Cellectis Q2 2023 Earnings Call Transcript

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August 4, 2023

There are 13 speakers on the call.

Operator

Morning, and everyone. Welcome to the Celtics Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Please be aware that today's conference call is being recorded.

Operator

I'd now like to introduce the first speaker, Arthur Strel, Chief Business Officer. You may begin.

Speaker 1

Good morning, And welcome everyone to Selectus' Q2 2023 Corporate Update and Financial Results Conference Call. Joining me on the call today with prepared remarks are Doctor. Andre Sulika, our Chief Executive Officer Doctor. Bing Huang, our Chief Financial Officer And Doctor. Mark Fotini, our Chief Medical Officer.

Speaker 1

Yesterday evening, Selectus issued a press release reporting a corporate and business update for the Q2 2023 and its non audited financial results for the 6 months period ended June 30, 2023. As disclosed in our press release published yesterday, the report including our non audited financial statements for Q2 will be released in the coming days. As a reminder, we will make statements regarding Selective's financial outlook, including the sufficiency of cash to fund operation, In addition to its manufacturing, regulatory and product development status and plans and product development of its licensed partners, These forward statements, which are based on our management's current expectations and assumptions and on information currently available to management, including information provided or otherwise publicly reported by our licensed partners 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 filed with the Securities and Exchange Commission, SEC, and The financial reports, including the management report for the year ended on December 31, 2022, and subsequent filings Selectus makes with the SEC from time to time. I would now like to turn the call over to Andre.

Speaker 2

Thank you, Arthur. Good morning and thank you everyone for joining us today. The second 2023 quarter was marked by strong execution. Our last clinical data presented for UCART T22 at the European Hematology Association Annual Meeting are encouraging for patient With relapsed or refractory B cell acute lymphoblastic leukemia who has failed multiple lines of treatment Options including chemo immunotherapy, CD19 directed CAR T cell therapy and allogeneic stem cell transplant. We're looking forward to releasing our new data later this year on UCART T22 manufactured in house.

Speaker 2

Alexis also presented an encore of the clinical data of the AMALY-one clinical trial evaluating UCART T123 At the American Society of Gene and Cell Therapy Annual Meeting. These preliminary data Support the continued administration of QCAR T123 after fludarabine, cyclophosphamide and alemtuzumab lymphodepletion in patients Relapsed or refractory acute myeloid leukemia. In addition, this quarter, Elekta's innovation team was proud To present strong preclinical data on gene editing process to develop a bonafide HBV gene correction of Sickled mutation. In addition to that, we have presented a comprehensive analysis to better design Efficient tau based editor at the International Society of Cell and Gene Therapy Annual Meeting. These achievements showcase more the power of gene editing platform both as tailings for therapeutic gene editing And that we are continuing to deliver constant breakthrough innovation to treat diseases with unmet medical needs.

Speaker 2

Let us announce that during this Annual Shareholder Meeting, Doctor. Cecile Chartier has been appointed as the Director of the company's Board of Director. At the end of this meeting, the Terms of the office of Mr. Opno and Mrs. Fabrique ended.

Speaker 2

I'm very pleased to welcome Doctor. Chartier to Selective's Board. Her extensive experience in the development of next generation cell and gene therapies coupled with her deep knowledge of QS Biotechnology Industry With a huge asset will be a huge asset to select us. We look forward to our contribution and insights as we continue advancing the development of our product candidates. In 2023, We made substantial progress with our pipeline.

Speaker 2

Despite an unprecedented challenging market environment for the cell and gene therapies company, Cellectis remains deeply focused on its core clinical trial, BALI-one evaluating UCART T22, NATALI-one evaluating UCART T20x22 and AMALI-one evaluating UCART T123 And on its mission to develop innovative cancer therapy product candidate. With that, I would like to turn the call over to Doctor. Protini, our Chief Medical Officer, who will give an overview of these clinical trials. Mark, please go ahead.

Speaker 3

Thank you, Andre. As Andre mentioned, we have made Progress in our VAL-one clinical trial with the presentation of updated clinical and translational data at the European Hematology Association annual meeting that supports the preliminary safety and efficacy of UCART22 in a heavily pretreated relapsedrefractory The poster presentation reviewed clinical and translational data from patients who receive UCART 22, after lymphodepletion with fludarabine and cyclophosphamide or FC or fludarabine, cyclophosphamide and alemtuzumab or FCA in patients with relapsedrefractory B cell ALL. Compared to the clinical update on VAL-one at ASH 2021, the poster presented data from 6 additional patients who receive UCART22 at dose level 3 as of December 31, 2022 data cutoff. UCART22 administered after FCA lymphodepletion regimen For FCA dose level 3, 5,000,000 cells per kilogram, 50% of the 6 patients responded. Post lymphocytics remain suppressed through day 28 for all patients who received FCA lymphodepletion.

Speaker 3

Peak ferritin levels correlated with UCART22 cell expansion and cytokine secretion. UCART22 continues to be safe and tolerable with no treatment emergent serious adverse events or DLTs recorded. UHECR22 cell expansion was detected in 9 of 13 patients in the FCA lymphodepletion arm and associated with clinical activity. The VALDE-one study is currently enrolling patients after FCA lymphodepletion with Cellectis' in house manufactured product. The next data set is expected to be released later this year.

Speaker 3

Our AMALY-one study evaluating UCART-one hundred and twenty three in patients with relapsedrefractory AML Continues to progress and enroll patients in the FCA 2 dose regimen arm. On May 17, Select has presented an encore of the clinical data that were unveiled at the ASH 2022 Annual Meeting At the American Society of Gene and Cell Therapy Annual Meeting. These preliminary data The continued administration of UCART123 after FCA lymphodepletion in patients with relapsedrefractory AML. The oral presentation reviewed preliminary data from patients who receive UCART-one hundred and twenty three at one of the following dose levels: dose level 1, 2.5x105 cells per kilogram dose level 2, 6.25x105 cells For dose level 3, 3.3x106 cells per kilogram after lymphodepletion with Fc or FCA. The data presented showed that adding alemtuzumab to the Fc lymphodepletion regimen was associated with Sustained host lymphodepletion and significantly higher UCART123 cell expansion That correlated with improved anti leukemia activity.

Speaker 3

2 of 8 or 25 percent of patients at dose level 2 in the FCA Allogeneic stem cell transplant, who experienced a durable minimal residual disease negative complete response That continued beyond 12 months as of December 2022. Lastly, I will speak about our NATALIA-one study evaluating UCART 20x22. UCART 20x22 is Selectus' 1st dual allogeneic CAR T cell product candidate targeting both CD20 and CD22 and is being evaluated in patients with relapsedrefractory B cell non Hodgkin lymphoma. The NASHALI-one clinical study is ongoing and CELLECTUS expects to provide first in human data later this year. Selectus also continues to advance our Preclinical programs and provided preclinical proof of concept data for UCART20x22 to overcome current mechanisms of resistance to CAR T cell therapies in B cell NHL, while providing a potential therapeutic alternative to CD19 targeting and allowing a reduction in the time from treatment decision to cell infusion.

Speaker 3

We demonstrated that UCART 20x22 displays robust activity both in vitro and in vivo against targets expressing heterogeneous levels of CD22 and CD20. In vitro cytotoxicity assays against different tumor cell lines Showed strong activity whether these cells expressed the single antigen CD20 or CD22 Or both antigens simultaneously. These preclinical data were presented in June at the International Society of With that, I would like to hand the call over to Doctor. Bing Huang, Selectus' Chief Financial Officer for an overview of our financials for the Q2 of 2023. Bing, please go ahead.

Speaker 4

Thank you, Mark. I would like to highlight that in our financials, the cash, cash equivalent A restricted cash position of Selectus, excluding Calyxt, as of June 30, 2023, was $89,000,000 compared to $95,000,000 as of December 31, 2022. This difference mainly reflects $55,000,000 of cash out, Which includes $50,000,000 of payments for R and D expenses, dollars 7,000,000 for SG and A suppliers, dollars 23,000,000 for staff costs, $7,000,000 for rent and taxes, dollars 3,000,000 of reimbursement of the PGE loan, a $21,000,000 net cash inflow from EIB loan, a $1,000,000 of refundable advance from BPI, dollars 2,000,000 of financial investments, capital gain and interest, A $1,000,000 reimbursement of social charges on stock options, a $1,000,000 cash inflow from customers and a $23,000,000 net cash inflow from the capital raise closed in February. This cash position is expected to be sufficient to fund Selecta's stand alone operations into the Q3 of 2024. The closing of the proposed Calyxt merger was finalized on May 31, 2023.

Speaker 4

Consequently, Calyxt was deconsolidated and presented as discontinued operations in the financial statements only until May 31, 2023. The net loss was $46,000,000 in the 6 month period of 2023 compared to a loss of $54,000,000 in the 6 month period of 2022. This $8,000,000 decrease in net loss between 2023 2022 was primarily by a decrease of $6,000,000 in purchases And external expenses because of quality and manufacturing internalization, a decrease of $4,000,000 In personnel expenses due to headcount rationalization and an increase of $2,000,000 of net financial gain, Almost fully offset by an increase of $3,500,000 in net loss of discontinued operations. The net loss attributable to shareholders of Selectus was $41,000,000 or 0 $0.76 per share in the 6 month period of 2023 compared to a loss of 51,000,000 We're $1.12 per share in the 6 month period of 2022. This $10,000,000 decrease in net loss Between 2023 2022 was primarily driven by a decrease of $11,000,000 of R and D and SG and A expenses, An increase of $2,000,000 of the financial gain, partially offset by the $3,500,000 decrease of net loss attributable to shareholders of Selectus, which excludes non cash stock based compensation expenses, was $37,000,000 or 0.68 cents per share in the 6 month period of 2023 compared to a loss of $46,000,000 or $1 per share in 2022.

Speaker 4

The tranche A of €20,000,000 of the credit facility we received from the European Investment Bank Was received in April. The initial payment from BPI related to our grant and refundable amounts of $1,100,000 Was received in June for $900,000 $200,000 in July. We are laser focused on spending our cash on developing our clinical candidates and operating our state of the art Manufacturing Facilities in Paris and in Raleigh. In addition, our focus on maintaining an efficient corporate infrastructure

Speaker 2

Thank you, Bing. To close out this call, I would like to reiterate how confident we are about the continued progress of our 3 ongoing clinical trials In hematological malignancies as well as our continued development of our preclinical programs. At Selectus, we strongly believe that our product candidates, our technologies And our in house manufacturing capabilities will lead us to a paradigm shift for patients with hard to treat cancers, positioning us at the forefront of this promising medical and scientific field. With that, I would like to open the call for the Q and A.

Operator

Thank you. We will now be conducting a question and answer session. Our first question comes from Yigal Nochomovitz with Citigroup. Please proceed with your question.

Speaker 5

Yes. Hi. I had a question about the VAL-one study, in ALL. So you said you had 6 additional patients at dose level 3, 50% ORR and now you're continuing with the study The in house product, are you going to be going with the same dose with the in house product or will the in house product move

Speaker 1

Thank you, Yigal. Great question. I'll hand this one over to Mark.

Speaker 6

Hi, Yigal. Thanks for your question. So, yes, so That presentation was at DL3 with the CDMO manufactured product. I think as we've discussed previously, the in vitro comparability tests that were done between the CDMO manufactured product and The product that was manufactured at Selectus showed that the Selectus product was significantly more potent than the CDMO Manufactured product and therefore, we elected to bring the Cellectis product into The clinic, at a reduced dose level at dose level 2, so it started in patients at 1,000,000

Speaker 5

Okay, thanks. And could you talk about the Expectations for when we might see the first data from the in house product?

Speaker 6

Yes. So, we will discuss the first patient's dose with the in house product later this year. It will be disclosed.

Speaker 5

Okay. Thank you.

Operator

Our next question comes from Gena Wang with Barclays. Please proceed with your question.

Speaker 7

Thank you for taking my questions. I have 2. The first one is regarding Clinical data, the UCAR22, you did show very promising response at the EHA update. Just wondering how long do you think a post And this question applied to UCART22, but also My second question is regarding your The base editor, you also demonstrate your gene editing platform capability with base editor. So any

Speaker 1

Thank you, Gina. These are 2 great questions. I will give the first one to Mark and then on base editing maybe Andre.

Speaker 6

Okay, great. Thanks, Gina, for your question. So, yes, agreed. In terms of durability of response, this is Obviously, once we get to an RP2D dose that we want to move forward with, I think in similar fashion that's been shown in the autologous space, we're Looking at the 6 month duration, I think would be appropriate.

Speaker 2

Hi, Gina. Thank you very much for the question on base editing. It's We're very excited by this technology because of its extreme precision and the ability to reduce as much as Possible the potential, genotoxicity because it doesn't clip DNA unlike new places. And we consider using them in series of different type of disposition. For example, making combos When you want to do knock ins and knock outs.

Speaker 2

So with the base editor, you can essentially edit the base, so you can disable the gene, So make a knockout or restore function of the gene in changing the base there that might induce a mutation, But you cannot insert or replace DNA. Therefore, Technology could be used, for example, when you want to multiplex and in order to reduce the number of clips in the DNA, Even though if you do 2 series of cutting and you wait between the 2, if you want to Pile up, it's better to combine a base editor that does not clip the DNA with a potential new place to do a knock in, Wait a bit and do a second shot. For example, when you look at the product that we have developed, Mach 1 Have 2 knockings and 3 knockouts. And this could be, for example, disposition for this Amazing prologue for triple negative breast cancer and ovarian cancer. So it has a lot of potential with this.

Speaker 2

The second thing that we believe that Could be used for base editing is potentially for in vivo delivery for certain type of genetic diseases And because it doesn't require to have the combination with the repair matrix For example, fixing DNA and can essentially either by knockout or by fixing a mutation induce Certain mutations and then also in other type of application in genetics. But Essentially, I think that's going to be a huge add up on the design The CAR Ts that we do when we'll move into we'll scale up the sophistication of gene editing into this And in multiplexing, the modification in D cell, so it's next gen things that we're bringing. The thing that you don't want is to make too many cuts in the DNA Because that would induce whatever you do, it will induce translocation and a certain rate is not acceptable. Hope it answered your question.

Speaker 7

Yes. That's very helpful. Thank you both.

Speaker 4

Thanks.

Operator

Our next question comes from Yanan Zhu with Wells Fargo. Please proceed with your question.

Speaker 8

Hi. Thanks for taking the questions. I was wondering about the UCART 20 by 2022 Data readout later this year. What could we expect from the readout in terms of how many patients And what duration of follow-up? And also, will the patients be mostly in a setting of post autologous CD19 CAR And what would be considered a successful outcome from this readout from the company's perspective?

Speaker 8

Thank you.

Speaker 1

Thank you very much, Shannon, for the spotlight on UCART 20 by 20 2. Over to you, Mark.

Speaker 6

Yes, great. Thanks for the question. So obviously, we're all very excited about 20 by-twenty 2. And as you know, the trial just We started accruing earlier this year, so we expect to reveal the first in human data for this Very interesting dual allogeneic CAR T cell product, in patients with relapsedrefractory B cell non Hodgkin lymphoma. As part of the inclusion criteria for this study, the patients will have to have failed some form CD19 directed therapy, including autologous CD19 CAR T if they're eligible to get them, but Patients are also eligible for this study if for some reason that they are not, able to, generate an autologous product.

Speaker 6

So and in terms of the response, these are early days in escalation. So we'll reveal that response rate later this year with the 1st in human group.

Speaker 8

Got it. And In terms of the dose level, could you talk about The designed dose levels and at which dose level we might see data?

Speaker 6

Yes. So the initial dose level that we started enrolling patients is 50,000,000 cells flat dose. So it's a flat dosing like most of the NHL CAR T cell studies.

Speaker 8

Got it. And lastly, I was wondering if you could talk about options to extend the Cash runway and whether there could be consideration For example, monetization of The royalty stream from Evogene.

Speaker 4

Yes, Cheryl. Thank you. Thank you. Sure. I mean from a cash perspective, I will also highlight we have multiple other options.

Speaker 4

I'll give you, for example, the European Investment Bank loan That we signed in end of last year, for example, we haven't drawn on tranche B yet, even though we fulfill the precedent condition for tranche B, as an example. As opposed to monetization of royalty, we're not obviously in a position to discuss that right now in this form. Thank you very much, Anna.

Speaker 8

Great. Thank you.

Operator

Our next question comes from Salveen Richter With Goldman Sachs, please proceed with your question.

Speaker 9

Hi. Yes, this is Anamit on for Salveen. Thank you for taking our question. Just jumping on the back of the previous question, if you could just provide an update on how enrollment is going in that Trial whether you've experienced any bottlenecks there and then just what has the physician feedback been with respect to that asset? Thank you so much.

Speaker 1

Thank you. These are great questions. I'll hand them over to Mark.

Speaker 6

Yes. Thanks for the question. So yes, enrollment is continuing. And What I can say is that the investigators are incredibly excited by the potential to use an alternative to CD19 in this Disease space and particularly dual CAR T cell and one That's allogeneic coming off the shelf to provide rapid access to these patients of this product. So There's intense excitement around this protocol.

Speaker 9

Thank you.

Operator

Our next question comes from Kelly Shi with Jefferies. Please proceed with your question.

Speaker 10

This is Dave on for Kelly Sheehy at Jefferies. Thank you for taking our questions. So continuing on UCAR-twenty two, Quick question. How many patient data should we expect at year end? And if the baseline will be similar to what we saw with the previous product?

Speaker 10

Also, just wondering if you can add how many sites are active in the U. S. And EU? And maybe if you can remind if you have initiated dosing in the U. S.

Speaker 10

Sites or not? Thank you.

Speaker 1

Thank you. That will be for you, Mark, as well.

Speaker 6

Yes. Thanks for the question. As we discussed previously, we will be revealing The first patient data with the new in house manufactured product. And as we discussed prior, we did bring that into the clinic at dose level 2. So that's What we will be discussing later this year.

Speaker 6

In terms of enrollment, This trial is enrolling both in the U. S. And in the EU with the in house manufactured product.

Operator

Our next question comes from Hartaj Singh with Oppenheimer and Co. Please proceed with your question.

Speaker 11

Great. Thank you. And thanks for the question after a very busy week this Friday. Just had a quick question on UCART22. Maybe you could just talk a little bit about the unmet need in that post CD19 patients.

Speaker 11

It seems that a few years ago, there was a small, Maybe for lack of a better word niche population, but it seems to be increasing the patient population there and the unmet need is fairly high too. If you could just talk a little bit about that And I imagine that's where UCART22 slots in. And then with just UCART123, you indicated previously This target can be unstable and it's a difficult patient population. With the addition of FCA, how's that changing in your view and your ability to 3 pieces. Thank you for the questions.

Speaker 1

Thank you, Hartaj. And I think both questions would definitely go for Mark.

Speaker 6

Thanks, Hartaj, for the question. So I think in the 22 space, this, the UCART-twenty 2 Right now is the only allogeneic CAR T cell that's being developed in the ALL space. As you point out, there was all the initial success of 2019, which is a great target. However, there are a significant number of relapses that have been seen as also in terms of The duration in the ALL space as well. And so this clearly, as you point out, open up A very significant window for this UCART 22 in this space.

Speaker 6

Also in the fact that in terms of being able to give this product to patients that have been so heavily pretreated, chemo Transplant, prior CD19 CAR T, a lot of times these patients come in with limited marrow reserves. So obviously an allogeneic CAR So, is in fact a great option for them at that point where they may not be able to mobilize anything for an additional Autologous product. I think for 123, I don't know about it being Stable. I think the issue is more that we needed the alemtuzumab to allow For significant host lymphosuppression throughout the DLT period and beyond, so at least 28 to 30 Plus days of having the host lymphocytes down so that we could see significant expansion of the UCART-1, And therefore, clinical activity. So I think that's really the major focus For the addition of the alemtuzumab, it's very similar into what we've shown in the 22 study for why we need the alemtuzumab Seated with 20 by 22 going in with FCA lymphodepletion for that reason.

Speaker 6

I hope that answers your question.

Speaker 11

No, no, that's great. Thank you, Mark. Appreciate the update.

Operator

Our next question comes from Jack Allen with Baird. Please proceed with your question.

Speaker 12

Great. Thank you so much for taking our questions. Just two quick ones from us. Maybe starting on the clinical side with UCART 20x22, it's to see that product getting a lot of focus on the call today. Number of questions have already been asked here, but the one I had was, what are the expression requirements for CD2022 in the patients As it relates to enrollment criteria, are there any expression requirements or are you taking all comers in that post CAR T or post CD19 Setting.

Speaker 12

And then on the financial side, I was hoping, Bing, maybe you could speak just briefly about any comments around the Seviets. I know it's more an allergy and Seviets thing, but I'd love to hear any updates you have on that perspective as well. Thanks so much.

Speaker 1

Thanks, Jack, Further questions and continued focus on 20 by 22, I will start with Mark on this one.

Speaker 6

Hi, Jack. Thanks for the question. So, Yes. So for the 20 by-twenty 2 study, there's no requirement for both antigens. There's they only have to Express one or the other, so either 20 or 22 or both.

Speaker 6

So that's in terms of expression.

Speaker 1

Okay. Thanks. And for the question on the survey, I'll hand it over to Andre.

Speaker 2

Hi, Jack. Well, thank you very much for the questions. Really appreciate it. Last year, like in September 20 22, Allogene and Us issued some information that survey was Not helping that much on these trials and since then there was limited communication. Given the situation, I'm going to abstain to say anything in order not to complexify the situation.

Speaker 2

Therefore, you'll have to wait up to the time the situation clarifies. And today, Hope that there will be clarity in the future.

Speaker 12

No problem. Completely understood. Thank you very much for the question. But I

Speaker 2

know it's Frustrating, but this is it, like you know these type of situation.

Speaker 12

Yes, yes, completely understand. Thanks for the comment.

Operator

Our next question comes from Silvan Tourocan with JMP Securities. Please proceed with your question.

Speaker 9

Hey, good morning and thanks for taking my question. I just have a quick question on your fat CAR T. Could you talk

Speaker 1

a little bit about the target And the initial population is there. And then in terms of big picture, when would that move that into the clinic? And or are you currently just executing on your three Asset in the clinic. Thank you so much. Thanks.

Speaker 1

So then a great question on UCAR T Fab. That one would be for Andre.

Speaker 2

Well, we're super excited by this product. SAB is an amazing cancer like a product For a series of different type of cancers, but could do quite potentially for other things also. And we would like to we can push it either in monotherapy or Combo therapies and we haven't given clear Guidance on how we're going to use it, but definitely it's one of the pro dogs that is one of the highlight of the preclinical pipeline that Selectus Once to push, there is like a mention about this product in frontiers immunology publication We have currently, but watch the company, the cash position would change in the near future. It's something that would

Operator

There are no further questions at this time. I would now like to turn the floor back over to Andre for closing comments.

Speaker 2

Well, thank you very much everyone for attending this Q and A session and earnings call. And we're Very excited by first half of this year and the execution. We're extremely proud of what happened. And We're really looking forward into the second half of this year because there are like strong events that will mark the company For the second half up to the end of the year and definitely watch like this and the execution that It's happening today and also the innovation that we're bringing to the clinic. It would be very interesting.

Speaker 2

And thank you very much for everyone.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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