Cellectis S.A. — FY 2017 Form 20-F
Reporting period: Year ended December 31, 2017. This is an annual report, not a standalone fourth-quarter filing; the filing does not provide a clear Q4-only set of results. Amounts below are in U.S. dollars unless stated otherwise. The audited statements use IFRS. Cellectis changed its presentation currency from euros to dollars in 2017, retrospectively.
Business context
Cellectis is a clinical-stage gene-editing company with Therapeutics and Plants segments. Therapeutics develops allogeneic CAR T-cell cancer candidates; Plants comprises majority-owned Calyxt, which is developing gene-edited food and crop products. Neither segment had product-sale revenue in 2017. Collaboration, licensing and research-related income therefore remained important sources of revenue.
Financial results and liquidity
| Metric | FY 2017 | FY 2016 | Change |
|---|---|---|---|
| Revenue | $25.2 million | $44.8 million | Down 43.8% |
| Other income | $8.5 million | $11.6 million | Down 26.7% |
| Total revenue and other income | $33.7 million | $56.4 million | Down 40.3% |
| Research and development expense | $79.2 million | $78.5 million | Up 1.0% |
| Selling, general and administrative expense | $44.8 million | $43.4 million | Up 3.1% |
| Operating loss | $92.7 million | $67.3 million | Loss increased |
| Financial gain (loss) | $(11.0) million | $0.05 million gain | Shifted to loss |
| Net loss | $103.7 million | $67.3 million | Loss increased 54.2% |
| Net loss attributable to Cellectis shareholders | $99.4 million | $67.3 million | Loss increased |
| Operating cash flow | $(52.3) million | $(32.7) million | Greater cash use |
Operating and net margins were deeply negative given the development-stage business and absence of product sales; the filing does not present a conventional product gross margin. Basic and diluted loss per share was $2.78, versus $1.91 in 2016. The company’s non-IFRS adjusted net loss attributable to Cellectis shareholders was $50.4 million, excluding non-cash stock-based compensation of $50.4 million; this measure should be considered alongside, not instead of, IFRS results.
At December 31, 2017, cash and cash equivalents were $256.4 million and current financial assets were $40.6 million, totaling $297.0 million. Current assets were $323.2 million and current liabilities $43.5 million. Financial liabilities were $34,000, principally finance leases; the company also reported $69.4 million of contractual commitments, chiefly leases, licenses and manufacturing agreements. Total shareholders’ equity was $285.9 million.
Material changes and unusual items
- Revenue from collaboration agreements fell to $22.8 million from $41.9 million. The filing attributes the decline mainly to a 2016 UCART19 milestone, lower recognition of previously paid upfront fees, reduced R&D reimbursements and one-time UCART19 supply payments in 2016.
- The net financial loss of $11.0 million was driven principally by $17.7 million of foreign-exchange losses, partly offset by financial income and fair-value items. The change to dollar presentation and currency movements are relevant to comparisons.
- R&D spending was broadly level overall, but purchases and external expenses rose as clinical, manufacturing and process-development activities advanced. Non-cash stock-based compensation was $50.4 million, down from $58.6 million in 2016.
- Calyxt’s July 2017 IPO generated approximately $58.0 million of net proceeds; after Cellectis’s $20.0 million investment, consolidated net proceeds were about $38.1 million. Cellectis owned approximately 79.7% of Calyxt at year-end.
- Calyxt’s Roseville property sale-leaseback generated approximately $7.0 million in proceeds and created long-term lease commitments. Cellectis guaranteed Calyxt’s lease obligations, subject to the stated termination condition.
- The company recorded a $0.8 million impairment related to its unused Montvale facility and a provision for the expected loss on the lease contract. It also recorded $4.3 million of net loss attributable to non-controlling interests, principally reflecting Calyxt’s minority shareholders after its IPO.
Outlook, commentary and key risks
- Management estimated that cash, expected collaboration receipts and government funding would fund operations into 2020. This is a forward-looking estimate; management warned that development plans, costs and financing needs could change and that additional capital may be required.
- Cellectis expected continued losses and increasing expenses as it advanced UCART123, other therapeutic candidates and Calyxt’s agricultural pipeline. Management targeted approximately one new IND or foreign equivalent filing per year; it planned UCART22 IND filing in the first half of 2018 and UCARTCS1 in 2019.
- The FDA placed both UCART123 studies on clinical hold in September 2017 after a patient death in the BPDCN study; the hold was lifted in November under revised protocols. Clinical safety, efficacy and regulatory outcomes remain uncertain.
- Servier reported preliminary UCART19 results at the 2017 ASH meeting, including an 83% complete-remission rate across the adult and pediatric studies. These were early results from a small patient group, are not statistically conclusive, and do not establish later-trial success. Servier controls UCART19 development under its license.
- Calyxt expected to commercialize its high-oleic soybean product by the end of 2018. That timing was a company expectation, not assurance of launch or commercial uptake.
- Key risks include clinical setbacks and adverse events, manufacturing scale-up and third-party supply dependence, regulatory uncertainty for gene-edited therapies and plants, reliance on collaborators and milestone payments, competition, intellectual-property challenges, foreign-exchange exposure, and the possibility of future financing or dilution.
- The company reported effective disclosure controls and internal control over financial reporting at year-end; its auditor issued unqualified opinions on the financial statements and internal controls.
Important facts for investors to verify
- Reconcile the revenue decline and the $11.0 million financial loss, particularly collaboration income timing and foreign-exchange effects.
- Assess the basis and assumptions behind the cash-runway estimate through 2020, including expected collaboration receipts, clinical spending and Calyxt commitments.
- Track revised UCART123 protocols, subsequent safety disclosures and clinical progress; treat UCART19 early response data as preliminary.
- Confirm Calyxt’s soybean launch timing, regulatory and supply-chain readiness, and the commercial terms and financial impact of the Roseville lease guarantee.
- Review the effect of the dollar presentation change and the forthcoming IFRS 15 revenue-recognition transition, including the disclosed $1.8 million opening-equity adjustment.