Cellectis S.A.
Q4 2017 Earnings Call Transcript

Published: 13 Mar 2018

[Operator:]

Greetings and welcome to the Cellectis Full Year 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Simon Harnest, Vice President of Corporate Strategy and Finance. Thank you. You may begin.

[Simon Harnest:]

Thank you and welcome, everyone, to Cellectis fiscal year and fourth quarter 2017 financial results conference call. Joining me on the call today with prepared remarks are André Choulika, our Chairman and Chief Executive Officer; and Eric Dutang, our Chief Financial Officer. Yesterday evening, Cellectis issued a press release reporting our financial results for the fourth quarter and year ended December 31, 2017. This press release is available on our website at www.cellectis.com. As a quick reminder, we will make forward-looking statements regarding financial outlook in addition to regulatory and product development plans. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our more recent Form 20-F on file with the SEC. With that, I would like to turn over the call over to André. André, please go ahead.

[André Choulika:]

Well, thank you very much, Simon, and good morning, everyone. 2017 was a great year and of tremendous advancement for the CAR T field as a whole and for Cellectis in particular as we brought our first wholly-owned program into the clinic. We are more than ever very excited about the potential of CAR T for the treatment of cancer. Cellectis is the company of true revolutionary concepts

[Eric Dutang:]

Okay. Thank you, André. As of December 31, 2017, Cellectis had $297 million in cash, cash equivalents and current financial assets, compared to $291 million as of December 31, 2016. The $6 million increase over the 12-month period was notably explained by the following elements

[André Choulika:]

Well, thank you very much, Eric. I would like to highlight again what quite remarkable progress was made in 2017 by transforming the off-the-shelf CAR T-cell concept into reality. Today, everyone knows that the future CAR Ts is in gene-editing. It’s a fact. We made it a reality. I believe, we can say without a doubt that we have only just scratched the surface of what a powerful treatment gene-edited CAR T-cell therapy represents. In 2018, Cellectis will be building up on the foundation set during the past five years and will reach a turning point in 2019, reaching expansion phase and extending our leading into the allogeneic CAR T-cell field together with our partners. By the end of this year, three of the off-the-shelf CAR T product candidates will be in the clinic with our wholly-owned UCART123 and UCART22 programs as well as partnered UCART19. Looking ahead into 2019, we will have two different oncology programs, ALL, AML and an expansion phase, and expect to advance additional UCART product candidate into clinical development with UCARTCS1 and UCARTCLL1. This year and next, we will continue the robust development of the best-in-class manufacturing process of our next-generation CAR T therapeutics, including implementing our proprietary gene-targeted gene insertion technology into our pipeline of product candidates. To support this progress, we will significantly expand our clinical leadership team and footprint in the U.S. and will invest significantly in proprietary assets, such as in-house manufacturing of commercial supplies with the state-of-the-art industrial process and large-scale multiplexed gene-editing. At Cellectis, we think big and with a proof-of-concept in hand, we are pushing forward full force with our partners to bring allogeneic CAR T-cell program into the clinic and to the patients worldwide. We also plan to file an IND for a program built on our TALEN gene-editing platform outside of the field of oncology in the future, extending our lead in the gene-editing space. We look forward to sharing more about our exciting work in this area at the medical meetings throughout 2018 and 2019. With that, I want to thank you very much for your attention. And I’d like to open the call for questions. Joining me for the Q&A will be Eric Dutang and Simon Harnest. Operator, please go ahead.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Christopher Marai with Nomura Instinet. Please proceed with your question.

[Christopher Marai:]

Hi. Hi, congrats on the progress and thanks for taking my question. First, I was wondering if you could further elaborate on your UCART123 studies and the type of data we might see yearend. You discussed obviously the requirement to have dose-escalation for the allogeneic CAR T approaches and I was just wondering is it your expectation to have the recommended Phase II dose sort of declared in the yearend update for that program. And then secondarily with respect to the expansion phase, how should we think about that? It’s about 150 patients. That looks to be about the size of some of the registrational trial. In AML, obviously, I guess, you’re selecting for patients with CD123 or that’s relatively also heavily expressed in AML anyway. Can you maybe walk us through that approach with respect to registration? Thank you.

[André Choulika:]

Well, thank you, Chris for these very, very good questions and good morning by the way. I thought it should be quite early for you. Yes, actually the dose escalation, we of course plan by like within one year to have the right dose. We think that the start dose, we started with last year at 6.25x105, which led to the clinical hold after the injection of the BPDCN patient with a grade 4 CRS was probably a good dose. But we’re now like 62,000 cells per kg, like 62,500 cells per kg, which is a very low dose, so we still think we’re below the optimal dose and we have to move forward into the dose escalation. It’s a three-plus-three dose escalation. Potentially, we can maybe, just for confirmation, have three more patients. There is a lot of enthusiasm around like the product and we would like to – you will probably see that Cellectis is trying to accelerate this in the future. So we’d like to push forward into a speed-up process and we are working with our Chief Medical Officer, they’re trying to speed – and our Chief Regulatory Officer to try to speed up this process to try to reach the time where we have defined this best dose. But the dose finding is a critical step in oncology. If you go too fast in there and you miss the right dose, it might also hamper the potential of the product. So we are doing this extremely seriously. Now, for the second part of doing this seriously and we expect probably to complete this within a year. On the expansion phase, I said, up to 150 patients for AML and BPDCN, it’s like both trials. We will of course be extremely open and try to dialog with the FDA to try to see what is the threshold to go for registration. But whenever we have results and meeting the endpoints, we will of course like run into registration. This is why also we’re starting to think about what should be a commercial supply manufacturing plan. So we should get started for now.

[Christopher Marai:]

Great. Thank you. And then, with respect to the UCART22 program, maybe you can elaborate on some of the patient populations you may go into with those CAR T naïve patients or would you go into patients who have previously progressed, having previously received CD19-based CAR Ts? Thank you.

[André Choulika:]

The trial is, like in the trial we’d like to be totally agnostic like concerning patient that relapse CD19 negative, CD22 positive. The only criteria we’re looking at is the presence of CD22 on the surface of the B-cell malignancy. One of the things also is like the – CD22, the gene, then CD19, so the stability of expression on the cells under there, variegation cell expression from patient to patient could be quite different. So what we will be focusing on is, of course, the presence of the tumor-associated antigen on the tumor surface. We expect potentially to have maybe less of potential compared to UCART19 to go directly in patient untreated with CAR T or maybe we will have the potential to go with patient that have not been treated with CAR T. But definitely you have series of patients that do relapse CD19-negative and are CD22 positive. Or potentially, you could use this in combo. So it could be also definitely very interesting way to be able to treat patient like with a shot of 19, hold by shot of 22. So the potential of off-the-shelf CAR Ts and the potential of repeat dosing and combo therapy is unexplored for now and we definitely have the intention to do this. So it’s like really start like we’re not like hampering ourself of any, like preventing ourselves to go in like any direction for now, very open.

[Operator:]

Thank you. Our next question comes from Pete Lawson with SunTrust Robinson Humphrey. Please proceed with your question.

[Peter Lawson:]

André, thanks for taking the questions and good morning to you or good afternoon. Just I apologize, I joined late so if I – if you already mentioned this. Just on 123 reopening, how many patients have you enrolled since November?

[André Choulika:]

I did not said it, how many were enrolled, but like the trial have restarted like since end of 2017 and, but, it’s not the number we communicated on.

[Peter Lawson:]

Okay. And you don’t want to talk about like how many already in or just what the pipeline is like for patients?

[André Choulika:]

No, not in this call. We’ll probably talk about this later. But for an earnings call, I think that is pretty too early to speak about this, like the trial have really like resumed since like the end of like 2017. It’s maybe early to start like giving numbers on this. We’re – you’ll probably see some information concerning this in the coming months.

[Peter Lawson:]

Got you. Thank you. But it sounds like there’s pent-up demand, and wonder if you could also talk through additional sites that you will be opening for the 123 trial? Thank you.

[André Choulika:]

Yes. Currently, it’s essentially at MD Anderson and Cornell for both trials and like the expansion will come up in the future. There’s probably two new sites that will open in the U.S. and potentially more sites outside the U.S. during the year. So the real intention of the company to try to speed-up the patient enrollment and make like an expanded potential different type of protocols and therapies, and trying to tune this up, but our intention is to put the pedal in the metal.

[Peter Lawson:]

Perfect. Okay. Thanks for taking my questions.

[Operator:]

Thank you. Our next question comes from Hartaj Singh with Oppenheimer & Co. Please proceed with your question.

[Hartaj Singh:]

My part, on UCART22, it’s getting really interesting that you’re also now mentioning B-cell NHL, André, as an area that you are focused on the relapse setting there. What’s the – can you just tell us a little bit about what percentage of the NHL population is U22 positive in this relapse setting? ALL, I imagine is a lot smaller than going to NHL. And then I got a quick question on also GvHD. We were at the BMT Tandem Meeting out in Salt Lake City, and it’s interesting in bone marrow transplantation. They regularly see about 7% to 10% of GvHD docs that are pretty used to dealing with it, but sometimes we get pushback from investors on the low percentage point GvHD that you see. Can you just put that in context? What you are seeing versus what the BMT community used to dealing with? Thank you.

[André Choulika:]

Hi, Hartaj. Well, thank you very much for these questions. So concerning GvHD, I am starting – I will start by the question on GvHD. Concerning GvHD with being dosing series of patients for now, between UCART19 and UCART123, and the process of manufacturing is fully similar because there is two editing in 19 and one editing in 123. We can consider today as the problem of GvHD as irrelevant in our process. The worst case scenario that we had was I think the first patient and what’s like probably one of the first batch we ever made clinically – like for clinical supplies was for UCART19 was the first patient that we dose as the suspected grade 2 GvHD and even though we are not 100% sure that this was related to ourselves and more or like the other – like the analysis of the skin GvHD that was detected, there was a grade 2 that disappeared in 48 hours after using topical cream seem to be the result of the previous bone marrow transplant that happened that failed. But currently, for example, for adults we don’t have – like for 123, we’ve seen no signs of GvHD for adults, for the 19 we see no signs of GvHD and few skin rashes that could be grade 1 GvHD in two cases I think. So I – it’s cannot be compared with like allo-bone-marrow transplant for now. And with the performance of cell filtration and the process of gene editing that we have and I considered this problem as, of course, something that has to be a real concern during the manufacturing, of course, and like the safety of the product, but the QC and all the details that we are dealing with can definitely lead with product that are super high quality and then don’t lead to GvHD, so it’s not a problem anymore and I think that part of the past after now. Now like the first part of the question was?

[Simon Harnest:]

What part of…

[André Choulika:]

Sorry.

[Hartaj Singh:]

Yeah, what part of NHL is CD22 percentage [indiscernible].

[André Choulika:]

Yeah, okay, okay, okay, I remember the question. So like 22, the expression of 22 on B-cells, it’s present on all B-cells, unless there is a mutation that leads to the disappearance of 22. It’s not that much of a problem. It’s more the variation in the expression of like CD22 under surface of cells. So you see there’s a wobble in the expression. So certain patients are high expressers and this is fine. Some other patients are low expressers, where you have an iatrogenic population, and we don’t know exactly how much you can wipe out down the threshold of suboptimal expression of CD22 under surface. Now I get that once you’re starting using the CD22 as a target. You’d probably fall into maybe a category of like pressure over the tumor, where you might have CD22 negative. But we know that, 22 is always expressed on B-cells up to now. It’s like CD19 is very like much copycat with this instability and the expression that makes it may be a target that could be very valuable and used in combo with 19 for all the B-cell leukemia in general. So we like this product, we think it’s a very good combo product for B-cell leukemia, it’s a kind of the copycat of CD19, UCART19. But we believe that also the rationale beside the portfolio and the combination of CART or using like the same old CART brings huge potential. Now in NHL or ALL or CLL, we always can like find these population and our intention is not to – without regard to any other option that I cited, is trying to push down UCART22 in all the potential indication, where it could be useful, always in trying to get the patient that have the best expresser – expression for CD22. Of course…

[Hartaj Singh:]

Great…

[André Choulika:]

But Logistics [ph] are developing a portfolio.

[Hartaj Singh:]

Sure. Got it. I really appreciate the answers. Thank you.

[Operator:]

Thank you. Our next question comes from Wangzhi Li with Ladenburg Thalmann. Please proceed with your question.

[Wangzhi Li:]

Hey, good morning. Thanks for taking my questions. So just a few, may be started with UCART19. You said, you guys are going to present the data at the upcoming EBMT meeting on March 21. Can you maybe provide a little more color in terms of – what we should expect the data, you mentioned a longer follow-up, could we also could expect more patient or maybe how many more additional patient, any additional color there?

[André Choulika:]

Wangzhi, hi, how are you? Like, you want me to have like problem with Servier, if I say a word on this, they will not be very happy about me, speaking about what they’re going to present. So like I will not – I cannot say this, because I very much respect my partners and I am not allowed to speak of other programs. And second, I think, it would be really pity to start to disclose the results before like the physicians have the occasion to present these data by themselves. So I’m sorry, I am not going to be able to answer this question. But it’s a good question. Thank you very much.

[Wangzhi Li:]

Okay. No problem. Okay, so maybe you cannot answer. The second question too. So I just wanted may be your thinking in terms, you mentioned that the UCART19, we have the expansion phase in 2019 followed with the registration trial, which I assume the ALL. I just what’s your thinking or your partner thinking right now, on spending UCART19 with DLBCL?

[André Choulika:]

I think our partners have the plan to develop UCART19 in all indications, not with everything that – like every tumor that could be targeted with like UCART19 will have a potential development. But of course, started with ALL pediatric and adult, but you will very soon to see how much effort we’re putting on this and how much acceleration our intention is in the future. Yes, DLBCL will be part of it, but non-Hodgkin lymphomas, in general, and all other tumors that have CD19 on the surface. The results we have obtained with ALL are very convincing to try to expand this into a lot of different type of indications. And I think that there’s absolutely no restriction behind this. No, this product is not meant to become only bridge to transplant. No, this product is not to become only for ALL. This product is going to become major product for all B-cell leukemia as much as the expressed CD19. And as I said it, it could also be potential synergies with other products targeting B-cell such as UCART22.

[Wangzhi Li:]

Got it. And I’m sure, you can answer this one. I just want to, if any updates on the two compassionate use patients, because, right now, they should have been followed up for long-time, right? Are they still in remission?

[André Choulika:]

Yes. These two patients are still in complete remission, we’re close to three years for the first patient like in June, it will be the case and we are up to 2.5 years for the second patients, it was dosed in November 2015. This is spectacular, seriously, because like they receive one dose of UCART19 and this is it. These patients failed all other therapies including bone marrow transplant, blinatumomab, everything, it’s like it was really the first demonstration. And, of course, everyone was expecting these patients to relapse, which is I think not good for patients in general. And we are extremely pleased to see that like we do have long-term remission.

[Wangzhi Li:]

Great. Great to learn. Maybe last question, as you mentioned earlier in your call, the gene editing space, they’re getting very active. So just maybe share some color in terms of Cellectis thinking or plan and go on the business development front for this year or next year?

[André Choulika:]

Well, yeah, actually there is like everyone is becoming extremely agitated about using gene editing in CAR T-Cells these days. And suddenly, hey, like it’s becoming the main ID and we’ve been talking advocating this in several years, and I know that most of you have been following Cellectis on this lead. There is a strong conversation between lot of gene-editing companies, including Cellectis and other players in this field. The future of CAR T, the future of cell therapy, if cells are becoming a therapy, then the future lies in the ability to program the DNA of these cells to make them better products, either for the strong tissue such as CAR T so it’s like ablation of tissues, such as a cancer or reconstructing tissues, repairing tissues or healing, and all these things. So gene-editing is part of the future of medicine and it’s becoming a reality since three years since Cellectis is pushing this forward. And are we pushing forward to make more deals in this field? Cellectis has the intention today to bring our portfolio of product and beyond the product you already know to commercialization. This is my goal. This is the goal of Cellectis. It’s becoming a commercial company in the future and being able to commercialize very important products for the patients, and promote the high standard products. It has been the development part of the strategy, potentially to bring in new technologies, but our goal as we are today is essentially to try to bring 123 in to commercial, to bring 22 to commercial, CS1, CLL1 et cetera and develop the wholly-owned portfolio of products either for CAR T, but also beyond CAR T. Now, yes, there is a lot of like business development interest all around our space today. And I think that 2018 is going to be a huge year for CAR T and gene-editing in general. When I look over the announcement of our partners around, because there potential lot of INDs and new patients that are going to be dosed, so I think it’s going to be a real turning point, in the industry in general. Well, with the past deal from like Gilead with Sangamo BioSciences that shows the interest at – it’s exactly the same type of deal we signed with Pfizer in like 2014, four years ago, like almost four years ago. So we’re excited to see that finally other companies are starting to say while the future of autologous CAR T, it’s allogeneic CAR T, we’re not alone anymore.

[Wangzhi Li:]

Got it. Okay, great. Thank you very much for taking my questions.

[André Choulika:]

Thank you very much. Thank you.

[Operator:]

Thank you our final question comes from Biren Amin with Jefferies. Please proceed with your question.

[Biren Amin:]

Yeah, hey, guys. Thanks for taking my questions. Just for the 123 trial, given other AML studies allow for bridge-to-transplant in patients that achieved complete remission, is this something that you’re allowing for the UCART123 study in AML?

[André Choulika:]

Of course, Biren, this is – hi, Biren, this is André. How are you? The – making a single shot in the patient did make sense back five or six years ago, when CAR T started to spring, because whatever you can get from like T cells, from a patient and you can do with those. Then with the use of like antiviral transaction, then finally you inject everything you had and like you see what’s happening. With the potential of having off-the-shelf products and with the potential of the ability to develop a therapy and not just like a therapeutic procedure, there is a span of potential that is limited. Today, we still have to find a right dose, what is the number of cells, the potency they have injected to the patient confronting to this tumor mass would give that much of activity or tumor melting at the end. We have to know exactly the robustness in manufacturing, what is the activity of cells to melt down tumor cells, how many tumor cells they can melt. And once you get all these data, then the potential of developing different type of administration mode is unlimited. And we have a strong conviction at Cellectis, in order to reduce potentially the initial CRS that we have, for example for the AML and the BPDCN patient last year in the summer, it’s potentially to go with lower doses of starts and expand the number of CAR T cells with repeat dosing, so the potential issues. But first of all, we have to go through the dose escalation with a potential to re-dose afterwards and you will see that the protocol that was decided by Cellectis will expand its potential, in the future in different type of protocol settings, but we’re strong believers by this type of approach. Not only this, but what I said in – like during this call, you can go after tumor that have, for example, multiple type of tumor-associated antigen, tackle the tumor with CD123, then retackle this tumor with let’s say CLL1 et cetera to be sure that you cleaned up all the cells with a repeat dosing one after the other in trying to reduce slowly the tumor for the comfort of the patient and his safety, but also the ability to totally clean up on the long-term to patient even at a potential to re-dose maybe six months after, I think nothing can be ruled out at the stage of today with a potential of opening a freezer and pull out a vial, whatever this vial is, and analyzing the tumor and how the tumor reacts. I think that this is the key component to the CAR T therapy in the next decade and probably in the 21st century.

[Biren Amin:]

Great. Thank you.

[Operator:]

Thank you. There are no further questions at this time. I would like to turn the call back over to Mr. Harnest for any closing remarks.

[Simon Harnest:]

Thank you, everyone, for the great questions, and for obviously tuning into our yearend financial call. We really appreciate the interest in the company and look forward to seeing you at future conferences. Thank you so much.

[Operator:]

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.