Cellectis S.A. Q2 FY2020 Earnings Call

Greetings and welcome to the Cellectis Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, Simon Harnest. Thank you. You may begin.

Thank you, and welcome everyone to Cellectis Second Quarter 2020 Corporate Update and Financial Results Conference Call. Joining me on the call today with prepared remarks are Dr. André Choulika, our Chairman and Chief Executive Officer; Dr. Carrie Brownstein, our Chief Medical Officer; and Eric Dutang, our Chief Financial Officer. Yesterday evening, Cellectis issued a press release reporting our financial results for the second quarter ended June 30, 2020. The press release is available on our website at 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 most recent Form 20-F on file with the SEC and the financial report including the management report for the year ended December 31, 2019 and subsequent filings Cellectis makes with the SEC from time to time. I would now like to turn the call over to André.

Thank you, Simon. Good morning and thank you everyone for joining us today. I will start with a quick introduction before handing the call over to our Chief Medical Officer, Carrie Brownstein for an update on our clinical programs and our Chief Financial Officer Eric Dutang for a review of the financials. The second quarter of 2020 has been very productive for Cellectis. We continue to be amazed by the commitment and the relentlessness of every nurse and doctor who gives outstanding care to cancer patients at the critical need in these exceptional times. I would like to highlight the outstanding progress of partners, Allogene and Servier have made in driving forward the development of our lead license candidates UCART19 and UCARTBCMA which Allogene renamed into ALLO-501, ALLO-501A and ALLO-715 respectively. As a reminder, UCART19 or ALLO-501 is exclusively licensed to Servier and Servier exclusively sublicenses its rights in the U.S. to Allogene. UCARTBCMA or ALLO-715 is exclusively licensed to Allogene. ALLO-501 has made headlines at ASCO in June where our partners Allogene and Servier presented interim Phase I dose escalation data in patients with non-Hodgkin lymphoma, achieving a complete response rate of 44% and an overall response rate of 75% in the subgroup of patients who were naive to CAR T-cell treatment. No GVHD and an adequate safety profile, this data update comes as a follow-up to the data presented at ASH 2018, where the Phase I dose escalation in relapsed/refractory ALL patients showed an 82% CR rate with optimal lymphodepletion. UCARTBCMA or ALLO-715 is also progressing nicely into a Phase I dose escalation trial in relapsed/refractory multiple myeloma patients. The advancement of our partner program significantly relates to the anticipated milestone and royalty revenue for Cellectis. Cellectis is entitled to receive up to $410 million in outstanding milestone payments, plus a low double-digit royalty on worldwide sales from Servier and Allogene for the CD19-directed allogeneic CAR-T program, as well as up to $2.8 billion in milestone payments plus a high single-digit royalty on worldwide sales from Allogene DARPA for the 15 licensed allogenic CAR T-cell targets, including BCMA. On our side, we are pleased to see the progress in patient enrollment for our proprietary allogenic CAR T-cell program for UCART22 for patients with relapsed/refractory BLL in the BALLI-01 trial, as well as for new UCART123 for patients with relapsed/refractory AML in the AMELI-01 trial. Both programs are currently at dose level two in their respective Phase I dose escalation after dosing their first patient in December and January respectively. UCARTCS1 for patients with relapsed/refractory multiple myeloma in the MELANI-01 trial has been put on hold in early July, following the death of a patient at DLT, and we're currently working with the FDA to address the agency's request and hope to resume the trial. Our strategy is to provide an early interim data update on one of our proprietary programs in Q4 of this year, around a relevant scientific meeting. This update will mark the beginning of our proprietary clinical data readout, which we plan to share periodically at relevant scientific meetings at regular intervals. With that, I would like to hand the call over to Dr. Brownstein, our Chief Medical Officer, to discuss the status of Cellectis sponsored trials. Carrie, please go ahead.

Thank you, André. As previously mentioned, BALLI-01 evaluating UCART22 in patients with relapsed/refractory T-cell acute lymphoblastic leukemia and AMELI-01 evaluating UCART123 in patients with relapsed/refractory acute myelogenous leukemia continue to progress through their respective dose levels in these Phase 1 dose escalation studies. The primary objective of these Phase 1 studies is to evaluate the safety of the product candidates and determine an optimal UCART dose and corresponding lymphodepletion regimen. In addition to safety, correlative studies will evaluate T-cell expansion, window of persistence, and antitumor activity at all dose levels. As a reminder, BALLI-01 is planned to complete three consecutive dose cohorts and AMELI-01 is planned to complete four consecutive dose cohorts, followed by expansion cohorts at the optimal dose and lymphodepletion regimen. The optimal lymphodepletion regimen prior to the administration of allogeneic CAR T-cell product candidates remains an area of investigation in the field of CAR T-cell therapy. One of the fundamental goals of our Phase 1 dose escalation and expansion trials is to determine the optimal lymphodepletion regimen prior to treatment with the allogeneic CAR T-cell product. Cellectis holds the patent and is the inventor of the CD52 knockout in allogeneic CAR T-cells that allows the use of a CD52 targeting antibody like alemtuzumab in the lymphodepletion strategy. This concept has demonstrated prolonged selective host T-cell depletion, which correlated with Allo CAR-T expansion and is already incorporated in the current UCART19, UCART22, and UCART123 constructs. We recently filed protocol amendments with the FDA for both the BALLI-01 trial with UCART22 and AMELI-01 trial with UCART123 to include the evaluation of the addition of alemtuzumab to the cyclophosphamide plus fludarabine lymphodepletion regimen. Importantly, this UCART22 program also allows the enrollment of patients who have previously failed prior anti-CD19 CAR T-cell therapies, giving these patients with significant unmet medical need another CAR T-cell therapy option. UCART123 is currently in dose level two in patients with relapsed or refractory AML. To date, the AMELI-01 study is advancing as planned and importantly, we have not seen any adverse safety signals in the Phase 1 dose escalation. Moving on to UCARTCS1. On July 6, 2020, Cellectis announced that the MELANI-01 trial Phase 1 dose escalation and expansion study of UCARTCS1 in patients with relapsed and refractory multiple myeloma had been placed on clinical hold by the FDA. This hold, which impacts only this specific product candidate, was initiated following the submission of a safety report regarding one patient enrolled in the study at dose level two. The patient, who had been treated unsuccessfully with numerous lines of prior therapy including autologous CAR T-cells, experienced a fatal treatment-emergent adverse event toward the end of the 28-day DLT observation period. The clinical evaluation of the case is ongoing and additional details as to the immediate and underlying causes of this event are being collected. Of note, prior to the clinical hold being issued by the FDA, we had already decided to expand enrollment at dose level one, which may be an appropriate dose for further evaluation in the expansion portion of this trial and potentially the recommended Phase 2 dose based on assessment of the preliminary clinical and translational data. We had already begun executing updates to the clinical protocol to reflect this and also to monitor and mitigate potential risks given the novel mechanism of action of the UCARTCS1 product candidate. We are working closely with the FDA to address the agency's request. Additional information and an amended protocol are expected to be submitted in due course, as we are working diligently with the agency towards lifting the hold in order to advance this promising program in the clinic. With that, I would like to hand over the call to our Chief Financial Officer, Eric Dutang for an overview of our first quarter 2020 financials. Eric?

Thank you, Carrie. Cellectis' first half of 2020 was driven by strong financials. The cash, cash equivalents, current financial assets and restricted cash position of Cellectis stand-alone without Calyxt as of June 30, 2020, was at $282 million compared to $304 million as of December 31, 2019. That reflects $28 million of proceeds received from Servier in connection with the March 2020 amendment to the license development and commercialization agreement, which was offset by $48 million of net cash flows used in operating, investing, and lease financing activities and $3 million of unfavorable ForEx impact. This cash position will be sufficient to fund Cellectis stand-alone operations into 2022. The consolidated cash, cash equivalents, current financial assets and restricted cash position of Cellectis including Calyxt was $317 million as of June 30, 2020 compared to $364 million as of December 31, 2019. The change notably reflects $20 million and $26 million of net cash flows used in operating, capital expenditures, and lease financing activities of Cellectis and Calyxt respectively. The Cellectis standalone net income, attributable to shareholders of Cellectis, was $3 million in the first half of 2020 compared to a net loss of $37 million in the first half of 2019. This $40 million increase in the net result between 2020 and 2019, was primarily driven by a significant increase in revenues and other income of $26 million and a decrease in SG&A expenses of $1 million. That was partially offset by an increase in R&D expenses of $4 million and a decrease in financial gains of $4 million. The consolidated net loss attributable to shareholders of Cellectis, including Calyxt, was $12 million or $0.29 per share in the first half of 2020 compared to $49 million or $1.50 per share in the first half of 2019. The consolidated adjusted net loss, attributable to shareholders of Cellectis, excluding non-cash stock-based compensation expenses, was $4 million or $0.09 per share in the first half of 2020 compared to $39 million or $0.91 per share in the first half of 2019. We are laser-focused on spending our cash on developing our deep pipeline of product candidates in the clinic and completing the construction of our state-of-the-art manufacturing facilities in Paris and Raleigh in 2020. I will now turn the presentation back over to André for closing remarks. André?

Thank you, Eric. We continue to invest our human capital and a big part of this is the growth of our in-house manufacturing platform. I'm excited to announce that Dr. Steve Doares recently joined Cellectis from Biogen as Senior Vice President of our U.S. manufacturing site and Head of our Raleigh manufacturing plant in North Carolina. At Biogen, Steve led all aspects of Global Manufacturing Sciences, technology transfer, and manufacturing process support. We're all looking forward to seeing his leadership and guidance advance our mission to develop life-changing allogenic CAR T-cell products for cancer patients. Dr. Leopold Bertea joined us in May 2020 in the role of Senior Vice President of Technical Operations, Europe. His mission is to ensure execution at the GMP Paris manufacturing facility with support to the development and production of Cellectis proprietary product candidates. Dr. Bertea joined Cellectis from CELLforCURE, where he was General Manager and site head through the acquisition of CELLforCURE by Novartis. Dr. Bertea and Dr. Doares will be jointly leading Cellectis' technical operation, replacing Bill Montes, who is leaving the company on August 6, 2020 to pursue other opportunities. Both are joining the company executive committee. We're on track to complete our full manufacturing independence by the middle of next year, which will be an important piece of further establishing Cellectis as a leader in the allogeneic CAR T-cell field. I personally couldn't be more excited about Cellectis' position in the market today with a healthy lineup of clinical programs that will deliver data and create value for all patients and stakeholders one after the other. It has been a long road with many challenges to get where we are today, but we have always successfully overcome every challenge in our way. This speaks for the expertise and resilience of our team. We are well-capitalized to achieve our next milestone, and I am excited for what is to come, both for our proprietary as well as licensed clinical programs together with our partners Allogene and Servier. With that, I would like to open the call to address any questions you may have. Operator, please go ahead.

We will now be conducting a question-and-answer session. First question is from Jim Birchenough of Wells Fargo.

Hi, guys. Congratulations on all the progress during the quarter. A couple of questions. I guess first just in terms of the alemtuzumab preconditioning, what's the earliest that we might be able to get a sense on whether that's the optimal approach to preconditioning? And if it turns out that it does become part of the standard of care for allogeneic CAR-T therapy, how could you leverage your IP around CD52 knockout outside of Cellectis? And then I got a follow-up.

Jim, thank you so much. Good morning. Great question. This is Simon. I would like to direct this question to Carrie because she is obviously heading the clinical operations. Carrie?

Sure. Hi, Jim. Thanks for the question. So as we've previously said, we've submitted the amendment to FDA. We have to obviously get all that through at all the sites. We're hoping to have updates on our data as we've already disclosed, hopefully, by the end of the year. And it will really all depend on how long it takes to get through all the processes required for getting changes to protocols updated throughout our sites and through the FDA. But I'm hopeful that we will have data in a reasonably short time frame to better understand whether this is the appropriate way forward.

And the second part of the question that's a good point on the IP on CD52. So just as a reminder for everyone, we are the inventor and patent holder of the CD52 knockout in CAR T-cells, together with the concurrent administration of alemtuzumab, which is an antibody that targets CD52. So, this is becoming a very interesting patent and concept that we pioneered in 2015 and now is looking to become a real standard part of this prolonged persistence. And the question is, there are some programs that may need prolonged persistence of CAR T-cells. In others, you don't want to have that prolonged persistence. But maybe André, you can add some comments on our strategy around this.

Jim, it's a very good question. And this is a very powerful tool for engrafting and expanding allogenic CAR-Ts in general, but there are flaxy exceptions. For example, UCARTCS1 that is definitely on hold today is depleting. Cartiva is supposed to have the same type of action similar to alemtuzumab. So for UCARTCS1, we don't precondition with alemtuzumab, and we expect the CAR to have similar activity there. So all in all, I think this could become one of the standards but there are other alternatives that could also bring powerful approaches to engrafting and the persistence of the CAR. The IP, of course, is an important component. Cellectis has been building on this allogeneic approach and gene-edited CAR-T in general for eight years, and we have a strong IP estate that we are definitely willing to leverage and find the industry. Our goal is not to block but to actively enable great options to those who want to treat medical needs in general.

UCARTCS1 and the adverse patient outcome here, could you give us any more detail as to whether there were cytokine release syndrome associated with this patient? If this might have related to the self-preconditioning of the product? Or if there are patient factors that could be easily excluded going forward?

Again, that's a good question for Carrie. And just upfront Jim, we haven't disclosed any of the details yet because we're still collecting the data and all the information for that patient. But just as we noted, this patient death occurred very much towards the end of the DLT observation period, which is 28 days long. So, Carrie, if you want to elaborate on that a little bit.

Yeah, there's not that much additional to say. I think given they're still gathering information and we haven't disclosed the details at this time, I don't want to elaborate on it further. But I think from what Simon just said, it was really towards the end of the DLT period. It's a complicated story and we will, once we're off hold and moving forward, have a plan we will be sharing this information.

Hey, guys. Good morning. And thanks for taking my questions. Another question around the multiple myeloma program. You did mention that you decided to expand already at dose level one prior to the safety event occurring. Maybe talk a little bit about what gives you the confidence that this is the right dose already at this point. And how do you think about the need to potentially explore further doses in the future? Maybe just a few more details around that item.

Yes. So maybe I can start and hand it over to Carrie. So for UCARTCS1, just as a reminder, we started at one million cells per kilogram as a dose. This was with the consideration that UCARTCS1 is also targeting a portion of the patient's T-cells expressing CS1, because the CAR-T itself has an edit to remove CS1 from the surface. So this kind of dual action of both targeting multiple myeloma cells and a portion of the patient's T cells led us to initiating the study at a slightly higher dose than for example UCART123 or UCART22. And now, Carrie maybe you can say a little bit of color on what we think the plan forward could be.

Yes. Sure. So thanks so much for that question. As Simon pointed out, the dose at dose level one in this study was actually very close to some of the final doses for other CAR T-cells that are out there. So we're definitely starting at a higher dose. And as you know, we're collecting safety activity translational data as we go along through the dose escalation. So once we open dose level 2, we will be starting to get additional data from the first dose level, and it just appeared that dose level one might be appropriate for further expansion at that dose and potentially being the dose. It doesn't necessarily rule out expanding and exploring other dose levels. But I think the data that we were getting from dose level one seemed to support that it was worth further pursuit at that level.

Just on the incorporation of alemtuzumab-based lymphodepletion into the other two trial product CARs. I was just wondering if you could provide some additional thoughts on some of the protocol amendments. Are you planning, for example, to evaluate several different doses of alemtuzumab, repeat dosing? Or is it just going to be one cohort in each study where you evaluate a certain fixed dose? Maybe talk a little bit about how you think about the various parameters that need to be evaluated to optimize the lymphodepletion protocol there.

Yes, I can take that, Simon.

Yes, Carrie, go ahead.

Thank you very much for the question. Since we are currently in Phase 1 and investigating various aspects, it remains a work in progress. The key point regarding alemtuzumab isn't just about the schedule of administration but rather about balancing the deep selective T-cell depletion it offers with safety. As you know, alemtuzumab data has been presented over many years in the context of allogeneic stem cell transplantation, which carries risks of viral and other opportunistic infections. Therefore, the challenge is to ensure we achieve sufficient selective T-cell depletion without overly compromising the patients' immune systems, which could expose them to significant risks of infections that would undermine our efforts to treat their cancer. That’s how I view this, and we will be investigating its use to find the most effective approach. This will certainly include all the aspects you mentioned. I don't believe it is necessary to try multiple different administration methods. You can certainly do so, but I’m not convinced it would significantly impact the outcomes based on existing data. We have a good understanding from both Allogene and Servier’s data, as well as prior insights from allogeneic cell transplantation, regarding what an optimal dose might be and how to administer it safely, given the notable risks associated with infusion-related reactions with alemtuzumab. Therefore, we believe that the combined data will enable us to determine the best approach efficiently rather than needing to explore countless different methods of administration.

Question is from Gena Wang of Barclays.

Hi. Thank you for taking my questions. So regarding the UCARTCS1, just wondering I know since the last announcement has been one month, did you have additional communication with the FDA? And can you share a little bit more of what the FDA is looking for? And when do you think you can submit the package to the FDA? And then the second question is later this year, Q4 maybe hopefully at ASH, can you lay out the data we might see from all the programs, UCART22, 123 and CS1?

Yes, Carrie, first question and maybe André can chime in on the second question.

All right. Perfect. So Gena, thank you so much for your question. And we know that you and others want to know exactly what the FDA wants us to do and how quickly we'll move forward. And at this time, I don't think we want to disclose exactly what is being requested. I think what's important to know is that we are in discussions with the FDA. They're supportive, and we'll be moving the program forward and ensuring with their help that we can do it in a smart appropriate way to ensure patient safety, which is really the bottom line. So we will be working with them to come up with how we can best do that. That's really all I can say at this point. But I understand that you'd love to know more.

No worries. And André, maybe for the second part of the question, how we're building our momentum for data presentation towards the end of the year.

Well, it's a great question, Gena. The idea essentially is we have three trials. One I hope will resume as soon as necessary for the FDA and us to be sure that we’re not going to repeat the same type of event hopefully. But we have three trials and interesting data to share, but we don't want to release it all at once. From the three trials, we'd like to start potentially at the end of this year releasing part of the data as we have always said. And then on a regular basis at scientific conferences organized or attended by us, we will release data regularly from each trial and update you on the initial trials as we think that the development of this is starting without alemtuzumab and then adding alemtuzumab with the same doses and comparing the two and advancing progressively. I think towards the end of this year, there will be a data-rich course for the company, and hopefully other things will come up, such as the kickoff of the manufacturing, the go-live of the manufacturing site in Paris, and the go-live of the manufacturing site in Raleigh. I think these are two very important events in transforming the company into a true biopharma and moving towards, I hope, for all three trials for pivotal trials and potentially registering and commercializing these products.

Which program do you think that we will see the data first?

So which trial we're not saying that. Yes, it's definitely something that we know, but we want to keep the suspense until the end. But as we said, it’s going to be very early data on – like we started the trials at the beginning of this year or the end of last year. It will be early and it will be partial at this stage, but I think it's going to be interesting.

Next question is from Biren Amin of Jefferies.

Hi, thank you for taking my question. To start with CS1, I believe the investigators activated the Rituxan switch for the first dose level. Can you discuss the patients who received Rituxan at that initial dose level and what prompted the investigators to make that decision? Also, regarding the CD22 CAR, are there restrictions on patients who have previously received CD19 CAR treatment based on their earlier response? Lastly, for both the CD22 and CD123 CARs, are you testing different doses of alemtuzumab in those studies?

Yes. I'll hand it over to Carrie to answer these questions. Thank you, Biren. Carrie?

At this time, we haven't disclosed details about the patients in the UCARTCS1 study. We're gathering all of our information. We are evaluating what happened with the patient as I said earlier and will disclose and present this data when we have everything available so that we can make smart decisions about moving forward, as well as giving a full picture as to what happened with the study. So at this point, we're really not going to disclose the details about the individual patients and their course. So that's the first part of the question. And the second part, I think, was about the alemtuzumab.

Whether...

Yes. So patients who have had prior CD19 CAR are eligible for the trial, and there have been patients enrolled, but it's not required for entering the study.

Next question is from Yigal Nochomovitz of Citi.

Hi. This is Samantha on for Yigal. Thanks very much for taking my question. Just a broad question to start with, as you look over the recent ALLO-501 data and you think about correlations to your own program, what are the big takeaways from read-through from that data that you think applies to your pipeline?

Hey again, that's a good question for Carrie. Sorry, Carrie, I don't know about you?

Thank you so much for the question. We know that UCART19, or ALLO-501, is the same construct but uses a different CAR compared to our entire pipeline. The positive momentum in that program reflects well on our entire pipeline. It validates our approach, gene editing, and constructs. We can derive significant clinical and programmatic insights to advance our work. This is encouraging, and we can learn a lot regarding safety, conditioning, and other aspects. Simon or André, do you have anything else to add?

The situation varies, especially with the CAR-T therapies. For instance, UCART123 is quite distinct, making it challenging to draw parallels when the targets and diseases differ. However, when addressing B-cell malignancies like 19 and 22, both CAR-Ts share the same structure. The stock-outs for DLBCL were similar due to that shared molecule. This opens up potential conclusions and connections that can be beneficial, especially since we already have a CAR that is much more developed, allowing us to refine our methods. Thus, connections are relevant when dealing with the same indications for similar diseases. However, introducing new targets presents an entirely different narrative that needs to be explored.

Great. And that's very helpful, and it sort of leads into my next question as well. For UCART22 you're focused on the B-ALL. But I'm curious if you have thought of expanding into non-Hodgkin lymphoma given CD22 is also expressed in those tumors. And also Allogene's early data suggest that re-treatment of CD19 CAR-T might not be effective, but potentially a CD22 CAR-T could have better results. Just curious on your thoughts there, on that opportunity.

Well, I can take this question. So thank you. CD19 is an overcrowded target. You have everything against CD19, bispecifics, CAR-Ts, autologous, Regeneron, etc. So the pressure on the target and the number of patients is high. Therefore, you have a lot of patients that relapse after CD19 treatments. That's where we believe, CD22 becomes an interesting product with a very high unmet medical need. Now it has to, of course, be efficient and provide a benefit to the patient. But the overcrowding around 19 does create an interesting opportunity for CD22 as well, which we believe could provide an alternative in those scenarios.

Our next question is from Raju Prasad of William Blair.

Hi. This is Sami on for Raju. Jumping off a previous question about learnings from Allogene, since they're developing a next generation of their ALLO-501A without the rituximab safety switch, I was curious if you guys had any plans to produce a similar product for either your UCARTCS1 switch or UCART123. If that was an idea you had kind of thrown around at all or if you're waiting to see the data Allogene produces. Thank you.

Yes. Thank you for the great question. This is a very important part of our platform strategy because we have all these tools at our disposal. So it's a very interesting position that at Cellectis we find ourselves in because we were really the first ones to go into allogeneic CAR-T and think of all these parameters with an off switch with CD52 knockout for alemtuzumab, co-injection with different types of gene edits. So it's really kind of turning out to be a very enviable position that we're in because we have the ability to use all these tools at our disposal. So Allogene, as you know, triggered a larger upfront milestone payment to us with the demand of basically having an ALLO501A version without the rituximab off switch. And from their perspective this was to actually include patients in NHL that have been treated with rituximab in their course of therapy, so as to not exclude these patients if that antibody is still present in their system. This is something we could do at any time. We haven't disclosed any program where we would do this, but just consider that all options are always on the table for us.

Thanks for taking my question.

The next question is from Wangzhi Li of Ladenburg Thalmann.

Hi. Thanks for taking my questions. Maybe start with a follow-up on the UCARTCS1 patient. I know you cannot share too much, but I'm just curious do you know if the patient had pre-existing cardiovascular conditions or risks?

Thanks, Wangzhi, for the great question. And again, I'm sure Carrie's answer will be the same, that we haven't disclosed more information on these spaces. But Carrie, if you want to add anything, please go ahead.

Yeah. No. I really appreciate the question and I know everybody wants to know, but we would really like to wait and compile all the data to present the story in a coherent consistent manner once everything is together, as opposed to a little bit here and there. But thank you.

Okay, I understand. Can you provide any update on the autopsy analysis? Has it been completed, is it in progress, or do you have any idea about the timeline?

Yeah. Again I don't want to comment on what information and additional data and clinical information we're going to receive and when. But again, once we have everything together and we're able to present it all to the FDA and have a plan forward, we will work on getting that information presented.

The next question is from Salveen Richter of Goldman Sachs.

Good morning, thanks for taking my question. Just kind of a follow-up here on the CD19 population for UCART22. But in the Allogene study, when they looked at refractory autologous CAR-T patients, they didn't really have a response or they may have had resistance here. Just curious in your thoughts there as you look at this population, if there's any way to kind of adapt from those learnings? And then a second question on Calyxt. Is there a strategy change here with a focus on kind of optimizing talent-based technology? Thank you.

Hey, Salveen, it's Simon. Thank you so much for all the good questions. I will maybe first address Calyxt and then talk about your first question on CAR-T naive versus pre-treated. So Calyxt is just evolving in their business as they have always pursued a strategy of monetizing the talent technology. The company really has a fantastic brain pool to address challenges through gene editing in the agricultural field that traditional companies just don't have the tool set for. So there's more and more demand for projects that other companies would like us to work on. The company is also pursuing a very lean business model to prove concept, with the soybean to show that we can develop a product, bring it into the market, and commercialize it. It's a great product and there's demand for it, but there's a lot of work attached to kind of having this downstream integration. This was to show we can get into 100,000 acres and really build a huge business around this with railroad car access with crusher access for the soybeans, etc. So that was fantastic work done by the team in record time, given they're the first company in the world to commercialize a gene-edited agricultural food product. Now the transition is more into an asset light business model to not do it yourself so to speak with establishing that infrastructure, but working with partners to build products together for upfront and milestone fees. So for the question on CAR-T, it’s interesting because Allogene mentioned on their earnings call that they're exploring re-treatment of patients. They have seen that patients that for example are partial responders in an initial shot are getting retreated or will potentially be retreated. We’re super excited for that part of the strategy to become more prominent because we think the allogeneic concept is positioned this way that you have an off-the-shelf drug that you can dose and where you can do repeat dosing. We saw the first data from that actually already a couple of years ago where a handful of patients were retreated successfully. So we’re looking forward to what Allogene is working on and will be presenting in the future. We think about that type of strategy as well. But in terms of patients that have been treated with autologous CAR T, as André said, there's a lot of pressure on the CD19 antigen with a prior CAR T treatment, whether it's autologous or allogeneic. That's why we pursue this dual strategy of being first in the pack of an allogeneic CAR T-cell set of companies pursuing very prominent targets with CD19 and BCMA, for example. And these are our licensed programs. Then the proprietary program that Cellectis has with alternative targets could address patients that have not responded or basically relapsed without the expression of any given antigen. And Carrie, if you want to elaborate on that further.

Yes. I believe that in the Allogene data presented, the patients who previously received CAR T did not appear to respond. For the others, we need to consider the targets, as Simon mentioned. In this case, they are targeting the same antigen. Similarly, the autologous CAR Ts also target CD19. Therefore, it is not surprising that they were less likely to respond to another T-cell therapy targeting CD19. Our strategy, however, involves targeting a different antigen. So, even if someone has previously received an allogeneic product targeting CD19, like those in clinical trials such as Allogene or if they have had an autologous product, I don't believe that pursuing a different target will lead to any response issues.

The next question is from Hartaj Singh of Oppenheimer & Co.

Thank you for the updates. I have a question regarding manufacturing. You've mentioned that manufacturing should be operational by the middle of next year in both Paris and Raleigh. Could you provide an update on the progress of the three projects? Is the material being produced clinical-grade? As you transition to larger clinical trials next year, will you be moving to commercial-grade material? The FDA has noted that this is a significant bottleneck for many cell therapies, and it seems you are close to addressing this issue. Can you explain how you envision the transition from clinical to commercial manufacturing for these three projects assuming they proceed to larger pivotal trials? I also have a quick follow-up.

Yes. That's a great question, Hartaj. And this is kind of the basis of what we're doing, really differentiating ourselves with a rich pipeline of different programs that are all going to be manufactured in-house. So this transition...

I can...

Yes, André, you can go ahead.

Simon, maybe I can answer the question very simply for Hartaj because the answer is very straightforward. We are not starting by having the grading of the production at our manufacturing plants for clinical supplies first and then upgrading to commercial. We are starting as if we're producing the pivotal and commercial CAR T and the grade will be commercial at start, but it will produce also our clinical supplies. So it will already be totally fully GMP and inspected. We’re not doing it in two steps. It’s a one full step for commercial and then it will be producing clinical supply.

Great. André, that's very helpful. And then so it seems like as you go to larger trials and potentially pivotal trials, any one of these three projects, you should have the CMC part of future applications is sort of already mostly locked into place?

Actually, can you rephrase your question? I'm not sure I understood.

Yes. So I apologize. Yes. So assuming a future new drug application NDA for one of the three projects, CMC is one of the three sections, right, preclinical, clinical, and CMC. So is it a good assumption on our part that moving forward your CMC portion of a potential future NDA is already sort of mostly... as a company, you have great visibility into that in terms of that section of a potential NDA following with the FDA?

Well, yes, exactly. The goal is to start putting all the procedures internally to fulfill the CMC section for the FDA. That's the plan, frankly. And we're preparing the company to... because we don’t know how these trials will go. But you always plan for success, and that's what we're doing. If it's successful and the CAR-Ts give promising results, especially for example in AML or in ALL where there's a strong medical need, it can go pretty fast. So it’s better to be ready ahead of time and not to do it in several steps.

Great. André, that's very helpful. I think that's very forward-looking. Another question is, and you might have addressed this in your prepared remarks, so I apologize if I just caught it late. But you've managed to bring basically one product to the clinic over the last three years. You have three in the clinic right now, and I know you have a lot on your hands with all three. What are your thoughts on bringing more projects into the clinic? Are you still hoping to stick to that one project per year goal for the clinic, or do you think the next one or two could take a bit longer?

It's an excellent question because we needed to ramp up our clinical capacity and production capacity because the space is becoming overcrowded. The strategy we have is to pursue positive terms of INDs up to the time we ramp up in terms of production capacity. We'll be fully operational next year with the Raleigh site going live, and the Paris site going live this year will be producing nucleic acids and vectors. Since the arrival of Carrie, this has transformed the clinical department in the company, ramping it up also to large capacity. I give you rendezvous for I hope like in 2021 at an R&D Day. We will unveil all the elements that make Cellectis distinctive compared to other companies in the innovation department that is very productive. You can see through most of the publications that we've decided to keep it low-key for now. I hope once we start releasing clinical data by the end of this year, we'll have an opportunity for a nice R&D day where we can showcase the power of this pipeline and start releasing new INDs.

Our last question is from Madhu Kumar of Baird.

Hi, Rob on here for Madhu. I was just wondering how do you think you can use your candidates post-CAR-T? And if there are any specific safety concerns?

Carrie, would you like to start with that?

Sure. Could you please clarify your question again? I'm sorry, it wasn't quite clear.

Sure. I was just wondering how do you think about the use of your candidates post-auto CAR-T? And are there any specific safety concerns?

Sure. I don't see there being an issue using them post-auto CAR-T at all. I think that obviously we're always in Phase 1 and in early studies looking at safety. Obviously, when someone has been previously treated with an auto CAR-T, they’ve received similar lymphodepletion prior to those products. From that perspective, you may want to look a little bit closer at that. But by the time they would be progressing from their prior therapy and getting to our study, there wouldn't be necessarily auto CAR-T around anymore. They wouldn't have been progressing. So, I don't see there being any real concern with those patients versus patients who hadn't received a prior auto CAR-T. But obviously, it's an area that needs to be focused on and we have to pay attention to. But I don't foresee any specific issue that I would be concerned about.

All right. Thank you.

Sure.

That concludes our question-and-answer session. Thank you. I would like to hand the call back to Simon for closing comments.

Yes. Again, thank you all very much for all these great questions and your patience in getting through the Q&A. We always love to hear.