subsidies.

Total Operating Expenses: Total operating expenses for the fourth
quarter of 2016 were €30.9 million, compared to €28.0 million for the
fourth quarter of 2015. The non-cash stock-based compensation expenses
included in these amounts were €13.1 million and €12.6 million,
respectively.

R&D Expenses: For the quarters ended December 31, 2015 and
2016, research and development expenses increased by €2.6 million from
€16.0 million in 2015 to €18.7 million in 2016. Personnel expenses
increased by €0.5 million from €11.2 million in 2015 to €11.6 million in
2016, due to a €1.8 million increase in social charges on stock options,
partially offset by a €1.1 million decrease in non-cash stock based
compensation expense and a €0.2 million decrease in wages and salaries.
Purchases, external expenses and other expenses increased by €2.2
million from €4.3 million in 2015 to €6.5 million in 2016.

SG&A Expenses: During the quarters ended December 31, 2015
and 2016, we recorded €8.1 million and €11.4 million, respectively, of
selling, general and administrative expenses. The increase of €3.3
million primarily reflects the increase in personnel expenses from €5.6
million to €8.9 million, attributable to the increase of €1.5 million in
non-cash stock-based compensation expense, €1.4 million in social
charges on stock options, and €0.4 million in wages and salaries. No
material variance has been identified on purchases, external expenses
and other expenses.

Financial Gain (Loss): The financial gain was €7.0 million for
the fourth quarter of 2015 compared with a financial gain of €6.4
million for the fourth quarter of 2016. The change in financial result
was primarily attributable to the increase of €1.3 million in fair value
adjustment expense on our foreign exchange derivatives and current
financial assets, partially offset by the gain of €0.8 million due 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 quarters ended December 31, 2015 and 2016, we recorded a net
gain of €8.2 million (or €0.23 per share on both a basic and a diluted
basis) and net loss of €12.5 million (or €0.35 per share on both a basic
and a diluted basis), respectively. Adjusted income attributable to
shareholders of Cellectis for the fourth quarter of 2016 was €0.6
million (€0.02 per share on both a basic and a diluted basis) compared
to adjusted income attributable to shareholders of Cellectis of €20.9
million (€0.59 per share on both a basic and a diluted basis), for the
fourth quarter of 2015. Adjusted income (loss) attributable to
shareholders of Cellectis for the fourth quarter of 2016 and 2015
excludes non-cash stock-based compensation expense of €13.1 million and
€12.6 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.

Full year 2016 Financial Results

Cash: As of December 31, 2016 Cellectis had €276.2 million in
total cash, cash equivalents and current financial assets compared to €
314.2 million as of December 31, 2015. This decrease of €38.0 million
was primarily driven by (i) €29.6 million of cash used in operating
activities, related to our research and development and manufacturing
efforts, including the advancement of UCART123, for which an IND was
filed in the United States in early 2017, partially offset by payments
received from Servier and Pfizer pursuant to our collaboration
agreements and R&D tax credit, and (ii) €12.5 million of cash used in
investment activities, primarily through Calyxt’s land acquisition and
greenhouse construction in an aggregate amount of €9.5 million. The
decrease was also partially offset by the positive unrealized
translation effect of exchange rate fluctuations on our U.S. dollar
cash, cash equivalents and current financial assets of €4.4 million.

Cellectis expects that its cash, cash equivalents and Current financial
assets of €276.2 million as of December 31, 2016 will be sufficient to
fund its current operations to 2019.

Revenues and Other Income: During the year ended December 31,
2015 and 2016, we recorded €56.4 million and €51.0 million,
respectively, in revenues and other income. This decrease is mainly due
(i) to the decrease of €10.4 million in collaboration revenues notably
due to revenue recorded in 2015 in relation to early exercise by Servier
of its option to acquire the exclusive worldwide rights to further
develop and commercialize UCART19 (€18.8 million) partially offset by
the revenue from an agreement to provide Servier with raw materials and
additional batches of UCART19 products and the achievement of two
milestones in 2016 (totaling €11.9 million), (ii) increases of €4.0
million in research tax credit, €0.5 million in licenses fees and €0.4
million in research subsidies.

Total Operating Expenses: Total operating expenses for the year
ended December 31, 2016 were €111.8 million, compared to €84.3 million
for the year ended December 31, 2015. The non-cash stock-based
compensation expenses included in these amounts were €53.0 million and
€30.1 million, respectively.

R&D Expenses: For the year ended December 31, 2015 and 2016,
research and development expenses increased by €18.5 million from €52.4
million in 2015 to €70.9 million in 2016. Personnel expenses increased
by €8.8 million from €35.5 million in 2015 to €44.3 million in 2016,
notably due to a €1.6 million increase in wages and salaries, and a
€11.5 million increase in non-cash stock based compensation expense,
partially offset by a €4.3 million decrease in social charges on stock
options and free share grants. Purchases and external expenses increased
by €9.8 million from €15.2 million in 2015 to €25.0 million in 2016, due
to increased expenses related to UCART123 and other product candidates’
development, including payments to third parties and costs related to
preparation of UCART123 clinical trials, purchases of biological
materials and expenses associated with the use of laboratories and other
facilities.

SG&A Expenses: During the year ended December 31, 2015 and
2016, we recorded €27.2 million and €39.2 million, respectively, of
selling, general and administrative expenses. The increase of €12.0
million primarily reflects (i) an increase of €10.7 million in personnel
expenses from €19.6 million to €30.3 million attributable to a
€0.9 million increase in wages and salaries, an increase of
€11.4 million of non-cash stock-based compensation expense, partially
offset by a decrease of €1.6 million of social charges on stock options
and free share grants, (ii) an increase of €1.9 million in purchases and
external expenses and (iii) a decrease of €0.6 in other expenses due to
lower business taxes and lower provisions.

Financial Gain (Loss): The financial gain was €7.6 million for
the year ended December 31, 2015 and the financial gain was null for the
year ended December 31, 2016. The decrease in financial income and
expenses between 2016 and 2015 was mainly attributable to the decrease
of €5.9 million in net foreign exchange gain, €1.6 million foreign
exchange derivatives fair value expense, and €0.9 million current
financial assets fair value expenses, partially offset by an increase of
€0.5 million in interest income.

Net Income (Loss) Attributable to Shareholders of Cellectis:
During the year ended December 31, 2015 and 2016, we recorded a net loss
of €20.5 million (or € 0.60 per share on both a basic and a diluted
basis) and a net loss of €60.8 million (or €1.72 per share on both a
basic and diluted basis), respectively. Adjusted loss attributable to
shareholders of Cellectis for the year ended December 31, 2016 was €7.8
million (€0.22 per share on both a basic and a diluted basis) compared
to Adjusted income attributable to shareholders of Cellectis of € 9.6
million (€0.28 per share on both a basic and a diluted basis), for the
year ended December 31, 2015. Adjusted income (loss) attributable to
shareholders of Cellectis for the year ended December 31, 2016 and 2015
excludes non-cash stock-based compensation expense of €53.0 million and
€30.1 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.

CELLECTIS S.A.

STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(€ in
thousands)

CELLECTIS S.A.

STATEMENT OF CONSOLIDATED OPERATIONS – Fourth quarter
(unaudited)
(€
in thousands, except per share data)

CELLECTIS S.A.

STATEMENT OF CONSOLIDATED OPERATIONS – Full years
(€ in
thousands, except per share data)

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.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME – Fourth quarter
(unaudited)
(€
in thousands, except per share data)

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME – Full years
(€
in thousands, except per share data)

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 17 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.

¹ Cellectis granted Servier an exclusive license to UCART19
product candidate, and Pfizer has been exclusively licensed by Servier
for the development and commercialization of UCART19 in U.S.
²
Translated only for convenience into U.S. dollars at an exchange rate of
€1.00=$1.0541, the daily reference rate reported by the European Central
Bank (“ECB”) as of December 31, 2016
³ Translated only
for convenience into U.S. dollars at an exchange rate of €1.00=$1.1066,
the arithmetic average of the ECB’s monthly average reference rates for
the twelve months comprising full year 2016
⁴ See the
section related to the reconciliation of GAAP to non-GAAP net income.
GAAP Net Loss attributable to shareholders amounts to $67 million (€61
million) for the year ended December, 31 2016.

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