UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
(Amendment No. 1 to Report on Form
6-K
(Film No. 211148935) Report of Foreign Private Issuer
Pursuant to Rule
13a-16
or 15d-16
under the Securities Exchange Act of 1934
Date of Report:
August 31, 2021
Commission File Number:
001-36891
(Exact Name of registrant as specified in its charter)
8, rue de la Croix Jarry
75013 Paris, France
+33 1 81 69 16 00
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or Form 40-F:
Form 20-F ☒ Form
40-F ☐
Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation S-T
Rule 101(b)(1): ☐ Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation S-T
Rule 101(b)(7): ☐ Explanatory Note
This report on Form 6-K/A (this “Amendment”) filed by Cellectis S.A. (the “Company”) amends the Company’s report on Form 6-K, which included the Company’s unaudited condensed Consolidated Financial Statements for the three and six-month periods ended June 30, 2021 (the “Report”), filed with the U.S. Securities and Exchange Commission on August 5, 2021, solely to provide the financial statements formatted in iXBRL (Inline eXtensible Business Reporting Language) in accordance with Rule 405 of Regulation S-T and paragraph C.(6)(a)(ii) of the General Instructions to Form 6-K. Exhibit 101 includes information in Inline eXtensible Business Reporting Language.
Other than as expressly set forth above, this Amendment does not, and does not purport to, amend, revise, update or restate the information presented in the Report or reflect any events that have occurred after the Report was originally filed.
Exhibits
The following document, which is attached as an exhibit hereto, is incorporated by reference herein.
This report on Form
6-K
shall be deemed to be incorporated by reference in the registration statements of the Company on Form F-3
(No. 333-238881)
and Form S-8
(Nos. 333-204205,
333-214884,
333-222482,
333-227717
and 333-258514), to the extent not superseded by documents or reports subsequently filed. | Exhibit |
Title | |
| 99.1 | Cellectis S.A.’s interim report for the three- and six-month periods ended June 30, 2021. | |
| 101 | The following materials from Cellectis S.A.’s Report on Form 6-K formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Interim Statements of Consolidated Financial Position, (ii) the Unaudited Statements of Consolidated Operations, (iii) the Interim Statements of Consolidated Comprehensive Income (Loss), (iv) the Interim Statements of Consolidated Cash Flows, (v) the Statements of Changes in Consolidated Shareholders’ Equity, and (vi) Notes to the Interim Consolidated Financial Statements. | |
EXHIBIT INDEX
| Exhibit |
Title | |
| 99.1 | Cellectis S.A.’s interim report for the three- and six-month period ended June 30, 2021. | |
| 101 | The following materials from Cellectis S.A.’s Report on Form 6-K formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Interim Statements of Consolidated Financial Position, (ii) the Unaudited Statements of Consolidated Operations, (iii) the Interim Statements of Consolidated Comprehensive Income (Loss), (iv) the Interim Statements of Consolidated Cash Flows, (v) the Statements of Changes in Consolidated Shareholders’ Equity, and (vi) Notes to the Interim Consolidated Financial Statements. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CELLECTIS S.A. (Registrant) | ||||||
August 31 , 2021 |
By: |
/s/ André Choulika | ||||
André Choulika | ||||||
Chief Executive Officer | ||||||
Exhibit 99.1
PRELIMINARY NOTE
The unaudited condensed Consolidated Financial Statements for the three and
six-month
periods ended June 30, 2021, included herein, have been prepared in accordance with International Accounting Standard 34 (“IAS 34” )– Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements are presented in U.S. dollars. All references in this interim report to “$” and “U.S. dollars 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. These forward-looking statements are subject to numerous risks and uncertainties and are made in light of information currently available to us. Actual results, performance or events may differ materially from those projected in any forward-looking statement. Many important factors may adversely affect such forward-looking statements and cause actual results to differ from those in any forward-looking statement, including, without limitation, the severity and duration of the evolving
COVID-19
pandemic and the resulting impact on macro-economic conditions; inconclusive clinical trial results or clinical trials failing to achieve one or more endpoints; early data not being repeated in ongoing or future clinical trials; failures to secure required regulatory approvals; disruptions from failures by third-parties on whom we rely in connection with our clinical trials; delays or negative determinations by regulatory authorities; changes or increases in oversight and regulation; increased competition; manufacturing delays or problems; inability to achieve enrollment targets; disagreements with our collaboration partners or failures of collaboration partners to pursue product candidates; legal challenges, including product liability claims or intellectual property disputes; commercialization factors, including regulatory approval and pricing determinations; disruptions to access to raw materials or starting material; delays or disruptions at our in-house
manufacturing facilities; proliferation and continuous evolution of new technologies; disruptions to Calyxt’s business, including disruptions resulting from Calyxt’s execution of its business model; management changes; dislocations in the capital markets; and other important factors 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 4, 2021 (the “Annual Report”) and under “Risk Factors” in the interim reports that we file with the Securities and Exchange Commission. 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. We own various trademark registrations and applications, and unregistered trademarks and service marks, including Cellectis
®
, TALEN®
and our corporate logos, and all such trademarks and service marks appearing in this interim report are the property of Cellectis. The trademark Calyxt®
is owned by Calyxt. All other trade names, trademarks and service marks of other companies appearing in this interim report are the property of their respective holders. Solely for convenience, the trademarks and trade names in this interim report may be referred to without the ®
and ™
symbols, but such references, or the failure of such symbols to appear, should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies. 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. References to “Calyxt” refer to Calyxt, Inc. and its subsidiaries, taken as a whole.
5
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6
PART I – FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (unaudited)
Cellectis S.A.
INTERIM STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
$ in thousands
As of |
||||||||||||
Notes |
December 31, 2020 |
June 30, 2021 |
||||||||||
ASSETS |
||||||||||||
Non-current assets |
||||||||||||
Intangible assets |
||||||||||||
Property, plant, and equipment |
6 |
|||||||||||
Right-of-use |
5 |
|||||||||||
Other non-current financial assets |
7 |
|||||||||||
Total non-current assets |
||||||||||||
Current assets |
||||||||||||
Inventories |
||||||||||||
Trade receivables |
8.1 |
|||||||||||
Subsidies receivables |
8.2 |
|||||||||||
Other current assets |
8.3 |
|||||||||||
Current financial assets |
9.1 |
|||||||||||
Cash and cash equivalents |
9.2 |
|||||||||||
Total current assets |
||||||||||||
TOTAL ASSETS |
||||||||||||
LIABILITIES |
||||||||||||
Shareholders’ equity |
||||||||||||
Share capital |
13 |
|||||||||||
Premiums related to the share capital |
13 |
|||||||||||
Currency translation adjustment |
( |
) | ( |
) | ||||||||
Retained earnings |
( |
) | ( |
) | ||||||||
Net income (loss) |
( |
) | ( |
) | ||||||||
Total shareholders’ equity - Group Share |
||||||||||||
Non-controlling interests |
||||||||||||
Total shareholders’ equity |
||||||||||||
Non-current liabilities |
||||||||||||
Non-current financial liabilities |
10 |
|||||||||||
Non-current lease debts |
10 |
|||||||||||
Non-current provisions |
16 |
|||||||||||
Other non-current liabilities |
— | |||||||||||
Total non-current liabilities |
||||||||||||
Current liabilities |
||||||||||||
Current lease debts |
10 |
|||||||||||
Trade payables |
10 |
|||||||||||
Deferred revenues and contract liabilities |
12 |
|||||||||||
Current provisions |
16 |
|||||||||||
Other current liabilities |
11 |
|||||||||||
Total current liabilities |
||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
7
Cellectis S.A.
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the
six-month
period ended June 30, $ in thousands, except per share amounts
For the six-month period ended June 30, |
||||||||||||
Notes |
2020 |
2021 |
||||||||||
Revenues and other income |
||||||||||||
Revenues |
3.1 |
|||||||||||
Other income |
3.1 |
|||||||||||
Total revenues and other income |
||||||||||||
Operating expenses |
||||||||||||
Cost of revenue |
3.2 |
( |
) | ( |
) | |||||||
Research and development expenses |
3.2 |
( |
) | ( |
) | |||||||
Selling, general and administrative expenses |
3.2 |
( |
) | ( |
) | |||||||
Other operating income (expenses) |
||||||||||||
Total operating expenses |
( |
) |
( |
) | ||||||||
Operating income (loss) |
( |
) |
( |
) | ||||||||
Net Financial gain (loss) |
( |
) |
||||||||||
Income tax |
||||||||||||
Net income (loss) |
( |
) |
( |
) | ||||||||
Attributable to shareholders of Cellectis |
( |
) | ( |
) | ||||||||
Attributable to non-controlling interests |
( |
) | ( |
) | ||||||||
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis |
15 |
|||||||||||
Basic net income (loss) attributable to shareholders of Cellectis per share ($ /share) |
( |
) | ( |
) | ||||||||
Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) |
( |
) | ( |
) | ||||||||
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
8
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE
INCOME (LOSS)
For the
six-month
period ended June 30, $ in thousands
For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
Net income (loss) |
( |
) |
( |
) | ||||
Actuarial gains and losses |
||||||||
Other comprehensive income (loss) that will not be reclassified subsequently to income or loss |
||||||||
Currency translation adjustment |
( |
) | ( |
) | ||||
Commodity derivative contracts |
( |
) | — | |||||
Other comprehensive income (loss) that will be reclassified subsequently to income or loss |
( |
) | ( |
) | ||||
Total Comprehensive income (loss) |
( |
) |
( |
) | ||||
Attributable to shareholders of Cellectis |
( |
) | ( |
) | ||||
Attributable to non-controlling interests |
( |
) | ( |
) | ||||
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
9
Cellectis S.A.
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the three-month period ended June 30,
$ in thousands, except per share amounts
For the three-month period ended June 30, |
||||||||||||
Notes |
2020 |
2021 |
||||||||||
Revenues and other income |
||||||||||||
Revenues |
3.1 |
|||||||||||
Other income |
3.1 |
|||||||||||
Total revenues and other income |
||||||||||||
Operating expenses |
||||||||||||
Cost of revenue |
3.2 |
( |
) | ( |
) | |||||||
Research and development expenses |
3.2 |
( |
) | ( |
) | |||||||
Selling, general and administrative expenses |
3.2 |
( |
) | ( |
) | |||||||
Other operating income (expenses) |
||||||||||||
Total operating expenses |
( |
) |
( |
) | ||||||||
Operating income (loss) |
( |
) |
( |
) | ||||||||
Financial gain (loss) |
( |
) |
( |
) | ||||||||
Income tax |
||||||||||||
Net income (loss) |
( |
) |
( |
) | ||||||||
Attributable to shareholders of Cellectis |
( |
) | ( |
) | ||||||||
Attributable to non-controlling interests |
( |
) | ( |
) | ||||||||
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis |
15 |
|||||||||||
Basic net income (loss) attributable to shareholders of Cellectis per share ( $ /share) |
( |
) | ( |
) | ||||||||
Diluted net income (loss) attributable to shareholders of Cellectis per share ( $ /share) |
( |
) | ( |
) | ||||||||
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
10
Cellectis S.A.
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE
INCOME (LOSS)
For the three-month period ended June 30,
$ in thousands
2020 |
2021 |
|||||||
| Net income (loss) |
( |
) |
( |
) | ||||
| |
|
|
|
|||||
| Actuarial gains and losses |
||||||||
| |
|
|
|
|||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss |
||||||||
| |
|
|
|
|||||
| Currency translation adjustment |
||||||||
| Commodity derivative contracts |
( |
) | — | |||||
| |
|
|
|
|||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss |
||||||||
| |
|
|
|
|||||
| Total Comprehensive income (loss) |
( |
) |
( |
) | ||||
| |
|
|
|
|||||
| Attributable to shareholders of Cellectis |
( |
) | ( |
) | ||||
| Attributable to non-controlling interests |
( |
) | ( |
) | ||||
The accompanying notes form an integral part of these un
a
udited condensed Interim Consolidated Financial Statements 11
Cellectis S.A.
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the
six-month
period ended June 30, $ in thousands
For the six-month period ended June 30, |
||||||||||||
Notes |
2020 |
2021 |
||||||||||
Cash flows from operating activities |
||||||||||||
Net income (loss) for the period |
( |
) | ( |
) | ||||||||
Reconciliation of net income (loss) and of the cash provided by (used in) operating activities |
||||||||||||
Adjustments for |
||||||||||||
Amortization and depreciation |
||||||||||||
Net loss (income) on disposals |
||||||||||||
Net financial loss (gain) |
( |
) | ||||||||||
Expenses related to share-based payments |
||||||||||||
Provisions |
( |
) | ||||||||||
Other non-cash items |
||||||||||||
Gain upon the forgiveness of the Payroll Protection Program loan |
10.1 |
— | ( |
) | ||||||||
Convertible note received for up-front license fee classified in non-current assets |
7 |
( |
) | |||||||||
Interest (paid) / received |
( |
) | ||||||||||
Operating cash flows before change in working capital |
( |
) |
( |
) | ||||||||
Decrease (increase) in inventories |
( |
) | ( |
) | ||||||||
Decrease (increase) in trade receivables and other current assets |
( |
) | ||||||||||
Decrease (increase) in subsidies receivables |
||||||||||||
(Decrease) increase in trade payables and other current liabilities |
||||||||||||
(Decrease) increase in deferred income |
( |
) | ( |
) | ||||||||
Change in working capital |
( |
) |
||||||||||
Net cash flows provided by (used in) operating activities |
( |
) |
( |
) | ||||||||
Cash flows from investment activities |
||||||||||||
Acquisition of intangible assets |
( |
) | ( |
) | ||||||||
Acquisition of property, plant and equipment |
( |
) | ( |
) | ||||||||
Net change in non-current financial assets |
( |
) | ( |
) | ||||||||
Sale (Acquisition) of current financial assets |
( |
) | ||||||||||
Net cash flows provided by (used in) investing activities |
( |
) |
||||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from the exercise of stock options Cellectis |
— | |||||||||||
Proceeds from the exercise of stock options Calyxt |
||||||||||||
Increase in share capital Cellectis |
||||||||||||
Payments on lease debts |
( |
) | ( |
) | ||||||||
Net cash flows provided by (used in) financing activities |
( |
) |
||||||||||
(Decrease) increase in cash and cash equivalents |
( |
) |
||||||||||
Cash and cash equivalents at the beginning of the year |
||||||||||||
Effect of exchange rate changes on cash |
( |
) | ( |
) | ||||||||
Cash and cash equivalents at the end of the period |
9 |
|||||||||||
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
12
Cellectis S.A.
UNAUDITED STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY
For the
six-month
period ended June 30, $ in thousands, except share data
Notes |
Share Capital Ordinary Shares |
Premiums related to share capital |
Currency translation adjustment |
Retained earnings (deficit) |
Income (Loss) |
Equity |
Total Shareholders’ Equity |
|||||||||||||||||||||||||||||||||
Number of shares |
Amount |
attributable to shareholders of Cellectis |
Non controlling interests |
|||||||||||||||||||||||||||||||||||||
As of January 1, 2020 |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Net Loss |
— | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
Other comprehensive income (loss) |
— |
— |
— |
( |
) | — |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Total comprehensive income (loss) |
— |
— |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||||||||||||
Allocation of prior period loss |
— | — | — | — | ( |
) | — | — | — | |||||||||||||||||||||||||||||||
Exercise of share warrants, employee warrants, stock options and free shares vesting |
13 |
— | — | ( |
) | — | — | — | — | |||||||||||||||||||||||||||||||
Transaction with subsidiaries |
— | — | — | — | ( |
) | — | ( |
) | — | ||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense |
13 |
— | — | — | — | — | ||||||||||||||||||||||||||||||||||
As of June 30, 2020 |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
As of January 1, 2021 |
( |
) |
( |
) |
( |
) |
5 |
|||||||||||||||||||||||||||||||||
Net Loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Total comprehensive income (loss) |
— |
— |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||||||||||||
Allocation of prior period loss |
( |
) | — | — | — | |||||||||||||||||||||||||||||||||||
Exercise of stock options Calyxt |
||||||||||||||||||||||||||||||||||||||||
Capital Increase Cellectis (ATM) |
— | — | ||||||||||||||||||||||||||||||||||||||
Transaction costs (1) |
— | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Transaction with subsidiaries |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Exercise of share warrants, employee warrants, stock-options and free-shares vesting Cellectis |
13 |
— | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense |
13 |
( |
) | |||||||||||||||||||||||||||||||||||||
Other movements |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
As of June 30, 2021 |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
| (1) | These costs correspond to the issuance costs related to the At-The-Market |
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial Statements
13
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1. The Company
Cellectis S.A. (hereinafter “Cellectis” or “we”) is a limited liability company (“société anonyme”) registered and domiciled in Paris, France.
We are a clinical stage biotechnological company, employing our core proprietary technologies to develop products based on gene-editing with a portfolio of allogeneic Chimeric Antigen Receptor
T-cells
(“UCART”) product candidates in the field of immuno-oncology and gene-edited hematopoietic stem cells (“HSC”) product candidates in other therapeutic indications. Our UCART product candidates, based on gene-edited products and are capable of being stored and distributed worldwide. Our gene-editing expertise also enables us to develop product candidates that feature additional safety and efficacy attributes, including control properties designed to prevent them from attacking healthy tissues, to enable them to tolerate standard oncology treatments, and to equip them to resist mechanisms that inhibit immune-system activity.
T-cells
that express Chimeric Antigen Receptors (“CARs”), seek to harness the power of the immune system to target and eradicate cancers. We believe that CAR-based
immunotherapy is one of the most promising areas of cancer research, representing a new paradigm for cancer treatment. We are designing next-generation immunotherapies that are based on gene-edited CAR T-cells.
Our gene-editing technologies allow us to create allogeneic CAR T-cells,
meaning they are derived from healthy donors rather than the patients themselves. We believe that the allogeneic production of CAR T-cells
will allow us to develop cost-effective, “off-the-shelf”
Together with our focus on immuno-oncology, we are using, through our platform, HEAL, our gene-editing technologies to develop HSC product candidates in genetic diseases.
As of June 30, 2021, Cellectis S.A. also owns 64.4 % of the outstanding shares of common stock of Calyxt, Inc., our plant-based biotechnology platform subsidiary that is focused on deploying its core strengths in research and development, including gene editing, plant breeding, and trait development, toward developing high value, sustainable and plant-based innovations with substantial disruption potential.
Cellectis S.A., Cellectis, Inc., Cellectis Biologics Inc. and Calyxt, Inc. are sometimes referred to as a consolidated group of companies as the “Group.”
COVID-19
Update While implementing health and safety measures in response to the
COVID-19
pandemic, we continued to advance our proprietary allogeneic CAR T-cell
programs during the six months ended June 30, 2021. Although the
COVID-19
pandemic has slowed the enrolment of new patients, Cellectis continued to enroll patients in its AMELI-01,
BALLI-01
and MELANI-01
clinical trials during this first half of 2021, and each of the trials currently continues to progress through its respective dose levels. Despite the increasing availability of
COVID-19
vaccines, the COVID-19
pandemic and government actions to contain it continue to result in significant disruptions to various public and commercial activities. With respect to clinical trials for both our proprietary allogeneic CAR T-cell
programs and programs conducted by commercial partners, enrollment of new patients and the ability to conduct 14
patient
follow-up
is expected to continue to be impacted by the COVID-19
pandemic. The exact timing of delays and overall impact of the COVID-19
pandemic to our business, preclinical studies, clinical trials and manufacturing activities is currently unknown, and we are monitoring the pandemic as it continues to evolve. At Calyxt, during the first half of 2021, the
COVID-19
pandemic did not have a material impact on operations. However, a resurgence of the COVID-19
pandemic, governmental response measures, and resulting disruptions could adversely affect Calyxt’s operations and results. The overall impact to Cellectis’ and Calyxt’s businesses will be dependent on future developments, which are highly uncertain and difficult to predict.
Note 2. Accounting principles
2.1 Basis for preparation
The Interim Consolidated Financial Statements of Cellectis as of, and for the three- and
six-month
periods ended, June 30, 2021 were approved by our Board of Directors on August 5, 2021. The Interim Consolidated Financial Statements are presented in U.S. dollars. See Note 2.2.
The Interim Consolidated Financial Statements as of, and for the three- and
six-month
periods ended June 30, 2021 have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). The Interim Consolidated Financial Statements as of and for the three- and
six-month
periods ended June 30, 2021 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2020, except as described below related to the new or amended accounting standards applied. 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”).
Application of new or amended accounting standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2021 but had no significant impact on the Interim Consolidated Financial Statements:
| • | Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). |
| • | Amendments to IFRS 16 Leases: Covid-19-Related |
15
Accounting standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for accounting periods beginning after January 1, 2022. 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:
| • | Amendments to IAS 37 – Onerous Contracts: Cost of Fulfilling a Contract (Effective for the accounting periods as of January 1, 2022) |
| • | Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use (Effective for the accounting periods as of January 1, 2022) |
| • | Amendments to IFRS 3 – Reference to the Conceptual Framework (Effective for the accounting periods as of January 1, 2022) |
| • | Amendments to IAS 8 – Definition of Accounting Estimates (issued on 12 February 2021 and Effective for the accounting periods as of January 1, 2023) |
| • | Amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 8 May 2021 and Effective for the accounting periods as of January 1, 2023) |
2.2 Currency of the financial statements
The Interim Consolidated Financial Statements are presented in U.S. dollars, which differs from the functional currency of Cellectis, which is the euro. We believe that this presentation enhances the comparability with peers, which primarily present their financial statements in U.S. dollars.
All financial information (unless indicated otherwise) is presented in thousands of U.S. dollars.
The statements of financial position of consolidated entities having a functional currency different from the U.S. dollar are translated into U.S. dollars at the closing exchange rate (spot exchange rate at the statement of financial position date) and the statements of operations, statements of comprehensive income (loss) and statements of cash flows of such consolidated entities are translated at the average period to date exchange rate. The resulting translation adjustments are included in equity under the caption “Accumulated other comprehensive income (loss)” in the Statements of Changes in Shareholders’ Equity.
2.3 Consolidated entities and
non-controlling
interests Accounting policy
We control all the legal entities included in the consolidation. An investor controls an investee when the investor is exposed to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Control requires power, exposure to variability of returns and a linkage between the two.
16
To have power, the investor needs to have existing rights that give it the current ability to direct the relevant activities that significantly affect the investee’s returns.
In order to ascertain control, potential voting rights which are substantial are taken into consideration.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full in the consolidation.
Consolidated entities
For the
six-month
periods ended June 30, 2021 and June 30, 2020, the consolidated group of companies (sometimes referred to as the “Group”) includes Cellectis S.A., Cellectis, Inc., Cellectis Biologics, Inc. and Calyxt. As of June 30, 2021, Cellectis S.A. owns 100 % of Cellectis, Inc., which owns 100 % of Cellectis Biologics, Inc., and approximately 64.4 % of Calyxt’s outstanding shares of common stock.
Non-controlling
interests Non-controlling
shareholders held a non-controlling
interests were generated during the initial public offering of Calyxt and a subsequent follow-on
offering, as well as through vesting and exercises of equity awards. 17
Note 3. Information concerning the Group’s Consolidated Operations
3.1 Revenues and other income
3.1.1 For the
six-month
period ended June 30 Revenues by country of origin and other income
For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
$ in thousands |
||||||||
From France |
||||||||
From USA (1) |
||||||||
Revenues |
||||||||
Research tax credit |
||||||||
Subsidies and other (2) |
( |
) | ||||||
Other income |
||||||||
Total revenues and other income |
||||||||
| (1) | Revenues from USA concern Calyxt only. |
| (2) | As of June 30, 2021, this only includes Calyxt’s PPP loan, which is now forgiven and recognized as other income such as disclosed in note 10.1. |
Revenues by nature
For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
$ in thousands |
||||||||
Recognition of previously deferred upfront payments |
— | |||||||
Other revenues |
||||||||
Collaboration agreements |
||||||||
Licenses |
— | |||||||
Products & services |
||||||||
Total revenues |
||||||||
Recognition of other revenues for the 15.0 million of upfront amounts related to the grant of a license as part of the agreement signed between Cellectis and Cytovia on February 12, 2021 and (ii) the recognition of a $5.1 million milestone related to Cellectis’ agreement with Allogene. The agreement with Cytovia provides for several types of financial compensation to Cellectis, including equity or cash compensation of $15 million committed at the signature of the contract, as well as cash milestones payments, cash upfront payment upon delivery of products and single-digit royalties.
six-month
period ended June 30, 2021 mainly reflects (i) the recognition of $right-of-use
18
Revenues related to licenses include royalties received under our various license agreements.
Products and services revenues mainly include the revenues of plants activities which are primarily attributable to Calyxt’s seed and grain crop sales for $16.7 million during the first half of 2021.
3.1.2 For the three-month period ended June 30
Revenues by country of origin and other income
For the three-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
$ in thousands |
||||||||
From France (3) |
( |
) | ||||||
From USA (1) |
||||||||
Revenues |
||||||||
Research tax credit |
||||||||
Subsidies and other (2) |
( |
) | ||||||
Other income |
||||||||
Total revenues and other income |
||||||||
| (1) | Revenues from USA concern Calyxt only. |
| (2) | As of June 30, 2021, this only includes Calyxt’s PPP loan, which is now forgiven and recognized as other income such as disclosed in note 10.1. |
| (3) | As of June 30, 2021, the negative impact corresponds to Cytovia’s convertible note revaluation for the three months ended March 31, 2021 which has been reclassified to financial result in the three months ended June 30, 2021. |
Revenues by nature
For the three-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
$ in thousands |
||||||||
Recognition of previously deferred upfront payments |
— | — | ||||||
Other revenues (1) |
( |
) | ||||||
Collaboration agreements |
( |
) | ||||||
Licenses (1) |
( |
) | ||||||
Products & services |
||||||||
Total revenues |
||||||||
| (1) | As of June 30, 2021, the negative impact corresponds to Cytovia’s convertible note revaluation for the three months ended March 31, 2021 which has been reclassified to financial result in the three months ended June 30, 2021. |
19
3.2 Operating expenses
3.2.1 For the
six-month
period ended June 30 For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
Cost of goods sold |
( |
) | ( |
) | ||||
Royalty expenses |
( |
) | ( |
) | ||||
Cost of revenue |
( |
) |
( |
) | ||||
For the six-month period ended June 30, |
||||||||
Research and development expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ( |
) | ||||
Personnel expenses |
( |
) |
( |
) | ||||
Purchases and external expenses |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
Total research and development expenses |
( |
) |
( |
) | ||||
For the six-month period ended June 30, |
||||||||
Selling, general and administrative expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ||||||
Personnel expenses |
( |
) |
( |
) | ||||
Purchases and external expenses |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
Total selling, general and administrative expenses |
( |
) |
( |
) | ||||
For the six-month period ended June 30, |
||||||||
Personnel expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ( |
) | ||||
Total personnel expenses |
( |
) |
( |
) | ||||
20
3.2.2 For the three-month period ended June 30
For the three-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
Cost of goods sold |
( |
) | ( |
) | ||||
Royalty expenses |
( |
) | ( |
) | ||||
Cost of revenue |
( |
) |
( |
) | ||||
For the three-month period ended June 30, |
||||||||
Research and development expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on free shares and stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ( |
) | ||||
Personnel expenses |
( |
) |
( |
) | ||||
Purchases and external expenses |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
Total research and development expenses |
( |
) |
( |
) | ||||
For the three-month period ended June 30, |
||||||||
Selling, general and administrative expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on free shares and stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ( |
) | ||||
Personnel expenses |
( |
) |
( |
) | ||||
Purchases and external expenses |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
Total selling, general and administrative expenses |
( |
) |
( |
) | ||||
For the three-month period ended June 30, |
||||||||
Personnel expenses |
2020 |
2021 |
||||||
Wages and salaries |
( |
) | ( |
) | ||||
Social charges on free shares and stock option grants |
— | ( |
) | |||||
Non-cash stock based compensation expense |
( |
) | ( |
) | ||||
Total personnel expenses |
( |
) |
( |
) | ||||
21
3.3 Reportable segments
Accounting policies
Reportable segments are identified as components of the Group that have discrete financial information available for evaluation by the Chief Operating Decision Maker (“CODM”), for purposes of performance assessment and resource allocation.
For the three-month and
six-month
periods ended June 30, 2021, Cellectis’ CODM is composed of: | • | The Chief Executive Officer; |
| • | The Executive Vice President Strategic Initiatives; |
| • | The Executive Vice President Global Quality (until March 31, 2021); |
| • | The Senior Vice President Europe Technical Operations; |
| • | The Senior Vice President of US Manufacturing; |
| • | The Chief Scientific Officer; |
| • | The Chief Financial Officer; |
| • | The General Counsel; |
| • | The Chief Business Officer; |
| • | The Chief Regulatory & Compliance Officer; |
| • | The Chief Medical Officer; and |
| • | The Chief Human Resources Officer. |
We view our operations and manage our business in two operating and reportable segments that are engaged in the following activities:
| • | Therapeutics: This segment is focused on the development (i) gene-edited allogeneic Chimeric Antigen Receptor T-cells product candidates (UCART) in the field of immuno-oncology (UCART) and (ii) gene-edited hematopoetic stem cells (HSC) product candidates in other therapeutic indications. These approaches are based on our core proprietary technologies. All these activities are supported by Cellectis S.A., Cellectis, Inc. and Cellectis Biologics, Inc. The operations of Cellectis S.A., the parent company, are presented entirely in the Therapeutics segment which also comprises research and development, management and support functions. |
| • | Plants: This segment focused on using an advanced plant-based technology platform to develop sustainable products and technologies, while leveraging partners and licensees to manage commercialization and the associated costs and risks. It corresponds to the activity of our U.S.-based majority-owned subsidiary, Calyxt, which is currently based in Roseville, Minnesota. |
There are inter-segment transactions between the two reportable segments, including allocation of corporate general and administrative expenses by Cellectis S.A. and allocation of research and development expenses to the reportable segments.
With respect to corporate general and administrative expenses, Cellectis S.A. has provided Calyxt, with general sales and administrative functions, accounting and finance functions, investor relations, intellectual property, legal advice, human resources, communication and information technology under a Management Services Agreement. Effective with the end of the third quarter 2019,
22
Calyxt has internalized nearly all of the services previously provided by Cellectis under this agreement. Under the Management Services Agreement, Cellectis S.A. charges Calyxt, in euros at cost plus a
mark-up
ranging between zero to 10%, depending on the nature of the service. Amounts due to Cellectis S.A. pursuant to inter-segment transactions bear interest at a rate of the 12-month
Euribor plus 5% per annum. The intersegment revenues represent the transactions between segments. Intra-segment transactions are eliminated within a segment’s results and intersegment transactions are eliminated in consolidation as well as in key performance indicators by reportable segment.
Information related to each reportable segment is set out below. Segment revenues and other income, Research and development expenses, Selling, general and administrative expenses, and Cost of revenue and other operating income and expenses, and Adjusted net income (loss) attributable to shareholders of Cellectis (which does not include
non-cash
stock-based compensation expense) are used by the CODM for purposes of making decisions about allocating resources to the segments and assessing their performance. The CODM does not review any asset or liability information by segment or by region. Adjusted Net Income (Loss) attributable to shareholders of Cellectis S.A. is not a measure calculated in accordance with IFRS. Because Adjusted Net Income (Loss) attributable to shareholders of Cellectis excludes
Non-cash
stock based compensation expense—a non-cash
expense, our management believes 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. The net income (loss) by segment includes the impact of the operations between segments while the intra-segment operations are eliminated.
23
Details of key performance indicators by reportable segment for the
six-month
periods ended June 30, For the six-month period ended June 30, 2020 |
For the six-month period ended June 30, 2021 |
|||||||||||||||||||||||
$ in thousands |
Plants |
Therapeutics |
Total reportable segments |
Plants |
Therapeutics |
Total reportable segments |
||||||||||||||||||
External revenues |
||||||||||||||||||||||||
External other income |
— | |||||||||||||||||||||||
External revenues and other income |
||||||||||||||||||||||||
Cost of revenue |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Selling, general and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Other operating income and expenses |
( |
) | ||||||||||||||||||||||
Total operating expenses |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Operating income (loss) before tax |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net financial gain (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Net income (loss) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Non controlling interests |
— | — | ||||||||||||||||||||||
Net income (loss) attributable to shareholders of Cellectis |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
R&D non-cash stock-based expense attributable to shareholder of Cellectis |
||||||||||||||||||||||||
SG&A non-cash stock-based expense attributable to shareholder of Cellectis |
( |
) | ( |
) | ||||||||||||||||||||
Adjustment of share-based compensation attributable to shareholders of Cellectis |
( |
) |
||||||||||||||||||||||
Adjusted net income (loss) attributable to shareholders of Cellectis |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Additions to tangible and intangible assets |
||||||||||||||||||||||||
24
Details of key performance indicators by reportable s
e
gment for three-month periods ended June 30, For the three-month period ended June 30, 2020 |
For the three-month period ended June 30, 2021 |
|||||||||||||||||||||||
$ in thousands |
Plants |
Therapeutics |
Total reportable segments |
Plants |
Therapeutics |
Total reportable segments |
||||||||||||||||||
External revenues |
( |
) | ||||||||||||||||||||||
External other income |
— | |||||||||||||||||||||||
External revenues and other income |
||||||||||||||||||||||||
Cost of revenue |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Selling, general and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Other operating income and expenses |
( |
) | ||||||||||||||||||||||
Total operating expenses |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Operating income (loss) before tax |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Financial gain (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Net income (loss) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Non controlling interests |
— | — | ||||||||||||||||||||||
Net income (loss) attributable to shareholders of Cellectis |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
R&D non-cash stock-based expense attributable to shareholder of Cellectis |
( |
) | ||||||||||||||||||||||
SG&A non-cash stock-based expense attributable to shareholder of Cellectis |
||||||||||||||||||||||||
Adjustment of share-based compensation attributable to shareholders of Cellectis |
||||||||||||||||||||||||
Adjusted net income (loss) attributable to shareholders of Cellectis |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Additions to tangible and intangible assets |
||||||||||||||||||||||||
25
Note 4. Impairment tests
Our cash-generating units (“CGUs”) correspond to the operating/reportable segments: Therapeutics and Plants.
six-month
periods ended June 30, 2021. Note 5. assets
Right-of-use
Accounting policy
Lease contracts recognition
Lease contracts, as defined by IFRS 16 “Leases”, are recorded in the statement of consolidated financial position, which leads to the recognition of:
| • | an asset representing a right of use of the asset leased during the lease term of the contract “right-of-use”; |
| • | a liability related to the payment obligation “lease debt”. |
Measurement of the
right-of
use asset At the commencement date, the asset is measured at cost and comprises:
right-of-use
| • | the amount of the initial measurement of the lease liability, to which is added, if applicable, any lease payments made at or before the commencement date, less any lease incentives received; |
| • | where relevant, any initial direct costs incurred by the lessee for the conclusion of the contract. These are incremental costs which would not have been incurred if the contract had not been concluded; and |
| • | estimated costs for restoration of the leased asset according to the terms of the contract. |
Following the initial recognition, the asset must be depreciated over the useful life of the underlying assets as lease term for the rental component.
right-of-use
Measurement of the lease liability
At the commencement date, the lease liability is recognized for an amount equal to the present value of the lease payments over the lease term.
Amounts involved in the measurement of the lease liability are:
| • | fixed payments (including in-substance fixed payments; meaning that even if they are variable in form, they are in-substance unavoidable); |
| • | variable lease payments that depend on an index or a rate, initially measured using the index or the rate in force at the lease commencement date; amounts expected to be payable by the lessee under residual value guarantees; and |
| • | payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. |
The lease liability is subsequently measured based on a process similar to the amortized cost method using the discount rate:
26
| • | the liability is increased by the accrued interests resulting from the discounting of the lease liability, at the beginning of the lease period; and |
| • | payments made are deducted. |
The interest cost for the period as well as variable payments, not taken into account in the initial measurement of the lease liability and incurred over the relevant period are recognized as costs.
In addition, the lease liability may be remeasured in the following situations:
| • | the occurrence of a change in the lease term or a modification related to the assessment of the reasonably certain nature (or not) of the exercise of an option, |
| • | a remeasurement linked to residual value guarantees, or |
| • | the occurrence of an adjustment to the rates and indices according to which the rents are calculated when rent adjustments occur. |
COVID-19-Related
On March 31, 2021, the IASB issued Rent Concessions beyond 30 June 2021”, an amendment to IFRS 16. The amendment, which is applicable from April 1, 2021 allows lessees not to account for rent concessions as lease modifications if they are a direct consequence of
“COVID-19-Related
COVID-19
and meet certain conditions. The practical expedient has been applied by the Group to all rent concessions that meet the conditions in IFRS 16.46B. The amount recognised in profit or loss for the reporting period to reflect changes in lease payments that arise from rent concessions to which the Group has applied the practical expedient in IFRS 16.46A is immaterial. There was no rent concession in the
six-month
period ended June 30, 2021. Main contracts applicable
Based on its analysis, the Group has identified lease contracts according to the standard concerning office buildings, laboratories, production facilities and storage facilities.
For purposes of IFRS 16, the lease term reflects the Group’s reasonable expectation of the period during which the underlying asset will be used.
The discount rate used to calculate the lease debt is determined, for each portfolio of assets, according to the incremental borrowing rate at the contract date.
The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the asset in a similar economic environment.
right-of-use
The rental charges relating to short term and low value lease remains classified as leases expenses in operating expenses.
27
Details of assets
Right-of-use
IFRS 16 “Leases” is applicable for annual periods beginning on or after January 1, 2019. The consequence of the application of this standard is to recognize a right of use and lease liability on the Statement of financial position.
The breakdown of assets is as follows:
right-of-use
Building lease |
Office and laboratory equipment |
Total |
||||||||||
$ in thousands |
||||||||||||
Net book value as of January 1, 2020 |
||||||||||||
Additions to tangible assets |
||||||||||||
Depreciation expense |
( |
) | ( |
) | ( |
) | ||||||
Translation adjustments |
( |
) | ||||||||||
Net book value as of June 30, 2020 |
||||||||||||
Gross value at end of period |
||||||||||||
Accumulated depreciation and impairment at end of period |
( |
) | ( |
) | ( |
) | ||||||
Net book value as of January 1, 2021 |
||||||||||||
Additions |
( |
) | ||||||||||
Depreciation expense |
( |
) | ( |
) | ( |
) | ||||||
Translation adjustments |
( |
) | ( |
) | ( |
) | ||||||
Net book value as of June 30, 2021 |
||||||||||||
Gross value at end of period |
||||||||||||
Accumulated depreciation at end of period |
( |
) | ( |
) | ( |
) | ||||||
28
Note 6. Property, plant and equipment
Lands and Buildings |
Technical equipment |
Fixtures, fittings and other equipment |
Assets under construction |
Total |
||||||||||||||||
$ in thousands |
||||||||||||||||||||
Net book value as of January 1, 2020 |
||||||||||||||||||||
Additions to tangible assets |
||||||||||||||||||||
Disposal of tangible assets |
— | ( |
) | — | ( |
) | ( |
) | ||||||||||||
Reclassification |
( |
) | ( |
) | ||||||||||||||||
Depreciation expense |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||
Translation adjustments |
( |
) | ||||||||||||||||||
Net book value as of June 30, 2020 |
||||||||||||||||||||
Gross value at end of period |
||||||||||||||||||||
Accumulated depreciation and impairment at end of period |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Net book value as of January 1, 2021 |
||||||||||||||||||||
Additions to tangible assets |
||||||||||||||||||||
Disposal of tangible assets |
( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||
Reclassification |
( |
) | ( |
) | ( |
) | ||||||||||||||
Depreciation expense |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||
Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Net book value as of June 30, 2021 |
||||||||||||||||||||
Gross value at end of period |
||||||||||||||||||||
Accumulated depreciation and impairment at end of period |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
For the six-month period ended June 30, 2021, we continued our investments in research and development equipment in both the United States of America and France. The addition in tangible assets reflects improvements of Calyxt and Cellectis sites for $2.8 million and other equipment for $3.2 million ($2.1 million of technical equipment and $1.1 million of other equipment).
Assets under construction as of June 30, 2021 primarily relates to Cellectis’ new raw materials manufacturing facility and offices in Paris ($2.0 million), and a new commercial manufacturing facility in Raleigh, North Carolina ($41.4 million), and the balance relates to capital expenditure in Cellectis’ New York office and in the Plants Segment. The assets put into service in 2021 mainly concern Cellectis’ Paris and Raleigh manufacturing facilities and offices for $3.8 million, with the remaining part relating to Calyxt.
29
Note 7.
Non-current
financial assets On February 12, 2021, Cellectis entered into an agreement with Cytovia Therapeutics, Inc. (“the Cytovia agreement”). The consideration to Cellectis includes a convertible note for $15 million issued by Cytovia to Cellectis upon the signature of the contract (which may be settled in cash or converted to equity of Cytovia under certain conditions). This convertible note does not bear interest. As of June 30, 2021, management has determined that the fair value of the note approximates its carrying value. The fair value measurement of the convertible note is categorized within Level 1. No credit loss is expected related to this convertible note.
As of June 30, 2021, 2.6 million deposit for Raleigh’s building and $1.9 million related to Stonebriar’s equipment.
non-current
financial assets include also a $Note 8. Trade receivables and other current assets
8.1 Trade receivables
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
Trade receivables |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Total net value of trade receivables |
||||||||
All trade receivables have payment terms of less than one year. The trade receivables as of June 30, 2021 are mainly due to Calyxt’s seed and grain crop sales.
8.2 Subsidies receivables
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
Research tax credit |
||||||||
Total subsidies receivables |
||||||||
Research tax credit receivables as of June 30, 2021 include the accrual for a French research tax credit related to 2021 for $4.2 million, and to previous periods for $1.3 million. The remaining amount relates to refundable tax credits in the United States. During December 2018, the French Tax Authority initiated an audit related to the 2014, 2015, 2016 and 2017 French research tax credits. Based on our current evaluation of the status of the audit, we do not believe that a provision should be recorded as of June 30, 2021
30
8.3 Other current assets
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
VAT receivables |
||||||||
Prepaid expenses and other prepayments |
||||||||
Tax and social receivables |
||||||||
Deferred expenses and other current assets |
||||||||
Total other current assets |
||||||||
Prepaid expenses and other prepayments primarily include advances to our
sub-contractors
on research and development activities. These mainly relate to advance payments to suppliers of biological raw materials and to third parties participating in product manufacturing. During the year ended December 31, 2020, and the
six-month
period ended June 30, 2021, we prepaid certain manufacturing costs related to our product candidates UCART 123, UCART 22 and UCART CS1 of which the delivery of products or services is expected in the coming months. As of December 31, 2020, deferred expenses and other current assets mainly relates to a $6.2 million receivable following Cellectis’ employees’ option exercises which was subsequently received, a Calyxt broker receivable and certain down payments to suppliers for $2.7 million, as well as a right of $3.0 million to obtain equipment at our Raleigh facility which generated an equivalent financial liability As of June 30, 2021, deferred expenses and other current assets mainly relates to down payments to suppliers for Calyxt and Cellectis Paris. All equipment at our Raleigh facility has been received.
As of December 31, 2020, and as of June 30, 2021, tax and social receivables relate mainly to social charges on personnel expenses.
31
Note 9. Current financial assets and Cash and cash equivalents
As of December 31, 2020 |
Carrying amount |
Unrealized Gains/(Losses) |
Estimated fair value |
|||||||||
$ in thousands |
||||||||||||
Current financial assets |
— | |||||||||||
Cash and cash equivalents |
— | |||||||||||
Current financial assets and cash and cash equivalents |
— |
|||||||||||
As of June 30, 2021 |
Carrying amount |
Unrealized Gains/(Losses) |
Estimated fair value |
|||||||||
$ in thousands |
||||||||||||
Current financial assets |
— | |||||||||||
Cash and cash equivalents |
— | |||||||||||
Current financial assets and cash and cash equivalents |
— |
|||||||||||
9.1 Current financial assets
Current financial assets include current restricted cash and other current financial assets.
As of June 30, 2021, restricted cash consists of:
| i. | deposit to secure commitment to supplier regarding the manufacturing facility construction for $ |
| ii. | deposits to secure a Calyxt furniture and equipment sale-leaseback for $ |
Other current financial assets are measured at fair value through profit or loss and are classified as follows within the fair value hierarchy:
Instruments classified under level 1 are measured with reference to quoted prices in active markets; they consist of corporate debt securities and commercial paper. Their nominal value and their fair value amounted to $0.0 11.7
9.2 Cash and cash equivalents
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
Cash and bank accounts |
||||||||
Money market funds |
||||||||
Fixed bank deposits |
||||||||
Total cash and cash equivalents |
||||||||
Money market funds earn interest and are refundable overnight. Fixed bank deposits have fixed terms that are less than three months or are readily convertible to a known amount of cash.
32
Note 10. Financial liabilities
10.1 Detail of financial liabilities
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
Lease debts |
||||||||
State Guaranteed loan « PGE » |
||||||||
PPP loan |
— | |||||||
Other non-current financial liabilities |
||||||||
Total non-current financial liabilities and non-current lease debts |
||||||||
Lease debts |
||||||||
Total current financial liabilities |
||||||||
Trade payables |
||||||||
Other current liabilities |
||||||||
Total Financial liabilities |
||||||||
As of June 30, 2021, the other 1.3 million loan to finance leasehold improvement at its location in New York.
non-current
financial liabilities is composed of Cellectis’ obtention in 2020 of a $PPP loan corresponds to Calyxt’s obtention of a $1.5 million paycheck protection program (PPP) loan under the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act, for which Calyxt has obtained full forgiveness on April 8, 2021, from the Small Business Administration, which administers the PPP loan program, and recognized as other income in the three months ended June 30, 2021.
State Guaranteed loan « PGE » corresponds to includes Cellectis’ obtention of an €18.5 million (or $22.0 million using exchange rate as of June 30, 2021) loan from a bank syndicate formed with HSBC, Société Générale, Banque Palatine and Bpifrance in the form of a state-guaranteed loan (Prêt Garanti par l’Etat) (the “PGE“). Initiated by the French Government to support companies during the 0.31 % to 3.35 %. After an initial interest-only term of two years, the loan will be amortized over up to four years at the option of the Company. The French government guarantees 90 % of the borrowed amount.
COVID-19
crisis, the PGE is a bank loan with a fixed interest rate ranging from 33
10.2 Due dates of the financial liabilities
Balance as of June 30, 2021 |
Book value |
Less than One Year |
One to Five Years |
More than Five Years |
||||||||||||
$ in thousands |
||||||||||||||||
Lease debts |
||||||||||||||||
Other financial liabilities |
||||||||||||||||
Financial liabilities |
||||||||||||||||
Trade payables |
— | — | ||||||||||||||
Other current liabilities |
— | — | ||||||||||||||
Total financial liabilities |
||||||||||||||||
Note 11. Other current liabilities
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
VAT Payables |
||||||||
Accruals for personnel related expenses |
||||||||
Other |
||||||||
Total |
||||||||
Accruals for personnel are related to annual bonuses, vacations accruals and social expenses on stock options. The decrease in accruals for personnel related expenses between December 31, 2020 and June 30, 2021 is mainly explained by yearly bonus payments which occurred in February 2021.
The decrease in other between December 31, 2020 and June 30, 2021, is mainly driven by fixed assets accruals.
Note 12. Deferred revenues and contract liabilities
As of December 31, 2020 |
As of June 30, 2021 |
|||||||
$ in thousands |
||||||||
Deferred revenues and contract liabilities |
||||||||
Others |
||||||||
Total Deferred revenue and contract liabilities |
||||||||
34
Note 13. Share capital and premium related to the share capitals
Nature of the Transactions |
Share Capital |
Share premium |
Number of shares |
Nominal value |
||||||||||||
$ in thousands (except number of shares) |
in $ |
|||||||||||||||
Balance as of January 1, 2020 |
||||||||||||||||
Capital Increase |
— | — | ||||||||||||||
Non-cash stock based compensation expense |
— | — | — | |||||||||||||
Other movements |
— | — | — | — | ||||||||||||
Balance as of June 30, 2020 |
||||||||||||||||
Balance as of January 1, 2021 |
||||||||||||||||
Capital increase (ATM) |
— | |||||||||||||||
Exercise of share warrants, employee warrants and stock options |
— | |||||||||||||||
Non-cash stock based compensation expense |
— | — | — | |||||||||||||
Transaction costs |
— | ( |
) | — | — | |||||||||||
Other movements |
— | ( |
) | — | — | |||||||||||
Balance as of June 30, 2021 |
||||||||||||||||
Capital evolution during the
six-month
period ended June 30, 2021 | • | During the six-month period ended June 30, 2021, Cellectis’At-The-Market |
| • | During the six-month period ended June 30, 2021, $ |
Note 14.
Non-cash
stock-based compensation 14.1 Detail of Cellectis equity awards
Holders of vested Cellectis stock options and warrants are entitled to exercise such options and warrants to purchase Cellectis ordinary shares at a fixed exercise price established at the time such options and warrants are granted during their useful life.
For stock options and warrants, we estimate the fair value of each option on the grant date or other measurement date if applicable using a Black-Scholes option-pricing model, which requires us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. We estimate our future stock price volatility based on Cellectis historical closing share prices over the expected term period. Our expected term represents the period of time that options granted are expected to be outstanding determined using the simplified method. The risk-free interest rate for periods during the expected term of the options is based on the French government securities with maturities similar to the expected term of the options in effect at the time of grant. We have never declared or paid any cash dividends and do not presently plan to pay cash
35
dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero . Options may be priced at 100 percent or more of the fair market value on the date of grant, and generally vest over four years after the date of grant. Options generally expire within ten years after the date of grant.
Stock Options
The weighted-average fair values of stock options granted and the assumptions used for the Black-Scholes option pricing model were as follows:
2020 |
2021 | |||
Weighted-Average fair values of stock options granted |
||||
Assumptions: |
||||
Risk-free interest rate |
||||
Share entitlement per options |
||||
Exercise price |
||||
Grant date share fair value |
||||
Expected volatility |
||||
Expected term (in years) |
||||
Vesting conditions |
||||
Vesting period |
Information on stock option activity follows:
Options Exercisable |
Weighted- Average Exercise Price Per Share |
Options Outstanding |
Weighted- Average Exercise Price Per Share |
Remaining Average Useful Life |
||||||||||||||||
Balance as of December 31, 2019 |
€ |
€ |
||||||||||||||||||
Granted |
€ | |||||||||||||||||||
Exercised |
( |
) | € | |||||||||||||||||
Forfeited or Expired |
( |
) | € | |||||||||||||||||
Balance as of December 31, 2020 |
€ |
€ |
||||||||||||||||||
Granted |
||||||||||||||||||||
Exercised |
( |
) | € | |||||||||||||||||
Forfeited or Expired |
( |
) | € | |||||||||||||||||
Balance as of June, 2021 |
€ |
€ |
||||||||||||||||||
Share-based compensation expense related to stock option awards was $1.6 million and $5.5 million for the
six-month
period ended June 31, 2021 and 2020, respectively. 36
Warrants
No Warrants (or “Bons de Souscriptions d’Actions” or “BSA”) have been granted during the periods presented.
Information on warrants activity follows:
Warrants Exercisable |
Weighted- Average Exercise Price Per Share |
Warrants Outstanding |
Weighted- Average Exercise Price Per Share |
Remaining Average Useful Life |
||||||||||||||||
Balance as of December 31, 2019 |
€ |
€ |
||||||||||||||||||
Granted |
||||||||||||||||||||
Exercised |
( |
) | € | |||||||||||||||||
Forfeited or Expired |
||||||||||||||||||||
Balance as of December 31, 2020 |
€ |
€ |
||||||||||||||||||
Granted |
||||||||||||||||||||
Exercised |
( |
) | € | |||||||||||||||||
Forfeited or Expired |
||||||||||||||||||||
Balance as of June 30, 2021 |
€ |
€ |
||||||||||||||||||
There was no share-based compensation expense related to warrants awards for the 0.2 million for the three-month period ended June 30, 2020.
six-months
period ended June 30, 2021 while share-based compensation expense related to warrants awards was $Free shares
The free shares granted prior to 2018 are subject to a vesting period and additional holding period for French residents and
two
-yeartwo
-yearfour
-years vesting period for foreign residents. The free shares granted in 2018 and after are subject to a vesting and additional vesting period for French residents and vesting period for foreign residents.
one
-yearone
-yeartwo
-yearsInformation on free shares activity follows:
Number of Free shares Outstanding |
Weighted-Average Grant Date Fair Value |
|||||||
Unvested balance at December 31, 2019 |
€ | |||||||
Granted (1) |
€ | |||||||
Vested |
( |
) | € | |||||
Cancelled |
( |
) | € | |||||
Unvested balance at December 31, 2020 |
€ | |||||||
Granted |
€ | |||||||
Vested |
( |
) | € | |||||
Cancelled |
( |
) | € | |||||
Unvested balance at June 30, 2021 |
€ | |||||||
37
| (1) | non-market performance vesting conditions and with a minimum vesting period of three yearsthree yearsnon-market performance vesting conditions. These free shares have been granted to a large number of our employees. |
The fair value of free shares corresponds to the grant date share fair value.
We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero in determining fair value.
Share-based compensation expense related to free shares awards was $3.0 million and $0.1 million for the
six-month
period ended June 30, 2021 and 2020, respectively. 14.2 Detail of Calyxt equity awards
Stock Options
The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option pricing model were as follows:
2020 |
2021 | |||
Weighted-Average fair values of stock options granted |
$ |
$ | ||
Assumptions: |
||||
Risk-free interest rate |
||||
Share entitlement per options |
||||
Expected volatility |
||||
Expected term (in years) |
||||
Vesting conditions |
||||
Vesting period |
Calyxt estimates the fair value of each option on the grant date or other measurement date if applicable using a Black-Scholes option-pricing model, which requires Calyxt to make predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. Calyxt estimates its future stock price volatility using the historical volatility of comparable public companies over the expected term of the option.
Calyxt’s expected term represents the period of time that options granted are expected to be outstanding determined using the simplified method.
The risk-free interest rate for periods during the expected term of the options is based on the U.S. Treasury
zero-coupon
yield curve in effect at the time of grant. Calyxt has not paid and does not expect to pay dividends for the foreseeable future.
38
Options may be priced at 100 percent or more of the fair market value on the date of grant, and generally vest over six years after the date of grant. Options generally expire within ten years after the date of grant. Certain awards granted before Calyxt’s IPO contained accelerated vesting provisions if certain events occurred as defined in the option agreement.
Information on stock option activity follows:
Options Exercisable |
Weighted- Average Exercise Price Per Share |
Options Outstanding |
Weighted- Average Exercise Price Per Share |
Remaining Average Useful Life |
||||||||||||||||
Balance as of December 31, 2019 |
$ |
$ |
||||||||||||||||||
Granted |
$ | |||||||||||||||||||
Exercised |
( |
) | $ | |||||||||||||||||
Forfeited or Expired |
( |
) | $ | |||||||||||||||||
Balance as of December 31, 2020 |
$ |
$ |
||||||||||||||||||
Granted |
$ | |||||||||||||||||||
Exercised |
( |
) | $ | |||||||||||||||||
Forfeited or Expired |
( |
) | $ | |||||||||||||||||
Balance as of June 30, 2021 |
$ |
$ |
||||||||||||||||||
Stock-based compensation expense related to stock option awards was an expense of $0.4 million, compared to an expense of $2.4 million for the
six-month
period ended June 30, 2021 and 2020, respectively. Restricted Stock Units
Units settled in stock subject to a restricted period may be granted to key employees under the 2017 Omnibus Plan. Restricted stock units generally vest and become unrestricted over five years after the date of grant.
Information on restricted stock unit activity follows:
Number of Restricted Stock Units Outstanding |
Weighted-Average Grant Date Fair Value |
|||||||
Unvested balance at December 31, 2020 |
$ |
|||||||
Granted |
$ | |||||||
Vested |
( |
) | $ | |||||
Cancelled |
( |
) | $ | |||||
Unvested balance at June 30, 2021 |
$ |
|||||||
The fair value of restricted stock units corresponds to the grant date share fair value.
Calyxt has not paid and does not expect to pay dividends for the foreseeable future.
Share-based compensation expense related to restricted stock units awards was a gain of $0.6 million due to options forfeiture, compared to an expense of $1.0 million for the
six-months
period ended June 30, 2021 and 2020, respectively. 39
Performance Stock Unit
In June 2019, Calyxt granted performance stock units, which carry a market condition based on Calyxt share price. These awards contain a continuous service period of three years , the performance period, from the date of grant, followed by a restricted period of two years if the shares are issued following the performance period during which the grantee is required to provide continuous service and the awarded shares must be held by the grantee until the end of the period. The number of shares of common stock delivered following the performance period depends upon the change in Calyxt share price during the performance period. Calyxt granted a targeted 311,667 performance stock units. The performance criteria allow for the actual payout to be between zero and 120 percent of target. The fair value of the performance stock units and the assumptions used for the Monte Carlo simulation were as follows:
Date of grant |
06/28/2019 |
|||
Estimated fair values of performance stock units granted |
$ | |||
Assumptions: |
||||
Risk-free interest rate |
% | |||
Expected volatility |
% | |||
Expected term (in years) |
||||
Information on performance stock unit activity follows:
Number of Performance Stock Units Outstanding |
Weighted- Average Grant Date Fair Value |
|||||||
Unvested balance at December 31, 2020 |
$ |
|||||||
Granted |
||||||||
Vested |
||||||||
Cancelled |
( |
) | ||||||
Unvested balance at June 30, 2021 |
$ |
|||||||
Share-based compensation expense related to performance stock units awards was a gain of $0.3 million due to options forfeiture, compared to an expense of $0.2 million for the
six-month
period ended June 30, 2021 and 2020, respectively. 40
Note 15. Earnings per share
15.1 For the
six-month
periods ended June 30 For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
Net income (loss) attributable to shareholders of Cellectis ($ in thousands) |
( |
) | ( |
) | ||||
Adjusted weighted average number of outstanding shares, used to calculate both basic and diluted net result per share |
||||||||
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis |
||||||||
Basic net income (loss) attributable to shareholders of Cellectis per share ( $ /share) |
( |
) | ( |
) | ||||
Diluted net income (loss) attributable to shareholders of Cellectis per share ( $ /share) |
( |
) | ( |
) | ||||
When we have adjusted net loss, in accordance with IFRS, we use the Weighted average number of outstanding shares, basic to compute the diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share). When we have adjusted net income, in accordance with IFRS, we use the weighted average number of outstanding shares, diluted to compute the diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share)
15.2 For the three-month periods ended June 30
For the three-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
Net income (loss) attributable to shareholders of Cellectis ($ in thousands) |
( |
) | ( |
) | ||||
Adjusted weighted average number of outstanding shares, used to calculate both basic and diluted net result per share |
||||||||
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis per share ($ / share) |
||||||||
Basic net income (loss) per share ($ /share) |
( |
) | ( |
) | ||||
Diluted net income (loss) per share ($ /share) |
( |
) | ( |
) | ||||
When we have adjusted net loss, in accordance with IFRS, we use the Weighted average number of outstanding shares, basic to compute the diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share). When we have adjusted net income, in accordance with IFRS, we use the weighted average number of outstanding shares, diluted to compute the diluted adjusted net income (loss) attributable to shareholders of Cellectis ($/share)
41
Note 16. Provisions
31/12/2020 |
Additions |
Amounts used during the period |
Reversals |
OCI |
30/06/2021 |
|||||||||||||||||||
$ in thousands |
||||||||||||||||||||||||
Pension |
— | — | ( |
) | ||||||||||||||||||||
Loss on contract |
— | — | — | |||||||||||||||||||||
Employee litigation and severance |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Commercial litigation |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Total |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
During the 0.9 million and (ii) pension service cost of the period for $0.3 million.
six-month
period ended June 30, 2021, additions mainly relate to (i) commercial litigation with a supplier for $The amounts used and reversed during the period mainly relate (i) the settlement of employee litigation for $0.2 million and (ii) the update of a commercial litigation for $(0.4 ) million.
Note 17. Commitments
As of June 30, 2021 |
Total |
Less than 1 year |
1 - 3 years |
3 - 5 years |
More than 5 years |
|||||||||||||||
$ in thousands |
||||||||||||||||||||
License agreements |
||||||||||||||||||||
Manufacturing agreements |
— | — | ||||||||||||||||||
Clinical & R&D agreements |
— | — | ||||||||||||||||||
Construction agreements |
— | — | — | |||||||||||||||||
IT licensing agreements |
— | — | ||||||||||||||||||
Other agreements |
— | — | — | |||||||||||||||||
Total commitments |
||||||||||||||||||||
Obligations under the terms of lease agreements
Almost all of our lease agreement are accounted for under IFRS 16 and thereby are presented in the statement of consolidated financial position. The commitments related to operating leases exempted from IFRS 16 application are immaterial.
Obligations under the terms of license agreements
We have entered into various license agreements with third parties that subject us to certain fixed license fees, as well as fees based on future events, such as research and sales milestones.
We also have collaboration agreements whereby we are obligated to pay royalties and milestone payments based on future events that are uncertain and therefore they are not included in the table above.
42
Obligations under the terms of manufacturing agreements
We have manufacturing agreements whereby we are obligated to pay for services rendered in the next 12 months regarding our products UCART123, UCARTCS1 and UCART22.
Obligations under the terms of Clinical & Research agreements
We have entered into clinical and research agreements where we are obligated to pay for services to be provided regarding our research collaboration agreements, clinical trials and translational research projects.
Obligations under the terms of Construction agreements
We have entered into a construction agreement regarding our manufacturing facility based in Raleigh, North Carolina, where we committed to pay for construction work.
Obligations under the terms of other agreements
Calyxt has entered into seed and grain production agreements (Forward Purchase Contracts) with seed producers and growers. Calyxt announced in December 2020 that Archer Daniels Midland has committed to purchase over four million bushels of Calyxt’s grain, which includes all the 2020 soybean crop, which Calyxt will purchase from growers between January 1, 2021 and August 31, 2021. Calyxt expects to sell that grain throughout 2021 and no later than December 31, 2021. Calyxt expects to sell the remaining grain to Archer Daniels Midland at market prices, and as a result, Calyxt will continue to hedge fixed price grain inventories and fixed price Forward Purchase Contracts to mitigate the risk changing market prices may have on Calyxt’s margins.
As of June 30, 2021, Calyxt has 6.8 million based on current commodity futures market prices, other payments to growers, and estimated yields per acre. This commitment is not recorded in the consolidated financial statements because Calyxt has not taken delivery of the seed or grain as of June 30, 2021.
non-cancelable
commitments to purchase grain and seed from growers at dates throughout 2021 aggregating $The seed contracts often require Calyxt to pay prices for the seed produced at an exchange-traded price of grain plus a premium with the seed grower having the option to fix their price with Calyxt throughout the term of the agreement.
The grower contracts are linked to a commodity futures market prices with the grain grower having the option to fix their price with Calyxt throughout the term of the agreement. The grain grower contracts allow for delivery of grain to Calyxt at harvest if so specified when the agreement is executed, otherwise delivery occurs on a date that Calyxt elects through August 31 of the following year.
In all periods presented, we considered Forward Purchase Contracts as normal purchases and not derivatives. Any gains or losses associated with those contracts were reflected in inventory upon our purchase of the underlying grain
mark-to-market
As of June 30, 2021, Calyxt has $1.0 million of unrealized commodity derivative losses from hedging contracts sold to convert their fixed price grain inventories and fixed price Forward Purchase Contracts to floating prices. As of June 30, 2021, Calyxt held commodity contracts with a notional amount of $8.0 million.
43
Note 18. Subsequent events
None
44
Item 2. Management’s Discussion & Analysis of Financial Condition and Results of Operations
Overview
We are a clinical stage biotechnological company, employing our core proprietary technologies to develop products based on gene-editing with a portfolio of allogeneic Chimeric Antigen Receptor
T-cells
(“UCART”) product candidates in the field of immuno-oncology and gene-edited hematopoietic stem cells (“HSC”) product candidates in other therapeutic indications. Our UCART product candidates, based on gene-edited products and are capable of being stored and distributed worldwide. Our gene-editing expertise also enables us to develop product candidates that feature additional safety and efficacy attributes, including control properties designed to prevent them from attacking healthy tissues, to enable them to tolerate standard oncology treatments, and to equip them to resist mechanisms that inhibit immune-system activity.
T-cells
that express chimeric antigen receptors, or CARs, seek to harness the power of the immune system to target and eradicate cancers. We believe that CAR-based
immunotherapy is one of the most promising areas of cancer research, representing a new paradigm for cancer treatment. We are designing next-generation immunotherapies that are based on gene-edited CAR T-cells.
Our gene-editing technologies allow us to create allogeneic CAR T-cells,
meaning they are derived from healthy donors rather than the patients themselves. We believe that the allogeneic production of CAR T-cells
will allow us to develop cost-effective, “off-the-shelf”
Together with our focus on immuno-oncology, we are using, through our platform, HEAL, our gene-editing technologies to develop HSC product candidates in genetic diseases. HEAL is a new gene editing platform developed by Cellectis that leverages the power of TALEN
®
technology, to allow highly efficient gene inactivation, insertion and correction in hematopoietic stem and progenitor cells (HSPCs). Through the date of this interim report, Cellectis has announced programs in sickle cell disease, lysosomal storage disorders and primary immunodeficiencies. We currently conduct our operations through two business segments, Therapeutics and Plants. Our Therapeutics segment is focused on the development of products in the field of immuno-oncology and monogenic diseases. Our Plants segment, carried out through our 64.4% (as of June 30, 2021) ownership in Calyxt, is focused on using an advanced plant-based technology platform to develop sustainable products and technologies, while leveraging partners and licensees to manage commercialization and the associated costs and risks.
Since our inception in early 2000, we have devoted substantially all of our financial resources to research and development efforts. Our current research and development focuses primarily on our CAR
T-cell
immunotherapy and HSC product candidates, including conducting the pre-clinical
activities, and preparing to conduct clinical studies of our UCART product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any therapeutics products approved for sale and have not generated any revenues from therapeutic product sales.
For the license from the Cytovia licensing arrangement, a milestone reached as part of our collaboration with Allogene and royalties on licensed technologies.
six-month
period ended June 30, 2021, we derived all of our Therapeutics revenues from the receipt of a convertible note (to be settled in cash or equity of Cytovia, depending on certain conditions) in consideration for a “right-to-use”
As of June 30, 2021, we were eligible to receive potential development and commercial milestone payments pursuant to (i) the License, Development and Commercialization Agreement dated March 6, 2019 between Servier and Cellectis, as amended on March 4, 2020 (the “Servier
45
License Agreement”) of up to $410 million and (ii) the License Agreement dated March 7, 2019 between Allogene and Cellectis (the “Allogene License Agremeent) of up to $2.8 billion. Under the Allogene License Agreement, we are eligible to receive tiered royalties on annual worldwide net sales of any products that are commercialized by Allogene that contain or incorporate, are made using or are claimed or covered by, our intellectual property licensed to Allogene under the Allogene License Agreement at rates in the high single-digit percentages. Under the Servier License Agreement, we are eligible to receive flat low double-digit royalties based on annual net sales of commercialized products as well as a low double-digit royalty on certain development milestone payments received by Servier. For the
six-month
period ended June 30, 2021 no revenue was recorded under such agreements other than that which was related to the Allogene and Cytovia agreements. We are currently sponsoring clinical studies with respect to three proprietary Cellectis UCART product candidates at nine (9) sites for the
AMELI-01
Study, at five (5) sites for the BALLI-01
Study, and at four (4) sites for the MELANI-01
Study, as follows: | • | The AMELI-01 Study is a Phase 1 dose-escalation clinical trial designed to evaluate the safety, expansion, persistence and clinical activities of UCART123 in-patients with relapsed or refractory acute myeloid leukemia (r/r AML). The AMELI-01 Study is currently open for patient recruitment at MD Anderson Cancer Center (Houston, Texas), H. Lee Moffitt Cancer Center & Research Institute (Tampa, Florida), Dana Farber Cancer Institute (Boston, Massachusetts), New York Presbyterian / Weill Cornell College of Cornell University (New York, New York), Northwestern University (Chicago, Illinois), University of Miami (Miami, Florida), the University of Pennsylvania (Philadelphia, Pennsylvania), Northwestern University (Evanston, Illinois) and the University of California, San Francisco Campus (San Francisco, California). AMELI-01 employs a modified toxicity probability interval dose escalation design to evaluate progressive dose levels of UCART123 in concert with fludarabine and cyclophosphamide (“FC”) or fludarabine, cyclophosphamide and alemtuzumab (“FCA”) regimens in patients with r/r AML. The AMELI-01 Study protocol allows for up to 22 patients to enroll in the dose escalation period and 18-37 patients in the dose expansion period of the Phase 1. As of the date of this interim report, the AMELI-01 Study is active at DL2i of the FCA lymphodepletion cohort. |
| • | The BALLI-01 Study is a Phase 1/2 dose-escalation and expansion clinical trial designed to evaluate the safety, expansion, persistence and clinical activities of UCART22 in-patients with relapsed or refractory acute lymphoblastic leukemia (r/r ALL). The BALLI-01 Study is currently open to patient recruitment at New York Presbyterian / Weill Cornell College of Cornell University (New York, New York), the University of Chicago (Chicago, Illinois), MD Anderson Cancer Center (Houston, Texas), University of California Los Angeles (Los Angeles, California) and Dana Farber Cancer Institute (Boston, Massachusetts). Similar to AMELI-01 Study, BALLI-01 Study protocol employs a modified toxicity probability interval dose escalation design to evaluate progressive dose levels of UCART22 in concert with FC or FCA regimens in patients with r/r ALL. The BALLI-01 Study protocol allows for up to 30 patients to enroll in the dose escalation period and 53 patients in the dose expansion period of the Phase 1/2a. As of the date of this interim report, the BALLI-01 Study is enrolling patients at DL2i in the dose escalation of the FCA lymphodepletion cohort, with at least one additional dose level planned. |
| • | The MELANI-01 Study is a Phase 1 dose-escalation clinical trial designed to evaluate the safety, expansion, persistence and clinical activities of UCARTCS1 in patients with relapsed or refractory multiple myeloma (r/r MM). The MELANI-01 Study is currently open to patient recruitment at Hackensack Meridian Health (Hackensack, New Jersey), MD Anderson Cancer Center (Houston, Texas), the University of California, San Francisco Campus (San Francisco, California), and Mayo Clinic (Rochester, Minnesota). The MELANI-01 Study protocol allows for up to 18 patients to enroll in the dose escalation period and 12-30 patients in the dose expansion period of the Phase1. As of the date of this interim report, the MELANI-01 Study is enrolling patients at DL -1, the first of the 3 planned dose levels. |
46
In addition, we are evaluating four new UCART preclinical programs, as follows:
| • | UCART20x22, which is in development as the first allogeneic dual CAR T-cell candidate product for B-cell malignancies; |
| • | UCARTMESO, which is an allogeneic CAR T-cell candidate product for mesothelin expressing cancers; |
| • | UCARTMUC1, which is an allogeneic CAR T-cell candidate product for mucin-1 expressing epithelial cancers; |
| • | UCARTFAP, which is an allogeneic CAR-T candidate product targeting cancer associated fibroblasts (CAFs) in the tumor microenvironment. |
For a discussion of our operating capital requirements and funding sources, please see “Liquidity and Capital Resources” below.
COVID-19
Update While implementing health and safety measures, we continued to advance our proprietary allogeneic CAR
T-cell
programs during the six months ended June 30, 2021. Although the
COVID-19
pandemic has slowed the enrollment of new patients, Cellectis continued to enroll patients in its AMELI-01,
BALLI-01
and MELANI-01
clinical trials during the first half of 2021, and each of the trials currently continues to progress through its respective dose levels. Despite the increasing availability of
COVID-19
vaccines, the COVID-19
pandemic and government actions to contain it continue to result in significant disruptions to various public and commercial activities. With respect to clinical trials for both our proprietary allogeneic CAR T-cell
programs and programs conducted by commercial partners, enrollment of new patients and the ability to conduct patient follow-up
is expected to be impacted by the COVID-19
pandemic. The exact timing of delays and overall impact of the COVID-19
pandemic to our business, preclinical studies, clinical trials and manufacturing facility construction and initial production activity is currently unknown, and we are monitoring the pandemic as it continues to evolve. At Calyxt, during the first half of 2021, the
COVID-19
pandemic did not have a material impact on Calyxt’s operations. However, a resurgence of the COVID-19
pandemic, governmental response measures, and resulting disruptions could adversely affect Calyxt’s operations and results. The overall impact to Cellectis’ and Calyxt’s businesses will be dependent on future developments, which are highly uncertain and difficult to predict. See Part II, Item 3.D. “Risk Factor” of our report on Form
20-F.
Key events of the
six-month
period ended June 30, 2021 Since the beginning of 2021, Cellectis has made the following key achievements:
| • | On February 16, 2021, Cytovia Therapeutics, Inc. and Cellectis announced that they entered into a research collaboration and non-exclusive license agreement to develop TALEN® gene-edited iPSC NK and CAR-NK cells. The financial terms of the partnership include up to $760 million of development, regulatory, and sales milestones from Cytovia to Cellectis for the first 5 TALEN® gene-edited iPSC- |
47
| derived NK products (“partnership products”). Cellectis will also receive single-digit royalty payments on the net sales of all partnered products commercialized by Cytovia. Cellectis obtained a convertible note as consideration for a “right-to-use” |
| • | On March 29, 2021, Cellectis announced the commencement of an At-The-Market |
| • | On April 9, 2021, Cellectis announced that it has completed sales of approximately $47 million of ADSs pursuant to the Company’s ATM program (the “ATM Sales”), through Jefferies LLC, acting as sales agent. In the ATM Sales, an aggregate of 2,415,630 new ADSs and the same number of underlying new ordinary shares have been issued to existing and new investors at an at-the-market |
| • | On May 11, 2021, Cellectis entered into a partnership agreement and a supply agreement with Sanofi regarding alemtuzumab, an anti-CD52 monoclonal antibody, to be used as part of a lymphodepleting regimen in certain Cellectis sponsored UCART clinical trials. As part of the agreement, Sanofi will supply alemtuzumab to support Cellectis’ clinical studies and the parties agreed to enter into discussions to execute an agreement for the commercial supply of alemtuzumab under pre-agreed financial conditions. |
| • | On June 14, 2021, Cellectis hosted the Cellectis Innovation Days, a virtual company event held from May 24-28, 2021 providing an inside look into the Company’s current and new product candidate pipeline, and manufacturing and technologies. |
| • | At the date of this interim report, Cellectis’ Paris manufacturing facility is now fully operational and has finalized the manufacturing of plasmid starting materials as well as the first mRNA batches for our gene editing tool, TALEN ® , and the Raleigh, North Carolina, facility is nearing completion of qualification activities for the facility and its equipment and systems. |
Since the beginning of 2021, Calyxt, Cellectis’ majority-owned plant science subsidiary, has made the following developments:
| • | On February 19, 2021, Yves Ribeill, Ph.D., Chair of the Board of Directors of Calyxt, Inc., was appointed as the Executive Chair of the Board of Directors in connection with the departure of James Blome, Calyxt’s former Chief Executive Officer. Effective July 27, 2021 Michael A. Carr joined Calyxt, as its President, Chief Executive Officer, and member of its Board of Directors. Mr. Carr will assume the principal executive officer function for Calyxt as of August 6, 2021, upon the resignation of Dr. Ribeill as Calyxt’s Executive Chair. Mr. Carr was most recently the Vice President of M&A, Strategy, and Innovation at Darling |
48
| Ingredients, Inc., a global developer and producer of sustainable natural ingredients and renewable energy. Mr. Carr brings more than 20 years of business, financial, and operational leadership experience to Calyxt. |
| • | On March 2, 2021, Calyxt announced that it had completed appointments to its Scientific Advisory Board (SAB), chaired by Calyxt co-founder Dan Voytas, Ph.D. Appointees include world-renowned plant-biochemistry experts Anne Osbourn, Ph.D., Group Leader at the John Innes Center; Elizabeth Sattely, Ph.D., HHMI Investigator and Associate Professor of Chemical Engineering at Stanford University; and Paul Bernasconi, Ph.D., Former Global Function Head for Molecular Biology at BASF Biosciences. The SAB is focusing on the identification of high value targets for development and commercialization. |
| • | During the six-months ended June 30, 2021, Calyxt has continued to implement its go-to-market go-to-market |
| • | On April 8, 2021, Calyxt was notified by the Small Business Administration that the full amount of Calyxt’s PPP loan had been forgiven, and the PPP loan was forgiven during the three months ended June 30, 2021. |
| • | On May 1, 2021, Ms. Sarah Reiter was promoted to Chief Business Officer of Calyxt. |
| • | With respect to research and development, Calyxt announced on April 29, 2021 and May 4, 2021, respectively, that it had successfully completed a transformation of the hemp genome and the completion of its preliminary composition analysis of its next generation soybean product’s fatty acid profile. |
| • | On July 8, 2021, Calyxt announced further expansion of its hemp breeding platform with the addition of triploid breeding technology to create seedless hemp. |
Financial Operations Overview
We have incurred net losses in nearly each year since our inception. Substantially all of our net losses resulted from costs incurred in connection with our development programs and from selling, general and administrative expenses associated with our operations. As we continue our intensive research and development programs, we expect to continue to incur significant expenses and may again incur operating losses in future periods. We anticipate that such expenses will increase substantially if and as we:
| • | progress our sponsored clinical studies AMELI-01, BALLI-01 and MELANI-01, and initiate additional clinical trials for our other owned product candidates; |
| • | continue to advance the research and development of our current and future immuno-oncology product candidates; |
| • | initiate additional clinical studies for, or additional pre-clinical development of, our immuno-oncology product candidates; |
49
| • | advance research and development efforts for our HSC product candidates; |
| • | further develop and refine the manufacturing process for our product candidates; |
| • | complete construction of (in the case of our Raleigh facility), bring online, and commence production at our in-house manufacturing facilities and change or add additional manufacturers or suppliers of biological materials to support our in-house manufacturing capabilities; |
| • | seek regulatory and marketing approvals for our product candidates, if any, that successfully complete development; |
| • | establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; |
| • | seek to identify and validate additional product candidates; |
| • | acquire or in-license other product candidates, technologies or biological material; |
| • | make milestone or other payments under any in-license agreements; |
| • | maintain, protect and expand our intellectual property portfolio; |
| • | seek to attract and retain new and existing skilled personnel; |
| • | create additional infrastructure to support our operations as a public company; |
| • | continue, through Calyxt, to advance research and development of future plant-based innovations and solutions, and to execute upon the deployment of such innovations through Calyxt’s trait development and licensing go-to-market |
| • | experience any delays or encounter issues with any of the above. |
We do not expect to generate material revenues from sales of our therapeutic product candidates unless and until we successfully complete development of, and obtain marketing approval for, one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital prior to completing clinical development of any of our therapeutic product candidates. Until such time that we can generate substantial revenues from sales of our product candidates, if ever, we expect to finance our operating activities through a combination of milestone payments received pursuant to our collaboration and license agreements, equity offerings, debt financings, government or other third-party funding and collaborations, and licensing arrangements. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development programs or commercialization efforts or grant to others rights to develop or market product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to cease operations, in part or in full.
Our interim consolidated financial statements for the six months ended June 30, 2021 have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.
50
Results of Operations
Comparison for the
six-month
periods ended June 30, 2020 and 2021 Revenues.
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Collaboration agreements |
47,071 | 20,014 | -57.5 | % | ||||||||
| Other revenues |
5,922 | 16,763 | 183.1 | % | ||||||||
| Revenues |
52,993 |
36,777 |
-30.6 |
% | ||||||||
The decrease in revenues of $16.2 million between the license granted to Cytovia and a $5.0 million Allogene milestone. The increase in other revenues of $10.8 million relates to higher high oleic soybean seed grain sales at Calyxt.
six-month
period ended June 30, 2020 and 2021 primarily reflects a decrease of revenue pursuant to our collaboration agreements of $27.1 million, mainly due to a $27.6 million upfront payment received in March 2020 and the recognition of $19.4 million of deferred upfront and milestone payments already received on released targets in each case in connection with the amendment signed in March 2020 to our collaboration agreement with Servier, while revenue related to collaboration agreements in the first half of 2021 consists of the recognition of $15.0 million convertible note obtained as consideration for a “right-to-use”
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Research tax credit |
3,573 | 4,272 | 19.6 | % | ||||||||
| Other income |
(79 | ) | 1,532 | -2042.9 | % | |||||||
| Other income |
3,494 |
5,804 |
66.1 |
% | ||||||||
The increase in other income of $2.3 million between the
six-month
period ended June 30, 2020 and 2021 reflects an increase of $0.7 million in research tax credits, due to higher research and development purchases and external expenses during the six-month
period ended June 30, 2021 that are eligible for the tax credit and $1.5 million related to Calyxt’s PPP loan forgiveness obtained in April 2021. Cost of revenue
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Cost of goods sold |
(9,204 | ) | (18,706 | ) | 103.2 | % | ||||||
| Royalty expenses |
(1,223 | ) | (1,194 | ) | -2.4 | % | ||||||
| Cost of revenue |
(10,428 |
) |
(19,899 |
) |
90.8 |
% | ||||||
The increase in cost of goods sold of $9.5 million between the strategy.
six-month
period ended June 30, 2020 and 2021 is driven by higher volumes of product sold by Calyxt in 2021 compared to 2020 and higher average prices paid for Calyxt’s grain as a result of increases in commodity market prices for soybeans, partially offset by a $2.9 million year-over-year decrease in net realizable value adjustments to inventory as the year ago period included costs to write down excess seed inventory and also reflected the margin profile of selling soybean oil and meal compared to selling grain and $0.7 million of unrealized commodity derivative gains at Calyxt from hedging contracts sold to convert its fixed price grain inventory and fixed price Forward Purchase Contracts to floating prices to link them to market, consistent with Calyxt expects to sell the grain. These increases were partially offset by the benefits resulting from the advancement of Calyxt’s soybean product line go-to-market
51
Research and development expenses.
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Personnel expenses |
(18,290 | ) | (26,237 | ) | 43.5 | % | ||||||
| Purchases, external expenses and other |
(25,298 | ) | (36,101 | ) | 42.7 | % | ||||||
| Research and development expenses |
(43,587 |
) |
(62,338 |
) |
43.0 |
% | ||||||
Between the
six-month
periods ended June 30, 2020 and 2021, research and development expenses increased by $18.8 million. Personnel expenses increased by $7.9 million from $18.3 million in 2020 to $26.2 million in 2021 primarily due to a $7.7 million increase in wages and salaries as a result of increased R&D headcount in the therapeutic segment and a $0.8 million increase in social charges on stock option grants made in March 2021, which were partially offset by a $0.5 million decrease in non-cash
stock-based compensation expense (as a result of the completion of the vesting of awards under the 2017 plan that were not fully offset by the expense associated with the new grants). Purchases, external expenses and other increased by $10.8 million from $25.3 million in 2020 to $36.1 million in 2021 due to higher consumables and subcontracting costs for the therapeutic segment. Selling, general and administrative expenses.
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Personnel expenses |
(12,302 | ) | (9,024 | ) | -26.6 | % | ||||||
| Purchases, external expenses and other |
(8,911 | ) | (9,195 | ) | 3.2 | % | ||||||
| Selling, general and administrative expenses |
(21,213 |
) |
(18,219 |
) |
-14.1 |
% | ||||||
Between the
six-month
period ended June 2020 and 2021, the decrease in selling, general and administrative expenses of $3.0 million primarily reflects a $3.3 million decrease in personnel expenses from $12.3 million in 2020 to $9.0 million mainly due to a $4.9 million decrease in non-cash
stock-based compensation expense mainly explained by the favorable impact of the recapture of Calyxt’s CEO non-cash
stock-based compensation from the forfeiture of certain of his unvested stock options, restricted stock units, and performance stock units following his departure, partly offset by a $1.3 million increase in wages and salaries and a $0.4 million increase in social charges on stock option grants. Purchases, external expenses and other slightly increased by $0.3 million from $8.9 million in 2020 to $9.2 million in 2021. Other operating income and expenses.
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Other operating income (expenses) |
86 | 488 | 465.4 | % | ||||||||
52
The increase in other operating income between
six-month
period ended June 30, 2020 and 2021 amounted to $0.5 million and is mainly related to the reversal of certain provisions for bad debt. Net financial gain (loss).
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Financial income |
3,644 | 5,801 | 59.2 | % | ||||||||
| Financial expenses |
(4,279 | ) | (5,370 | ) | 25.5 | % | ||||||
| Net Financial gain (loss) |
(635 |
) |
431 |
-167.9 |
% | |||||||
The increase in financial income of $2.2 million between the
six-month
period ended June 30, 2020 and 2021 was mainly attributable to an increase of the foreign exchange gain of $3.2 million (from a $1.7 million gain in 2020 to a $4.9 million gain in 2021) partially offset by to the decrease of interest received from financial investments of $1.0 million. The increase in financial expenses of $1.1 million between the
six-month
period ended June 30, 2020 and 2021 was mainly attributable to the increase in lease debt related expenses for $1.2 million and higher provisions for $0.2 million partially offset by the $0.4 million decrease in foreign exchange loss (from a $2.9 million loss in 2020 to a $2.5 million loss in 2021). Net income (loss)
For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Net income (loss) |
(19,290 | ) | (56,956 | ) | 195.3 | % | ||||||
The increase in net loss of $37.7 million between the
six-month
period ended June 30, 2020 and 2021 was mainly due to (i) a $13.9 million decrease in revenues and other income, (ii) an increase of $11.1 million in purchases, external expenses, (iii) a $9.5 million increase in cost of goods sold, (iv) an increase of $8.9 million in wages, and (v) an increase of $1.2 million in social charges on stock option grants expense, partially offset by (i) a $5.4 million decrease in non-cash
stock based compensation expense and (ii) a $1.1 million increase in financial result. Non-controlling
interests For the six-month period ended June 30, |
% change |
|||||||||||
2020 |
2021 |
2021 vs 2020 |
||||||||||
| Gain (loss) attributable to non-controlling interests |
(7,069 | ) | (5,169 | ) | -26.9 | % | ||||||
During the
six-month
period ended June 30, 2021, we recorded $5.2 million in loss attributable to non-controlling
interests. During the six-month
period ended June 30, 2020, we recorded $7.1 million in loss attributable to non-controlling
interests.53
Segment Results
Information related to each of our reportable segments is set out below. Segment revenues and Other income, Research and development expenses, Selling, general and administrative expenses, and Royalties and other operating income and expenses, and Adjusted net income (loss) attributable to shareholders of Cellectis (which does not include
non-cash
stock-based expense) are used by the CODM to measure performance of each segment. The CODM does not review any asset or liability information by segment or by region. Adjusted Net Income (Loss) attributable to shareholders of Cellectis is not a measure calculated in accordance with IFRS. Because Adjusted Net 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. There are inter-segment transactions between the two reportable segments, including the allocation of corporate general and administrative expenses by Cellectis S.A. and the allocation of research and development expenses among the reportable segments. With respect to corporate general and administrative expenses, Cellectis S.A. has provided Calyxt with general sales and administrative functions, accounting and finance functions, investor relations, intellectual property, legal advice, human resources, communication and information technology pursuant to a Management Services Agreement. Under the Management Services Agreement, Cellectis S.A. charges Calyxt in euros at cost plus a
mark-up
ranging between zero to 10%, depending on the nature of the service. Amounts due to Cellectis S.A. pursuant to inter-segment transactions bear interest at a rate of 12-month
Euribor plus 5% per annum. Effective with the end of the third quarter of 2019, Calyxt has internalized nearly all of the services Cellectis provided. The intersegment revenues represent the transactions between segments. Intra-segment transactions are eliminated within a segment’s results and intersegment transactions are eliminated in consolidation as well as in key performance indicators by reportable segment.
54
The following table summarizes segment revenues and segment operating profit (loss) for the
six-month
period ended period 2020 and 2021: For the six-month period ended June 30, 2020 |
For the six-month period endedJune 30, 2021 |
|||||||||||||||||||||||
$ in thousands |
Plants |
Therapeutics |
Total reportable segments |
Plants |
Therapeutics |
Total reportable segments |
||||||||||||||||||
| External revenues |
4,670 | 48,323 | 52,993 | 16,716 | 20,061 | 36,777 | ||||||||||||||||||
| External other income |
— | 3,494 | 3,494 | 1,528 | 4,276 | 5,804 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| External revenues and other income |
4,670 |
51,817 |
56,487 |
18,244 |
24,337 |
42,581 |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cost of revenue |
(9,219 | ) | (1,207 | ) | (10,428 | ) | (18,706 | ) | (1,194 | ) | (19,899 | ) | ||||||||||||
| Research and development expenses |
(5,388 | ) | (38,199 | ) | (43,587 | ) | (5,836 | ) | (56,503 | ) | (62,338 | ) | ||||||||||||
| Selling, general and administrative expenses |
(11,774 | ) | (9,439 | ) | (21,213 | ) | (7,528 | ) | (10,691 | ) | (18,219 | ) | ||||||||||||
| Other operating income and expenses |
(44 | ) | 131 | 86 | 7 | 482 | 489 | |||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
(26,426 |
) |
(48,715 |
) |
(75,142 |
) |
(32,063 |
) |
(67,905 |
) |
(99,968 |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating income (loss) before tax |
(21,756 |
) |
3,102 |
(18,655 |
) |
(13,818 |
) |
(43,569 |
) |
(57,387 |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net financial gain (loss) |
(148 | ) | (487 | ) | (635 | ) | (584 | ) | 1,015 | 431 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
(21,904 |
) |
2,615 |
(19,290 |
) |
(14,402 |
) |
(42,554 |
) |
(56,956 |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Non controlling interests |
7,069 | — | 7,069 | 5,169 | — | 5,169 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) attributable to shareholders of Cellectis |
(14,835 |
) |
2,615 |
(12,221 |
) |
(9,233 |
) |
(42,554 |
) |
(51,787 |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| R&D non-cash stock-based expense attributable to shareholder of Cellectis |
573 | 4,177 | 4,750 | 532 | 3,703 | 4,235 | ||||||||||||||||||
| SG&A non-cash stock-based expense attributable to shareholder of Cellectis |
1,879 | 1,667 | 3,546 | (918 | ) | 916 | (2 | ) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Adjustment of share-based compensation attributable to shareholders of Cellectis |
2,452 |
5,844 |
8,296 |
(385 |
) |
4,619 |
4,233 |
|||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Adjusted net income (loss) attributable to shareholders of Cellectis |
(12,383 |
) |
8,459 |
(3,924 |
) |
(9,619 |
) |
(37,935 |
) |
(47,554 |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Depreciation and amortization |
(980 | ) | (3,212 | ) | (4,192 | ) | (1,218 | ) | (5,954 | ) | (7,173 | ) | ||||||||||||
| Additions to tangible and intangible assets |
355 | 29,832 | 30,187 | 308 | 11,020 | 11,327 | ||||||||||||||||||
We allocate the share-based compensation to the share-related entity, (rather than the entity related to the employee that benefited from such compensation), considering that the share-based compensation is linked to entity’s performance. Consequently, all share-based compensation based on Cellectis shares is charged in the Therapeutics segment, even if some Calyxt employees are included in a Cellectis stock-option plan.
55
Therapeutics segment
External revenues and other income in our Therapeutics segment decreased by $27.5 million, from $51.8 million for the
six-month
period ended June 30, 2020, to $24.3 million for the six-month
period ended June 30, 2021. The decrease was primarily due to a decrease of $27.0 million in collaboration agreement revenues, as described in sections “Revenues” and “Other income” under “Results of Operations” for the consolidated Group. The increase in total operating expenses of $19.2 million from the
six-month
period ended June 30, 2020 to the six-month
period ended June 30, 2021 resulted primarily from (i) higher purchases, external expenses and other of $11.9 million, higher personnel expenses of $7.7 million attributable to (ii) an increase of $7.7 million in personnel wages and salaries and (iii) an increase of $1.2 million in social charges on stock option grants partially offset by (i) a decrease of $1.2 million in non-cash
stock-based compensation expenses and (ii) an increase of $0.4 million in other income. Operating loss before tax for our Therapeutics segment increased by $46.7 million from the
six-month
period ended June 30, 2020 to the six-month
period ended June 30, 2021. Adjusted net loss attributable to shareholders of Cellectis for our Therapeutics segment decreased by $46.4 million from the
six-month
period ended June 30, 2020 to the six-month
period ended June 30, 2021. Plants segment
External revenues and other income in our Plants segment increased by $13.6 million from $4.7 million for the
six-month
period ended June 30, 2020 to $18.2 million for the six-month
period ended June 30, 2021 driven by the volume and mix of product sold in the period, as Calyxt sold seed and 25 percent of the 2020 grain crop in the first period of 2021 as compared to the first half of 2020, when Calyxt was selling soybean oil and meal. The increase in total operating expenses of $5.6 million from
six-month
period ended June 30, 2020 to the six-month
period ended June 30, 2021 resulted primarily from an increase in Calyxt’s activities, which contributed to (i) an increase in cost of goods sold of $9.5 million and (ii) an increase of $1.2 million in personnel wages and salaries mainly related to former CEO’s departure costs partially offset by (i) a decrease of $4.2 million in non-cash
stock-based compensation expenses mainly explained by the favorable impact of the recapture of Calyxt’s CEO non-cash stock-based from the forfeiture of certain of his unvested stock options, restricted stock units, and performance stock units following his departure and (ii) a decrease of $0.8 million in purchases, external expenses and other. Operating loss before tax for our Plants segment decreased by $7.9 million from the
six-month
period ended June 30, 2020 to the six-month
period ended June 30, 2021. Adjusted net loss attributable to shareholders of Cellectis for our Plants segment decreased by $2.8 million from the
six-month
period ended June 30, 2020 to the six-month
period ended June 31, 2021. 56
Liquidity and Capital Resources
Introduction
We have incurred losses and cumulative negative cash flows from operations since our inception in 2000, and we anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and selling, general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.
We have funded our operations since inception primarily through private and public offerings of our equity securities, grant revenues, payments received under patent licenses, reimbursements of research tax credit claims and payments under our collaboration agreements with Allogene and Servier.
Our ordinary shares have been traded on the Euronext Growth market of Euronext in Paris since February 7, 2007 and our ADSs have traded on the Nasdaq Global Market in New York since March 30, 2015.
Liquidity management
As of June 30, 2021, we had current financial assets and cash and cash equivalents of $251.6 million comprising cash and cash equivalents of $248.2 million and current financial assets of $3.4 million corresponding to current restricted cash. Long term restricted cash amounts to $5.3 million and is classified in Other
non-current
financial assets. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our cash and cash equivalents are held in bank accounts, money market funds, fixed bank deposits primarily in France. The portion of cash and cash equivalents denominated in U.S. dollars is $155.0 million as of June 30, 2021. Current financial assets denominated in U.S. Dollars amounted to $3.4 million as of June 30, 2021.
On March 9, 2021, we commenced the market prices. The ATM program provides for a total maximum gross amount of $125 million. On April 9, 2021, Cellectis completed an initial sale under the ATM program for gross proceeds of $47 million (equivalent to 40 million euros).
ATM-program,
which allows us to offer and sell, from time to time, ordinary shares in the form of ADSs, each representing one ordinary share of the Company, to certain eligible investors. We are not obligated to sell ADSs pursuant to the ATM program, and offers and sales occur only at our discretion and on our instructions and at-the-
57
Historical Changes in Cash Flows
The table below summarizes our sources and uses of cash for the
six-month
period ended June 30, 2020 and 2021: For the six-month period ended June 30, |
||||||||
2020 |
2021 |
|||||||
$ in thousands |
||||||||
| Net cash flows provided by (used in) operating activities |
(20,766 | ) | (53,054 | ) | ||||
| Net cash flows provided by (used in) investing activities |
(53,882 | ) | 9,941 | |||||
| Net cash flows provided by (used in) financing activities |
(1,898 | ) | 52,630 | |||||
| |
|
|
|
|||||
| Total |
(76,546 |
) |
9,518 |
|||||
| |
|
|
|
|||||
| Effect of exchange rate changes on cash |
(3,266 | ) | (2,439 | ) | ||||
For the
six-month
period ended June 30, 2021, our net cash flows used in operating activities are mainly due to Cellectis cash payments of $31.5 million to suppliers, wages and social expenses of $28.6 million, Calyxt operating payments net of receipts of $11.5 million, partially offset by $9.0 million of tax credit, the collection of a $5.0 million Allogene milestone payment, $1.0 million of licensing revenue at Cellectis, and $3.5 million of taxes and other fees. For the
six-month
period ended June 30, 2020, our net cash flows used in operating activities are mainly due to Cellectis cash payments of $22.2 million to suppliers, wages and social expenses of $15.1 million, Calyxt operating payments of $24.7 and $3.5 million of VAT offset by $32.9 million of payments received from Servier pursuant to our collaboration agreements, $2.0 million from our licensing and other collaboration agreements, $7.7 million of R&D credit received, $1.0 million of interest received and other variances. For the
six-month
period ended June 30, 2021, our net cash flows provided by investing activities primarily reflects our investments in R&D equipment and building fittings in both the United States and France of $13.7 million, including $3.8 million that relates to Cellectis’ new raw material manufacturing facility and offices in Paris, $9.3 million relates to the new commercial manufacturing facility in Raleigh, North Carolina, $0.3 million relates to our innovation center in New York, New York, and the remainder attributable to investing activity in the Plants segment, offset by $23.7 million of current financial assets variation. For the
six-month
period ended June 30, 2020, our net cash flows used in investing activities primarily reflects (i) our investments in R&D equipment and building fittings in both the United States and France of $22.0 million, including $3.5 million that relates to Cellectis’ new raw material manufacturing facility in Paris, $17.8 million relates to the new commercial manufacturing facility in Raleigh, North Carolina and the remainder attributable to investing activity in the Plants segment, with $30.0 million of new current financial assets and $1.9 million of new non-current
financial assets as well as other variances. For the
six-month
period ended June 30, 2021, our net cash provided by financing activities reflects mainly the net proceeds of $46.9 million from sales under the ATM-program
in April, the collection of $12.1 million of proceeds from stock option exercises and is partially offset by the payments on lease debts for $6.3 million. For the
six-month
period ended June 30, 2020, our net cash used by financing activities reflects mainly the payments on lease debts for $3.6 million partially offset by the collection of $1.5 million related to the PPP loan at Calyxt over the period. 58
Operating capital requirements
Our cash consumption is driven by our internal operational activities, as well as our outsourced activities, including the
pre-clinical
research and development activities, manufacturing and technology transfer expenses payable to CMO providers, costs and expenses associated with our clinical trials, including payments to clinical research centers, CROs involved in the clinical trials, and third-parties providing logistics and testing services, as well as costs and expenses relating to construction and bringing online of our in-house
manufacturing facilities. In addition, we incur significant annual payment and royalty expenses related to our in-licensing
agreements with different parties including LifeTechnologies and University of Minnesota. We also incur substantial expenses related to audit, legal, regulatory and tax related services associated with our public company obligations in the United States and our continued compliance with applicable U.S. exchange listing and SEC requirements. To date, we have not generated any revenues from therapeutic product sales. In addition to our cash generated by operations (including payments under our collaboration agreements), we have funded our operations primarily through private and public offerings of our equity securities, grant revenues, payments received under intellectual property licenses, and reimbursements of research tax credits.
We do not know when, or if, we will generate any revenues from therapeutic product sales. We do not expect to generate significant revenues from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future therapeutic product candidates.
In August 2020, Calyxt announced a transition to capital-efficient strategies. As part of the transition of strategy, Calyxt stopped processing soybeans into oil and meal and restructured its personnel involved in soybean processing and downstream product sales. In the fourth quarter of 2020, Calyxt announced having contracted to sell all its 2020 grain production (approximately four million bushels) of high oleic soybean to Archer Daniels Midland (ADM). Since the sales commenced in the third quarter of 2020, Calyxt has, to date, sold more than 75% of the 2020 grain crop to ADM with the remaining grain projected to be sold throughout 2021. Calyxt’s primary focus on trait development and licensing provides a capital-efficient, lower-cost, and highly scalable approach. Calyxt has not yet generated substantial third-party licensing revenue, and we do not know when, or if, Calyxt will generate substantial revenues from the implementation of its strategies.
go-to-market
go-to-market
We are subject to all risks incident in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We are also subject to all risks incident in the development of new plant-based innovations and solutions, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
We anticipate that we will need additional funding in connection with our continuing operations, including for the further development of our existing product candidates and to pursue other development activities related to additional product candidates.
We believe that the consolidated cash, cash equivalents, current financial assets and restricted cash position of Calyxt as of June 30, 2021 will be sufficient to fund their operations into the second half of 2022, while amounts attributable to Cellectis will be sufficient to fund Cellectis’ Therapeutics operations into early 2023.
59
Until we can generate a sufficient amount of revenues from our products, if ever, we expect to finance a portion of future cash needs through public or private equity or debt offerings. Additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing shareholders, increased fixed payment obligations and these securities may have rights senior to those of our ordinary shares. If we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects.
Our assessment of the period of time through which our and Calyxt’s financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. This estimate takes into account our projected cash flow from operations (including payments we expect to receive pursuant to our strategic licensing agreements) and government funding of research programs, as well as Calyxt’s anticipated cash burn rate, anticipated expense reduction efforts, and its expectations regarding an effective advancement of its strategy and anticipated cash receipts from its product development efforts with partners. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:
go-to-market
| • | the initiation, progress, timing, costs and results of pre-clinical and clinical studies for our product candidates; |
| • | the capacity of manufacturing our products in France and in the United States; |
| • | the outcome, timing and cost of regulatory approvals by U.S. and non-U.S. regulatory authorities, including the possibility that regulatory authorities will require that we perform more studies than those that we currently expect; |
| • | the ability of our product candidates to progress through clinical development successfully; |
| • | the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; |
| • | our need to expand our research and development activities; |
| • | our need and ability to hire additional personnel; |
| • | our need to implement additional infrastructure and internal systems, including manufacturing processes for our product candidates; |
| • | the effect of competing technological and market developments; |
| • | the cost of establishing sales, marketing and distribution capabilities for any products for which we may receive regulatory approval; and |
| • | progress, timing and success of Calyxt’s business and its ability to successfully deploy products and technologies under its go-to-market |
60
If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected.
Off-Balance
Sheet Arrangements. As of June 30, 2021, we do not have any
off-balance
sheet arrangements as defined under SEC rules. Item 3. Quantitative and Qualitative Disclosures About Market Risks
For quantitative and qualitative disclosures about market risk that affect us, see “Quantitative and Qualitative Disclosures About Market Risk in Item11 of Part I of the Annual Report. There have been no material changes in information that would have been provided in the context of Item 3 from the end of the preceding year until June 30, 2021.
Item 4. Controls and Procedures
We must maintain effective internal control over financial reporting in order to accurately and timely report our results of operations and financial condition. In addition, as a public company, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires, among other things, that we assess the effectiveness of our disclosure controls and procedures and the effectiveness of our internal control over financial reporting at the end of each fiscal year. We issued management’s annual report on internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act, as of December 31, 2020.
There have been no changes in the Company’s internal control over financial reporting during the
six-month
period ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 61
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
There are no material changes to the risk factors described in Item 3.D. of Cellectis’ Annual Report on Form
20-F
for the year ended December 31, 2020. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
Item 6. Exhibits
None.
62