Cellectis S.A. (ALCLS) Earnings Call Transcript & Summary

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Okay. Good morning, and thank you very much for joining us this morning. For those of you who don't know me, my name is Peter Smith, and I'm an associate on the EU pharma team here at Bank of America. And it's my pleasure to welcome André Choulika from Cellectis, Chairman and CEO. And thank you very much for joining me, particularly, as it's so early in the morning over there. And just as a reminder, for people listening in, if you have any questions you'd like me to ask, please submit them via the Veracast app, or if there are any technical issues with this, please feel free to email me at peter2.smith@bofa.com. And with that, I'm going to hand over to André, who's going to give a presentation to kick us off, and then we'll jump into Q&A and fire side chat. So over to you, André.

Well, thank you very much, Peter, and good morning, everyone. Thank you very much for joining this conference. I think we have 40 minutes of time and my proposal is to go for a quick introduction of the company for 2 minutes. I think all of you have the slides. And what I will do is tell you, talk to this slide -- slide number and expecting to have questions after, and we'll go for Q&A just afterwards. On the slide show, my suggestion is to immediately jump to Slide 2, which is the forward-looking statement and take a careful look at this slide because we're a listed company both on Euronext and NASDAQ, and it's important to have a clear information about our forward-looking statements. That means that I'm just going to jump to Slide 3 and give you a history of the company. Cellectis is a gene-editing company at the basis. We've been in the space of gene-editing for the past 20 years. And this is the core competency of the company. In 2012, Cellectis jumped on a mission of building allogeneic CAR-T. At this time, this was not a concept even and Cellectis invented this concept of these allogeneic CAR-T. And we're extremely excited that today it's becoming one of the standard idea in the CAR-T industry. In 2015, we had our first-in-man application of allogeneic CAR-T with the first complete remission that happened in England, in University College London. And we're really excited to say that so far, the last time we checked, the patient that received the first allogeneic CAR-T is still alive 5 years later, which is a great outcome. And today, we have 6 clinical trials ongoing. Just to have you -- give you a global idea of Cellectis space, where we stand today. We're going to jump to Slide 5. So just to give you the idea of what is Cellectis team. So in total, we are in partnership with the leaders in the industry. The first partnership is the partnership we have with Allogene. It's an exclusive license on 15 allogeneic CAR-T targets, including UCARTBCMA or ALLO-715, but other CAR-T that are going to go into clinic. There's $2.8 billion in development and sales milestones plus the high single-digit royalty. This alliance that we have with Allogene come back to the time we signed agreement with Pfizer in 2014, and Pfizer has signed this agreement to newly formed entity that is Allogene and is a continuation of this collaboration with Pfizer. The other agreement we have is with Servier. We've been working with Servier for more than 6.5 years to date, a very productive collaboration on UCART19, which was the first allogeneic CAR-T that went into the clinic, that has been licensed in the U.S. to Pfizer, that's what now Allogene with the 2 CAR-T that had been to clinic today, ALLO-501 and ALLO-501A, so it's UCART19. There is $410 million in development and sales milestone, plus the low double-digit royalty. Finally, we have also an agreement with Iovance Biotherapeutics with an exclusive license agreement on TALEN technology to be developed in gene-edited TILs. The milestones and royalty rate are not disclosed in there. However, Cellectis is very excited by this collaboration, and we're looking forward to the first IND on the Iovance side because we definitely believe that this could be transformed into edited TILs first time in the clinic. Now we're going to move to Slide 6. That gives you a global idea of where we stand in term of clinical development with 3 wholly controlled clinical trials that Cellectis is controlling with the blue bars that you see on this Gantt chart. The UCART123, acute myeloid leukemia, AMELI-01 trial has moved swiftly into Phase I dose escalation. And we're very excited by this CAR-T that went initially into clinic and went into hold in 2017, that resumed into a new IND since the beginning of this year, and it's a new CAR that has a very interesting outcome [indiscernible]. There is UCART22 for acute lymphoblastic leukemia targeting CD22 in BALLI-01, it is also moving to dose escalation -- Phase I dose escalation. And it's also a very interesting CAR-T. Both of them, UCART123 and UCART22 will go in parallel comparison between cohorts at DL2 without alemtuzumab and cohort at DL2 with alemtuzumab will go into DL3 and potentially for UCART123 into DL1. CS1 went into clinical hold at the beginning of July. We hope to resume this trial soon. We're in discussion currently with the FDA. This is a CAR-T targeting CS1 or SLAMF7 as a target. We think it's a very, very interesting target and a very interesting CAR-T to be followed. We're working hard with the FDA and our team currently and the clinical team to try to answer all the questions and move forward and get back into clinic. And finally, you have the partner CAR-T, that are the orange bar, UCART19 in PALL and CALM for acute lymphoblastic leukemia in adult and pediatric conducted by Servier. But in ALPHA, a CAR-T trial for non-Hodgkin's lymphoma, developed by Allogene in the U.S. was a great thing that it had been presented at ASCO recently. And finally, this year there is like the expansion into dose escalation for UCARTBCMA in universal trial that's conducted by Allogene. So we're going to jump immediately to Slide 8 and 9. So Slide 8 and 9, especially 8 gives you an idea of the validation of the allogeneic platforms Cellectis listed above. So here, what I'm talking about the platform is the concept of this allogeneic CAR-T where you have the TCR alpha [ on account ] combined to CD52, the TCR prevents GvHD for graft-versus-host. And the CD52 prevent host-versus-graft if you precondition the patient with the CD52 monoclonal antibody such as alemtuzumab. And the result that we see both for ALL and for Non-Hodgkin or DLBCL, we have pretty similar data as autologous CAR-T and very encouraging data for the expansion that we always want to start very soon for these 2 trials. We're deeply convinced that these are the first allogeneic CAR-T that is going to hit the market in the future. These results that gives very low safety risks, so with no graft-versus-host disease, with on ICANS, with very little Grade III cytokine release syndrome and a little number of infection and infusion reaction. So the safety profile looks great. The data look great. It matches the data of autologous CAR-T. We have to wait up to the time we see duration in the treatment. But definitely, this is a CAR that had been reinjected [indiscernible] redosing and expand the lifespan of the CAR inside the patient without needing to have a CAR that stay there forever. And I'm going to skip the 3 CAR-T trials that we have because we have -- we said that we'll give you update on one of these trials by the end of the year in 2020, and we'll keep this promise. So it's going to be interesting. However, we're going to update you on a regular basis on UCARTCS1, UCART22 and UCART123 in the 3 trials, AMELI-01, MELANI-01, and BALLI-01 in the future. It's going to be a very intense communication time over the next months and years. So we're really excited about that and hope that you will be keen to see the progress of our [ stuff there ] like wholly controlled CAR-T trials. One thing I would like to say is on Page 14 about our gene-editing platform. Cellectis believe that the TALEN platform that we have is the most powerful, precise, safe and efficient CAR-T platform. One thing that has to be said is that we have the whole combo from older IP and fundamental IP that we have on the CAR-T to the platform to build these CAR-T up to the time where you can collect report and control all the technology to bring these TALEN inside -- actually not CAR-T with TALEN -- these TALEN inside the cell and it gives you very high efficiency and very high knock-out and very high knock-in, so gene -- part of the gene insertion efficiency with a very nice safety profile. A number of these TALEN edited cells went into the clinic. So there is confidence over the safety of these technology to own the clinic and we're going to push this into a series of different type of mutations. Finally, 1 word before jumping into the Q&A about our manufacturing facility on Page 16. So we have completed on Page 16, the 14,000 square feet facility we have in Paris and this is going live this year, starting to -- will start producing the raw materials, starting material for making CAR-T, DNA, RNA and vectors. And when you see what's going on, has tension on the market currently to produce DNA and RNA with all this -- all global crisis, it's extremely valuable and important for Cellectis to be able to match from A to Z the manufacturing of the CAR-T, starting with the raw materials up to the finalized CAR-T for clinical supplies, but also for commercial supplies in our 82,000 square feet facility, that's still under construction in Raleigh, North Carolina today, while the construction is supposed to end in 2 months and will go live next year in 2021. One point about the cash situation of the company. At the end of June 2020, we had $282 million in cash, and this is expected to fund operations, it's on Page 17, up to 20 -- like into 2022. The company has 3 sites, New York, where innovation is happening, Paris where we do the process development and we build the raw materials and then finally Raleigh where we build the finalized product for clinical supplies and commercial supplies. In the future, we'll build also our [ proprietary ] CAR-T products. This is the end and the last slide. One thing, on Page 18, gives you the expected milestones, is at the end of the year, we'll start producing the first clinical data. And then on a regular basis, we will update you on the progress of the company either on the manufacturing plants at the start of the production, but also on MELANI-01, AMELI-01, and BALLI-01 for BLL, multiple myeloma and acute myeloid leukemia with a very rich platform that we'll be producing more and more cohorts in the future. Thank you very much, and looking forward to your questions. I suggest that you can put the last slide that tells you thank you and gives you an idea of the 3 sites we have in Paris, New York and Raleigh that are very exquisite site for [ biotechnology ]. Thank you.

Great. Thank you. Thank you very much for that. So let's kick off -- kick off Q&A with just your cash requirements. You mentioned you've got cash to fund you to up to 2022. If you could just frame when you're likely to have revenue from your proprietary CAR-Ts and what your funding requirements are going to be out beyond 2022 to get you to the point where you're at breakeven? Just any color around that would be useful.

Well, Cellectis is definitely trying to focus on the ability to produce CAR-T for commercial supplies and having the first BLA filed. It's quite difficult to say if it's going to be 2024 -- 2023, '24, but partnerships, 3 partnership, the one with Servier and Allogene, we expect potentially their UCART19 and potentially their UCARTBCMA would go also commercial and expecting some like milestone to be gained, quick commercial milestones, but also commercial milestones, plus either high single-digit or low double-digit royalty gain on this. And that would be revenue for the company. Our own licensed wholly controlled CAR-T pipeline. It's extremely difficult to know exactly when these are going to go in the production, but we're planning to have this ready by 2023. It doesn't mean that the CAR-T [indiscernible] at this time, but the ability to manufacture commercial CAR-T will be ready by then. And it's better to be ready ahead of time because like the production will have to produce the -- all of this CAR-T. Nevertheless, I think the company will need probably to finance the operations, you don't wait up to the time you have 0 money to continue operations and probably the company will need to refinance ahead of time. So this is something we're always opportunistic to do this. And we're keeping the idea that if we go through 2022, it will be ahead of time [indiscernible].

Makes sense. And then just looking into your next stage and you mentioned on one of your slides you plan to provide interim clinical data from completed cohorts at scientific conferences. Can you give any more color on what that data will be, what cohorts and level of confidence?

Well, I don't think it's in the interest of our shareholders to air the data before a conference like this. So no, unfortunately, we're not going to give any insight on this. My recommendation for investors is to keep an eye on the end of the year on the conferences, on the medical conferences, where we might be able to produce data. At this time, we are not going to say of which trial. And the thing that we will like to have is a very rich communication pipeline. So we'll give some data by end of the CS1 trial, and we'll give a regular round review to all our shareholders on a regular basis, and we'll update them on each trial on a regular basis to keep the momentum. You don't want to blow out all the information at the first time. So there is no value building events after. We're going to take some time to release the data in a timely manner to keep the momentum. So we'll start with 1 trial, wait a bit, second trial, wait a bit, third trial, and update new cohort with alemtuzumab and potentially a new IND that can flow in, but also the information by our -- on our production metrics.

Makes sense. And then just thinking about COVID-19, which is the hot topic across near enough all pharma companies, what's been the impact there, whether it be on your clinical trials or construction of your new facilities?

Well, COVID-19 did not stop cancer, unfortunately. So people still have cancer. And this is a sad thing, which would be great if it would be gone by that. So the trial continued in the meantime. When you look at the number of people that die from cancer every day worldwide, it's like close to 50,000 worldwide unfortunately. So the trial went on. The difficulties we have is with third-party contractors and also lockdown. So we're working with a lot of SME companies all across the border and -- not in the United States where there wasn't absolutely no slowdown on the manufacturing plant at Raleigh, definitely the thing went on very well. Here in our manufacturing plant in Paris, we've been working across border with other companies and like not being able to come to France and some difficulties like this has put some like a rough time in the ability to execute. But on the other side also, people stop everything. So we have more ability to have more employee -- like workers on-site to build the manufacturing plant. So we gained sometimes on certain things and had some difficulties to bring external targeting. So all in all, we're on par with the manufacturing plant in Paris. Recruitment didn't slow down. We had, of course, this hold on UCARTCS1, but that's not related to COVID-19 crisis. So far, we don't see any difference in there.

Makes sense. And then -- and you mentioned the alemtuzumab priming. And as I look through your results, of course, there seems to be quite a lot of discussion on strategy and considerations for the best rate of prime patients. Could you just quickly talk us through what the debate is there and what Cellectis' strategy is?

Okay. It's a good content. So we'll know a lot this year. 2020 will be the year of Allogene in CAR-T. This is a very exciting year, by the way. It's not only us, but our partners also, third-party company. When we started with the first allogeneic CAR-T, UCART19, back in 2015, the first CAR-T that was dosed was UCL and first patient that received gene-edited CAR-T. The concept was based graft-versus-host knock-out of TCR alpha, host versus graft knock-out of CD52 and preconditioning with alemtuzumab. So the patient comes in, your precondition with cyclophosphamide, fludarabine. And then to maintain the immune system down, while your CAR can do the work and clean up the tumor, we precondition with 1 dose of alemtuzumab and this strategy worked very well and is implemented very strongly by our partners, Servier and Allogene. Even though Pfizer has started building their own CD52 biosimilar to alemtuzumab, which is developed currently by Allogene, so they have their own preconditions. On our side, we don't know exactly how an allogeneic CAR-T can behave without alemtuzumab. There are third-party companies that don't do preconditioning with CD52 monoclonal antibody. And we would like to know -- so we do 1 cohort without. And then once the cohort is finished, so we start at DL2, we do 1 cohort with. So we can make a clear comparison to know how you're going to dose the patient with alemtuzumab. How much of Cy/Flu you can give, you can reduce Cy/Flu, you can give 1 dose of alemtuzumab, several doses of alemtuzumab, knowing that your CD52 knock-out of the CAR makes it tough. What is interesting also is that CS1 don't have the CD52 knock-out. So interestingly, CS1 has a self lymphodepleting activity theoretically. So we will compare CS1 without alemtuzumab, but with the self lymphodepleting activity compared with doses without alemtuzumab with no self lymphodepleting and with alemtuzumab, but also there are third-party companies that are using other type of preconditioning, that Cellectis is also trying to implement, but still in preclinic. So all these details that we will get by the end of this year, I think ASH is going to be an interesting platform to hear what's going on in this space. We're going to be able to tune up the way to precondition the patient during the expansion trial to move [indiscernible] where you can accelerate [indiscernible].

Makes sense. And then you mentioned 2020 is going to be the year of allogeneic CAR-T. Can you just talk us through how much of an advantage is that off-the-shelf capability over your autologous CAR-T.

Personally, I still more than ever believe that an autologous CAR-T has their own, but it's a product that is meant to be remain in hospitals. It's like a bone marrow transplant. You don't have companies selling bone marrow transplant. Companies usually sell products. And autologous CAR-T is a service. Patient comes in, you do an apheresis, you do personalized modification of their T-cell and reimplant the T-cell. And this has been initially started at University of Pennsylvania, Sloan-Kettering at the NCI and amazingly went into companies such as Novartis and Gilead with Kymriah and Yescarta. Usually, companies do products that can be stored, shipped and can yield gross margins at least 85%, et cetera. And it makes sense to have a real product that can be distributed, that can have market access, a real market access, et cetera. So I think allogeneic CAR-T are meant with the success we showed with 19 so far with our partners to replace totally autologous CAR-T from the market in the next decade. And autologous CAR-T will remain, I'm not saying they are going to disappear, but as a service that is given in clinical centers. Allogeneic CAR-T is similar to any biologically, like a monoclonal antibody [biostack ] et cetera. You open a freezer, pullout a vial, give it to the patient, after preconditioning, you can do combos, you can do repeat dosing, you can do plenty of different things. And it's a very exciting product because you can do a lot of different type of engineering. UCART19, UCARTBCMA, CS1, 122 -- 123, 22, et cetera, are just the start. The next-generation CAR-T that you'll see will have way more sophisticated technologies coming into the clinic, and this is going to make a differentiation. So cell therapy and gene-editing are the future of this industry.

So are combinations in next-gen something we can expect to see coming from Cellectis in the future it sounds like.