Full Press Release Details
These unaudited condensed Interim Consolidated Financial Statements for the three-month and nine-month periods ended September 30,
2016 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 euros. All
references in this interim report to $, US$, U.S.$, U.S. dollars, dollars, and USD 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, 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 21, 2016 (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.
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.
| PART I FINANCIAL INFORMATION | 3 | |||||
| Item 1. | Condensed Financial Statements (Unaudited) | 3 | ||||
| Item 2. | Management s Discussion & Analysis of Financial Condition and Results of Operations | 29 | ||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 38 | ||||
| Item 4. | Controls and Procedures | 39 | ||||
| PART II OTHER INFORMATION | 39 | |||||
| Item 1. | Legal Proceedings | 39 | ||||
| Item 1A. | Risk Factors | 39 | ||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 | ||||
| Item 3. | Defaults Upon Senior Securities | 39 | ||||
| Item 4. | Mine Safety Disclosures | 40 | ||||
| Item 5. | Other Information | 40 | ||||
| Item 6. | Exhibits | 40 |
PART I FINANCIAL INFORMATION
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
| As of | ||||||||||
| Notes | December 31, 2015 | September 30, 2016 | ||||||||
| ASSETS | ||||||||||
| Non-current assets | ||||||||||
| Intangible assets | 956 | 1,180 | ||||||||
| Property, plant, and equipment | 6 | 5,043 | 15,141 | |||||||
| Other non-current financial assets | 845 | 612 | ||||||||
| Total non-current assets | 6,844 | 16,933 | ||||||||
| Current assets | ||||||||||
| Inventories and accumulated costs on orders in process | 158 | 106 | ||||||||
| Trade receivables | 6,035 | 11,382 | ||||||||
| Subsidies receivables | 7 | 9,102 | 14,535 | |||||||
| Other current assets | 8 | 4,685 | 7,252 | |||||||
| Current financial assets | 9.1 | 77,665 | ||||||||
| Cash and cash equivalents | 9.2 | 314,238 | 186,303 | |||||||
| Total current assets | 334,218 | 297,243 | ||||||||
| TOTAL ASSETS | 341,062 | 314,177 | ||||||||
| LIABILITIES | ||||||||||
| Shareholders equity | ||||||||||
| Share capital | 10 | 1,759 | 1,767 | |||||||
| Premiums related to the share capital | 10 | 420,682 | 460,474 | |||||||
| Treasury share reserve | (184 | ) | (373 | ) | ||||||
| Currency translation adjustment | (1,631 | ) | (1,933 | ) | ||||||
| Retained earnings | (137,188 | ) | (158,032 | ) | ||||||
| Net income (loss) | (20,544 | ) | (48,309 | ) | ||||||
| Total shareholders equity - Group Share | 262,894 | 253,595 | ||||||||
| Non-controlling interests | 725 | 1,471 | ||||||||
| Total shareholders equity | 263,619 | 255,066 | ||||||||
| Non-current liabilities | ||||||||||
| Non-current financial liabilities | 12.1 | 66 | 37 | |||||||
| Non-current provisions | 14 | 437 | 581 | |||||||
| Total non-current liabilities | 503 | 619 | ||||||||
| Current liabilities | ||||||||||
| Current financial liabilities | 12.1 | 1,921 | 1,922 | |||||||
| Trade payables | 6,611 | 9,176 | ||||||||
| Deferred revenues and deferred income | 13 | 54,758 | 41,893 | |||||||
| Current provisions | 14 | 953 | 467 | |||||||
| Other current liabilities | 15 | 12,697 | 5,034 | |||||||
| Total current liabilities | 76,940 | 58,492 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 341,062 | 314,177 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED OPERATIONS
For the nine months ended September 30,
in thousands, except per share amounts
| For the nine-month period ended September 30, | ||||||||||
| Notes | 2015 | 2016 | ||||||||
| Revenues and other income | ||||||||||
| Revenues | 16.1 | 23,356 | 32,892 | |||||||
| Other income | 16.1 | 3,845 | 6,053 | |||||||
| Total revenues and other income | 27,201 | 38,945 | ||||||||
| Operating expenses and other operating income (expenses) | ||||||||||
| Royalty expenses | (1,153 | ) | (1,035 | ) | ||||||
| Research and development expenses | 17.1 | (36,375 | ) | (52,220 | ) | |||||
| Selling, general and administrative expenses | 17.1 | (19,145 | ) | (27,839 | ) | |||||
| Other operating income | 515 | 380 | ||||||||
| Redundancy plan | 14 | 259 | 3 | |||||||
| Other operating expenses | (432 | ) | (216 | ) | ||||||
| Total operating expenses and other operating income (expenses) | (56,331 | ) | (80,926 | ) | ||||||
| Operating income (loss) | (29,130 | ) | (41,981 | ) | ||||||
| Financial gain (loss) | 515 | (6,328 | ) | |||||||
| Net income (loss) | (28,615 | ) | (48,309 | ) | ||||||
| Attributable to shareholders of Cellectis | (28,786 | ) | (48,309 | ) | ||||||
| Attributable to non-controlling interests | 171 | |||||||||
| Basic / Diluted earnings per share attributable to shareholders of Cellectis | 18.1 | |||||||||
| Basic earnings per share ( /share) | (0.85 | ) | (1.37 | ) | ||||||
| Diluted earnings per share ( /share) | (0.85 | ) | (1.37 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
For the nine months ended September 30,
| For the nine-month period ended September 30, | ||||||||
| 2015 | 2016 | |||||||
| Net income (loss) | (28,615 | ) | (48,309 | ) | ||||
| Actuarial gains and losses | 36 | (94 | ) | |||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | 36 | (94 | ) | |||||
| Currency translation adjustment | (1,429 | ) | (320 | ) | ||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (1,429 | ) | (320 | ) | ||||
| Total Comprehensive income (loss) | (30,008 | ) | (48,723 | ) | ||||
| Attributable to shareholders of Cellectis | (30,114 | ) | (48,705 | ) | ||||
| Attributable to non-controlling interests | 106 | (18 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED OPERATIONS
For the three months ended September 30,
in thousands, except per share amounts
| For the three-month period ended September 30, | ||||||||||||
| Notes | 2015 | 2016 | ||||||||||
| Revenues and other income | ||||||||||||
| Revenues | 16.2 | 7,600 | 10,091 | |||||||||
| Other income | 16.2 | 2,379 | 1,215 | |||||||||
| Total revenues and other income | 9,978 | 11,306 | ||||||||||
| Operating expenses and other operating income (expenses) | ||||||||||||
| Royalty expenses | (334 | ) | (311 | ) | ||||||||
| Research and development expenses | 17.2 | (16,156 | ) | (13,824 | ) | |||||||
| Selling, general and administrative expenses | 17.2 | (6,921 | ) | (8,712 | ) | |||||||
| Other operating income | (6 | ) | ||||||||||
| Redundancy plan | 24 | 3 | ||||||||||
| Other operating expenses | (37 | ) | (10 | ) | ||||||||
| Total operating expenses and other operating income (expenses) | (23,425 | ) | (22,860 | ) | ||||||||
| Operating income (loss) | (13,447 | ) | (11,555 | ) | ||||||||
| Financial gain (loss) | 680 | (1,035 | ) | |||||||||
| Net income (loss) | (12,766 | ) | (12,590 | ) | ||||||||
| Attributable to shareholders of Cellectis | (12,766 | ) | (12,590 | ) | ||||||||
| Attributable to non-controlling interests | ||||||||||||
| Basic / Diluted earnings per share attributable to shareholders of Cellectis | 18.2 | |||||||||||
| Basic earnings per share ( /share) | (0.36 | ) | (0.36 | ) | ||||||||
| Diluted earnings per share ( /share) | (0.36 | ) | (0.36 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
For the three months ended September 30,
| For the three-month period ended September 30, | ||||||||
| 2015 | 2016 | |||||||
| Net income (loss) | (12,766 | ) | (12,590 | ) | ||||
| Actuarial gains and losses | 1 | |||||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss | 1 | |||||||
| Currency translation adjustment | (635 | ) | (429 | ) | ||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss | (635 | ) | (429 | ) | ||||
| Total Comprehensive income (loss) | (13,399 | ) | (13,019 | ) | ||||
| Attributable to shareholders of Cellectis | (13,399 | ) | (13,013 | ) | ||||
| Attributable to non-controlling interests | (6 | ) |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the nine months ended September 30,
| For the nine-month period ended September 30, | ||||||||||
| Notes | 2015 | 2016 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net loss for the period | (28,615 | ) | (48,309 | ) | ||||||
| Reconciliation of net loss and of the cash used for operating activities | ||||||||||
| Adjustments for | ||||||||||
| Amortization and depreciation | 1,228 | 1,457 | ||||||||
| Net loss on disposals | 27 | 11 | ||||||||
| Net finance expenses (revenue) | (515 | ) | 6,330 | |||||||
| Expenses related to share-based payments | 17,481 | 39,911 | ||||||||
| Provisions | (618 | ) | (441 | ) | ||||||
| Interest (paid) / received | 707 | 1,540 | ||||||||
| Operating cash flows before change in working capital | (10,305 | ) | 499 | |||||||
| Decrease (increase) in inventories | (43 | ) | 52 | |||||||
| Decrease (increase) in trade receivables and other current assets | 2,775 | (8,076 | ) | |||||||
| Decrease (increase) in subsidies receivables | 785 | (6,191 | ) | |||||||
| (Decrease) increase in trade payables and other current liabilities | 564 | (4,244 | ) | |||||||
| (Decrease) increase in deferred income | (15,758 | ) | (12,846 | ) | ||||||
| Change in working capital | (11,678 | ) | (31,305 | ) | ||||||
| Net cash flows provided by (used in) operating activities | (21,983 | ) | (30,806 | ) | ||||||
| Cash flows from investment activities | ||||||||||
| Proceeds from disposal of property, plant and equipment | 50 | |||||||||
| Sale (Acquisition) of subsidiaries net of cash disposed of | (2,850 | ) | ||||||||
| Acquisition of intangible assets | (39 | ) | (302 | ) | ||||||
| Acquisition of property, plant and equipment | (3,316 | ) | (11,259 | ) | ||||||
| Net change in non-current financial assets | 84 | 192 | ||||||||
| Acquisition of current financial assets | 9.1 | (78,787 | ) | |||||||
| Net cash flows provided by (used in) investing activities | (6,070 | ) | (90,156 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Increase in share capital net of transaction costs | 196,804 | 648 | ||||||||
| Decrease in borrowings | (1,054 | ) | (74 | ) | ||||||
| Treasury shares | (89 | ) | (189 | ) | ||||||
| Net cash flows provided by (used in) financing activities | 195,661 | 385 | ||||||||
| (Decrease) increase in cash | 167,608 | (120,577 | ) | |||||||
| Cash and cash equivalents at the beginning of the year | 112,347 | 314,238 | ||||||||
| Effect of exchange rate changes on cash | (599 | ) | (7,358 | ) | ||||||
| Cash and cash equivalents at the end of the period | 9.2 | 279,356 | 186,303 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
in thousands, except share data
| Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Share Capital | attributable | |||||||||||||||||||||||||||||||||||||||||||
| Ordinary Shares | Currency | Retained | to | Non | Total | |||||||||||||||||||||||||||||||||||||||
| Number of shares | Amount | Premiums | Treasury shares | translation adjustment | earnings (deficit) | Income (Loss) | shareholders of Cellectis | controlling interests | Shareholders Equity | |||||||||||||||||||||||||||||||||||
| As of January 1, 2015 | 29,446,721 | 1,472 | 192,842 | (251 | ) | (762 | ) | (132,536 | ) | 20 | 60,787 | (1,259 | ) | 59,528 | ||||||||||||||||||||||||||||||
| Net Loss | (28,786 | ) | (28,786 | ) | 171 | (28,615 | ) | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (1,362 | ) | 34 | (1,328 | ) | (65 | ) | (1,393 | ) | |||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (1,362 | ) | 34 | (28,786 | ) | (30,114 | ) | 106 | (30,008 | ) | ||||||||||||||||||||||||||||||||||
| Allocation of prior period loss | 20 | (20 | ) | |||||||||||||||||||||||||||||||||||||||||
| Capital Increase | 10 | 5,500,000 | 275 | 194,387 | (3 | ) | 194,659 | 194,659 | ||||||||||||||||||||||||||||||||||||
| Purchase of non-controlling interests | (4,653 | ) | (4,653 | ) | 1,153 | (3,500 | ) | |||||||||||||||||||||||||||||||||||||
| Treasury shares | (89 | ) | (89 | ) | (89 | ) | ||||||||||||||||||||||||||||||||||||||
| Exercise of share warrants and employee warrants | 10 | 153,997 | 8 | 1,496 | (3 | ) | 1,501 | 1,501 | ||||||||||||||||||||||||||||||||||||
| Share based compensation | 17,218 | 17,218 | 262 | 17,480 | ||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2015 | 35,100,718 | 1,755 | 405,943 | (340 | ) | (2,124 | ) | (137,140 | ) | (28,786 | ) | 239,307 | 262 | 239,570 | ||||||||||||||||||||||||||||||
| As of January 1, 2016 | 35,178,614 | 1,759 | 420,682 | (184 | ) | (1,632 | ) | (137,188 | ) | (20,544 | ) | 262,894 | 725 | 263,619 | ||||||||||||||||||||||||||||||
| Net Loss | (48,309 | ) | (48,309 | ) | (48,309 | ) | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (302 | ) | (94 | ) | (395 | ) | (18 | ) | (413 | ) | ||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (302 | ) | (94 | ) | (48,309 | ) | (48,705 | ) | (18 | ) | (48,723 | ) | ||||||||||||||||||||||||||||||||
| Allocation of prior period loss | (20,544 | ) | 20,544 | |||||||||||||||||||||||||||||||||||||||||
| Treasury shares | (189 | ) | (189 | ) | (189 | ) | ||||||||||||||||||||||||||||||||||||||
| Exercise of share warrants and employee warrants | 10 | 154,958 | 8 | 646 | (5 | ) | 648 | 648 | ||||||||||||||||||||||||||||||||||||
| Share based compensation | 39,147 | 39,147 | 764 | 39,911 | ||||||||||||||||||||||||||||||||||||||||
| Other movements | (201 | ) | (201 | ) | (201 | ) | ||||||||||||||||||||||||||||||||||||||
| As of September 30, 2016 | 35,333,572 | 1,767 | 460,474 | (373 | ) | (1,933 | ) | (158,032 | ) | (48,309 | ) | 253,594 | 1,471 | 255,066 |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
NOTES TO THE UNAUDITED 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 gene-editing company, employing our core proprietary technologies to develop products in the emerging 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 cancers. Our gene-editing technologies allow us to create allogeneic CAR T-cells, meaning they are derived from healthy donors rather than
the patients themselves. 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.
We view our operations and manage our business in two operating and reportable segments that are engaged in the following activities: (1) Therapeutics,
which is focused on the development of products in the field of immuno-oncology and of novel therapies outside immuno-oncology to treat other human diseases; (2) Plants, which is focused on the development of new generation plant products in
the field of agricultural biotechnology on our own or through alliances with other companies in the agricultural industry.
presentation and statement of compliance
All financial information (unless indicated otherwise) is presented in thousands of euros.
2.1 Compliance with the IFRS accounting framework
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 ).
The Interim Consolidated Financial Statements as of and for the three-month and nine-month periods ended September 30, 2016 have been prepared in
accordance with IAS 34 Interim Financial Reporting, as endorsed by the International Accounting Standards Board ( IASB ).
Consolidated Financial Statements as of and for the three-month and nine-month periods ended September 30, 2016 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2015.
These Interim Consolidated Financial Statements as of and for the three-month and nine-month periods ended September 30, 2016 were approved by our Board
of Directors on November 22, 2016.
Cellectis reclassified certain expenses related to the year ended December 31, 2015 from SG&A expenses
to R&D expenses in the fourth quarter of 2015. This reclassification is effective starting in 2015, and is due to the increased level of efforts towards our R&D activities in order to develop product candidates and work toward clinical
phases. Starting in 2015, we classify personnel and other costs related to information technology, human resources, business development, legal, intellectual property and general management in Research and development expenses based on the time that
employees spent contributing to research and development activities versus general and administrative activities. We approved the reclassification in Q4 2015 and assess the performance of the consolidated company based on this new classification.
| Three-month period ended | Nine-month period ended | |||||||||||||||
| March 31, 2015 | June 30, 2015 | September 30, 2015 | September 30, 2015 | |||||||||||||
| in thousands | ||||||||||||||||
| Expenses reclassified from SG&A to R&D | (1,836 | ) | (2,216 | ) | (2,681 | ) | (6,733 | ) | ||||||||
| R&D expenses as reported | (5,600 | ) | (10,565 | ) | (13,476 | ) | (29,641 | ) | ||||||||
| R&D expenses as amended | (7,436 | ) | (12,782 | ) | (16,157 | ) | (36,375 | ) | ||||||||
| SG&A expenses as reported | (7,195 | ) | (9,082 | ) | (9,602 | ) | (25,879 | ) | ||||||||
| SG&A expenses as amended | (5,359 | ) | (6,865 | ) | (6,921 | ) | (19,145 | ) |
2.2 Application of new or amended standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2016 but had no significant impact on the Interim Consolidated
Financial Statements:
2.3 Standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for first quarter accounting periods beginning after January 1, 2017. 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.
IFRS 15 Revenue from Contracts with Customers
establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue . IFRS 15 is effective for annual reporting periods
beginning on or after January 1, 2018, with early adoption permitted. We are assessing the potential impact on our consolidated financial statements resulting from the application of IFRS 15.
In January 2016, the IASB issued IFRS 16 Leases , which is effective for annual periods beginning on or after January 1, 2019. This new
standard aligns the accounting treatment of operating leases with that already applied to finance leases (i.e. recognition in the balance sheet of future lease payments and the associated rights of use).
Note 3. Consolidated entities
2015 and for the nine months ended September 30, 2016, the consolidated group of companies (sometimes referred to as the Group ) includes Cellectis S.A., Cellectis, Inc. and Calyxt, Inc. Cellectis, Inc. and Calyxt, Inc. are fully
owned by Cellectis S.A.
Our Interim Consolidated Financial Statements for the nine months ended September 30, 2015 include the
operations of Cellectis S.A.; our two French subsidiaries, Cellectis Bioresearch and Ectycell; our three U.S. subsidiaries, Calyxt, Inc., Cellectis, Inc. and Cellectis Bioresearch Inc. Non-controlling shareholders held a 24.5% interest in Cellectis
Bioresearch, Cellectis Bioresearch Inc. and Ectycell until May 18, 2015.
The following internal reorganization was completed in 2015:
Note 4. Reportable segments
Reportable segments are identified as components of an enterprise that have discrete financial information available for evaluation by the Chief
Operating Decision Maker ( CODM ), for purposes of performance assessment and resource allocation.
Cellectis CODM is composed of:
We view our operations and manage our business in two operating
and reportable segments that are engaged in the following activities:
There are inter-segment transactions between the two reportable segments, including allocation of corporate general and administrative expenses by Cellectis
S.A. to its subsidiaries and allocation of research and development expenses to the reportable segments.
These inter-segment transactions are generally
priced based on provisions of service agreements signed between our legal entities, according to which services are to be allocated at cost plus a mark-up of between 4% and 10%, depending on the nature of the service. According to a cash pooling
agreement with our subsidiaries, interest is allocated/paid to segments at 12-month Euribor plus 5%.
Information related to each reportable segment is