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unaudited condensed Consolidated Financial Statements for the nine-month period ended September 30, 2020, included herein, have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the
International Accounting Standards Board ( IASB ). The Consolidated Financial Statements are presented in U.S. dollars. All references in this interim report to $, and U.S. dollars mean U.S. dollars and all
references to and euros mean euros, unless otherwise noted.
This interim report, including
Management s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the
Securities Act. All statements other than present and historical facts and conditions contained in this interim report, including statements regarding our future results of operations and financial position, business strategy, plans and our
objectives for future operations, are forward-looking statements. When used in this interim report, the words anticipate, believe, can, could, estimate, expect,
intend, is designed to, may, might, plan, potential, predict, objective, scheduled, should, will or the negative of
these and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those projected in any forward-looking statement. Factors that may cause actual results to differ from those in any
forward-looking statement include, without limitation, the severity and duration of the evolving COVID-19 pandemic and the resulting impact on macro-economic conditions; inconclusive clinical trial results or
clinical trials failing to achieve one or more endpoints, early data not being repeated in ongoing or future clinical trials, failures to secure required regulatory approvals, disruptions from failures by third-parties on whom we rely in connection
with our clinical trials, delays or negative determinations by regulatory authorities, changes or increases in oversight and regulation; increased competition; manufacturing delays or problems, inability to achieve enrollment targets, disagreements
with our collaboration partners or failures of collaboration partners to pursue product candidates, legal challenges, including product liability claims or intellectual property disputes, commercialization factors, including regulatory approval and
pricing determinations, disruptions to access to raw materials or starting material, proliferation and continuous evolution of new technologies; disruptions to Calyxt s business, including disruptions resulting from Calyxt s execution of
its streamlined business model; management changes; dislocations in the capital markets; and other important factors, described under Risk Factors and Special Note Regarding Forward-Looking Statements in our Annual Report on
Form 20-F filed with the Securities and Exchange Commission on March 5, 2020 (the Annual Report ) and under Risk Factors in the interim reports that we file with the Securities and
Exchange Commission. As a result of these factors, we cannot assure you that the forward-looking statements in this interim report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may
be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any
specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
We own various trademark registrations and applications, and unregistered trademarks and service marks, including Cellectis , TALEN and our corporate logos, and all such trademarks and service marks appearing in this interim report are the property of Cellectis.
The trademark Calyxt is owned by Calyxt. All other trade names, trademarks and service marks of other companies appearing in this interim report are the property of their respective holders.
Solely for convenience, the trademarks and trade names in this interim report may be referred to without the and symbols, but such
references, or the failure of such symbols to appear, should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other
companies trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
As used in this interim report, the terms Cellectis, we, our, us, and the
Company refer to Cellectis S.A. and its subsidiaries, taken as a whole, unless the context otherwise requires. References to Calyxt refer to Calyxt, Inc. and its subsidiaries, taken as whole.
| PART I FINANCIAL INFORMATION | 7 | |||||
| Item 1. | Condensed Financial Statements (Unaudited) | 7 | ||||
| Item 2. | Management s Discussion & Analysis of Financial Condition and Results of Operations | 42 | ||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 62 | ||||
| Item 4. | Controls and Procedures | 62 | ||||
| PART II OTHER INFORMATION | 63 | |||||
| Item 1. | Legal Proceedings | 63 | ||||
| Item 1A. | Risk Factors | 63 | ||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 63 | ||||
| Item 3. | Default Upon Senior Securities | 63 | ||||
| Item 4. | Mine Safety Disclosures | 63 | ||||
| Item 5. | Other Information | 63 | ||||
| Item 6. | Exhibits | 63 |
PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (unaudited)
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
| As of | ||||||||||||
| Notes | December 31, 2019 | September 30, 2020 | ||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | 1,108 | 1,074 | ||||||||||
| Property, plant, and equipment | 6 | 23,712 | 64,071 | |||||||||
| Right-of-use assets | 5 | 45,612 | 64,313 | |||||||||
| Other non-current financial assets | 5,517 | 9,781 | ||||||||||
| Total non-current assets | 75,949 | 139,239 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 2,897 | 6,262 | ||||||||||
| Trade receivables | 7.1 | 2,959 | 4,036 | |||||||||
| Subsidies receivables | 7.2 | 9,140 | 8,364 | |||||||||
| Other current assets | 7.3 | 15,617 | 24,872 | |||||||||
| Current financial assets | 8.1 | 20,385 | 41,242 | |||||||||
| Cash and cash equivalents | 8.2 | 340,522 | 260,941 | |||||||||
| Total current assets | 391,520 | 345,718 | ||||||||||
| TOTAL ASSETS | 467,469 | 484,957 | ||||||||||
| LIABILITIES | ||||||||||||
| Shareholders equity | ||||||||||||
| Share capital | 12 | 2,767 | 2,768 | |||||||||
| Premiums related to the share capital | 12 | 843,478 | 851,348 | |||||||||
| Currency translation adjustment | (22,641 | ) | (13,556 | ) | ||||||||
| Retained deficit | (406,390 | ) | (508,586 | ) | ||||||||
| Net income (loss) | (102,091 | ) | (41,605 | ) | ||||||||
| Total shareholders equity Group Share | 315,123 | 290,369 | ||||||||||
| Non-controlling interests | 40,347 | 35,841 | ||||||||||
| Total shareholders equity | 355,470 | 326,210 | ||||||||||
| Non-current liabilities | ||||||||||||
| Non-current financial liabilities | 9 | 31,473 | ||||||||||
| Non-current lease debts | 9 | 46,540 | 67,357 | |||||||||
| Non-current provisions | 15 | 2,855 | 3,303 | |||||||||
| Total non-current liabilities | 49,395 | 102,134 | ||||||||||
| Current liabilities | ||||||||||||
| Current lease debts | 9 | 1,067 | 4,331 | |||||||||
| Trade payables | 9 | 29,264 | 35,003 | |||||||||
| Deferred revenues and contract liabilities | 11 | 20,033 | 440 | |||||||||
| Current provisions | 15 | 3,743 | 1,109 | |||||||||
| Other current liabilities | 10 | 8,497 | 15,731 | |||||||||
| Total current liabilities | 62,604 | 56,613 | ||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 467,469 | 484,957 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the nine-month period ended September 30,
$ in thousands, except per share amounts
| For the nine-month period ended September 30, | ||||||||||||
| Notes | 2019 | 2020 | ||||||||||
| Revenues and other income | ||||||||||||
| Revenues | 3.1 | 10,756 | 60,037 | |||||||||
| Other income | 3.1 | 5,887 | 6,510 | |||||||||
| Total revenues and other income | 16,643 | 66,547 | ||||||||||
| Operating expenses | ||||||||||||
| Cost of revenue | 3.2 | (5,698 | ) | (18,159 | ) | |||||||
| Research and development expenses | 3.2 | (61,604 | ) | (63,594 | ) | |||||||
| Selling, general and administrative expenses | 3.2 | (34,270 | ) | (31,765 | ) | |||||||
| Other operating income (expenses) | (9 | ) | (291 | ) | ||||||||
| Total operating expenses | (101,582 | ) | (113,810 | ) | ||||||||
| Operating income (loss) | (84,938 | ) | (47,263 | ) | ||||||||
| Financial gain (loss) | 11,073 | (4,733 | ) | |||||||||
| Income tax | ||||||||||||
| Net income (loss) | (73,865 | ) | (51,996 | ) | ||||||||
| Attributable to shareholders of Cellectis | (64,703 | ) | (41,605 | ) | ||||||||
| Attributable to non-controlling interests | (9,162 | ) | (10,391 | ) | ||||||||
| Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis | 14 | |||||||||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ( $ /share) | (1.52 | ) | (0.98 | ) | ||||||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ( $ /share) | (1.52 | ) | (0.98 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the nine-month period ended September 30,
| For the nine-month period ended September 30, | ||||||||
| 2019 | 2020 | |||||||
| Net income (loss) | (73,865 | ) | (51,996 | ) | ||||
| Actuarial gains and losses | (441 | ) | (17 | ) | ||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | (441 | ) | (17 | ) | ||||
| Currency translation adjustment | (13,596 | ) | 9,611 | |||||
| Commodity derivative contracts | (55 | ) | (58 | ) | ||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (13,650 | ) | 9,553 | |||||
| Total Comprehensive income (loss) | (87,957 | ) | (42,460 | ) | ||||
| Attributable to shareholders of Cellectis | (79,032 | ) | (32,574 | ) | ||||
| Attributable to non-controlling interests | (8,925 | ) | (9,885 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the three-month period ended September 30,
$ in thousands, except per share amounts
| For the three-month period ended September 30, | ||||||||
| 2019 | 2020 | |||||||
| Revenues and other income | ||||||||
| Revenues | 8,487 | 6,179 | ||||||
| Other income | 1,719 | 3,063 | ||||||
| Total revenues and other income | 10,206 | 9,242 | ||||||
| Operating expenses | ||||||||
| Cost of revenue | (4,256 | ) | (7,820 | ) | ||||
| Research and development expenses | (21,596 | ) | (20,103 | ) | ||||
| Selling, general and administrative expenses | (10,967 | ) | (10,301 | ) | ||||
| Other operating income (expenses) | (38 | ) | (374 | ) | ||||
| Total operating expenses | (36,857 | ) | (38,595 | ) | ||||
| Operating income (loss) | (26,651 | ) | (29,353 | ) | ||||
| Financial gain (loss) | 7,167 | (4,250 | ) | |||||
| Income tax | ||||||||
| Net income (loss) | (19,484 | ) | (33,602 | ) | ||||
| Attributable to shareholders of Cellectis | (15,999 | ) | (30,297 | ) | ||||
| Attributable to non-controlling interests | (3,485 | ) | (3,305 | ) | ||||
| Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis | ||||||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ( $ /share) | (0.38 | ) | (0.71 | ) | ||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ( $ /share) | (0.38 | ) | (0.71 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the three-month period ended September 30,
| For the three-month period ended September 30, | ||||||||
| 2019 | 2020 | |||||||
| Net income (loss) | (19,484 | ) | (33,602 | ) | ||||
| Actuarial gains and losses | (196 | ) | (160 | ) | ||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | (196 | ) | (160 | ) | ||||
| Currency translation adjustment | (11,537 | ) | 10,245 | |||||
| Commodity derivative contracts | (17 | ) | ||||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (11,554 | ) | 10,245 | |||||
| Total Comprehensive income (loss) | (31,234 | ) | (22,622 | ) | ||||
| Attributable to shareholders of Cellectis | (27,734 | ) | (19,369 | ) | ||||
| Attributable to non-controlling interests | (3,500 | ) | (3,253 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the nine-month period ended September 30,
| For the nine-month period ended September 30, | ||||||||||||
| Notes | 2019 | 2020 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income (loss) for the period | (73,865 | ) | (51,996 | ) | ||||||||
| Reconciliation of net income (loss) and of the cash provided by (used in) operating activities | ||||||||||||
| Adjustments for | ||||||||||||
| Amortization and depreciation | 4,939 | 6,776 | ||||||||||
| Net loss (income) on disposals | 25 | 27 | ||||||||||
| Net financial loss (gain) | (11,073 | ) | 4,748 | |||||||||
| Expenses related to share-based payments | 19,787 | 12,808 | ||||||||||
| Provisions | 272 | (2,426 | ) | |||||||||
| Other non cash items | (20 | ) | ||||||||||
| Interest (paid) / received | 5,844 | 3,705 | ||||||||||
| Operating cash flows before change in working capital | (54,071 | ) | (26,378 | ) | ||||||||
| Decrease (increase) in inventories | (3,105 | ) | (3,353 | ) | ||||||||
| Decrease (increase) in trade receivables and other current assets | (8,150 | ) | (2,741 | ) | ||||||||
| Decrease (increase) in subsidies receivables | (5,012 | ) | 1,112 | |||||||||
| (Decrease) increase in trade payables and other current liabilities | 3,950 | 4,603 | ||||||||||
| (Decrease) increase in deferred income | 129 | (19,617 | ) | |||||||||
| Change in working capital | (12,189 | ) | (19,996 | ) | ||||||||
| Net cash flows provided by (used in) operating activities | (66,260 | ) | (46,374 | ) | ||||||||
| Cash flows from investment activities | ||||||||||||
| Proceeds from disposal of property, plant and equipment | 414 | |||||||||||
| Acquisition of intangible assets | (32 | ) | (43 | ) | ||||||||
| Acquisition of property, plant and equipment | (10,277 | ) | (28,226 | ) | ||||||||
| Net change in non-current financial assets | (3,604 | ) | (2,480 | ) | ||||||||
| Sale (Acquisition) of current financial assets | (19,840 | ) | (20,856 | ) | ||||||||
| Net cash flows provided by (used in) investing activities | (33,339 | ) | (51,604 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Increase in share capital net of transaction costs | 183 | |||||||||||
| Shares of Calyxt issued to third parties | (332 | ) | 211 | |||||||||
| Increase in borrowings | 23,849 | |||||||||||
| Payments on lease debts | (2,505 | ) | (9,598 | ) | ||||||||
| Net cash flows provided by (used in) financing activities | (2,837 | ) | 14,645 | |||||||||
| (Decrease) increase in cash and cash equivalents | (102,435 | ) | (83,333 | ) | ||||||||
| Cash and cash equivalents at the beginning of the year | 451,501 | 340,522 | ||||||||||
| Effect of exchange rate changes on cash | (6,581 | ) | 3,753 | |||||||||
| Cash and cash equivalents at the end of the period | 8 | 342,485 | 260,941 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
For the nine-month period ended September 30,
$ in thousands, except share data
| Share Capital Ordinary Shares | Equity | |||||||||||||||||||||||||||||||||||||||||||
| Notes | Number of shares | Amount | Premiums related to share capital | Treasury shares reserve | Currency translation adjustment | Retained earnings (deficit) | Income (Loss) | attributable to shareholders of Cellectis | Non controlling interests | Total Shareholders Equity | ||||||||||||||||||||||||||||||||||
| As of January 1, 2019 | 42,430,069 | 2,765 | 828,525 | (16,668 | ) | (326,628 | ) | (78,693 | ) | 409,301 | 40,970 | 450,272 | ||||||||||||||||||||||||||||||||
| Net Loss | (64,703 | ) | (64,703 | ) | (9,162 | ) | (73,865 | ) | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (13,850 | ) | (479 | ) | (14,329 | ) | 237 | (14,092 | ) | |||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (13,850 | ) | (479 | ) | (64,703 | ) | (79,032 | ) | (8,925 | ) | (87,957 | ) | ||||||||||||||||||||||||||||||||
| Allocation of prior period loss | (78,693 | ) | 78,693 | |||||||||||||||||||||||||||||||||||||||||
| Capital Increase | 15,600 | 1 | (1 | ) | ||||||||||||||||||||||||||||||||||||||||
| Transaction with subsidiaries | (543 | ) | (543 | ) | 211 | (332 | ) | |||||||||||||||||||||||||||||||||||||
| Treasury shares | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of share warrants, employee warrants and stock options | 11 | |||||||||||||||||||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 12 | 10,909 | 10,909 | 8,879 | 19,787 | |||||||||||||||||||||||||||||||||||||||
| Other movements | 3 | (3 | ) | |||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2019 | 42,445,669 | 2,766 | 839,437 | (30,518 | ) | (406,347 | ) | (64,703 | ) | 340,636 | 41,135 | 381,771 | ||||||||||||||||||||||||||||||||
| As of January 1, 2020 | 42,465,669 | 2,767 | 843,478 | (22,641 | ) | (406,390 | ) | (102,091 | ) | 315,123 | 40,347 | 355,470 | ||||||||||||||||||||||||||||||||
| Net Loss | (41,605 | ) | (41,605 | ) | (10,391 | ) | (51,996 | ) | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 9,087 | (56 | ) | 9,031 | 506 | 9,537 | ||||||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | 9,087 | (56 | ) | (41,605 | ) | (32,574 | ) | (9,885 | ) | (42,460 | ) | |||||||||||||||||||||||||||||||||
| Allocation of prior period loss | (102,091 | ) | 102,091 | |||||||||||||||||||||||||||||||||||||||||
| Transaction with subsidiaries | 6 | 144 | 150 | 67 | 217 | |||||||||||||||||||||||||||||||||||||||
| Operation between shareholders | (8 | ) | (201 | ) | (210 | ) | 201 | (8 | ) | |||||||||||||||||||||||||||||||||||
| Exercise of share warrants, employee warrants and stock options | 20,464 | 1 | 182 | 183 | 183 | |||||||||||||||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 7,696 | 7,696 | 5,111 | 12,808 | ||||||||||||||||||||||||||||||||||||||||
| Other movements | (8 | ) | 8 | |||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2020 | 42,486,133 | 2,768 | 851,348 | (13,556 | ) | (508,586 | ) | (41,605 | ) | 290,369 | 35,841 | 326,210 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Cellectis S.A. (hereinafter Cellectis or we ) is a limited liability company ( soci t
anonyme ) registered and domiciled in Paris, France. We are a clinical-stage biotechnological company, employing our core proprietary technologies to develop
best-in-class products in the field of immuno-oncology. Our product candidates, based on gene-edited T-cells that express
chimeric antigen receptors, or CARs, seek to harness the power of the immune system to target and eradicate cancer cells. Our gene-editing technologies allow us to create allogeneic CAR T-cells, meaning they
are derived from healthy donors rather than the patients themselves. Our gene editing expertise also enables us to develop product candidates that feature additional safety and efficacy attributes, including control properties designed to prevent
them from attacking healthy tissues, to enable them to tolerate standard oncology treatments, and to equip them to resist mechanisms that inhibit immune-system activity. In addition to our focus on immuno-oncology, we are exploring the use of our
gene-editing technologies in other therapeutic applications, as well as through our subsidiary, Calyxt, to deliver plant-based innovations and solutions with substantial disruption potential across multiple industries.
Cellectis S.A., Cellectis, Inc., Cellectis Biologics Inc. (which was incorporated on January 18, 2019) and Calyxt are sometimes referred to as a
consolidated group of companies as the Group.
Note 2. Accounting principles
2.1 Basis for preparation
The Interim Consolidated
Financial Statements of Cellectis as of September 30, 2020 and for the three-month and nine-month period ended September 30, 2020 were approved by our Board of Directors on November 5, 2020.
The Interim Consolidated Financial Statements are presented in U.S. dollars. See Note 2.2.
The Interim Consolidated Financial Statements as of September 30, 2020 and for the three-month and nine-month period ended September 30, 2020 have
been prepared in accordance with International Accounting Standard ( IAS ) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board ( IASB ).
The Interim Consolidated Financial Statements as of September 30, 2020 and for the three-month and nine-month period ended September 30, 2020 have
been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2019, except as described below related to the new or amended accounting standards applied.
IFRS include International Financial Reporting Standards ( IFRS ), International Accounting Standards ( the IAS ), as well as the
interpretations issued by the Standards Interpretation Committee ( the SIC ), and the International Financial Reporting Interpretations Committee ( IFRIC ).
Application of new or amended accounting standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2020 but had no significant impact on the Interim Consolidated
Financial Statements:
Accounting standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for accounting periods beginning after January 1, 2021. We do not anticipate that the
adoption of these pronouncements and amendments will have a material impact on our results of operations, financial position or cash flows:
2.2 Currency of the financial statements
The Interim Consolidated Financial Statements are presented in U.S. dollars, which differs from the functional currency of Cellectis, which is the euro. We
believe that this presentation enhances the comparability with peers, which primarily present their financial statements in U.S. dollars.
information (unless indicated otherwise) is presented in thousands of U.S. dollars.
The statements of financial position of consolidated entities having
a functional currency different from the U.S. dollar are translated into U.S. dollars at the closing exchange rate (spot exchange rate at the statement of financial position date) and the statements of operations, statements of comprehensive income
(loss) and statements of cash flows of such consolidated entities are translated at the average period to date exchange rate. The resulting translation adjustments are included in equity under the caption Accumulated other comprehensive income
(loss) in the Statements of Changes in Shareholders Equity.
2.3 Consolidated entities and non-controlling interests
all the legal entities included in the consolidation. An investor controls an investee when the investor is exposed to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Control requires power, exposure to variability of returns and a linkage between the two.
To have power, the investor needs to have existing
rights that give it the current ability to direct the relevant activities that significantly affect the investee s returns.
In order to ascertain