Cellectis S.A. — FY2018 Form 20-F
Reporting period: Fiscal year ended December 31, 2018. This is an annual report, not a standalone fourth-quarter filing; the supplied filing text does not provide a clear Q4-only financial result. Figures below are in U.S. dollars unless noted. Financial statements are prepared under IFRS.
Business context
Cellectis is a clinical-stage gene-editing company with Therapeutics and Plants segments. Therapeutics develops allogeneic CAR T-cell candidates; Plants is conducted through majority-owned Calyxt (69.5% owned at year-end). Neither segment had established material product-sale revenue in 2018. Calyxt’s High Oleic Soybean was commercialized and received its first order in Q1 2019.
Financial performance and position
| Metric | FY2018 | FY2017 |
|---|---|---|
| Revenue | $12.7 million | $25.2 million |
| Other income | $8.7 million | $8.5 million |
| Total revenue and other income | $21.4 million | $33.7 million |
| Operating expenses | $126.5 million | $126.4 million |
| Operating loss | $105.1 million | $92.7 million |
| Net loss | $88.3 million | $103.7 million |
| Net loss attributable to Cellectis shareholders | $78.7 million | $99.4 million |
| Basic and diluted loss per share | $1.93 | $2.78 |
| Net cash used in operating activities | $68.1 million | $52.3 million |
| Cash and cash equivalents | $451.5 million | $256.4 million |
| Current financial assets | $0.4 million | $40.6 million |
| Total assets | $500.8 million | $332.9 million |
| Total shareholders’ equity | $450.3 million | $284.0 million |
- R&D expense was $76.6 million, down 3.4%; selling, general and administrative expense was $47.2 million, up 5.6%. Operating expenses remained broadly flat as lower non-cash share-based compensation offset higher payroll and external costs.
- Financial gain was $16.8 million, versus a loss of $11.0 million in 2017, mainly reflecting foreign-exchange movements and higher interest income. The resulting net loss narrowed despite lower revenue and a larger operating loss.
- Operating cash outflow increased by $15.8 million year over year. Financing cash inflow was $236.5 million, principally reflecting Cellectis’s $193.5 million gross follow-on offering and Calyxt’s follow-on offering. Cash balances also benefited from investing cash inflow, including proceeds from current financial assets.
- Financial debt was limited: year-end financial liabilities were primarily finance leases of $1.35 million gross ($1.02 million non-current and $0.33 million current). Total current liabilities were $46.9 million. The filing reports no material conventional borrowing balance.
Material changes and developments
- Revenue fell 49.5% to $12.7 million, mainly because collaboration revenue declined by $12.3 million, including lower recognition of previously received upfront fees and lower R&D cost reimbursements. Collaboration revenue was $10.5 million.
- Net loss narrowed by $15.4 million, primarily because financial results improved by $27.8 million and non-cash share-based compensation declined by $13.2 million; lower revenue and higher payroll and external costs partly offset those benefits.
- Operating cash use rose as R&D and other operating payments outpaced collaboration receipts. Revenue remained concentrated: two customers represented 55% and 21% of total revenue in 2018.
- Cellectis raised $190.5 million gross through its 2018 ADS offering; Calyxt raised $60.9 million gross, including Cellectis’s $8.25 million participation. Outstanding ordinary shares were 42,430,069 at year-end.
Outlook, risks and unusual items
- Management expected cash, anticipated collaboration receipts and government funding to fund operations through 2021, while cautioning that plans, clinical progress and spending could change and additional funding may be needed. The company expects ongoing losses and higher spending as it advances trials, manufacturing and commercialization preparations.
- Clinical progress remained early-stage. UCART123 trials had previously been put on FDA clinical hold following a patient death in the BPDCN study; the hold was lifted in November 2017 under revised protocols. Manufacturing issues slowed UCART123 progress and UCART22 startup during 2018.
- In 2018, a contract manufacturer identified particulate contamination in materials used in some UCART123 and UCART22 batches. Cellectis notified the FDA and voluntarily withheld potentially affected batches pending regulatory assessment. Fourth-quarter UCART123 and UCARTCS1 batches did not use the identified materials.
- The French tax authority began an audit of the 2014–2017 research tax credits in December 2018. The 2017 credit reimbursement was pending; management said it had not recorded a provision at that stage. Research tax credit receivables totaled $16.8 million at year-end.
- Post-year-end developments disclosed in the report include March 2019 leases for the planned Raleigh IMPACT manufacturing facility, targeted to be operational by 2021, and new Servier and Allogene license agreements. These are subsequent events, not FY2018 results.
- Key risks include clinical safety and efficacy, regulatory uncertainty, manufacturing scale-up and third-party supply, collaboration dependence, future financing needs, foreign-exchange volatility, and Calyxt’s commercialization, crop, commodity-price and gene-edited-food acceptance risks. The report identifies no material legal proceeding expected by management to adversely affect the business.
- IFRS 15 was applied retrospectively; it deferred certain collaboration milestone revenue and reduced opening equity by $1.7 million as of January 1, 2016. IFRS 16 was expected to add approximately $35–45 million of right-of-use assets and lease liabilities from 2019. Auditors issued unqualified opinions; management and the auditor reported effective internal control over financial reporting at December 31, 2018.
Investor verification points
- Reconcile the $451.5 million cash balance, currency exposure and operating cash burn with management’s runway-through-2021 estimate.
- Check the composition and timing of collaboration revenue, milestone eligibility, customer concentration, and contractual termination rights under the Servier and Allogene arrangements.
- Track FDA assessment of potentially affected UCART123/UCART22 batches, manufacturing readiness and clinical trial enrollment, safety and protocol updates.
- Verify the status and collectability of the $16.8 million research tax credit receivable, particularly the pending 2017 refund and ongoing French tax audit.
- Monitor Calyxt’s High Oleic Soybean sales, costs and supply-chain execution, and the adoption and regulatory treatment of its other plant products.