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unaudited Condensed Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2019, 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 in order to enhance comparability with Cellectis peers, which primarily present their financial
statements in U.S. dollars. All references in this interim report to $, U.S. dollars, and dollars, mean U.S. dollars and all references to and euros mean euros, unless otherwise
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, should, 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, those 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 13, 2019, as amended on April 25, 2019 (the Annual Report ).
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 trademarks Calyxt and Calyno are 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.
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| PART I FINANCIAL INFORMATION | 3 | |||||
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 3 | ||||
| Item 2. | Management s Discussion & Analysis of Financial Condition and Results of Operations | 48 | ||||
| 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 |
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PART I FINANCIAL INFORMATION
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
| As of | ||||||||||||
| Notes | December 31, 2018 | September 30, 2019* | ||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | 1,268 | 1,120 | ||||||||||
| Property, plant, and equipment | 6 | 10,041 | 16,762 | |||||||||
| Right-of-use assets | 5 | 46,391 | ||||||||||
| Other non-current financial assets | 1,891 | 5,468 | ||||||||||
| Total non-current assets | 13,199 | 69,740 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 275 | 3,344 | ||||||||||
| Trade receivables | 7.1 | 2,971 | 8,038 | |||||||||
| Subsidies receivables | 7.2 | 17,173 | 21,165 | |||||||||
| Other current assets | 7.3 | 15,333 | 15,322 | |||||||||
| Current financial assets | 8.1 | 388 | 20,381 | |||||||||
| Cash and cash equivalents | 8.2 | 451,501 | 342,485 | |||||||||
| Total current assets | 487,641 | 410,734 | ||||||||||
| TOTAL ASSETS | 500,840 | 480,475 | ||||||||||
| LIABILITIES | ||||||||||||
| Shareholders equity | ||||||||||||
| Share capital | 12 | 2,765 | 2,766 | |||||||||
| Premiums related to the share capital | 12 | 828,525 | 839,437 | |||||||||
| Currency translation adjustment | (16,668 | ) | (30,518 | ) | ||||||||
| Retained deficit | (326,628 | ) | (406,347 | ) | ||||||||
| Net income (loss) | (78,693 | ) | (64,703 | ) | ||||||||
| Total shareholders equity - Group Share | 409,301 | 340,636 | ||||||||||
| Non-controlling interests | 40,970 | 41,135 | ||||||||||
| Total shareholders equity | 450,272 | 381,771 | ||||||||||
| Non-current liabilities | ||||||||||||
| Non-current lease debts | 9 | 1,018 | 44,466 | |||||||||
| Non-current provisions | 15 | 2,681 | 2,857 | |||||||||
| Total non-current liabilities | 3,699 | 47,323 | ||||||||||
| Current liabilities | ||||||||||||
| Current lease debts | 9 | 333 | 2,996 | |||||||||
| Trade payables | 9 | 15,883 | 19,761 | |||||||||
| Deferred revenues and contract liabilities | 11 | 20,754 | 19,586 | |||||||||
| Current provisions | 15 | 1,530 | 1,891 | |||||||||
| Other current liabilities | 10 | 8,369 | 7,147 | |||||||||
| Total current liabilities | 46,869 | 51,381 | ||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 500,840 | 480,475 |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
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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 | 2018 | 2019* | ||||||||||
| Revenues and other income | ||||||||||||
| Revenues | 3.1 | 11,861 | 10,756 | |||||||||
| Other income | 3.1 | 6,592 | 5,887 | |||||||||
| Total revenues and other income | 18,453 | 16,643 | ||||||||||
| Operating expenses | ||||||||||||
| Cost of revenue | 3.2 | (2,016 | ) | (5,698 | ) | |||||||
| Research and development expenses | 3.2 | (55,169 | ) | (61,604 | ) | |||||||
| Selling, general and administrative expenses | 3.2 | (36,772 | ) | (34,270 | ) | |||||||
| Other operating income (expenses) | (138 | ) | (9 | ) | ||||||||
| Total operating expenses | (94,095 | ) | (101,582 | ) | ||||||||
| Operating income (loss) | (75,642 | ) | (84,938 | ) | ||||||||
| Financial gain (loss) | 13,598 | 11,073 | ||||||||||
| Income tax | ||||||||||||
| Net income (loss) | (62,044 | ) | (73,865 | ) | ||||||||
| Attributable to shareholders of Cellectis | (55,425 | ) | (64,703 | ) | ||||||||
| Attributable to non-controlling interests | (6,619 | ) | (9,162 | ) | ||||||||
| 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) | (1.38 | ) | (1.52 | ) | ||||||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) | (1.38 | ) | (1.52 | ) |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
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UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the nine-month period ended September 30,
| For the nine-month period ended September 30, | ||||||||
| 2018 | 2019 | |||||||
| Net income (loss) | (62,044 | ) | (73,865 | ) | ||||
| Actuarial gains and losses | (441 | ) | ||||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | (441 | ) | ||||||
| Currency translation adjustment | (16,071 | ) | (13,596 | ) | ||||
| Commodity derivative contracts | (55 | ) | ||||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (16,071 | ) | (13,650 | ) | ||||
| Total Comprehensive income (loss) | (78,114 | ) | (87,957 | ) | ||||
| Attributable to shareholders of Cellectis | (70,821 | ) | (79,032 | ) | ||||
| Attributable to non-controlling interests | (7,294 | ) | (8,925 | ) |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
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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, | ||||||||||
| Notes | 2018 | 2019* | ||||||||
| Revenues and other income | ||||||||||
| Revenues | 3.1 | 906 | 8,487 | |||||||
| Other income | 3.1 | 1,286 | 1,719 | |||||||
| Total revenues and other income | 2,192 | 10,206 | ||||||||
| Operating expenses | ||||||||||
| Cost of revenue | 3.2 | (868 | ) | (4,256 | ) | |||||
| Research and development expenses | 3.2 | (18,694 | ) | (21,596 | ) | |||||
| Selling, general and administrative expenses | 3.2 | (11,562 | ) | (10,967 | ) | |||||
| Other operating income (expenses) | 30 | (38 | ) | |||||||
| Total operating expenses | (31,096 | ) | (36,857 | ) | ||||||
| Operating income (loss) | (28,904 | ) | (26,651 | ) | ||||||
| Financial gain (loss) | 3,591 | 7,167 | ||||||||
| Income tax | ||||||||||
| Net income (loss) | (25,313 | ) | (19,484 | ) | ||||||
| Attributable to shareholders of Cellectis | (22,805 | ) | (15,999 | ) | ||||||
| Attributable to non-controlling interests | (2,508 | ) | (3,485 | ) | ||||||
| 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) | (0.54 | ) | (0.38 | ) | ||||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ( $ /share) | (0.54 | ) | (0.38 | ) |
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UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the three-month periods ended September 30,
| For the three-month period ended September 30, | ||||||||
| 2018 | 2019 | |||||||
| Net income (loss) | (25,313 | ) | (19,484 | ) | ||||
| Actuarial gains and losses | (196 | ) | ||||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | (196 | ) | ||||||
| Currency translation adjustment | (11,537 | ) | ||||||
| Commodity derivative contracts | (2,224 | ) | (17 | ) | ||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (2,224 | ) | (11,554 | ) | ||||
| Total Comprehensive income (loss) | (27,537 | ) | (31,234 | ) | ||||
| Attributable to shareholders of Cellectis | (25,030 | ) | (27,734 | ) | ||||
| Attributable to non-controlling interests | (2,507 | ) | (3,500 | ) |
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UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the nine-month period ended September 30,
| For the nine-month period ended September 30, | ||||||||||||
| Notes | 2018 | 2019 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss for the period | (62,044 | ) | (73,865 | ) | ||||||||
| Reconciliation of net loss and of the cash provided by (used in) operating activities | ||||||||||||
| Adjustments for | ||||||||||||
| Amortization and depreciation | 1,730 | 4,939 | ||||||||||
| Net loss (income) on disposals | 87 | 25 | ||||||||||
| Net financial loss (gain) | (13,598 | ) | (11,073 | ) | ||||||||
| Expenses related to share-based payments | 29,164 | 19,787 | ||||||||||
| Provisions | (364 | ) | 272 | |||||||||
| Other non cash items | 418 | |||||||||||
| Interest (paid) / received | 4,928 | 5,844 | ||||||||||
| Operating cash flows before change in working capital | (39,679 | ) | (54,071 | ) | ||||||||
| Decrease (increase) in inventories | 19 | (3,105 | ) | |||||||||
| Decrease (increase) in trade receivables and other current assets | (1,749 | ) | (8,150 | ) | ||||||||
| Decrease (increase) in subsidies receivables | (6,502 | ) | (5,012 | ) | ||||||||
| (Decrease) increase in trade payables and other current liabilities | 7,357 | 3,950 | ||||||||||
| (Decrease) increase in deferred income | (6,981 | ) | 129 | |||||||||
| Change in working capital | (7,856 | ) | (12,189 | ) | ||||||||
| Net cash flows provided by (used in) operating activities | (47,535 | ) | (66,260 | ) | ||||||||
| Cash flows from investment activities | ||||||||||||
| Proceeds from disposal of property, plant and equipment | 19 | 414 | ||||||||||
| Acquisition of intangible assets | 4 | (32 | ) | |||||||||
| Acquisition of property, plant and equipment | (2,419 | ) | (10,277 | ) | ||||||||
| Net change in non-current financial assets | 223 | (3,604 | ) | |||||||||
| Sale (Acquisition) of current financial assets | 39,853 | (19,840 | ) | |||||||||
| Net cash flows provided by (used in) investing activities | 37,680 | (33,339 | ) | |||||||||
| Cash flows from financing activities | ||||||||||||
| Increase in share capital net of transaction costs | 186,433 | |||||||||||
| Shares of Calyxt issued to / (purchased from) third parties | 49,665 | (332 | ) | |||||||||
| Payments on lease debts | (65 | ) | (2,505 | ) | ||||||||
| Treasury shares | 297 | |||||||||||
| Net cash flows provided by (used in) financing activities | 236,330 | (2,837 | ) | |||||||||
| (Decrease) increase in cash and cash equivalents | 226,475 | (102,435 | ) | |||||||||
| Cash and cash equivalents at the beginning of the year | 256,380 | 451,501 | ||||||||||
| Effect of exchange rate changes on cash | (7,080 | ) | (6,581 | ) | ||||||||
| Cash and cash equivalents at the end of the period | 8 | 475,775 | 342,485 |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
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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, 2018, as restated (*) | 35,960,062 | 2,367 | 614,037 | (297 | ) | 1,834 | (253,702 | ) | (99,368 | ) | 264,872 | 19,113 | 283,985 | |||||||||||||||||||||||||||||
| Net Loss | (55,425 | ) | (55,425 | ) | (6,619 | ) | (62,044 | ) | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (15,396 | ) | (15,396 | ) | (675 | ) | (16,071 | ) | ||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (15,396 | ) | (55,425 | ) | (70,821 | ) | (7,294 | ) | (78,114 | ) | ||||||||||||||||||||||||||||||||
| Allocation of prior period loss | (99,368 | ) | 99,368 | |||||||||||||||||||||||||||||||||||||||
| Capital Increase | 6,146,000 | 379 | 178,209 | 178,588 | 178,588 | |||||||||||||||||||||||||||||||||||||
| Transaction with subsidiaries (1) | 26,680 | 26,680 | 22,986 | 49,665 | ||||||||||||||||||||||||||||||||||||||
| Treasury shares | 297 | (59 | ) | 238 | 238 | |||||||||||||||||||||||||||||||||||||
| Exercise of share warrants, employee warrants and stock options | 323,364 | 19 | 7,825 | 7,845 | 7,845 | |||||||||||||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 13 | 23,282 | 23,282 | 5,882 | 29,164 | |||||||||||||||||||||||||||||||||||||
| Other movements | (35 | ) | (35 | ) | (15 | ) | (50 | ) | ||||||||||||||||||||||||||||||||||
| As of September 30, 2018 | 42,429,426 | 2,765 | 823,353 | (13,561 | ) | (326,484 | ) | (55,425 | ) | 430,648 | 40,672 | 471,320 | ||||||||||||||||||||||||||||||
| 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 | 12 | 15,600 | 1 | (1 | ) | |||||||||||||||||||||||||||||||||||||
| Transaction with subsidiaries (2) | (543 | ) | (543 | ) | 211 | (332 | ) | |||||||||||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 13 | 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 |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
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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 to develop healthier food products for a growing population.
Cellectis, Inc., Cellectis Biologics Inc. (which was incorporated on January 18, 2019) and Calyxt, Inc. are sometimes referred to as a consolidated group of companies as the Group.
Note 2. Accounting principles
The Interim Condensed Consolidated Financial Statements of Cellectis as of September 30, 2019 and for the three-month and
nine-month periods ended September 30, 2019 were approved by our Board of Directors on November 6, 2019.
The Interim Condensed Consolidated
Financial Statements are presented in U.S. dollars. See Note 2.4.
The Interim Condensed Consolidated Financial Statements as of September 30, 2019
and for the three-month and nine-month periods ended September 30, 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board ( IASB ).
The Interim Condensed Consolidated Financial Statements as of September 30, 2019 and for the three-month and nine-month periods ended September 30,
2019 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2018, except as described below related to the new or amended 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 standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2019 but had no significant impact on the Interim Condensed
Consolidated Financial Statements:
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Standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for accounting periods beginning after January 1, 2020. 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 IFRS16 application
Since January 1, 2019, Cellectis has applied the new standard IFRS 16 Leases .
Under this standard, a financial asset and a financial liability are recognized for Group leases that meet the standard s criteria.
The financial statements for the 2018 financial year have not been restated in accordance with the transition options of IFRS 16 elected by the Group since
Cellectis has applied the modified retrospective approach.
The Group uses the two capitalization exemptions provided by the standard:
The Group has also applied the following practical expedients at the transition date:
The following discount rates have been applied:
The main changes introduced by IFRS 16 are the following:
Capitalization of the right-of-use assets for real-estate lease contracts:
Identified lease contracts mainly concern Cellectis Headquarters and R&D buildings in Paris, New York and Raleigh, North Carolina, USA and
Calyxt s Headquarters and its production and storage areas in Roseville, Minnesota, USA.
For purposes of IFRS 16, the lease term corresponds to the non-terminable period as extended, if applicable, by renewal options whose exercise by the Group are reasonably certain.