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Cellectis Reports Financial Results for 3rd Quarter and First Nine Months 2016Regulatory 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 September 30, 2016 and for the nine-month period ended September 30, 2016. Recent Corporate Highlights UCART19 in collaboration with Servier / Pfizer
UCART123
Pfizer Partnership
IP / Patent Portfolio
Award
Conferences
Calyxt - Cellectis' plant science subsidiary
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 ("GAAP"). Third Quarter 2016 Financial Results Cash: As of September 30, 2016, Cellectis had €264.0 million in total cash, cash equivalents and current financial assets compared to €269.7 million as of June 30, 2016. This decrease of €5.7 million notably reflects (i) the net cash flows used in operating activities of €1.7 million, which includes €9.2 million of cash receipts in the third quarter of 2016 in connection with the achievement of two milestones under our collaboration agreement with Servier that occurred during the second quarter of 2016, and (ii) capital expenditures of €2.2 million. The change was also attributable to the unrealized negative translation effect of exchange rate fluctuations on our U.S. dollar cash, cash equivalents and current financial assets of €1.6 million. Revenues and Other Income: During the quarters ended September 30, 2015 and 2016, we recorded €10.0 million and €11.3 million, respectively, in revenues and other income. This is mainly due to (i) the increase of €2.5 million in collaboration revenues, notably due to the agreement to provide Servier with raw materials and batches of UCART19 products, partly offset by (ii) the decrease of €0.3 million in research tax credit and €0.8 million in subsidies. Total Operating Expenses and Other Operating Income: Total operating expenses and other operating income for the third quarter of 2016 were €22.9 million, compared to €23.4 million for the third quarter of 2015. The non-cash stock-based compensation expenses included in these amounts were €12.1 million and €9.5 million, respectively. R&D Expenses: For the quarters ended 2015 and 2016, research and development expenses decreased by €2.3 million from €16.2 million in 2015 to €13.8 million in 2016. Personnel expenses decreased by €1.1 million from €10.3 million in 2015 to €9.2 million in 2016, notably due to a €2.5 million decrease in social charges on stock options and free share grants, partly offset by a €0.4 million increase in wages and salaries, and a €0.9 million increase in non-cash stock based compensation expense. Purchases and external expenses and other expenses decreased by €1.2 million from €5.8 million in 2015 to €4.6 million in 2016. SG&A Expenses: During the quarters ended 2015 and 2016, we recorded €6.9 million and €8.7 million, respectively, of selling, general and administrative expenses. The increase of €1.8 million primarily reflects (i) an increase of €0.9 million in personnel expenses from €5.7 million to €6.7 million, attributable, among other things, to an increase of €1.7 million of non-cash stock-based compensation expense, partly offset by a decrease of €1.0 million of social charges on stock options and free share grants, and (ii) an increase of €0.9 million in purchases and external expenses and other charges. Financial Gain (Loss): The financial gain was €0.7 million for the third quarter of 2015 compared with a financial loss of €1.0 million for the third quarter of 2016. The change in financial result was primarily attributable 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 three months ended September 30, 2015 and 2016, we recorded a net loss of €12.8 million (or €0.36 per share on both a basic and a diluted basis) and net loss of €12.6 million (or €0.36 per share on both a basic and a diluted basis), respectively. Adjusted loss attributable to shareholders of Cellectis for the third quarter of 2016 was €0.5 million (€0.01 per share on both a basic and a diluted basis) compared to adjusted loss attributable to shareholders of Cellectis of €3.3 million (€0.09 per share on both a basic and a diluted basis), for the third quarter of 2015. Adjusted loss attributable to shareholders of Cellectis for the third quarter of 2016 and 2015 excludes non-cash stock-based compensation expense of €12.1 million and €9.5 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. First Nine Months 2016 Financial Results Cash: As of September 30, 2016, Cellectis had €264.0 million in total cash, cash equivalents and current financial assets compared to € 314.2 million as of December 31, 2015. This decrease of €50.3 million was primarily driven by (i) €30.8 million of cash used in operating activities, notably in connection with the initiation of industrial Good Manufacturing Practice ("GMP") production of UCART123, increased expenses in materials required of GMP production of UCART 123 and other targets, a payment of €7.2 million of value added taxes related to proceeds received in the fourth quarter of 2015 from Servier, partly offset by cash receipts of €9.2 million in connection with the achievement of two milestones under our collaboration agreement with Servier that occurred during the second quarter of 2016 and (ii) €11.3 million of cash used in investment activities, primarily through Calyxt's land acquisition and greenhouse construction in an aggregate amount of €8.9 million. The decrease was also partially attributable to the negative unrealized translation effect of exchange rate fluctuations on our U.S. dollar cash, cash equivalents and current financial assets accounts of €7.4 million. Cellectis expects that its cash, cash equivalents and Current financial assets of €264.0 million as of September 30, 2016 will be sufficient to fund its current operations through the end of 2018. Revenues and Other Income: During the nine-month periods ended September 30, 2015 and 2016, we recorded €27.2 million and €38.9 million, respectively, in revenues and other income. This is mainly due to the increase of (i) €9.6 million in collaboration revenues mainly due to both the agreement to provide Servier with raw materials and additional batches of UCART19 products and the achievement of two milestones (totaling €11.7 million) under our collaboration agreement with Servier and (ii) €3.1 million in research tax credit, partly offset by a decrease of €0.9 million in research subsidies, resulting from the termination of research programs. Total Operating Expenses and Other Operating Income: Total operating expenses and other operating income for the nine-month period ended September 30, 2016 were €80.9 million, compared to €56.3 million for the nine months ended September 30, 2015. The non-cash stock-based compensation expenses included in these amounts were €39.9 million and €17.5 million, respectively. R&D Expenses: For the nine months ended September 30, 2015 and 2016, research and development expenses increased by €15.8 million from €36.4 million in 2015 to €52.2 million in 2016. Personnel expenses increased by €8.4 million from €24.3 million in 2015 to €32.7 million in 2016, notably due to a €1.9 million increase in wages and salaries, and a €12.6 million increase in non-cash stock based compensation expense, partly offset by a €6.1 million decrease in social charges on stock options and free share grants. Purchases and external expenses increased by €7.6 million from €11.0 million in 2015 to €18.6 million in 2016, due to increased expenses related to innovation and platform development, including payments to third parties participating in product development, purchases of biological raw materials and expenses associated with the use of laboratories and other facilities. SG&A Expenses: During the nine months ended September 30, 2015 and 2016, we recorded €19.1 million and €27.8 million, respectively, of selling, general and administrative expenses. The increase of €8.7 million primarily reflects (i) an increase of €7.4 million in personnel expenses from €14.0 million to €21.4 million, attributable, among other things, to a €0.5 million increase in wages and salaries, and an increase of €9.9 million of non-cash stock-based compensation expense, partly offset by a decrease of €3.0 million of social charges on stock options and free share grants, and (ii) an increase of €1.0 million in purchases and external expenses. Financial Gain (Loss): The financial gain was €0.5 million for the nine months ended September 30, 2015 compared with financial loss of €6.3 million for the nine months ended September 30, 2016. The change in financial result was primarily attributable 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 nine months ended September 30, 2015 and 2016, we recorded a net loss of €28.8 million (or € 0.85 per share on both a basic and a diluted basis) and a net loss of €48.3 million (or €1.37 per share on both a basic and diluted basis), respectively. Adjusted loss attributable to shareholders of Cellectis for the nine months ended September 30, 2016 was €8.4 million (€0.24 per share on both a basic and a diluted basis) compared to adjusted loss attributable to shareholders of Cellectis of € 11.3 million (€0.33 per share on both a basic and a diluted basis), for the nine months ended September 30, 2015. Adjusted loss attributable to shareholders of Cellectis for the nine months ended September 30, 2016 and 2015 excludes a non-cash stock-based compensation expense of €39.9 million and €17.5 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.
___________________ (1) 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 expense 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.
___________________ (1) 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 expense 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. 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.
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 16 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. 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 Cash position amounted €264 million and was converted to
Dollars using Euro-US Dollar exchange rate as of September 30, 2016:
1.1161
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