Cellectis - Activity Report 2010

ACTIVITY REPORT

2010

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Note from the CEO 2010 Highlights CELLECTIS IN BRIEF Our core activity CELLECTIS IN 2010

Our science

Business development Corporate development

Human Resources - Communications SUBSIDIARIES

Cellectis bioresearch

Cellectis plant sciences

Ectycell

Cellectis therapeutics

FINANCIAL STATEMENTS

APPENDICES

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Note from the CEO 2010 Highlights CELLECTIS IN BRIEF Our core activity CELLECTIS IN 2010

Our science

Business development Corporate development

Human Resources - Communications SUBSIDIARIES



Ectycell



APPENDICES

4 l Cellectis l Activity Report 2010 l 5

Growth and developmentWe made several acquisitions in 2010, offering us the promise of new technological innovations and boosting our intellectual property portfolio. In September, for example, we purchased all the assets of CytoPulse, a company that specializes in electroporation systems, a technique that will enable us to introduce meganucleases, or other molecules, into a wide range of different cell types. We also decided to pursue the partnerships launched by CytoPulse, meaning that we are in a position to benefit from the operating licenses granted for electroporation technology. One strand of our development strategy is based on the acquisition of technologies that complement our genome engineering technologies and can be used for a broad range of applications, from research to therapy. In the pursuit of this aim, we have also acquired non-exclusive license rights that offer us access to induced pluripotent stem (iPS) cell technology resulting from the work of Kyoto University’s Professor Shinya Yamanaka. Cellectis is the first company in the world to secure licenses for human therapeutic or prophylactic applications under this portfolio and will be making these technologies available to its subsidiary Ectycell so that it can become a leading global player in this field.

Innovation and performanceWe have made considerable progress in our key business sectors this year, both in terms of science and product development and in the area of intellectual property and sales activity. It goes without saying that there is still a lot to be done, and we have not yet achieved all our goals. However, we are more convinced than ever that we possess an effective economic model and technologies with the potential to make a radical impact. Our success is under-pinned by the people who make up our group, our resources, our culture of excellence and our vision of the biotechnology industry, which together have made it possible for us to build a group on a global scale.

Dr. André Choulika, Chief Executive Officer

We are living in an era that is redefining the very essence of biotechnology. The core concept of biotechnology is based on using living organisms to transform products by means of industrial methods. This notion was revolutionized in the late 1970s with the discovery of recombinant DNA and the production of therapeutic proteins, developments made possible by our ability to modify DNA fragments in test tubes and reintroduce the products of this engineering process into cells, thereby changing their genetic makeup. We have now reached a new stage in this biotechnological revolution. Changing the genetic makeup of cells is no longer down to chance but is performed using rational methods. A discipline once characterized by genetic manipulations resulting from makeshift “tinkering” with living organisms has now become a branch of engineering science. DNA programming now uses a perfect knowledge of the entire genome sequence to obtain a predictable, reliable and exact result.

A silent revolutionPredictions in the field of biotechnology are often optimistic. But the speed at which scientists have been able to decode the DNA of the human genome, and the DNA of all iving species, has constantly surpassed all predictions. Today we are at the cusp of a new era in which genetic information will be available to everyone. It is estimated that by 2013, the cost of decoding the human genome will be less than 1,000 euros per person, and the process will be possible in under four weeks. In just a few years, millions of people will have their genome decoded and be able to use it to design customized medical treatments. Genome engineering is situated downstream of this wave. The technologies developed by Cellectis will make it possible to treat innate or acquired genomic defects. Genome engineering will generate a host of new, innovative products, taking up thetorch from fossil and chemical resources. These new resources from living organisms offer vast potential for growth and sustainable development over the coming decades.

Leader in genome engineering Cellectis is in a strong position in this emerging industrial sector. We develop new classes of therapeutic products with the potential to transform the way in which diseases are treated and to cure diseases that are currently incurable. We also develop products for research, biopharmaceutical production, agrobiotechnology, induced stem cells and, more recently, in the area of alternative fuels. Our approach to biotechnology is poised to bring fundamental changes to this industry in the coming decades and to offer an endless source of innovation and growth for our society.

NOTE FROM THE CEO

2010 a year of construction

l Cellectis l Activity Report 2010 l4

4 l Cellectis l Activity Report 2010 l 5

Growth and developmentWe made several acquisitions in 2010, offering us the promise of new technological innovations and boosting our intellectual property portfolio. In September, for example, we purchased all the assets of CytoPulse, a company that specializes in electroporation systems, a technique that will enable us to introduce meganucleases, or other molecules, into a wide range of different cell types. We also decided to pursue the partnerships launched by CytoPulse, meaning that we are in a position to benefit from the operating licenses granted for electroporation technology. One strand of our development strategy is based on the acquisition of technologies that complement our genome engineering technologies and can be used for a broad range of applications, from research to therapy. In the pursuit of this aim, we have also acquired non-exclusive license rights that offer us access to induced pluripotent stem (iPS) cell technology resulting from the work of Kyoto University’s Professor Shinya Yamanaka. Cellectis is the first company in the world to secure licenses for human therapeutic or prophylactic applications under this portfolio and will be making these technologies available to its subsidiary Ectycell so that it can become a leading global player in this field.

Innovation and performanceWe have made considerable progress in our key business sectors this year, both in terms of science and product development and in the area of intellectual property and sales activity. It goes without saying that there is still a lot to be done, and we have not yet achieved all our goals. However, we are more convinced than ever that we possess an effective economic model and technologies with the potential to make a radical impact. Our success is under-pinned by the people who make up our group, our resources, our culture of excellence and our vision of the biotechnology industry, which together have made it possible for us to build a group on a global scale.

Dr. André Choulika, Chief Executive Officer

We are living in an era that is redefining the very essence of biotechnology. The core concept of biotechnology is based on using living organisms to transform products by means of industrial methods. This notion was revolutionized in the late 1970s with the discovery of recombinant DNA and the production of therapeutic proteins, developments made possible by our ability to modify DNA fragments in test tubes and reintroduce the products of this engineering process into cells, thereby changing their genetic makeup. We have now reached a new stage in this biotechnological revolution. Changing the genetic makeup of cells is no longer down to chance but is performed using rational methods. A discipline once characterized by genetic manipulations resulting from makeshift “tinkering” with living organisms has now become a branch of engineering science. DNA programming now uses a perfect knowledge of the entire genome sequence to obtain a predictable, reliable and exact result.

A silent revolutionPredictions in the field of biotechnology are often optimistic. But the speed at which scientists have been able to decode the DNA of the human genome, and the DNA of all iving species, has constantly surpassed all predictions. Today we are at the cusp of a new era in which genetic information will be available to everyone. It is estimated that by 2013, the cost of decoding the human genome will be less than 1,000 euros per person, and the process will be possible in under four weeks. In just a few years, millions of people will have their genome decoded and be able to use it to design customized medical treatments. Genome engineering is situated downstream of this wave. The technologies developed by Cellectis will make it possible to treat innate or acquired genomic defects. Genome engineering will generate a host of new, innovative products, taking up thetorch from fossil and chemical resources. These new resources from living organisms offer vast potential for growth and sustainable development over the coming decades.

Leader in genome engineering Cellectis is in a strong position in this emerging industrial sector. We develop new classes of therapeutic products with the potential to transform the way in which diseases are treated and to cure diseases that are currently incurable. We also develop products for research, biopharmaceutical production, agrobiotechnology, induced stem cells and, more recently, in the area of alternative fuels. Our approach to biotechnology is poised to bring fundamental changes to this industry in the coming decades and to offer an endless source of innovation and growth for our society.

NOTE FROM THE CEO

2010 a year of construction


l Cellectis l Activity Report 2010 l6 l Cellectis l Activity Report 2010 l 7

2010 HIGHLIGHTS

Cellectis and the French National Institute for Agricultural Research (INRA) sign cooperation agreement Cellectis and INRA wished to collaborate in the fields of cell biology and plant and animal biotechnologies. They decided to pool their expertise, where possible, to acquire new scientific knowledge, to create technological innovations, and to share these results, knowledge, and transfer technology to businesses, particularly to small and medium-sized enterprises in the agrofood, agriculture and environment sectors.

Cellectis receives INPI National Innovation Award 2009 Cellectis won a National Innovation Award from the French National Institute for Industrial Property (INPI). Cellectis’ IP Manager Michèle Paquier received the award from the President of the INPI Board, Thierry Morin. The awards, organized annually by the INPI since 1991, honor small and medium-sized enterprises whose growth can be attri- buted to their outstanding innovation policies and which use a comprehensive intellectual property strategy to leverage business growth. “Cellectis represents a fine balance between research activities and a healthy management strategy,” said Thierry Morin.

Cellectis launches Cellectis plant sciences, a subsidiary dedicated to plant applications The main aims of this subsidiary are to increase and accelerate usage of Cellectis’ proprietary technology in agricultural biology, broaden the company’s skills base to attract new and expanded licensing opportunities and explore the development of proprietary traits for selected applications. Cellectis plant sciences is located in Minneapolis, Minnesota, USA, with laboratory space close to the University of Minnesota and its greenhouse facilities. Its ChiefScientific Officer, Professor Daniel Voytas,currently Director of the University of Minnesota Center for Genome Engineering, is an internationally renowned scientist and established expert in plant genome engineering.

New journal publication details in vivo activity of Cellectis’ meganucleases in muscle fibres Researchers at the Laval University Hospital Center in Quebec, Canada, used meganucleases engineered by Cellectis to restore the expression of microdystrophin in human myoblasts in vitro and in muscle fibers in vivo.

They were therefore able to show the potential of using meganucleases to treat Duchenne muscular dystrophy, a hereditary disease that is characterized by rapid degeneration of the muscle tissue, eventually leading to loss of mobility and death. The results of this research were published in the scientific journal Gene Therapy.

Cellectis bioresearch and Lonza enter development and commercial manufacturing agreement Cellectis bioresearch and Lonza, a world leader in biotechnology manufacture have entered into a contract for the development and marketing of bioengi-neered cell lines. Cellectis bioresearch will use its meganucleases to inactivate (“knock-out”) the glutamine synthetase (GS) in CHOK1SV, Lonza’s proprietary host cell line. John Birch, CSO of Lonza Biopharmaceuticals, said, “Lonza is delighted to work with Cellectis bioresearch. This collaboration makes sense and will enhance our long-standing and successful GS technology.”

New study shows meganuclease-driven targeted integration using Cellectis bioresearch’s cGPS® CHO-K1 kit to be highly efficient for drug discovery Scientific research based on a unique method for generating stable cell lines compatible with high throughput screening (HTS) was published in the Journal of Biomolecular Screening.

This research showed that the techno-logy developed by Cellectis bioresearch, based on meganuclease-driven targeted integration, is faster, more practical and more efficient than traditional methods in deriving cell-based assays for HTS studies.

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Stylized meganuclease.


2010 HIGHLIGHTS

Cellectis and the French National Institute for Agricultural Research (INRA) sign cooperation agreement Cellectis and INRA wished to collaborate in the fields of cell biology and plant and animal biotechnologies. They decided to pool their expertise, where possible, to acquire new scientific knowledge, to create technological innovations, and to share these results, knowledge, and transfer technology to businesses, particularly to small and medium-sized enterprises in the agrofood, agriculture and environment sectors.

Cellectis receives INPI National Innovation Award 2009 Cellectis won a National Innovation Award from the French National Institute for Industrial Property (INPI). Cellectis’ IP Manager Michèle Paquier received the award from the President of the INPI Board, Thierry Morin. The awards, organized annually by the INPI since 1991, honor small and medium-sized enterprises whose growth can be attri- buted to their outstanding innovation policies and which use a comprehensive intellectual property strategy to leverage business growth. “Cellectis represents a fine balance between research activities and a healthy management strategy,” said Thierry Morin.

Cellectis launches Cellectis plant sciences, a subsidiary dedicated to plant applications The main aims of this subsidiary are to increase and accelerate usage of Cellectis’ proprietary technology in agricultural biology, broaden the company’s skills base to attract new and expanded licensing opportunities and explore the development of proprietary traits for selected applications. Cellectis plant sciences is located in Minneapolis, Minnesota, USA, with laboratory space close to the University of Minnesota and its greenhouse facilities. Its ChiefScientific Officer, Professor Daniel Voytas,currently Director of the University of Minnesota Center for Genome Engineering, is an internationally renowned scientist and established expert in plant genome engineering.

New journal publication details in vivo activity of Cellectis’ meganucleases in muscle fibres Researchers at the Laval University Hospital Center in Quebec, Canada, used meganucleases engineered by Cellectis to restore the expression of microdystrophin in human myoblasts in vitro and in muscle fibers in vivo.

They were therefore able to show the potential of using meganucleases to treat Duchenne muscular dystrophy, a hereditary disease that is characterized by rapid degeneration of the muscle tissue, eventually leading to loss of mobility and death. The results of this research were published in the scientific journal Gene Therapy.

Cellectis bioresearch and Lonza enter development and commercial manufacturing agreement Cellectis bioresearch and Lonza, a world leader in biotechnology manufacture have entered into a contract for the development and marketing of bioengi-neered cell lines. Cellectis bioresearch will use its meganucleases to inactivate (“knock-out”) the glutamine synthetase (GS) in CHOK1SV, Lonza’s proprietary host cell line. John Birch, CSO of Lonza Biopharmaceuticals, said, “Lonza is delighted to work with Cellectis bioresearch. This collaboration makes sense and will enhance our long-standing and successful GS technology.”

New study shows meganuclease-driven targeted integration using Cellectis bioresearch’s cGPS® CHO-K1 kit to be highly efficient for drug discovery Scientific research based on a unique method for generating stable cell lines compatible with high throughput screening (HTS) was published in the Journal of Biomolecular Screening.

This research showed that the techno-logy developed by Cellectis bioresearch, based on meganuclease-driven targeted integration, is faster, more practical and more efficient than traditional methods in deriving cell-based assays for HTS studies.

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Stylized meganuclease.


Cellectis acquires assets from CytoPulse Sciences Inc. CytoPulse specializes in the development, manufacture and marketing of electro-poration technology and equipment. Electroporation is a highly efficient way for molecules such as meganucleases to be introduced into any type of cell, with applications ranging from research and biomanufacturing to agriculture and therapeutics. “CytoPulse’s assets are a great strategic acquisition for Cellectis,” said Cellectis Chief Executive Officer André Choulika.

“As we announced in 2009, part of our development strategy is to acquire technologies that complement our existing meganuclease platform and can be leveraged across all aspects of our business, from research to therapeutics. We saw such an opportunity in the technologies at CytoPulse Sciences Inc. and look forward to unlocking the value of these assets.”

Cellectis bioresearch announces availability of research kits through new online online-store, provides enhanced accessibility to meganuclease technology Cellectis bioresearch announced the launch of its e-store, with approximately one hundred ready-to-use products available for sale online via a new func-tional and intuitive website to meet the needs of both academic and industry research. “The launch of a website with online purchasing capability was a vital step in improving researchers’ access to our meganuclease technology,” explained Luc Selig, VP Sales and Marketing at Cellectis bioresearch.“Our product offering has expanded rapidly, and we now market over one hundred different products on three target markets.”

Cellectis launches its new corporate website - Information sharing, interactivity and new media space Visitors to the new website are ensured enhanced usability and information sharing, including more streamlined access to information about Cellectis’ technology and products.

The new Cellectis website focuses on three central themes: research and technology, business development and investor relations.

Cellectis bioresearch announces establishment of subsidiary in the US Located at the Cambridge Innovation Center in Cambridge, Massachusetts, Cellectis bioresearch Inc. will be responsible for the US-wide promotion of Cellectis bioresearch products and services.

Cellectis in-licenses induced pluripotent stem cell technology from iPS Academia Japan – First patent license in the therapeutic fieldCellectis entered into two separate non-exclusive license agreements granting the company worldwide access to the induced Pluripotent Stem (iPS) cell patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) at the University of Kyoto, Japan.

Cellectis is the first company in the world to be licensed by iPS Academia Japan to use this patent portfolio for applications in human therapeutics and prophylactics. In the research tool field, this is the first agreement with a French company, following agreements with US and German companies.

Cellectis grants Harvard Bioscience a license to CytoPulse electroporation instrumentsCellectis and Harvard Apparatus, a division of Harvard Bioscience Inc. which develops, manufactures and markets a broad range of tools to advance life science research and regenerative medicine worldwide, signed a license agreement that grants Harvard Apparatus the worldwide exclusive right to manu-facture and market, for research use, the full line of electroporation-based instruments acquired by Cellectis from CytoPulse in September 2010.

Cellectis, however, retains all rights to the use of these instruments for its own research and development programs as well as in clinical trials and prophylactic or therapeutic procedures, for both humans and animals.

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Cellectis acquires assets from CytoPulse Sciences Inc. CytoPulse specializes in the development, manufacture and marketing of electro-poration technology and equipment. Electroporation is a highly efficient way for molecules such as meganucleases to be introduced into any type of cell, with applications ranging from research and biomanufacturing to agriculture and therapeutics. “CytoPulse’s assets are a great strategic acquisition for Cellectis,” said Cellectis Chief Executive Officer André Choulika.

“As we announced in 2009, part of our development strategy is to acquire technologies that complement our existing meganuclease platform and can be leveraged across all aspects of our business, from research to therapeutics. We saw such an opportunity in the technologies at CytoPulse Sciences Inc. and look forward to unlocking the value of these assets.”

Cellectis bioresearch announces availability of research kits through new online online-store, provides enhanced accessibility to meganuclease technology Cellectis bioresearch announced the launch of its e-store, with approximately one hundred ready-to-use products available for sale online via a new func-tional and intuitive website to meet the needs of both academic and industry research. “The launch of a website with online purchasing capability was a vital step in improving researchers’ access to our meganuclease technology,” explained Luc Selig, VP Sales and Marketing at Cellectis bioresearch.“Our product offering has expanded rapidly, and we now market over one hundred different products on three target markets.”

Cellectis launches its new corporate website - Information sharing, interactivity and new media space Visitors to the new website are ensured enhanced usability and information sharing, including more streamlined access to information about Cellectis’ technology and products.

The new Cellectis website focuses on three central themes: research and technology, business development and investor relations.

Cellectis bioresearch announces establishment of subsidiary in the US Located at the Cambridge Innovation Center in Cambridge, Massachusetts, Cellectis bioresearch Inc. will be responsible for the US-wide promotion of Cellectis bioresearch products and services.

Cellectis in-licenses induced pluripotent stem cell technology from iPS Academia Japan – First patent license in the therapeutic fieldCellectis entered into two separate non-exclusive license agreements granting the company worldwide access to the induced Pluripotent Stem (iPS) cell patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) at the University of Kyoto, Japan.

Cellectis is the first company in the world to be licensed by iPS Academia Japan to use this patent portfolio for applications in human therapeutics and prophylactics. In the research tool field, this is the first agreement with a French company, following agreements with US and German companies.

Cellectis grants Harvard Bioscience a license to CytoPulse electroporation instrumentsCellectis and Harvard Apparatus, a division of Harvard Bioscience Inc. which develops, manufactures and markets a broad range of tools to advance life science research and regenerative medicine worldwide, signed a license agreement that grants Harvard Apparatus the worldwide exclusive right to manu-facture and market, for research use, the full line of electroporation-based instruments acquired by Cellectis from CytoPulse in September 2010.

Cellectis, however, retains all rights to the use of these instruments for its own research and development programs as well as in clinical trials and prophylactic or therapeutic procedures, for both humans and animals.

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CELLECTIS IN BRIEF

The company designs and markets nucleases or “DNA scissors” such as meganucleases, innovative tools which enable precise modification of the genome, as well as other products arising from this technology. Cellectis aims to exploit the full potential of its technology in medicine and other areas of scientific or industrial exploration.

Since its inception in 1999 by André Choulika, PhD, and David Sourdive, PhD, Cellectis has enjoyed exclusive rights to a patent portfolio owned by the Institut Pasteur. Professor Rodney Rothstein (Columbia University) chairs its Scientific Advisory Board, which comprises internationally renowned scientists.

To date, Cellectis has entered into more than 50 agreements with pharmaceutical labora-tories, seed producers and biotech companies

worldwide, and has formed more than 20 academic research partnerships.

Since 2007, Cellectis has been listed on the NYSE-Euronext Alternext market in Paris and has secured over ! 70 million in capital since its inception. While maintaining its ambitious growth targets, Cellectis has a very solid cash balance due to increased revenue from product sales, meganuclease production, partnerships and license agreements.

With 10 years of work on meganucleases, Cellectis has acquired unmatched expertise in the field of genome engineering. The internal R&D and meganuclease platform teams have broad knowledge of the field and the skills required to select and integrate new tech-nologies that would prove complementary to Cellectis’ offering.

CELLECTIS IN BRIEF

Worldwide pioneer in genome engineering

Established in 1999, listed on the NYSE-Euronext Alternext market in Paris since 2007 (ALCLS)

2010 operating revenues: 15.8 M !

Staff: 129 including 51 PhDs

4 subsidiaries: Cellectis bioresearch, Cellectis therapeutics, Cellectis plant sciences, Ectycell

Applications: research and biomanu-facturing, human health, agricultural biotechnology, stem cells

Main technologies: genome engineering, protein engineering (in particular nucleases or DNA scissors)

IP portfolio: 83 patents granted and more than 260 patent applications pending

Locations : Paris (France); Saint Paul, Minnesota and Cambridge, Massachussetts (USA)

As of December 31, 2010

Cellectis improves life by applying its genome engineering expertise to a broad range of applications, including human health, bioresearch and agriculture.


CELLECTIS IN BRIEF

The company designs and markets nucleases or “DNA scissors” such as meganucleases, innovative tools which enable precise modification of the genome, as well as other products arising from this technology. Cellectis aims to exploit the full potential of its technology in medicine and other areas of scientific or industrial exploration.

Since its inception in 1999 by André Choulika, PhD, and David Sourdive, PhD, Cellectis has enjoyed exclusive rights to a patent portfolio owned by the Institut Pasteur. Professor Rodney Rothstein (Columbia University) chairs its Scientific Advisory Board, which comprises internationally renowned scientists.

To date, Cellectis has entered into more than 50 agreements with pharmaceutical labora-tories, seed producers and biotech companies

worldwide, and has formed more than 20 academic research partnerships.

Since 2007, Cellectis has been listed on the NYSE-Euronext Alternext market in Paris and has secured over ! 70 million in capital since its inception. While maintaining its ambitious growth targets, Cellectis has a very solid cash balance due to increased revenue from product sales, meganuclease production, partnerships and license agreements.

With 10 years of work on meganucleases, Cellectis has acquired unmatched expertise in the field of genome engineering. The internal R&D and meganuclease platform teams have broad knowledge of the field and the skills required to select and integrate new tech-nologies that would prove complementary to Cellectis’ offering.

CELLECTIS IN BRIEF

Worldwide pioneer in genome engineering

Established in 1999, listed on the NYSE-Euronext Alternext market in Paris since 2007 (ALCLS)

2010 operating revenues: 15.8 M !

Staff: 129 including 51 PhDs

4 subsidiaries: Cellectis bioresearch, Cellectis therapeutics, Cellectis plant sciences, Ectycell

Applications: research and biomanu-facturing, human health, agricultural biotechnology, stem cells

Main technologies: genome engineering, protein engineering (in particular nucleases or DNA scissors)

IP portfolio: 83 patents granted and more than 260 patent applications pending

Locations : Paris (France); Saint Paul, Minnesota and Cambridge, Massachussetts (USA)

As of December 31, 2010

Cellectis improves life by applying its genome engineering expertise to a broad range of applications, including human health, bioresearch and agriculture.


Meganucleases are natural proteins found in many single-celled organisms. They are highly specific “DNA scissors”. They are able to recognize their binding site by identifying a nucleic acid sequence (nucleic acids are the constituents of DNA), which contains between 12 and over 30 base pairs. This site is statistically unique in a genome. Once the DNA break has been made, the cell activates its maintenance and repair system (for example, homologous recom-bination). This system corrects the DNA molecule by using, for example, its twin copy (gene correction) or a similar fragment specifically introduced into the cell as a model (insertion or “knock-in”). It is the same principle as the “copy and paste” function in word processing. When a gene just needs to be inactivated rather than replaced, the broken DNA is bound and loses information, therefore the targeted gene is inactivated (known as “knock-out”).

Cellectis manufactures meganucleases that can cut precise new sequences, and are thus tailor-made for genes of interest. The feasibility of meganuclease engineering allows the creation of a wide range of specific tools to modify the targeted genes. It is the technological vision upon which Cellectis was founded 11 years ago. This was achieved when the meganuclease platform was able to produce custom meganuclease specific of any new gene of interest, with the same characteristics as the wild type ones (efficacy, specificity, …). This expertise in genome engineering tools production has allowed Cellectis to evolve from a tool producer to a product-delivering company.

Genetics has demonstrated the link between the physical attributes of species and their genes, and thereby shown how particular genes are implicated in certain diseases or attri-butes. Genome engineering enables species’ genes to be modified in order to change certain attributes, to rectify an error, or to add a new trait of physiological or economic interest. This approach is not new: cross-breeding different plants or selecting the best animals for reproduction is based on the same principle. The aim is to improve species by giving them the best possible attributes – drought tolerance or pest resistance for crops, for example.

The targeted approach of genome engineering is predictable, more reliable and more effective than earlier techniques, and can even be applied to humans. The genomes of over 1,000 organisms have now been decoded. Knowledge of the sequence and location of the genes of living beings is therefore constantly improving, even though the workings of these genes are still not fully known. Our understanding in this field allows us to manipulate genes directly.

There are three possible strategies to do this:• Insertion is used to add a new attribute to the genome. For example in drug discovery, or in order to overcome a genetic defect like hemophilia. • Correction is used to replace an existing defective sequence (which generally impacts the gene’s functions) by a functional sequence. For example, to treat a serious genetic disease such as Duchenne muscular dystrophy.• Inactivation is used to prevent the expression of a gene. This approach can be used to treat persistent viral infections such as AIDS or herpes.

Our tool: Meganucleases Compared with earlier technologies, the effective power of genome engineering lies in its ability to insert the gene of interest in the chosen place. For many years, researchers’ methods were akin to “playing darts blindfolded”. They would study the effect of randomly inserted sequences, despite the fact that insertion in the wrong place can have harmful effects: one gene can be inserted into another and inactivate it, or activate cancer mechanisms. This is where Cellectis has the competitive edge. Its expertise in meganucleases means that it is able to precisely target a specific locus in the genome. Cellectis’ tools give scientists the precision they were lacking.

The principle of genome engineering is simple: it involves modifying the genome of an individual or species for the purposes of understanding the way it works, producing useful proteins or treating a disease.

Meganuclease

Chromosome

cut

OUR CORE ACTIVITY: GENOME ENGINEERING

Gene Insertion KNOCK IN GENE REPAIR

Gene InactivationKNOCK OUT

pastepasteloss of a few

base pairs

Non Homologous End Joining (NHEJ)

repair matrixIntegration matrix

Homologous Recombination



Meganucleases are natural proteins found in many single-celled organisms. They are highly specific “DNA scissors”. They are able to recognize their binding site by identifying a nucleic acid sequence (nucleic acids are the constituents of DNA), which contains between 12 and over 30 base pairs. This site is statistically unique in a genome. Once the DNA break has been made, the cell activates its maintenance and repair system (for example, homologous recom-bination). This system corrects the DNA molecule by using, for example, its twin copy (gene correction) or a similar fragment specifically introduced into the cell as a model (insertion or “knock-in”). It is the same principle as the “copy and paste” function in word processing. When a gene just needs to be inactivated rather than replaced, the broken DNA is bound and loses information, therefore the targeted gene is inactivated (known as “knock-out”).

Cellectis manufactures meganucleases that can cut precise new sequences, and are thus tailor-made for genes of interest. The feasibility of meganuclease engineering allows the creation of a wide range of specific tools to modify the targeted genes. It is the technological vision upon which Cellectis was founded 11 years ago. This was achieved when the meganuclease platform was able to produce custom meganuclease specific of any new gene of interest, with the same characteristics as the wild type ones (efficacy, specificity, …). This expertise in genome engineering tools production has allowed Cellectis to evolve from a tool producer to a product-delivering company.

Genetics has demonstrated the link between the physical attributes of species and their genes, and thereby shown how particular genes are implicated in certain diseases or attri-butes. Genome engineering enables species’ genes to be modified in order to change certain attributes, to rectify an error, or to add a new trait of physiological or economic interest. This approach is not new: cross-breeding different plants or selecting the best animals for reproduction is based on the same principle. The aim is to improve species by giving them the best possible attributes – drought tolerance or pest resistance for crops, for example.

The targeted approach of genome engineering is predictable, more reliable and more effective than earlier techniques, and can even be applied to humans. The genomes of over 1,000 organisms have now been decoded. Knowledge of the sequence and location of the genes of living beings is therefore constantly improving, even though the workings of these genes are still not fully known. Our understanding in this field allows us to manipulate genes directly.

There are three possible strategies to do this:• Insertion is used to add a new attribute to the genome. For example in drug discovery, or in order to overcome a genetic defect like hemophilia. • Correction is used to replace an existing defective sequence (which generally impacts the gene’s functions) by a functional sequence. For example, to treat a serious genetic disease such as Duchenne muscular dystrophy.• Inactivation is used to prevent the expression of a gene. This approach can be used to treat persistent viral infections such as AIDS or herpes.

Our tool: Meganucleases Compared with earlier technologies, the effective power of genome engineering lies in its ability to insert the gene of interest in the chosen place. For many years, researchers’ methods were akin to “playing darts blindfolded”. They would study the effect of randomly inserted sequences, despite the fact that insertion in the wrong place can have harmful effects: one gene can be inserted into another and inactivate it, or activate cancer mechanisms. This is where Cellectis has the competitive edge. Its expertise in meganucleases means that it is able to precisely target a specific locus in the genome. Cellectis’ tools give scientists the precision they were lacking.

The principle of genome engineering is simple: it involves modifying the genome of an individual or species for the purposes of understanding the way it works, producing useful proteins or treating a disease.

Meganuclease

Chromosome

cut

OUR CORE ACTIVITY: GENOME ENGINEERING

Gene Insertion KNOCK IN GENE REPAIR

Gene InactivationKNOCK OUT

pastepasteloss of a few

base pairs

Non Homologous End Joining (NHEJ)

repair matrixIntegration matrix




OUR CORE ACTIVITY: APPLICATIONS

Human healthGenome engineering is the basis for gene therapy. Often called “genome surgery”, this type of treatment could be used to cure many genetic diseases, such as sickle cell anemia (drepanocytosis). Research in this area has been carried out in collaboration with Cellectis at the Memorial Sloan-Kettering Cancer Center in New York. Inserm, the CNRS, and AFM (French Association against muscular dystrophy) are also closely involved in Cellectis’ progress in the therapeutic field. But genome engineering can also be used to fight viruses like herpes. These pathogens insert their DNA into the DNA of infected cells, meaning that the immune system is unable to get rid of them permanently. Cellectis’ ability to target very precise regions of viruses’ genome in order to inactivate them might make it possible to remove the genetic material of the viruses found in the infected cells. This therefore represents a potential breakthrough in the treatment of these diseases.

AgrobiotechnologyMeganucleases can be engineered so that they are specific to any gene of any species of plant. Cellectis uses its technology and expertise to provide seed producers with mega-nucleases that can make targeted modifications in plant genomes and to develop the next generation of high quality crop plants. Today Cellectis is developing partnership agreements with some of the major players in the agrobiotech sector, so that genome engineering will be accepted and widely used within this field of application. In 2010, Cellectis created Cellectis plant sciences, a subsidiary dedicated to genome engineering applications in plants. Its aim is to increase and accelerate usage of Cellectis’ proprietary technology in agrobiotechnology and to develop proprietary traits for selected applications.

Research and biomanufacturingGenome engineering is at the basis of the modern approach to fundamental research in biology. The entire human genome sequence has been identified, as well as those of more than a thousand species. However, biologists do not know the entire role of these genes that have been identified. To find out the role of these genes, we can use targeted DNA modification techniques to suppress or regulate the expression of a precise DNA sequence. Researchers can therefore understand the role of a gene by studying the effects of its absence or variations in its expression or its structure. In biomanufacturing, meganuclease applications have unique competitive advantages in terms of manufacturing processes, reduction in cycle time and improvements in protein quality. Research kits are marketed by Cellectis bioresearch allowing meganuclease-driven targeted integration of a gene into various cell lines. They make it easier for researchers to modify the DNA of species they are studying and for manufacturers to screen and evaluate their products’ efficiency.

Research teams

FX robot, DNA production in platesQpix robot, meganucleases tested on targets

The platform team and its robots

Colored test for mutant selection

DNA universality makes it possible for our technology to be applied to any kind of species (human, animal, plant, bacterial, or viral) and to every gene of interest. The technology conceived and mastered by Cellectis can be used to unlock or restore the potential of DNA, opening up a broad range of applications.

OUR FACILITIES


OUR CORE ACTIVITY: APPLICATIONS

Human healthGenome engineering is the basis for gene therapy. Often called “genome surgery”, this type of treatment could be used to cure many genetic diseases, such as sickle cell anemia (drepanocytosis). Research in this area has been carried out in collaboration with Cellectis at the Memorial Sloan-Kettering Cancer Center in New York. Inserm, the CNRS, and AFM (French Association against muscular dystrophy) are also closely involved in Cellectis’ progress in the therapeutic field. But genome engineering can also be used to fight viruses like herpes. These pathogens insert their DNA into the DNA of infected cells, meaning that the immune system is unable to get rid of them permanently. Cellectis’ ability to target very precise regions of viruses’ genome in order to inactivate them might make it possible to remove the genetic material of the viruses found in the infected cells. This therefore represents a potential breakthrough in the treatment of these diseases.

AgrobiotechnologyMeganucleases can be engineered so that they are specific to any gene of any species of plant. Cellectis uses its technology and expertise to provide seed producers with mega-nucleases that can make targeted modifications in plant genomes and to develop the next generation of high quality crop plants. Today Cellectis is developing partnership agreements with some of the major players in the agrobiotech sector, so that genome engineering will be accepted and widely used within this field of application. In 2010, Cellectis created Cellectis plant sciences, a subsidiary dedicated to genome engineering applications in plants. Its aim is to increase and accelerate usage of Cellectis’ proprietary technology in agrobiotechnology and to develop proprietary traits for selected applications.

Research and biomanufacturingGenome engineering is at the basis of the modern approach to fundamental research in biology. The entire human genome sequence has been identified, as well as those of more than a thousand species. However, biologists do not know the entire role of these genes that have been identified. To find out the role of these genes, we can use targeted DNA modification techniques to suppress or regulate the expression of a precise DNA sequence. Researchers can therefore understand the role of a gene by studying the effects of its absence or variations in its expression or its structure. In biomanufacturing, meganuclease applications have unique competitive advantages in terms of manufacturing processes, reduction in cycle time and improvements in protein quality. Research kits are marketed by Cellectis bioresearch allowing meganuclease-driven targeted integration of a gene into various cell lines. They make it easier for researchers to modify the DNA of species they are studying and for manufacturers to screen and evaluate their products’ efficiency.

Research teams

FX robot, DNA production in platesQpix robot, meganucleases tested on targets

The platform team and its robots

Colored test for mutant selection

DNA universality makes it possible for our technology to be applied to any kind of species (human, animal, plant, bacterial, or viral) and to every gene of interest. The technology conceived and mastered by Cellectis can be used to unlock or restore the potential of DNA, opening up a broad range of applications.

OUR FACILITIES


ORGANIZATION

CELLECTIS IN 2010

Four subsidiaries of Cellectis were created between 2008 and 2010. Their aim is to fully develop the applications of our technology within their given market sectors. The parent company centralizes the financial department of the group, the intellectual property, the legal department and other support functions, as well as the research and development around genome engineering technologies. The “DNA scissors” platform production will remain the strategic center of the company as a whole as well as the driving force of the group activity.

Cellectis and its subsidiaries

Ectycell

Ectycell was established in September 2009 to research and commercialize industrial

uses of stem cells.

The initial goals are to develop tools for generating

induced pluripotent stem cells from adult cells, robust,

reproducible differentiation of stem cells, and cell libraries for testing drug candidates.


Founded in 2008, Cellectis bioresearch develops and

markets research and production kits that make

genome engineering accessible to biological

researchers and companies worldwide.

It offers turnkey solutions, enabling biologists to design their daily work tools with

control and precision, such as cell lines with the

features of a healthy or diseased organ or tissue.


Established in March 2010,Cellectis plant sciences

is a subsidiary dedicatedto the applications of

meganucleases to plants.Its main mission is to increase

and accelerate usage of

Cellectis’ proprietary technology in agricultural

biology, broaden the company’s platform to

attract new and expandedlicensing opportunities

and explore the development of proprietary traits forselected applications.


Cellectis therapeutics, launched in 2008 under

the name Cellectis genome surgery, is dedicated to the development of innovative

therapeutic approaches using meganucleases to treat

genetic diseases, cancers and persistent viral infections. Cellectis genome surgery

seeks to treat patients suffering from serious diseases

resistant to conventional treatment. Its prospective therapy targets the very

DNA sequence responsible for the disease that may be

of congenital origin (genetic desease) or acquired

(viral infection or cancer).

Cellectis

Technologies development, protein production platform,intellectual property, support functions.

17 l Cellectis l Activity Report 2010 l


ORGANIZATION

CELLECTIS IN 2010

Four subsidiaries of Cellectis were created between 2008 and 2010. Their aim is to fully develop the applications of our technology within their given market sectors. The parent company centralizes the financial department of the group, the intellectual property, the legal department and other support functions, as well as the research and development around genome engineering technologies. The “DNA scissors” platform production will remain the strategic center of the company as a whole as well as the driving force of the group activity.

Cellectis and its subsidiaries

Ectycell

Ectycell was established in September 2009 to research and commercialize industrial

uses of stem cells.

The initial goals are to develop tools for generating

induced pluripotent stem cells from adult cells, robust,

reproducible differentiation of stem cells, and cell libraries for testing drug candidates.


Founded in 2008, Cellectis bioresearch develops and

markets research and production kits that make

genome engineering accessible to biological

researchers and companies worldwide.

It offers turnkey solutions, enabling biologists to design their daily work tools with

control and precision, such as cell lines with the

features of a healthy or diseased organ or tissue.


Established in March 2010,Cellectis plant sciences

is a subsidiary dedicatedto the applications of

meganucleases to plants.Its main mission is to increase

and accelerate usage of

Cellectis’ proprietary technology in agricultural

biology, broaden the company’s platform to

attract new and expandedlicensing opportunities

and explore the development of proprietary traits forselected applications.


Cellectis therapeutics, launched in 2008 under

the name Cellectis genome surgery, is dedicated to the development of innovative

therapeutic approaches using meganucleases to treat

genetic diseases, cancers and persistent viral infections. Cellectis genome surgery

seeks to treat patients suffering from serious diseases

resistant to conventional treatment. Its prospective therapy targets the very

DNA sequence responsible for the disease that may be

of congenital origin (genetic desease) or acquired

(viral infection or cancer).

Cellectis

Technologies development, protein production platform,intellectual property, support functions.

17 l Cellectis l Activity Report 2010 l


OUR SCIENCE RESEARCH AND DEVELOPMENT

Dr. Frédéric Pâques, Chief Scientific Officer

This achievement resulted from a proper industrialization of our processes, which illustrates the overall maturity and adapta-bility of the organization. This enhanced production capacity means that Cellectis can position itself as a supplier of tools for a very broad spectrum of applications and products.

But the progress that has been made in our manufacturing processes should not overshadow the advances made in the application of our products. One of the most significant achievements is the use of our products in genome surgery, which is now happening on an unprecedented scale, with over 15 collaborations with academic research labs all over the world (HSR-TIGET in Milan, VIB in Leuven, Children Hospital in Boston, …) producing both in vitro and in vivo data. This represents a greater number of meganucleases used as well as a broader variety of application methods, particularly the cell types that can be successfully targeted. Both aspects are directly linked to the increase in our manufacturing capacity, which is meeting the growing needs of our customers, our partners and our in-house research and development activities.

In 2010 we used dozens of meganucleases in immortalized cells, plants, animal models and stem cells. This broad applicability is a key feature of the potential of Cellectis technology. The amount of data gathered by different teams, both at Cellectis and elsewhere, is indicative of the robustness of this technology. Many of these results will be published throughout 2011.

Finally, our research has enabled us to assess the challenges that lie ahead, particularly in 2011 and and it is the therapeutic sector which holds some of the biggest challenges for us. Among them, the ability to get our molecules in sufficient numbers into the target cells will be a major priority for our research. Another key priority is ensuring the safety of this approach, which is directly linked to the specificity of the meganucleases.The specificity criteria are the most strictly applied in therapeutic applications, and safety most stringently assessed.

Safety and vectorization (or the method used to insert a meganuclease into a target cell) are therefore the two key words for 2011, as we spend the year focusing wholeheartedly on the applications of genome engineering – across research tools, agriculture or medicine.

Dr. Frédéric Pâques

The core activity of Cellectis internal R&D team is to engineer meganucleases that are specific to a chosen DNA target, i.e. to create “custom” meganucleases for each gene of interest.

The teams at Cellectis can identify the areas responsible for the “DNA scissor” function within the meganuclease structure, as well as the areas that correspond to the recognition of specific DNA sites. Our researchers are therefore able to modify the recognition and DNA fixation area so as to generate new variants that target new sites in a genome. As a result of this research, Cellectis now has a large bank of proteins with over 40,000 motifs that can becombined to obtain chimeric proteins capable of binding to different sequence combinations of the DNA.

In the labs at Cellectis, upstream research is split into two areas. One team of researchers focuses on the engineering of proteins – meganucleases in particular – in order to improve their activity and speci-ficity, and to increase the sequence space that can be targeted by these “tailor-made” meganucleases. The other team focuses on the activity of meganucleases in cells, and particularly on improving the efficiency of gene targeting and its recombination. This team is also working on new applications for meganucleases.

In 2010, the R&D group made important progress, including the identification of new protein structures with the capability to be engineered more quickly and offering new properties. This led to new meganucleases with optimized usage.

A very complete publication, which describes the different tools used in genome engineering and compares their properties, was published in Current Gene Therapy by the Cellectis research team at the end of 2010.

Meganucleases and other Tools for Targeted Genome Engineering: Perspectives and Challenges for Gene TherapySilva G, Poirot L, Galetto R, Smith J, Montoya G, Duchateau P, Pâques F.Curr Gene Ther. 2010, Dec 24

2010 was a particularly productive year in terms of the research and advancement of our core technology. One of our main achievements was the consolidation of our production platform in order to produce a record number of meganucleases (271 in 2010).


OUR SCIENCE RESEARCH AND DEVELOPMENT

Dr. Frédéric Pâques, Chief Scientific Officer

This achievement resulted from a proper industrialization of our processes, which illustrates the overall maturity and adapta-bility of the organization. This enhanced production capacity means that Cellectis can position itself as a supplier of tools for a very broad spectrum of applications and products.

But the progress that has been made in our manufacturing processes should not overshadow the advances made in the application of our products. One of the most significant achievements is the use of our products in genome surgery, which is now happening on an unprecedented scale, with over 15 collaborations with academic research labs all over the world (HSR-TIGET in Milan, VIB in Leuven, Children Hospital in Boston, …) producing both in vitro and in vivo data. This represents a greater number of meganucleases used as well as a broader variety of application methods, particularly the cell types that can be successfully targeted. Both aspects are directly linked to the increase in our manufacturing capacity, which is meeting the growing needs of our customers, our partners and our in-house research and development activities.

In 2010 we used dozens of meganucleases in immortalized cells, plants, animal models and stem cells. This broad applicability is a key feature of the potential of Cellectis technology. The amount of data gathered by different teams, both at Cellectis and elsewhere, is indicative of the robustness of this technology. Many of these results will be published throughout 2011.

Finally, our research has enabled us to assess the challenges that lie ahead, particularly in 2011 and and it is the therapeutic sector which holds some of the biggest challenges for us. Among them, the ability to get our molecules in sufficient numbers into the target cells will be a major priority for our research. Another key priority is ensuring the safety of this approach, which is directly linked to the specificity of the meganucleases.The specificity criteria are the most strictly applied in therapeutic applications, and safety most stringently assessed.

Safety and vectorization (or the method used to insert a meganuclease into a target cell) are therefore the two key words for 2011, as we spend the year focusing wholeheartedly on the applications of genome engineering – across research tools, agriculture or medicine.

Dr. Frédéric Pâques

The core activity of Cellectis internal R&D team is to engineer meganucleases that are specific to a chosen DNA target, i.e. to create “custom” meganucleases for each gene of interest.

The teams at Cellectis can identify the areas responsible for the “DNA scissor” function within the meganuclease structure, as well as the areas that correspond to the recognition of specific DNA sites. Our researchers are therefore able to modify the recognition and DNA fixation area so as to generate new variants that target new sites in a genome. As a result of this research, Cellectis now has a large bank of proteins with over 40,000 motifs that can becombined to obtain chimeric proteins capable of binding to different sequence combinations of the DNA.

In the labs at Cellectis, upstream research is split into two areas. One team of researchers focuses on the engineering of proteins – meganucleases in particular – in order to improve their activity and speci-ficity, and to increase the sequence space that can be targeted by these “tailor-made” meganucleases. The other team focuses on the activity of meganucleases in cells, and particularly on improving the efficiency of gene targeting and its recombination. This team is also working on new applications for meganucleases.

In 2010, the R&D group made important progress, including the identification of new protein structures with the capability to be engineered more quickly and offering new properties. This led to new meganucleases with optimized usage.

A very complete publication, which describes the different tools used in genome engineering and compares their properties, was published in Current Gene Therapy by the Cellectis research team at the end of 2010.

Meganucleases and other Tools for Targeted Genome Engineering: Perspectives and Challenges for Gene TherapySilva G, Poirot L, Galetto R, Smith J, Montoya G, Duchateau P, Pâques F.Curr Gene Ther. 2010, Dec 24

2010 was a particularly productive year in terms of the research and advancement of our core technology. One of our main achievements was the consolidation of our production platform in order to produce a record number of meganucleases (271 in 2010).


PRODUCTION PLATFORM

The scientists identify the protein modules whose DNA targets match with fragments from the targeted genome site. Then they combine the modules to create a new meganuclease with recognition specificity for the required gene target. The activity of each newly created meganuclease is then tested in a series of functional trials developed by Cellectis.

All the creation and analysis work is carried out by the production Platform team, who create from start to finish all the enzymes used and sold by Cellectis. The Platform team creates high quality meganucleases compliant with the precise specifications of each Cellectis partner or customer, internaland external. The Platform team can validate and secure orders by supplying each customer with a solution that best meets its needs. Using its array of robots, the Platform team is able to measure the activity of a vast number of meganucleases. It is actually able to run up to 1 million tests per week.

These data are then processed, analyzed and used to design meganucleases that are appropriate for each project. The Platform team enables the research departments to assess their theories in standard production conditions while following strict procedures that guarantee full sample traceability and quality. This work is supported by a bio-informatics team that supplies essential data to the research teams, enabling them to predict the correct structures for developingeffective meganucleases in the shortest possible time.

By carrying out its research work, the Platform team is able to expand the database, enhancing Cellectis’ knowledge and scientific expertise. 2010 was marked by a reduction and stabilization in manufacturing times within the Platform. This resulted in a significant increase in our production output, with 271 mega-nucleases manufactured in 2010 compared with 99 in 2009.

At Cellectis, the mission of the computational biology team is to produce engineered meganucleases using a rational approach. New meganucleases are today essentially produced by a so-called semi-rational approach: collections of meganuclease variants are built by randomly modifying specific areas of the protein, and these collections are tested by the platform to identify the mutants with the expected properties. Striving for a rational approach aims at determining, with more precision, which variants are more likely to be functional in order to generate and test a smaller number of these variants.

The Cellectis computational biology program aims to improve Platform performance in terms of delivery, cost, capacity, sequencing area and product quality. There has been regular progress in the last few years and with the use of innovative new techniques recently implemented at Cellectis, we can better address the core performance improvement aim of computational biology.

Computational design involves using software based on energy level calculations in a protein, and completely relies on the availability of structural data (i.e. tridimen-sional structures of meganucleases bound to their DNA target). Cellectis established in 2009-2010 a dedicated computational biology group, in parallel with the set up of a major structural biology program. The program is held at the CNIO (Madrid) in collaboration with Dr Guillermo Montoya. Exclusive access to a significant amount of structural data has been a key factor in the computational biology group gaining a better understanding of the mechanisms governingmeganuclease/DNA interactions, and optimizing the molecular modeling process and gradually replacing the experimental high-throughput screening method.

An article describing the work of Cellectis on meganucleases and the techniques used to create and produce new proteins that can cut new targets was published in November in the journal Protein EngineeringDesign and Selections. This article also describes the broad range of applications of meganucleases: development of celllines enabling protein expression, modified plants and animals, therapeutics applications like gene therapy, or creation of a new class of antiviral drugs.

The I-CreI meganuclease and its engineered derivatives: applications from cell modification to gene therapyArnould S, Delenda C, Grizot S, Desseaux C, Pâques F, Silva GH, Smith J.Protein Eng Des Sel. 2010, Nov 3 Print: 2011 Jan. 24(1-2) pp27-31

An article was published in the scientific journal Nucleic Acids Research, resulting from a collaboration between Cellectis and Dr. Guillermo Montoya’s laboratory at the CNIO of Madrid. It describes the structure of a meganuclease bound to its DNA target.

Molecular basis of engineered mega-nuclease targeting of the endogenous human RAG1 locus.Muñoz IG, Prieto J, Subramanian S, Coloma J, Redondo P, Villate M, Merino N, Marenchino M, D’Abramo M, Gervasio FL, Grizot S, Daboussi F, Smith J, Chion-Sotinel I,Pâques F, Duchateau P, Alibés A, Stricher F, Serrano L, Blanco FJ, Montoya G.Nucleic Acids Res. 2010, Sep 16Print: 2011; 39;729-743

21

COMPUTATIONAL BIOLOGY

Dr. George Silva, head of the computational biology departmentWhen a project requires a

different site in the genome to be modified, Cellectis’ teams create a new meganuclease from the Omegabase, a bank of meganucleases with modified characteristics, property of Cellectis.


PRODUCTION PLATFORM

The scientists identify the protein modules whose DNA targets match with fragments from the targeted genome site. Then they combine the modules to create a new meganuclease with recognition specificity for the required gene target. The activity of each newly created meganuclease is then tested in a series of functional trials developed by Cellectis.

All the creation and analysis work is carried out by the production Platform team, who create from start to finish all the enzymes used and sold by Cellectis. The Platform team creates high quality meganucleases compliant with the precise specifications of each Cellectis partner or customer, internaland external. The Platform team can validate and secure orders by supplying each customer with a solution that best meets its needs. Using its array of robots, the Platform team is able to measure the activity of a vast number of meganucleases. It is actually able to run up to 1 million tests per week.

These data are then processed, analyzed and used to design meganucleases that are appropriate for each project. The Platform team enables the research departments to assess their theories in standard production conditions while following strict procedures that guarantee full sample traceability and quality. This work is supported by a bio-informatics team that supplies essential data to the research teams, enabling them to predict the correct structures for developingeffective meganucleases in the shortest possible time.

By carrying out its research work, the Platform team is able to expand the database, enhancing Cellectis’ knowledge and scientific expertise. 2010 was marked by a reduction and stabilization in manufacturing times within the Platform. This resulted in a significant increase in our production output, with 271 mega-nucleases manufactured in 2010 compared with 99 in 2009.

At Cellectis, the mission of the computational biology team is to produce engineered meganucleases using a rational approach. New meganucleases are today essentially produced by a so-called semi-rational approach: collections of meganuclease variants are built by randomly modifying specific areas of the protein, and these collections are tested by the platform to identify the mutants with the expected properties. Striving for a rational approach aims at determining, with more precision, which variants are more likely to be functional in order to generate and test a smaller number of these variants.

The Cellectis computational biology program aims to improve Platform performance in terms of delivery, cost, capacity, sequencing area and product quality. There has been regular progress in the last few years and with the use of innovative new techniques recently implemented at Cellectis, we can better address the core performance improvement aim of computational biology.

Computational design involves using software based on energy level calculations in a protein, and completely relies on the availability of structural data (i.e. tridimen-sional structures of meganucleases bound to their DNA target). Cellectis established in 2009-2010 a dedicated computational biology group, in parallel with the set up of a major structural biology program. The program is held at the CNIO (Madrid) in collaboration with Dr Guillermo Montoya. Exclusive access to a significant amount of structural data has been a key factor in the computational biology group gaining a better understanding of the mechanisms governingmeganuclease/DNA interactions, and optimizing the molecular modeling process and gradually replacing the experimental high-throughput screening method.

An article describing the work of Cellectis on meganucleases and the techniques used to create and produce new proteins that can cut new targets was published in November in the journal Protein EngineeringDesign and Selections. This article also describes the broad range of applications of meganucleases: development of celllines enabling protein expression, modified plants and animals, therapeutics applications like gene therapy, or creation of a new class of antiviral drugs.

The I-CreI meganuclease and its engineered derivatives: applications from cell modification to gene therapyArnould S, Delenda C, Grizot S, Desseaux C, Pâques F, Silva GH, Smith J.Protein Eng Des Sel. 2010, Nov 3 Print: 2011 Jan. 24(1-2) pp27-31

An article was published in the scientific journal Nucleic Acids Research, resulting from a collaboration between Cellectis and Dr. Guillermo Montoya’s laboratory at the CNIO of Madrid. It describes the structure of a meganuclease bound to its DNA target.

Molecular basis of engineered mega-nuclease targeting of the endogenous human RAG1 locus.Muñoz IG, Prieto J, Subramanian S, Coloma J, Redondo P, Villate M, Merino N, Marenchino M, D’Abramo M, Gervasio FL, Grizot S, Daboussi F, Smith J, Chion-Sotinel I,Pâques F, Duchateau P, Alibés A, Stricher F, Serrano L, Blanco FJ, Montoya G.Nucleic Acids Res. 2010, Sep 16Print: 2011; 39;729-743

21

COMPUTATIONAL BIOLOGY

Dr. George Silva, head of the computational biology departmentWhen a project requires a

different site in the genome to be modified, Cellectis’ teams create a new meganuclease from the Omegabase, a bank of meganucleases with modified characteristics, property of Cellectis.


BUSINESS DEVELOPMENT

In 2010, Cellectis entered into a license agreement with Boehringer Ingelheim to obtain, breed and utilize animal models for pharmaceutical research throughout Europe, as well as with Bayer HealthCare to use its homologous recombination patents. BASF plant sciences has also broadened its collabo-ration with Cellectis to utilize its custom meganucleases.

Acquisition of assets from CytoPulse Inc.Electroporation is a very efficient way of inserting molecules such as meganucleases into any type of cell and has applications ranging from research and biomanufacturing to agriculture and therapeutics.

Through this transaction, Cellectis acquired three other technologies based on elec-troporation and developed by CytoPulse: Dermavax for transdermal DNA vaccination, Oncovet for veterinary vaccination appli-cations, and Hybrimmune to manufacture hybridomas for monoclonal antibodies production. The transaction was finalized on September 2, 2010, for $2.2 M.

Harvard Apparatus granted license agreement This agreement granted Harvard Apparatus the worldwide exclusive right to manufacture and market, for research use, the full line of electroporation-based instruments that Cellectis acquired from CytoPulse.

Cellectis retains all rights to use these instru-ments for its own research and development programs as well as in clinical trials and pro-phylactic or therapeutic procedures, for both humans and animals. Under the agreement, Cellectis will receive a payment of $1.3 M from Harvard Apparatus. Cellectis will also continue to receive annual licensing fees from some of its customers.

License to use Evrogen fluorescent proteinsThis non-exclusive agreement with Evrogen (Moscow, Russia) has allowed Cellectis bioresearch to incorporate these proteins into its own products and thus expand its range of genome engineering tools.

The integration matrix is one of the key com-ponents of the Cellectis bioresearch kits. It is this matrix that allows the user to express a gene of interest. By extending the choice of promoters and tags in these matrices, Cellectis bioresearch can offer its customers a full range of methods to achieve single-phase developments, thus saving valuable time during experiments.

Agreement with Lonza for modification of bioengineered cell line Cellectis bioresearch will use its mega-nucleases to inactivate (“knock-out”) theglutamine synthetase (GS) gene in CHOK1SV, Lonza’s proprietary host cell line. Lonza is world leader in therapeutic proteins produc-tion. Its ability to control production of the highest quality cell lines makes the company a perfect partner for the application of Cellectis technology and its meganucleases.

“We are delighted to be work-ing with Cellectis bioresearch. This collaboration makes sense and will enhance our long-standing and successful GS technology.”

John Birch, CSO of Lonza Biopharmaceuticals

License agreement with Midwest Oilseeds for plant transformation This agreement enables Cellectis plant sciences to use Midwest Oilseeds’ Aerosol Beam Injector (ABI) technology for the targeted modification of plant genomes.

The Midwest Oilseeds ABI technology enables functional meganucleases to be delivered directly into plant cells, thus avoid-ing the need for DNA vectors. This approach will allow Cellectis plant sciences to modify plant genomes without integrating DNA in the plant.

The aim of the Business Development team is to commercialize Cellectis’ intellectual property and to acquire other companies’ IP that would support the development of new technologies or products. Cellectis’ innovative intellectual property has a broad range of applications such as health, agriculture or research regarding stem cells and alternative energies. The Business Development team is also in charge of the business contracts with our partners.

The Business Development strategy comprises five main areas, which will help Cellectis advance its leadership in genome engineering.

These are:

• To give priority to meganucleases for therapeutic applications in order to treat rare genetic diseases and viral infections, and to develop new products to fight cancer or to improve allogeneic transplantation (transplant between two genetically different persons).

• To pro-actively transfer its technology to major academic and industrial laboratories for research purposes.

• To enter into business agreements in its four main fields of application: healthcare, biotechnology, agricultural biotechnology, and stem cells.

• To strengthen privileged partnerships established with some of the major players in agricultural biotechnology.

• And to sustain Cellectis’ competitive advantage by continuing to enhance its patent portfolio and by increasing its technological lead and expertise in order to bring value to the portfolio.

From a Business Development perspective, 2010 initiated a shift in focus from outlicensing of intellectual property towards generating income from products developed using such intellectual property. Whereas the main source of revenue remained licenses to homologous recombination patents, the incorporation and expansion of Cellectis plant sciences, the expansion of the stem cell activities in Ectycell thanks to the Shinya Yamanaka iPS license, and the acquisition of the CytoPulse electroporation technology will form the cornerstones of products based on Cellectis genome engineering technologies. This trend will continue through 2011 where Cellectis expects significant income from licensing of its intellectual property portfolio, but also expects to sign an increasing number of partnerships to develop innovative products in multiple fields.

Dr. Dirk Pollet, Chief Business Officer



BUSINESS DEVELOPMENT

In 2010, Cellectis entered into a license agreement with Boehringer Ingelheim to obtain, breed and utilize animal models for pharmaceutical research throughout Europe, as well as with Bayer HealthCare to use its homologous recombination patents. BASF plant sciences has also broadened its collabo-ration with Cellectis to utilize its custom meganucleases.

Acquisition of assets from CytoPulse Inc.Electroporation is a very efficient way of inserting molecules such as meganucleases into any type of cell and has applications ranging from research and biomanufacturing to agriculture and therapeutics.

Through this transaction, Cellectis acquired three other technologies based on elec-troporation and developed by CytoPulse: Dermavax for transdermal DNA vaccination, Oncovet for veterinary vaccination appli-cations, and Hybrimmune to manufacture hybridomas for monoclonal antibodies production. The transaction was finalized on September 2, 2010, for $2.2 M.

Harvard Apparatus granted license agreement This agreement granted Harvard Apparatus the worldwide exclusive right to manufacture and market, for research use, the full line of electroporation-based instruments that Cellectis acquired from CytoPulse.

Cellectis retains all rights to use these instru-ments for its own research and development programs as well as in clinical trials and pro-phylactic or therapeutic procedures, for both humans and animals. Under the agreement, Cellectis will receive a payment of $1.3 M from Harvard Apparatus. Cellectis will also continue to receive annual licensing fees from some of its customers.

License to use Evrogen fluorescent proteinsThis non-exclusive agreement with Evrogen (Moscow, Russia) has allowed Cellectis bioresearch to incorporate these proteins into its own products and thus expand its range of genome engineering tools.

The integration matrix is one of the key com-ponents of the Cellectis bioresearch kits. It is this matrix that allows the user to express a gene of interest. By extending the choice of promoters and tags in these matrices, Cellectis bioresearch can offer its customers a full range of methods to achieve single-phase developments, thus saving valuable time during experiments.

Agreement with Lonza for modification of bioengineered cell line Cellectis bioresearch will use its mega-nucleases to inactivate (“knock-out”) theglutamine synthetase (GS) gene in CHOK1SV, Lonza’s proprietary host cell line. Lonza is world leader in therapeutic proteins produc-tion. Its ability to control production of the highest quality cell lines makes the company a perfect partner for the application of Cellectis technology and its meganucleases.

“We are delighted to be work-ing with Cellectis bioresearch. This collaboration makes sense and will enhance our long-standing and successful GS technology.”

John Birch, CSO of Lonza Biopharmaceuticals

License agreement with Midwest Oilseeds for plant transformation This agreement enables Cellectis plant sciences to use Midwest Oilseeds’ Aerosol Beam Injector (ABI) technology for the targeted modification of plant genomes.

The Midwest Oilseeds ABI technology enables functional meganucleases to be delivered directly into plant cells, thus avoid-ing the need for DNA vectors. This approach will allow Cellectis plant sciences to modify plant genomes without integrating DNA in the plant.

The aim of the Business Development team is to commercialize Cellectis’ intellectual property and to acquire other companies’ IP that would support the development of new technologies or products. Cellectis’ innovative intellectual property has a broad range of applications such as health, agriculture or research regarding stem cells and alternative energies. The Business Development team is also in charge of the business contracts with our partners.

The Business Development strategy comprises five main areas, which will help Cellectis advance its leadership in genome engineering.

These are:

• To give priority to meganucleases for therapeutic applications in order to treat rare genetic diseases and viral infections, and to develop new products to fight cancer or to improve allogeneic transplantation (transplant between two genetically different persons).

• To pro-actively transfer its technology to major academic and industrial laboratories for research purposes.

• To enter into business agreements in its four main fields of application: healthcare, biotechnology, agricultural biotechnology, and stem cells.

• To strengthen privileged partnerships established with some of the major players in agricultural biotechnology.

• And to sustain Cellectis’ competitive advantage by continuing to enhance its patent portfolio and by increasing its technological lead and expertise in order to bring value to the portfolio.

From a Business Development perspective, 2010 initiated a shift in focus from outlicensing of intellectual property towards generating income from products developed using such intellectual property. Whereas the main source of revenue remained licenses to homologous recombination patents, the incorporation and expansion of Cellectis plant sciences, the expansion of the stem cell activities in Ectycell thanks to the Shinya Yamanaka iPS license, and the acquisition of the CytoPulse electroporation technology will form the cornerstones of products based on Cellectis genome engineering technologies. This trend will continue through 2011 where Cellectis expects significant income from licensing of its intellectual property portfolio, but also expects to sign an increasing number of partnerships to develop innovative products in multiple fields.




The aim of the Corporate Development team for 2010 was to set into action the opportunities available to us in the field of stem cells by establishing a cell platform for population leading to two different applications: research tools and cell therapy(transplants).

The aim is to organize a collection of cells that represent the physiology, pathology and diversity of a population so that we can understand this diversity in vitro. The initial purpose is to utilize stem cells to improve understanding of diseases and their mecha-nisms. If we can collect cell samples from donors who have these diseases, and have access to their medical files, it will then be possible to study the disease via the induced Pluripotent Stem (iPS) cells generated from the patient’s cells.

The CellMill platform project was therefore set up primarily to industrialize iPS cells and make them both robust and safe. 2010 enabled us to ensure that all our projects materialized by giving them the necessary resources. The CellMill project received a funding commitment from the regional authorities, the Caisse des dépôts et consignations (Bank for Official Deposits) and OSEO, a public enterprise whose aim is to fund and support innovation and company growth.

In addition, two non-exclusive license agree-ments have given Cellectis worldwide access to the induced Pluripotent Stem (iPS) cell patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) at the University of Kyoto (Japan). Cellectis is the first company in the world to be licensed by iPS Academia Japan under this iPS cell patent portfolio for human therapeutics and prophylactics.

Cellectis has also entered into a collabora-tion with CiRA to combine Cellectis’ genome engineering technologies with CiRA’s iPS cell technology to improve the natural character-istics of iPS cells for use as cellular tools.

“We are starting 2011 with the essential keys for success. It is now up to us to ensure that our projects reach their full potential.”

Dr. David Sourdive

Meganucleases offer new possibilities for establishing a viable alternative to oil. Microalgae are actually thought to be a very promising source of alternative to oil derivative: fuel, chemical molecules or materials. This is partly due to their strong ability to produce oils and their growth and effective yield rate.

Focus on oil substituteOur meganuclease technology would be well suited to help optimize these traits and enable an industrialization of the processes. As a natural source, algae alone are currently thought to be able to meet the demand for fuel effectively without competing with another need, such as food supply. Algae also use the process of photosynthesis and therefore need light, water and CO2, making them an environmentally friendly fuel.

It was for these reasons that, in 2010, Cellectis set up a research team to focus on micro-algae, and diatoms in particular, as a possible substitute for oil. Diatoms already play an important role in the environment because they produce one-fifth of all oxygen produced on earth every year. Diatoms are unicellular algae found in most humid environments and offer huge diversity, with 100,000 species already identified.

A preliminary program was therefore set up at Cellectis in order to provide proof of principle as soon as possible, particularly regarding the potential of meganuclease efficiency in these algae.

CORPORATE DEVELOPMENT

Dr. David Sourdive, EVP Corporate Development Dr. Alberto Amato, project leader, genome engineering on algae

Different kinds of diatoms


The aim of the Corporate Development team for 2010 was to set into action the opportunities available to us in the field of stem cells by establishing a cell platform for population leading to two different applications: research tools and cell therapy(transplants).

The aim is to organize a collection of cells that represent the physiology, pathology and diversity of a population so that we can understand this diversity in vitro. The initial purpose is to utilize stem cells to improve understanding of diseases and their mecha-nisms. If we can collect cell samples from donors who have these diseases, and have access to their medical files, it will then be possible to study the disease via the induced Pluripotent Stem (iPS) cells generated from the patient’s cells.

The CellMill platform project was therefore set up primarily to industrialize iPS cells and make them both robust and safe. 2010 enabled us to ensure that all our projects materialized by giving them the necessary resources. The CellMill project received a funding commitment from the regional authorities, the Caisse des dépôts et consignations (Bank for Official Deposits) and OSEO, a public enterprise whose aim is to fund and support innovation and company growth.

In addition, two non-exclusive license agree-ments have given Cellectis worldwide access to the induced Pluripotent Stem (iPS) cell patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) at the University of Kyoto (Japan). Cellectis is the first company in the world to be licensed by iPS Academia Japan under this iPS cell patent portfolio for human therapeutics and prophylactics.

Cellectis has also entered into a collabora-tion with CiRA to combine Cellectis’ genome engineering technologies with CiRA’s iPS cell technology to improve the natural character-istics of iPS cells for use as cellular tools.

“We are starting 2011 with the essential keys for success. It is now up to us to ensure that our projects reach their full potential.”

Dr. David Sourdive

Meganucleases offer new possibilities for establishing a viable alternative to oil. Microalgae are actually thought to be a very promising source of alternative to oil derivative: fuel, chemical molecules or materials. This is partly due to their strong ability to produce oils and their growth and effective yield rate.

Focus on oil substituteOur meganuclease technology would be well suited to help optimize these traits and enable an industrialization of the processes. As a natural source, algae alone are currently thought to be able to meet the demand for fuel effectively without competing with another need, such as food supply. Algae also use the process of photosynthesis and therefore need light, water and CO2, making them an environmentally friendly fuel.

It was for these reasons that, in 2010, Cellectis set up a research team to focus on micro-algae, and diatoms in particular, as a possible substitute for oil. Diatoms already play an important role in the environment because they produce one-fifth of all oxygen produced on earth every year. Diatoms are unicellular algae found in most humid environments and offer huge diversity, with 100,000 species already identified.

A preliminary program was therefore set up at Cellectis in order to provide proof of principle as soon as possible, particularly regarding the potential of meganuclease efficiency in these algae.

CORPORATE DEVELOPMENT

Dr. David Sourdive, EVP Corporate Development Dr. Alberto Amato, project leader, genome engineering on algae

Different kinds of diatoms


US/CA Europe Asia Australia

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

One of Cellectis’ foremost assets is its intellectual property portfolio. The Institut Pasteur patent families covering the use of homologous recombination and meganuclease-type endonucleases for inducing DNA recombination formed the platform upon which Cellectis was initially founded.

We have since developed a strong propri-etary portfolio, with patents across three broad categories – general principles, meganucleases and their specific appli-cations, and manufacturing processes of modified meganucleases. Our strategy involves expanding the intellectual property portfolio to further protect our products, their applications, and the corresponding body of technological knowledge.

At the end of 2010, Cellectis owned the rights to 83 patents worldwide, including 35 in the United States and Canada. This means that 25 new patents were obtained over the course of the year. Cellectis currently has more than 260 patent applications pending. In 2010, Cellectis bought all the assets of CytoPulse Inc., a company that specializes in electroporation systems, and through this operation obtained 16 new patents to add to its intellectual property portfolio. Thanks to these new patents, Cellectis will receive a regular income (>$600,000 in 2009), derived from the granting of exploitation licenses for CytoPulse’s HybrimuneTM electrofusion technology.

The company strives to optimize and uphold the intellectual property it licensed from the Institut Pasteur. Cellectis also endeavors to promote its intellectual property by defend-ing its own rights, while respecting the rights of others.

Evolution of Cellectis’ IP portfolio

Number of patents granted to Cellectis, per year and geographic area

100

80

60

40

20

0

INTELLECTUAL PROPERTY

With a headcount that has grown from 5 in 2000 to 129 at the end of 2010, the key word in our company is clearly “development,” in terms of our employees and their talents, as well as our core technology.

The policy at Cellectis involves enabling our staff to evolve as the company does so. Reflective of their passion and determination to see Cellectis become a major player in biotechnology, some of the previous project leaders are now at the head of a department and some laboratory technicians have taken up engineering assistant functions.

Moreover, Cellectis provides support for those individuals who would like to further their education in engineering.

These dynamics help us attract new talent to Cellectis, unify current staff and establish a genuine company identity in the midst of continuous growth and development. Cellectis is proud of its team spirit and intendsto expand all its energy to maintain it.

Team building is also achieved through seminars and other regular in-house events that are organized by the Communications Department. The department is also respon-sible for promoting Cellectis’ technology and expertise. One of the main tools set up by the Communications Department in 2010 was the new corporate website with several key features: information sharing, interactivity and a dedicated media area.

In light of its expansion, Cellectis chose to provide visitors to the website with clearer and more accessible insight into its work, products and achievements. Visitors to the new website are ensured enhanced usability and information sharing, including more streamlined access to information about Cellectis’ technologies and products.

The new Cellectis website focuses on three central themes:

• Research and technology• Business development• Investor relations

In addition to these focus areas, the website offers new features and fresh content including:

• Several specific RSS feeds, so that subscribers can monitor the Company’s business in real time, choosing only the subjects that interest them.

• Information sharing via social networks (particularly Facebook and Twitter).

• Downloadable documents that explain Cellectis’ technology.

• Illustrative videos and regular features on various aspects of Cellectis’ technology to help improve the public’s understanding of our scientific progress.

HUMAN RESOURCES – COMMUNICATIONS

The Intellectual Property Team


US/CA Europe Asia Australia

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

One of Cellectis’ foremost assets is its intellectual property portfolio. The Institut Pasteur patent families covering the use of homologous recombination and meganuclease-type endonucleases for inducing DNA recombination formed the platform upon which Cellectis was initially founded.

We have since developed a strong propri-etary portfolio, with patents across three broad categories – general principles, meganucleases and their specific appli-cations, and manufacturing processes of modified meganucleases. Our strategy involves expanding the intellectual property portfolio to further protect our products, their applications, and the corresponding body of technological knowledge.

At the end of 2010, Cellectis owned the rights to 83 patents worldwide, including 35 in the United States and Canada. This means that 25 new patents were obtained over the course of the year. Cellectis currently has more than 260 patent applications pending. In 2010, Cellectis bought all the assets of CytoPulse Inc., a company that specializes in electroporation systems, and through this operation obtained 16 new patents to add to its intellectual property portfolio. Thanks to these new patents, Cellectis will receive a regular income (>$600,000 in 2009), derived from the granting of exploitation licenses for CytoPulse’s HybrimuneTM electrofusion technology.

The company strives to optimize and uphold the intellectual property it licensed from the Institut Pasteur. Cellectis also endeavors to promote its intellectual property by defend-ing its own rights, while respecting the rights of others.

Evolution of Cellectis’ IP portfolio

Number of patents granted to Cellectis, per year and geographic area

100

80

60

40

20

0

INTELLECTUAL PROPERTY

With a headcount that has grown from 5 in 2000 to 129 at the end of 2010, the key word in our company is clearly “development,” in terms of our employees and their talents, as well as our core technology.

The policy at Cellectis involves enabling our staff to evolve as the company does so. Reflective of their passion and determination to see Cellectis become a major player in biotechnology, some of the previous project leaders are now at the head of a department and some laboratory technicians have taken up engineering assistant functions.

Moreover, Cellectis provides support for those individuals who would like to further their education in engineering.

These dynamics help us attract new talent to Cellectis, unify current staff and establish a genuine company identity in the midst of continuous growth and development. Cellectis is proud of its team spirit and intendsto expand all its energy to maintain it.

Team building is also achieved through seminars and other regular in-house events that are organized by the Communications Department. The department is also respon-sible for promoting Cellectis’ technology and expertise. One of the main tools set up by the Communications Department in 2010 was the new corporate website with several key features: information sharing, interactivity and a dedicated media area.

In light of its expansion, Cellectis chose to provide visitors to the website with clearer and more accessible insight into its work, products and achievements. Visitors to the new website are ensured enhanced usability and information sharing, including more streamlined access to information about Cellectis’ technologies and products.

The new Cellectis website focuses on three central themes:

• Research and technology• Business development• Investor relations

In addition to these focus areas, the website offers new features and fresh content including:

• Several specific RSS feeds, so that subscribers can monitor the Company’s business in real time, choosing only the subjects that interest them.

• Information sharing via social networks (particularly Facebook and Twitter).

• Downloadable documents that explain Cellectis’ technology.

• Illustrative videos and regular features on various aspects of Cellectis’ technology to help improve the public’s understanding of our scientific progress.

HUMAN RESOURCES – COMMUNICATIONS

The Intellectual Property Team


Letters to shareholdersIt is very important for Cellectis to forge closer links with its shareholders and this is why the Letter to Shareholders project was initiated in 2010. This is a quarterly letter addressed solely to shareholders that summarizes and comments on all the latest news. It offers a way for Cellectis CEO André Choulika to maintain direct and regular contact and thus build a lasting and trust-based relationship between Cellectis and its shareholders. Each Letter to Shareholders also has a “3 Questions” interview with one of the key people at Cellectis on a topic of particular relevance to the company at the time of issue. There is also a ‘Focus’ on one of our constantly-evolving activities.

Event: first R&D DayOn November 30, 2010, Cellectis held its first Research & Development Day, to which it invited investors, analysts and the media. This event, intended to be the first in a series, was a chance for Cellectis to forge stronger ties with the investment community, get to know these individuals better, and exchange ideas. The guests gained a more in-depth understanding of the business activities of Cellectis and its subsidiaries with a tour of the premises, in particular the laboratories, during which they met the teams that have made Cellectis the company it is today and represent the values it upholds. Following a tour of its proprietary technology facility that creates, produces and tests meganucleases, members of the Cellectis management and scientific teams detailed the activities within its core business areas: meganuclease engineering technology, research tools, genome engineering in plants, and therapeutic programs.

Dr Serge Braun, from the French Muscular Dystrophy Association (AFM), gave an update on his organization’s collaboration with Cellectis in therapeutics. To conclude the event, the potential applications of induced pluripotent stem cell (iPS) techno-logies, for which Cellectis recently signed a license agreement with iPS Academia Japan, were also described.

The presentations are available at www.cellectis.com/investors.

The Cellectis Communications team also manages everything that relates to the publication of yearly and half-yearly financial results, and organizes the general assemblieswhich are chaired by Christian Policard, Chairman of the Board of Directors, and attended by all the Cellectis shareholders.

All the information about the general assemblies is available in the Investors area on the Cellectis website www.cellectis.com.

“My position in the IT group is central to the business and involves working closely with all the staff at Cellectis. I’m glad I can help them progress their research.” Sandra Lapèze, Network and System Technician

“I chose to work at Cellectis because it is a well-known, growing biotech in France that is developing innovative technologies with the objective of becoming the leader in genome engineering.” Julien Pontin, Senior Lab technician

“Cellectis is a dynamic company in which team spirit and strong motivation are the driving forces that lead us further every day in pursuing innovative and fascinating matters.” Christelle Rochon, Researcher in Cellular and Molecular Biology at Ectycell

“Cellectis is a hub of innovation in which communication among teams and between departments flows actively. Working with teams that are highly skilled and open is a very rewarding personal and professional experience for me.” Justin Eyquem, Trainee Engineering preparing his thesis at Cellectis therapeutics

SHAREHOLDER RELATIONS

Cellectis’ staff

4%

25%

71%

Scientific Departments (SD) Business Development Administration

Cellectis 71% SD Cellectis bioresearch 71% SD Cellectis therapeutics* 100% SD Cellectis plant sciences 100% SD Ectycell 100% SD

*ex genome surgery

Breakdown by categories

Breakdown by subsidiariesTotal: 129 (including 4 in the USA and 2 in the UK)

Ectycell Team

Laboratories tour


Letters to shareholdersIt is very important for Cellectis to forge closer links with its shareholders and this is why the Letter to Shareholders project was initiated in 2010. This is a quarterly letter addressed solely to shareholders that summarizes and comments on all the latest news. It offers a way for Cellectis CEO André Choulika to maintain direct and regular contact and thus build a lasting and trust-based relationship between Cellectis and its shareholders. Each Letter to Shareholders also has a “3 Questions” interview with one of the key people at Cellectis on a topic of particular relevance to the company at the time of issue. There is also a ‘Focus’ on one of our constantly-evolving activities.

Event: first R&D DayOn November 30, 2010, Cellectis held its first Research & Development Day, to which it invited investors, analysts and the media. This event, intended to be the first in a series, was a chance for Cellectis to forge stronger ties with the investment community, get to know these individuals better, and exchange ideas. The guests gained a more in-depth understanding of the business activities of Cellectis and its subsidiaries with a tour of the premises, in particular the laboratories, during which they met the teams that have made Cellectis the company it is today and represent the values it upholds. Following a tour of its proprietary technology facility that creates, produces and tests meganucleases, members of the Cellectis management and scientific teams detailed the activities within its core business areas: meganuclease engineering technology, research tools, genome engineering in plants, and therapeutic programs.

Dr Serge Braun, from the French Muscular Dystrophy Association (AFM), gave an update on his organization’s collaboration with Cellectis in therapeutics. To conclude the event, the potential applications of induced pluripotent stem cell (iPS) techno-logies, for which Cellectis recently signed a license agreement with iPS Academia Japan, were also described.

The presentations are available at www.cellectis.com/investors.

The Cellectis Communications team also manages everything that relates to the publication of yearly and half-yearly financial results, and organizes the general assemblieswhich are chaired by Christian Policard, Chairman of the Board of Directors, and attended by all the Cellectis shareholders.

All the information about the general assemblies is available in the Investors area on the Cellectis website www.cellectis.com.

“My position in the IT group is central to the business and involves working closely with all the staff at Cellectis. I’m glad I can help them progress their research.” Sandra Lapèze, Network and System Technician

“I chose to work at Cellectis because it is a well-known, growing biotech in France that is developing innovative technologies with the objective of becoming the leader in genome engineering.” Julien Pontin, Senior Lab technician

“Cellectis is a dynamic company in which team spirit and strong motivation are the driving forces that lead us further every day in pursuing innovative and fascinating matters.” Christelle Rochon, Researcher in Cellular and Molecular Biology at Ectycell

“Cellectis is a hub of innovation in which communication among teams and between departments flows actively. Working with teams that are highly skilled and open is a very rewarding personal and professional experience for me.” Justin Eyquem, Trainee Engineering preparing his thesis at Cellectis therapeutics

SHAREHOLDER RELATIONS

Cellectis’ staff

4%

25%

71%

Scientific Departments (SD) Business Development Administration

Cellectis 71% SD Cellectis bioresearch 71% SD Cellectis therapeutics* 100% SD Cellectis plant sciences 100% SD Ectycell 100% SD

*ex genome surgery

Breakdown by categories

Breakdown by subsidiariesTotal: 129 (including 4 in the USA and 2 in the UK)

Ectycell Team

Laboratories tour


SUBSIDIARIES

CELLECTIS BIORESEARCH

Marc Le Bozec, Chief Financial Officer of Cellectis and Chief Executive Officer of Cellectis bioresearch

2010 Highlights2010 was for Cellectis bioresearch a year of consolidation in terms of research and develop-ment, such that we are now able to market over 150 products. We are particularly pleased with this growth, given that we only launched our first kit in December 2008 following the creation of Cellectis bioresearch in June of that year. We are able to supply a large number of new products, illustrating a very diverse offering. In 2010, we have adapted our products to a variety of cell lines, evidence of the efficiency by which we bring new products to market. We also adopted a new marketing strategy to increase our visibility and rapidly come to competition with the main global players in research. This involved both traditional advertising in the press and on the web, as well as attendance at some 20 trade shows, but also more original marketing methods: an interactive web platform aimed at the scientific community engaged in using new genomics-related techniques1 and a competition to provide financingfor a post-doctoral position involving a project including genome customization. From a business perspective, the results were very encouraging since we more than doubled our operating revenues. We also integrated the market share of CytoPulse, an American company whose assets we acquired. This included a complete range of electroporation instruments already commercialized, as well as the related intellectual property. Cellectis bioresearch’s 2010 operating revenues met the targets and expectations set. In the current economic climate, this is something we can be very proud of. Our success is due to our talented team, which now includes 20 employees, two-thirds in R&D and one-third in sales and marketing.

Challenges for 2011During the coming year, we will focus on three main areas to achieve our goal of providing our customers with thousands of products. The first area is technology. Whereas we currently supply mainly targeted integration tools, our aim is to supply both targeted modification and inactivation solutions also. The second area is to expand our product line in other species, such as plants like Arabidopsis thaliana, a widely-used plant model, or other key animal models, such as nematode C. elegans. In 2011 these key models are to undergo NHEJ (Non Homo-logous End Joining) meganuclease or TALEN (Transcription Activator-Like Effector Nuclease) testing, once this new technology is fully implemented on our platform. The third area of focus will be to expand our field of applications to the ADMET (Absorption, Distribution, Metabo-lism, Excretion and Toxicity) test to supply a cell line for cancer research, closer to the patient’s physiological reality. More generally, we aim to maintain our growth and to achieve short-term profitability while we deploy a field sales force in Europe and the United States. It was with this in mind that the American subsidiary Cellectis bioresearch Inc. was set up in October 2010. Our aim for 2011 is to set up teams in the United States and Europe, to put us on an equal footing with our competitors. The next two years will be decisive as they will determine the type of profitability we can expect to achieve. Marc Le Bozec, CEO of Cellectis bioresearch

1 www.genome-engineering.com


SUBSIDIARIES

CELLECTIS BIORESEARCH

Marc Le Bozec, Chief Financial Officer of Cellectis and Chief Executive Officer of Cellectis bioresearch

2010 Highlights2010 was for Cellectis bioresearch a year of consolidation in terms of research and develop-ment, such that we are now able to market over 150 products. We are particularly pleased with this growth, given that we only launched our first kit in December 2008 following the creation of Cellectis bioresearch in June of that year. We are able to supply a large number of new products, illustrating a very diverse offering. In 2010, we have adapted our products to a variety of cell lines, evidence of the efficiency by which we bring new products to market. We also adopted a new marketing strategy to increase our visibility and rapidly come to competition with the main global players in research. This involved both traditional advertising in the press and on the web, as well as attendance at some 20 trade shows, but also more original marketing methods: an interactive web platform aimed at the scientific community engaged in using new genomics-related techniques1 and a competition to provide financingfor a post-doctoral position involving a project including genome customization. From a business perspective, the results were very encouraging since we more than doubled our operating revenues. We also integrated the market share of CytoPulse, an American company whose assets we acquired. This included a complete range of electroporation instruments already commercialized, as well as the related intellectual property. Cellectis bioresearch’s 2010 operating revenues met the targets and expectations set. In the current economic climate, this is something we can be very proud of. Our success is due to our talented team, which now includes 20 employees, two-thirds in R&D and one-third in sales and marketing.

Challenges for 2011During the coming year, we will focus on three main areas to achieve our goal of providing our customers with thousands of products. The first area is technology. Whereas we currently supply mainly targeted integration tools, our aim is to supply both targeted modification and inactivation solutions also. The second area is to expand our product line in other species, such as plants like Arabidopsis thaliana, a widely-used plant model, or other key animal models, such as nematode C. elegans. In 2011 these key models are to undergo NHEJ (Non Homo-logous End Joining) meganuclease or TALEN (Transcription Activator-Like Effector Nuclease) testing, once this new technology is fully implemented on our platform. The third area of focus will be to expand our field of applications to the ADMET (Absorption, Distribution, Metabo-lism, Excretion and Toxicity) test to supply a cell line for cancer research, closer to the patient’s physiological reality. More generally, we aim to maintain our growth and to achieve short-term profitability while we deploy a field sales force in Europe and the United States. It was with this in mind that the American subsidiary Cellectis bioresearch Inc. was set up in October 2010. Our aim for 2011 is to set up teams in the United States and Europe, to put us on an equal footing with our competitors. The next two years will be decisive as they will determine the type of profitability we can expect to achieve. Marc Le Bozec, CEO of Cellectis bioresearch

1 www.genome-engineering.com


Cellectis bioresearch supplies researchers in the life sciences with easy and ready-to-use tools for creating cells and organisms that have the desired performance.

Cellectis bioresearch develops and markets genome customization products that can be used to create stable and isogenic cell lines, with characteristics and performances adapted to three main markets: drug development, gene function studies and protein production.

cGPS® and cGPS® Custom kitsThese kits are an easy and efficient way of using Cellectis’ meganuclease technologies. With the kits, a gene can be integrated into an extremely precise site in the genome.

At the end of 2010, Cellectis bioresearch was supplying over 150 products via its online shop and international distribution network (India and Canada). The company Cellectis bioresearch Inc. was recently set up in Cambridge, Massachusetts (United States) to promote the company’s products and cell line engineering services throughout America.

The genome customization kits contain reagents and protocols that enable precise and targeted modification of DNA sequences in the genome of interest, of whether a cell line, a primary cell, a stem cell or an entire organism.

Targeted integration involves a “copy and paste” process that is performed by a meganuclease, an integration matrix and the homologous recombination process.

Cellectis bioresearch’s targeted integration kits are easy and ready-to-use, and include a complete protocol. Each kit contains all the components that are needed for targeted integration: a wild-type or engineered meganuclease, an integration matrix, and, in cGPS® kits a cell line.

The ‘research kits’ line now includes five new cell types, and the product offering includes a pIM Store, a collection of around 100 integration matrices that can be used with different kits. In 2010, Cellectis bioresearch launched its first customized service to deliver stable clones by cGPS targeted integration. 2010 also saw a major R&D partnership with Lonza, a world leader in biotechnology manufacturing with the aim of modifying Lonza’s proprietary cell line CHOK1SV used to produce biotechnological drugs.

A study showed that Cellectis bioresearch’s technology based on meganuclease-driven targeted integration is faster, more reliable and more efficient than traditional methods in deriving cell-based assays for High Throughput Screening (HTS) studies, which allow rapid screening of a vast number of new molecules. Meganuclease-driven targeted integration using Cellectis bioresearch’s cGPS®CHO-K1 kit is therefore highly efficient for drug development.

The results of this scientific study focusing on a unique method for generating stable cell lines compatible with high throughput screening were published online July 12, 2010 by the Journal of Biomolecular Screening.

“The challenge is to replace traditional cell engineering methods based on random modification with targeted integration.” Marc Le Bozec

Meganuclease-Driven Targeted Integration in CHO-K1 Cells for the Fast Generation of HTS-Compatible Cell-Based Assays Cabaniols J, Ouvry C, Lamamy V, Fery I, Craplet M.L, Moulharat N, Guenin S.P, Bedut S, Nosjean O, Ferry G, Devavry S, Jacqmarcq C, Lebuhotel C, Mathis L, Delenda C, Boutin J.A, Duchâteau P, Cogé F, and Pâques FJ. Biomol. Screen. Sept 2010 - vol 15 no 8 p. 956-967

Integration of a natural Meganucleaserecognition site

Wild typeMeganuclease

EngineeredMeganucleaseDNA Repair DNA Repair

Meganuclease engineering

cGPS® cGPS®

CustomcGPS® cGPS®

Custom


Cellectis bioresearch supplies researchers in the life sciences with easy and ready-to-use tools for creating cells and organisms that have the desired performance.

Cellectis bioresearch develops and markets genome customization products that can be used to create stable and isogenic cell lines, with characteristics and performances adapted to three main markets: drug development, gene function studies and protein production.

cGPS® and cGPS® Custom kitsThese kits are an easy and efficient way of using Cellectis’ meganuclease technologies. With the kits, a gene can be integrated into an extremely precise site in the genome.

At the end of 2010, Cellectis bioresearch was supplying over 150 products via its online shop and international distribution network (India and Canada). The company Cellectis bioresearch Inc. was recently set up in Cambridge, Massachusetts (United States) to promote the company’s products and cell line engineering services throughout America.

The genome customization kits contain reagents and protocols that enable precise and targeted modification of DNA sequences in the genome of interest, of whether a cell line, a primary cell, a stem cell or an entire organism.

Targeted integration involves a “copy and paste” process that is performed by a meganuclease, an integration matrix and the homologous recombination process.

Cellectis bioresearch’s targeted integration kits are easy and ready-to-use, and include a complete protocol. Each kit contains all the components that are needed for targeted integration: a wild-type or engineered meganuclease, an integration matrix, and, in cGPS® kits a cell line.

The ‘research kits’ line now includes five new cell types, and the product offering includes a pIM Store, a collection of around 100 integration matrices that can be used with different kits. In 2010, Cellectis bioresearch launched its first customized service to deliver stable clones by cGPS targeted integration. 2010 also saw a major R&D partnership with Lonza, a world leader in biotechnology manufacturing with the aim of modifying Lonza’s proprietary cell line CHOK1SV used to produce biotechnological drugs.

A study showed that Cellectis bioresearch’s technology based on meganuclease-driven targeted integration is faster, more reliable and more efficient than traditional methods in deriving cell-based assays for High Throughput Screening (HTS) studies, which allow rapid screening of a vast number of new molecules. Meganuclease-driven targeted integration using Cellectis bioresearch’s cGPS®CHO-K1 kit is therefore highly efficient for drug development.

The results of this scientific study focusing on a unique method for generating stable cell lines compatible with high throughput screening were published online July 12, 2010 by the Journal of Biomolecular Screening.

“The challenge is to replace traditional cell engineering methods based on random modification with targeted integration.” Marc Le Bozec

Meganuclease-Driven Targeted Integration in CHO-K1 Cells for the Fast Generation of HTS-Compatible Cell-Based Assays Cabaniols J, Ouvry C, Lamamy V, Fery I, Craplet M.L, Moulharat N, Guenin S.P, Bedut S, Nosjean O, Ferry G, Devavry S, Jacqmarcq C, Lebuhotel C, Mathis L, Delenda C, Boutin J.A, Duchâteau P, Cogé F, and Pâques FJ. Biomol. Screen. Sept 2010 - vol 15 no 8 p. 956-967

Integration of a natural Meganucleaserecognition site

Wild typeMeganuclease

EngineeredMeganucleaseDNA Repair DNA Repair

Meganuclease engineering

cGPS® cGPS®

CustomcGPS® cGPS®

Custom


Between now and the year 2050, the world’s population will grow from approximately 6 billion to more than 9 billion people. This increase in population size, coupled with a changing climate and increasingly limited resources for agriculture, will place enormous strains on our planet’s collective ability to provide the food, fuel and fiber necessary to sustain humankind.

One bright spot on this otherwise troublesome scenario is the promise of new technologies. Genome engineering, in particular, will provide new crop plants with traits that can meet the demands placed on agriculture in the coming decades.

Created in March 2010, Cellectis plant sciences is a subsidiary dedicated to applying sequence-specific nucleases for plants to develop new species with traits of value. The company’s main goals are to increase and accelerate use of Cellectis’ proprietary techno-logy in agricultural biotechnology, to broaden the company’s expertise to attract new and expanded licensing opportunities, and to explore the development of proprietary traits.

Cellectis plant sciences is directed by a world-class scientific team. The company’s scientists were the first to implement genome engineering in plants. Among the team members is the subsidiary Chief Scientific Officer, Daniel Voytas, who is internationally renowned for his work on plant genome engineering. Dr. Voytas is also a professor at the University of Minnesota where he heads the Center for Genome Engineering. Dr. Feng Zhang serves as the subsidiary Director of Research, and he has extensive experience in maize, rice and Arabidopsis genome modification. In addition, the company is staffed by two PhD-level scientists and two research associates.

In its first year of operation, Cellectis plant sciences demonstrated efficient modification of plant genes by engineered meganucleases. Luc Mathis, Programs and Business Deve-lopment Director, highlighted that within months of its inception, Cellectis plant sciences obtained proof-of-concept data. These results demonstrate that meganucleases have similar capacities in plant cells as previously shown in human cells. From this strong data, Cellectis plant sciences is now focusing on its commercial aims: to deliver products, services and licenses for the agriculture industry as well as to build a portfolio of agricultural traits in its field of expertise – targeted mutagenesis in selected plant species.

CELLECTIS PLANT SCIENCES

“This is a very exciting time in plant biology, and our recent advances in genome engineering mark a new era. It is stimulating to be involved in a company that can have such a direct impact on human lives and the well-being of the planet.” Pr. Daniel Voytas

The near-term goal of Cellectis plant sciences is to move away from model plants (Arabi-dopsis and tobacco) and to apply its technology to commercial plant species. The Cellectis plant sciences team already has expertise in transforming corn, rice and soybean, and these skills will be essential in deploying the next phase of the company.

It has to be taken into account that the regulatory process required to release genetically modified plants into the environment is very expensive. As Cellectis plant sciences scientific team implements its genome engineering strategies, they ensure that only minimal changes are made to the plant’s genome. It is hoped that plant genomes modified with this kind of precision will be better accepted in the marketplace.

Professor Voytas has been with Cellectis plant sciences as Chief Scientific Officer since the company was set up. He is a professor in the Department of Genetics, Cell Biology and Development, and Director of the Center for Genome Engineering at the University of Minnesota in Minneapolis. Specializing in molecular biology and genetics, Pr. Voytas’ research focuses on plant genome modification using nucleases that can recognize specific DNA sequences.

He is an elected Fellow of the American Association for the Advancement of Science. He is an Associate Editor for the journal Genetics and Editor-in-Chief for the journal Mobile DNA. He is the co-founder of the Zinc Finger Consortium, a group of scientists dedicated to promoting applications of zinc finger proteins for genome modification. He has authored or co-authored dozens of scientific papers in the field of genome engineering in plant species.

Pr. Daniel Voytas, Chief Scientific Officer of Cellectis plant sciences


Between now and the year 2050, the world’s population will grow from approximately 6 billion to more than 9 billion people. This increase in population size, coupled with a changing climate and increasingly limited resources for agriculture, will place enormous strains on our planet’s collective ability to provide the food, fuel and fiber necessary to sustain humankind.

One bright spot on this otherwise troublesome scenario is the promise of new technologies. Genome engineering, in particular, will provide new crop plants with traits that can meet the demands placed on agriculture in the coming decades.

Created in March 2010, Cellectis plant sciences is a subsidiary dedicated to applying sequence-specific nucleases for plants to develop new species with traits of value. The company’s main goals are to increase and accelerate use of Cellectis’ proprietary techno-logy in agricultural biotechnology, to broaden the company’s expertise to attract new and expanded licensing opportunities, and to explore the development of proprietary traits.

Cellectis plant sciences is directed by a world-class scientific team. The company’s scientists were the first to implement genome engineering in plants. Among the team members is the subsidiary Chief Scientific Officer, Daniel Voytas, who is internationally renowned for his work on plant genome engineering. Dr. Voytas is also a professor at the University of Minnesota where he heads the Center for Genome Engineering. Dr. Feng Zhang serves as the subsidiary Director of Research, and he has extensive experience in maize, rice and Arabidopsis genome modification. In addition, the company is staffed by two PhD-level scientists and two research associates.

In its first year of operation, Cellectis plant sciences demonstrated efficient modification of plant genes by engineered meganucleases. Luc Mathis, Programs and Business Deve-lopment Director, highlighted that within months of its inception, Cellectis plant sciences obtained proof-of-concept data. These results demonstrate that meganucleases have similar capacities in plant cells as previously shown in human cells. From this strong data, Cellectis plant sciences is now focusing on its commercial aims: to deliver products, services and licenses for the agriculture industry as well as to build a portfolio of agricultural traits in its field of expertise – targeted mutagenesis in selected plant species.

CELLECTIS PLANT SCIENCES

“This is a very exciting time in plant biology, and our recent advances in genome engineering mark a new era. It is stimulating to be involved in a company that can have such a direct impact on human lives and the well-being of the planet.” Pr. Daniel Voytas

The near-term goal of Cellectis plant sciences is to move away from model plants (Arabi-dopsis and tobacco) and to apply its technology to commercial plant species. The Cellectis plant sciences team already has expertise in transforming corn, rice and soybean, and these skills will be essential in deploying the next phase of the company.

It has to be taken into account that the regulatory process required to release genetically modified plants into the environment is very expensive. As Cellectis plant sciences scientific team implements its genome engineering strategies, they ensure that only minimal changes are made to the plant’s genome. It is hoped that plant genomes modified with this kind of precision will be better accepted in the marketplace.

Professor Voytas has been with Cellectis plant sciences as Chief Scientific Officer since the company was set up. He is a professor in the Department of Genetics, Cell Biology and Development, and Director of the Center for Genome Engineering at the University of Minnesota in Minneapolis. Specializing in molecular biology and genetics, Pr. Voytas’ research focuses on plant genome modification using nucleases that can recognize specific DNA sequences.

He is an elected Fellow of the American Association for the Advancement of Science. He is an Associate Editor for the journal Genetics and Editor-in-Chief for the journal Mobile DNA. He is the co-founder of the Zinc Finger Consortium, a group of scientists dedicated to promoting applications of zinc finger proteins for genome modification. He has authored or co-authored dozens of scientific papers in the field of genome engineering in plant species.

Pr. Daniel Voytas, Chief Scientific Officer of Cellectis plant sciences


Ectycell was established in September 2009 to apply the benefits of Cellectis’ core technologies to developments within the field of stem cells, especially induced pluripotent stem (iPS) cells.

This subsidiary will utilize these technologies to transform stem cells into true develop-ment and manufacturing tools that will be novel, robust, reproducible and usable in high throughput experiments.

Ectycell has a number of research initiatives underway that take advantage of the benefits of meganucleases for genomic engineering. These programs include:

• Development of ‘Clean iPS Cells’ by generating iPS cells from adult cells using targeted integration and excision of reprogramming factors, which will circumvent the necessity to use random viral integration methods for iPS cell production.

• Development of novel and reproducible methods for cellular differentiation from iPS cells using targeted genome engineering technologies.

• Development of robust methodologies and processes for large scale production of iPS and differentiated cells

• Creation of iPS based cell libraries that will be ideally suited to high throughput drug screening applications.

In October, Cellectis in-licensed induced Pluripotent Stem Cell Technology from iPS Academia Japan. The two separate non-exclusive agreements grant Cellectis worldwide access to the induced Pluripotent Stem (iPS) cells patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) of the University of Kyoto, Japan.

Professor Yamanaka and his colleagues pioneered this groundbreaking work and Cellectis is the first company worldwide to be licensed by iPS Academia Japan under this iPS cell patent portfolio for human therapeutics and prophylactics.

Ectycell was founded on the fact that developing early-stage high throughput screening assays that better predict a molecule’s effect on the organism as a whole or on a geneti-cally diverse population could significantly reduce the high attrition rate currently observed during drug development. Advances under development at Ectycell may also open new opportunities in therapeutics, including regenerative medicine.

What is an induced Pluripotent Stem cell? An induced pluripotent Stem cell (or iPS cell) is an adult cell that has been reprogrammed to behave like an embryonic Stem cell (or ES cell).

When an ovum is fertilized, the egg divides, and within a short space of time cells are formed that have the potential to develop into all the tissues of the body. These cells are called embryonic stem cells and are known as pluripotent cells. Pluripotency is the ability to generate all different cell types.

As they mature, ES cells gradually lose their differentiation potential and develop a functional specialization. For example, a lymphocyte will tackle infections, whereas a pancreatic cell will be capable of producing insulin – for the rest of its life.

Until recently, it was believed to be impossible for a cell to return to a state of immaturity and recover its differentiation potential. In 2006, the team of Professor Shinya Yamanaka at Kyoto University demonstrated that it is possible to reprogram a mature adult cell to give it back the properties of an embryonic stem cell. In order for this adult cell to return to a state of immaturity and be able to differentiate into all cell types, you just need it to express four genes (not normally expressed in adult cells). These cells are termed induced pluripo-tent stem cells, or iPS cells.

ECTYCELL

“Ectycell is responsible for spreading Cellectis’ genome engineering technologies onto the stem cell field in order to transform these cells into true manufacturing tools that are robust, reproducible and usable in high throughput experiments.” David Sourdive, CEO of Ectycell

How to make an iPS

4 genes

precisely required cell types like ...

... Nerve cells ... Blood cells ... Cardiac cells

Pluripotent stem cells

Adult cell


Ectycell was established in September 2009 to apply the benefits of Cellectis’ core technologies to developments within the field of stem cells, especially induced pluripotent stem (iPS) cells.

This subsidiary will utilize these technologies to transform stem cells into true develop-ment and manufacturing tools that will be novel, robust, reproducible and usable in high throughput experiments.

Ectycell has a number of research initiatives underway that take advantage of the benefits of meganucleases for genomic engineering. These programs include:

• Development of ‘Clean iPS Cells’ by generating iPS cells from adult cells using targeted integration and excision of reprogramming factors, which will circumvent the necessity to use random viral integration methods for iPS cell production.

• Development of novel and reproducible methods for cellular differentiation from iPS cells using targeted genome engineering technologies.

• Development of robust methodologies and processes for large scale production of iPS and differentiated cells

• Creation of iPS based cell libraries that will be ideally suited to high throughput drug screening applications.

In October, Cellectis in-licensed induced Pluripotent Stem Cell Technology from iPS Academia Japan. The two separate non-exclusive agreements grant Cellectis worldwide access to the induced Pluripotent Stem (iPS) cells patent portfolio arising from the work of Professor Shinya Yamanaka at the Center for iPS Cell Research and Application (CiRA) of the University of Kyoto, Japan.

Professor Yamanaka and his colleagues pioneered this groundbreaking work and Cellectis is the first company worldwide to be licensed by iPS Academia Japan under this iPS cell patent portfolio for human therapeutics and prophylactics.

Ectycell was founded on the fact that developing early-stage high throughput screening assays that better predict a molecule’s effect on the organism as a whole or on a geneti-cally diverse population could significantly reduce the high attrition rate currently observed during drug development. Advances under development at Ectycell may also open new opportunities in therapeutics, including regenerative medicine.

What is an induced Pluripotent Stem cell? An induced pluripotent Stem cell (or iPS cell) is an adult cell that has been reprogrammed to behave like an embryonic Stem cell (or ES cell).

When an ovum is fertilized, the egg divides, and within a short space of time cells are formed that have the potential to develop into all the tissues of the body. These cells are called embryonic stem cells and are known as pluripotent cells. Pluripotency is the ability to generate all different cell types.

As they mature, ES cells gradually lose their differentiation potential and develop a functional specialization. For example, a lymphocyte will tackle infections, whereas a pancreatic cell will be capable of producing insulin – for the rest of its life.

Until recently, it was believed to be impossible for a cell to return to a state of immaturity and recover its differentiation potential. In 2006, the team of Professor Shinya Yamanaka at Kyoto University demonstrated that it is possible to reprogram a mature adult cell to give it back the properties of an embryonic stem cell. In order for this adult cell to return to a state of immaturity and be able to differentiate into all cell types, you just need it to express four genes (not normally expressed in adult cells). These cells are termed induced pluripo-tent stem cells, or iPS cells.

ECTYCELL

“Ectycell is responsible for spreading Cellectis’ genome engineering technologies onto the stem cell field in order to transform these cells into true manufacturing tools that are robust, reproducible and usable in high throughput experiments.” David Sourdive, CEO of Ectycell

How to make an iPS

4 genes

precisely required cell types like ...

... Nerve cells ... Blood cells ... Cardiac cells

Pluripotent stem cells

Adult cell


Cellectis therapeutics, launched in 2008 under the name Cellectis genome surgery, focuses on the development of innovative therapeutic approaches that use meganucleases to treat genetic diseases (such as muscular dystrophies and hemophilias…), cancers and persistent viral infections (herpes keratitis, AIDS).

This subsidiary has a team of 19, including 10 PhDs, and endeavors to find innovative treatments to treat patients with serious conditions that are resistant to conventional therapy. Cellectis therapeutics’ aim is to fulfill unmet medical needs. The treatment paradigm involves targeting the DNA sequence that causes the disease, which may be innate (genetic disease) or acquired (viral infection, cancers).

The genome surgery approach aims to fight the cause of a particular disease and cure the patient, rather than merely treat symptoms. Since its inception, Cellectis therapeutics has worked together with its partners – academic research groups and clinicians all over the world (including Children Hospital Boston, Institut de la Vision, Genomic Vision, CNRS, INSERM, and many others) – to transform its research into effective medical treatments.

Current clinical trialsAfter Cellectis’ buyout of the assets of CytoPulse in September 2010, the company decided to pursue the partnership program that had been set up by CytoPulse for the use of electro-porators for vaccination. CytoPulse’s electroporation technology is particularly effective for integrating molecules such as meganucleases into any kind of cell.

Cellectis supplies the Dermavax intradermal electroporation equipment to laboratories carrying out clinical trials requiring this kind of equipment. Dermavax is a system that applies an electric field to facilitate the integration of small fragments of DNA into cells, thereby potentializing the effect of DNA vaccines by stimulating the immune response.

Although Dermavax was originally developed for cancer vaccine treatments, it is also being tested today as a prophylactic approach on HIV infections. Three clinical trials are being conducted at the Karolinska Institute and at the Cancer Center in Stockholm, in the laboratories headed by Professors Britta Wahren and Eric Sandström, as well as at Uppsala University by Professor Totterman and Doctor Yachnin.

CELLECTIS THERAPEUTICS

“2010 was a year of intensive learning for both the Cellectis therapeutics teams and the partners and organizations in the medical biotechnology field with whom we collaborated. Alongside the first proofs of concept, we often pioneered technology use, production and validation.”Sylvain Arnould, PhD, preclinical project leader at Cellectis therapeutics

2010 was a turning point for Cellectis therapeutics, which obtained very promising results, particularly in terms of proof of concept on the antiviral activity of meganucleases*. During the year, we also made significant progress in our cell therapy programs.

Indeed, our team has been able to identify good targets for the so-called “Safe Harbor” approach. This approach consists in defining a site in a genome that allows the insertion of a new gene, which might be expressed without interfering with the cell functions.

We also implemented an effective non-viral vectorization approach using the electro-poration system obtained from the takeover of CytoPulse’s assets. In addition, we obtained very good preliminary results in homologous recombination in primary cells, which prepare the ground for our cell therapy development.

In gene therapy, the results obtained by our Canadian partners on Duchenne muscular dystrophy* offers a good example of the energy put in our therapeutic research on meganucleases by our academic partners.

In conclusion, our work in 2010 enabled us to obtain proofs of concept and confirm our scientific and regulatory strategy. We start 2011 with the aim of obtaining proofs of principle for these results on key pathologies such as hemophilia*.

Dr. Carole Desseaux

* more information next page

“Meganucleases can resolve the issue of random integration. The precision of the Cellectis technology means that the new gene can be delivered at a predetermined and safe location. We have high hopes that one day this research will lead to effective and life-enhancing therapies for hemophilia patients.”Dr. Thierry VandenDriessche and Dr. Marinee Chuah, VIB Vesalius Research Center at the Catholic University of Leuven (Belgium)

Dr. Carole Desseaux, Director of operations at Cellectis therapeutics


Cellectis therapeutics, launched in 2008 under the name Cellectis genome surgery, focuses on the development of innovative therapeutic approaches that use meganucleases to treat genetic diseases (such as muscular dystrophies and hemophilias…), cancers and persistent viral infections (herpes keratitis, AIDS).

This subsidiary has a team of 19, including 10 PhDs, and endeavors to find innovative treatments to treat patients with serious conditions that are resistant to conventional therapy. Cellectis therapeutics’ aim is to fulfill unmet medical needs. The treatment paradigm involves targeting the DNA sequence that causes the disease, which may be innate (genetic disease) or acquired (viral infection, cancers).

The genome surgery approach aims to fight the cause of a particular disease and cure the patient, rather than merely treat symptoms. Since its inception, Cellectis therapeutics has worked together with its partners – academic research groups and clinicians all over the world (including Children Hospital Boston, Institut de la Vision, Genomic Vision, CNRS, INSERM, and many others) – to transform its research into effective medical treatments.

Current clinical trialsAfter Cellectis’ buyout of the assets of CytoPulse in September 2010, the company decided to pursue the partnership program that had been set up by CytoPulse for the use of electro-porators for vaccination. CytoPulse’s electroporation technology is particularly effective for integrating molecules such as meganucleases into any kind of cell.

Cellectis supplies the Dermavax intradermal electroporation equipment to laboratories carrying out clinical trials requiring this kind of equipment. Dermavax is a system that applies an electric field to facilitate the integration of small fragments of DNA into cells, thereby potentializing the effect of DNA vaccines by stimulating the immune response.

Although Dermavax was originally developed for cancer vaccine treatments, it is also being tested today as a prophylactic approach on HIV infections. Three clinical trials are being conducted at the Karolinska Institute and at the Cancer Center in Stockholm, in the laboratories headed by Professors Britta Wahren and Eric Sandström, as well as at Uppsala University by Professor Totterman and Doctor Yachnin.

CELLECTIS THERAPEUTICS

“2010 was a year of intensive learning for both the Cellectis therapeutics teams and the partners and organizations in the medical biotechnology field with whom we collaborated. Alongside the first proofs of concept, we often pioneered technology use, production and validation.”Sylvain Arnould, PhD, preclinical project leader at Cellectis therapeutics

2010 was a turning point for Cellectis therapeutics, which obtained very promising results, particularly in terms of proof of concept on the antiviral activity of meganucleases*. During the year, we also made significant progress in our cell therapy programs.

Indeed, our team has been able to identify good targets for the so-called “Safe Harbor” approach. This approach consists in defining a site in a genome that allows the insertion of a new gene, which might be expressed without interfering with the cell functions.

We also implemented an effective non-viral vectorization approach using the electro-poration system obtained from the takeover of CytoPulse’s assets. In addition, we obtained very good preliminary results in homologous recombination in primary cells, which prepare the ground for our cell therapy development.

In gene therapy, the results obtained by our Canadian partners on Duchenne muscular dystrophy* offers a good example of the energy put in our therapeutic research on meganucleases by our academic partners.

In conclusion, our work in 2010 enabled us to obtain proofs of concept and confirm our scientific and regulatory strategy. We start 2011 with the aim of obtaining proofs of principle for these results on key pathologies such as hemophilia*.

Dr. Carole Desseaux

* more information next page

“Meganucleases can resolve the issue of random integration. The precision of the Cellectis technology means that the new gene can be delivered at a predetermined and safe location. We have high hopes that one day this research will lead to effective and life-enhancing therapies for hemophilia patients.”Dr. Thierry VandenDriessche and Dr. Marinee Chuah, VIB Vesalius Research Center at the Catholic University of Leuven (Belgium)

Dr. Carole Desseaux, Director of operations at Cellectis therapeutics



Herpes virusScientists from Cellectis therapeutics, the French National Center for Medical Research (CNRS), and Institut de la Vision (Paris) have used Cellectis’ proprietary meganucleases to successfully prevent infection of cultured cells by a herpes virus (HSV-1). The research was published in the journal Molecular Therapy. These are the first proof of concept datas to show that meganucleases can prevent viral infection. The article describes how scientists used specific meganucleases engineered by Cellectis to prevent the infection of human cultured cells by HSV-1.

Subsequent analysis of the treated cells by sequencing showed that the viral DNA had successfully been clipped by the meganuclease, and therefore lost its capacity to replicate and spread.

Duchenne muscular dystrophy Researchers at the Laval University Hospital Center in Quebec (Canada) used mega-nucleases engineered by Cellectis to restore the expression of microdystrophin in human myoblasts in vitro and in human cells in vivo. They were therefore able to show the potential of using meganucleases to treat Duchenne muscular dystrophy. These new findings were published in the scientific journal Gene Therapy.

Gene therapy for treating hemophilia The life sciences research institute VIB and Cellectis are collaborating on research into new approaches to treat hemophilia. They are using meganucleases to replace faulty blood clotting factor genes with functional copies. Hemophilia is a group of hereditary, recessive, X-linked genetic disorders that impair the body’s ability to control blood clotting or coagulation. Hemophilia patients suffer to various degrees from uncontrolled internal or external bleeding if a blood vessel is broken. In areas such as the brain or inside joints, this bleeding can be fatal or permanently debilitating.

Publications

Herpes virusMeganuclease-mediated Inhibition of HSV1 Infection in Cultured Cells Grosse S, Huot N, Mahiet C, Arnould S, Barradeau S, Clerre DL, Chion-Sotinel I, Jacqmarcq C, Chapellier B, Ergani A, Desseaux C, Cédrone F, Conseiller E, Pâques F, Labetoulle M, Smith J.Molecular Therapy. 2011 Jan 11.

Duchenne muscular dystrophyMeganucleases can restore the readingframe of a mutated dystrophinChapdelaine P, Pichavant C, Rousseau J, Pâques F and Tremblay J.PGene Therapy (2010) 17, 846–858;



Herpes virusScientists from Cellectis therapeutics, the French National Center for Medical Research (CNRS), and Institut de la Vision (Paris) have used Cellectis’ proprietary meganucleases to successfully prevent infection of cultured cells by a herpes virus (HSV-1). The research was published in the journal Molecular Therapy. These are the first proof of concept datas to show that meganucleases can prevent viral infection. The article describes how scientists used specific meganucleases engineered by Cellectis to prevent the infection of human cultured cells by HSV-1.

Subsequent analysis of the treated cells by sequencing showed that the viral DNA had successfully been clipped by the meganuclease, and therefore lost its capacity to replicate and spread.

Duchenne muscular dystrophy Researchers at the Laval University Hospital Center in Quebec (Canada) used mega-nucleases engineered by Cellectis to restore the expression of microdystrophin in human myoblasts in vitro and in human cells in vivo. They were therefore able to show the potential of using meganucleases to treat Duchenne muscular dystrophy. These new findings were published in the scientific journal Gene Therapy.

Gene therapy for treating hemophilia The life sciences research institute VIB and Cellectis are collaborating on research into new approaches to treat hemophilia. They are using meganucleases to replace faulty blood clotting factor genes with functional copies. Hemophilia is a group of hereditary, recessive, X-linked genetic disorders that impair the body’s ability to control blood clotting or coagulation. Hemophilia patients suffer to various degrees from uncontrolled internal or external bleeding if a blood vessel is broken. In areas such as the brain or inside joints, this bleeding can be fatal or permanently debilitating.

Publications

Herpes virusMeganuclease-mediated Inhibition of HSV1 Infection in Cultured Cells Grosse S, Huot N, Mahiet C, Arnould S, Barradeau S, Clerre DL, Chion-Sotinel I, Jacqmarcq C, Chapellier B, Ergani A, Desseaux C, Cédrone F, Conseiller E, Pâques F, Labetoulle M, Smith J.Molecular Therapy. 2011 Jan 11.

Duchenne muscular dystrophyMeganucleases can restore the readingframe of a mutated dystrophinChapdelaine P, Pichavant C, Rousseau J, Pâques F and Tremblay J.PGene Therapy (2010) 17, 846–858;



Assets Equity and Liabilities

Figures in thousands of euros December 31 2010 December 31 2009

Net intangible assets 3 976 903

Net tangible assets 3 913 2 893

Non-current financial assets 231 231

Deferred tax assets 8 169 5 133

Total non-current assets 16 289 9 160

Inventories 153 118

Trade receivables 2 491 1 768

Research tax credit and subsidies 6 588 1 570

Other current assets 2 486 2 465

Cash and cash equivalents 24 048 45 080

Total current assets 35 766 51 001

TOTAL ASSETS 52 055 60 161


Share capital 584 582

Share premium and reserves 45 170 52 404

Net income/loss (8 063) (7 768)

Equity 37 691 45 218

Retirement benefit obligation 120 42

Borrowings 809 491

Other financial liabilities 588 795

Provisions 50 71

Total non current liabilities 1 567 1 399

Borrowings 560 748


Trade accounts payable 8 464 6 548

Deferred income 3 516 6 141

Total current liabilities 12 797 13 544

TOTAL EQUITY AND LIABILITIES 52 055 60 161

Intangible assets at December 31, 2010 included ! 2.4 M of development expenses and ! 1.5 million for patents licensed. Research and development expenses concerning kits and plant activities are included under assets for the first time in 2010, which differs fromfiscal year 2009. This is a result of the growth of both activities which now generate recur-rent revenues. The total of patent assets significantly increased as a result of the acquisition of CytoPulse, Inc. assets.

Note:

Since 2010, the company has endeavored to improve the quality of its financial reporting by publishing complete accounts in line with IFRS standards.

This process is an ongoing one, requiring further restatements, particularly those concerning revenue recognition, leasing contracts, deferred tax assets and the capitalization of certain development expenses. The figures presented here therefore include all the restatements required by IFRS standards, but at the time of publishing this report, the consolidated accounts were still being reviewed by the statutory auditors.

Tangible assets mainly consisted of laboratory equipment.The tax credit associated with losses carried forward by Cellectis and its subsidiaries was capitalized, given the prospects for recoverability.

The (current and non-current) “Borrowings” item mainly corresponded to the restatement of leasing contracts for laboratory equipment.

The other financial liabilities consisted of refundable advances granted to the group for various research programs. In summary, the company financial debt is negligible while equity capital reached ! 38 M at the end of 2010.



Assets Equity and Liabilities


Net intangible assets 3 976 903

Net tangible assets 3 913 2 893

Non-current financial assets 231 231

Deferred tax assets 8 169 5 133

Total non-current assets 16 289 9 160

Inventories 153 118

Trade receivables 2 491 1 768

Research tax credit and subsidies 6 588 1 570

Other current assets 2 486 2 465

Cash and cash equivalents 24 048 45 080

Total current assets 35 766 51 001

TOTAL ASSETS 52 055 60 161


Share capital 584 582

Share premium and reserves 45 170 52 404

Net income/loss (8 063) (7 768)

Equity 37 691 45 218

Retirement benefit obligation 120 42

Borrowings 809 491


Provisions 50 71

Total non current liabilities 1 567 1 399

Borrowings 560 748


Trade accounts payable 8 464 6 548

Deferred income 3 516 6 141

Total current liabilities 12 797 13 544

TOTAL EQUITY AND LIABILITIES 52 055 60 161

Intangible assets at December 31, 2010 included ! 2.4 M of development expenses and ! 1.5 million for patents licensed. Research and development expenses concerning kits and plant activities are included under assets for the first time in 2010, which differs fromfiscal year 2009. This is a result of the growth of both activities which now generate recur-rent revenues. The total of patent assets significantly increased as a result of the acquisition of CytoPulse, Inc. assets.

Note:

Since 2010, the company has endeavored to improve the quality of its financial reporting by publishing complete accounts in line with IFRS standards.

This process is an ongoing one, requiring further restatements, particularly those concerning revenue recognition, leasing contracts, deferred tax assets and the capitalization of certain development expenses. The figures presented here therefore include all the restatements required by IFRS standards, but at the time of publishing this report, the consolidated accounts were still being reviewed by the statutory auditors.

Tangible assets mainly consisted of laboratory equipment.The tax credit associated with losses carried forward by Cellectis and its subsidiaries was capitalized, given the prospects for recoverability.

The (current and non-current) “Borrowings” item mainly corresponded to the restatement of leasing contracts for laboratory equipment.

The other financial liabilities consisted of refundable advances granted to the group for various research programs. In summary, the company financial debt is negligible while equity capital reached ! 38 M at the end of 2010.


Cash Flow Statement Profit & Loss

Figures in thousands of euros2010

12 months2009

12 months

Net income/loss of the year (8 063) (7 768)

Depreciation & amortization 1 186 793

Capital gain on assets disposal (61)

Deferred Taxes (3 036) (1 749)

Share based payments 435 1 045

Other non cash items 144 (30)

Cash Flow from operating activities before Working Capital change (9 334) (7 770)

(Increase) / Decrease in accounts receivable (758) (893)

(Increase) / Decrease of Research Tax Credit & Subsidies (5 018) 1 321

(Decrease) / Increase of trade accounts payable 1 916 71

Net change in other assets and liabilities (2 672) 3 952

Change in working capital (6 532) (4 451)

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (15 866) (3 319)

Acquisition of intangible assets (3 528) (1 017)

Acquisition of tangible assets (1 477) (448)

Acquisition of financial assets

Net income form sale of tangible assets 729 719

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (4 276) (746)

New borrowings 0 0

Repayment of long-term borrowings (983) (1 079)

Proceeds from issuance of common stock 93 22 296

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (890) 21 217

CHANGE IN CASH AND CASH EQUIVALENTS (21 032) 17 152

Opening cash and cash equivalents 45 080 27 928

Closing cash and cash equivalents 24 048 45 080

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (21 032) 17 152


12 months2009

12 months

Sales 8 166 7 613

Other revenues (Research tax credit & subsidies) 1 7 609 2 527

Total operating revenues 15 775 10 140

Cost of Sales (licensing-in) (1 445) (1 449)

Gross Margin Profit 14 330 8 691

Research and Development (12 311) (7 971)

Marketing and Administration (13 457) (10 601)

Other income 0 78

Other expenses (27)

Current operating income/loss (11 465) (9 803)

Financial income 485 463

Financial expenses (153) (173)

Other financial income & expenses 34 (4)

Net operating income/loss 366 286

Income tax 3 036 1 749

NET INCOME (8 063) (7 768)

1 Including research tax credit 6 148 1 255

The increase in the R&D tax credit in 2010 resulted in a considerable increase in this receivable at December 31. Intangible investments in 2010 consisted of ! 1.9 M capitalized development expenses, along with patent acquisitions. Approximately one third of the year’s cash burn was affected by a temporary unfavorable variation in working capital requirements. In 2011, the change in cash (and cash equivalents) is expected to be near the level of net income.

Revenues from licenses and research kit sales increased by more than 7% in 2010. This increase is significant considering certain agreements with major groups that have been placed on hold or in the midst of reorganization, particularly during the launch period of new research kits. The next fiscal year is expected to show further progress, particularly in kit sales and related services.

The R&D tax credit increased significantly in 2010 (! 6.1 M compared with ! 1.3 M in 2009), mainly due to the increase in R&D expenditure (+54%) and the reduction in grants received in 2010. A background study was conducted by Cellectis with the help of consultants in order to estimate the R&D tax credit.

The increase in operating expenses in 2010 is due to the implementation of a major growth strategy outlined in 2009, the consolidation of upstream research teams for Cellectis, and application platform development for each of the subsidiaries. Research and development expenses increased by approximately 50%, which remains consistent with the staff increase (+50% from the end of 2009 to the end of 2010).


Cash Flow Statement Profit & Loss


12 months2009

12 months

Net income/loss of the year (8 063) (7 768)

Depreciation & amortization 1 186 793

Capital gain on assets disposal (61)

Deferred Taxes (3 036) (1 749)

Share based payments 435 1 045

Other non cash items 144 (30)

Cash Flow from operating activities before Working Capital change (9 334) (7 770)

(Increase) / Decrease in accounts receivable (758) (893)

(Increase) / Decrease of Research Tax Credit & Subsidies (5 018) 1 321

(Decrease) / Increase of trade accounts payable 1 916 71

Net change in other assets and liabilities (2 672) 3 952

Change in working capital (6 532) (4 451)

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (15 866) (3 319)

Acquisition of intangible assets (3 528) (1 017)

Acquisition of tangible assets (1 477) (448)

Acquisition of financial assets

Net income form sale of tangible assets 729 719

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (4 276) (746)

New borrowings 0 0

Repayment of long-term borrowings (983) (1 079)

Proceeds from issuance of common stock 93 22 296

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (890) 21 217

CHANGE IN CASH AND CASH EQUIVALENTS (21 032) 17 152

Opening cash and cash equivalents 45 080 27 928

Closing cash and cash equivalents 24 048 45 080

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (21 032) 17 152


12 months2009

12 months

Sales 8 166 7 613

Other revenues (Research tax credit & subsidies) 1 7 609 2 527

Total operating revenues 15 775 10 140

Cost of Sales (licensing-in) (1 445) (1 449)

Gross Margin Profit 14 330 8 691

Research and Development (12 311) (7 971)

Marketing and Administration (13 457) (10 601)

Other income 0 78

Other expenses (27)

Current operating income/loss (11 465) (9 803)

Financial income 485 463

Financial expenses (153) (173)

Other financial income & expenses 34 (4)

Net operating income/loss 366 286

Income tax 3 036 1 749

NET INCOME (8 063) (7 768)

1 Including research tax credit 6 148 1 255

The increase in the R&D tax credit in 2010 resulted in a considerable increase in this receivable at December 31. Intangible investments in 2010 consisted of ! 1.9 M capitalized development expenses, along with patent acquisitions. Approximately one third of the year’s cash burn was affected by a temporary unfavorable variation in working capital requirements. In 2011, the change in cash (and cash equivalents) is expected to be near the level of net income.

Revenues from licenses and research kit sales increased by more than 7% in 2010. This increase is significant considering certain agreements with major groups that have been placed on hold or in the midst of reorganization, particularly during the launch period of new research kits. The next fiscal year is expected to show further progress, particularly in kit sales and related services.

The R&D tax credit increased significantly in 2010 (! 6.1 M compared with ! 1.3 M in 2009), mainly due to the increase in R&D expenditure (+54%) and the reduction in grants received in 2010. A background study was conducted by Cellectis with the help of consultants in order to estimate the R&D tax credit.

The increase in operating expenses in 2010 is due to the implementation of a major growth strategy outlined in 2009, the consolidation of upstream research teams for Cellectis, and application platform development for each of the subsidiaries. Research and development expenses increased by approximately 50%, which remains consistent with the staff increase (+50% from the end of 2009 to the end of 2010).


Share Price and Capital Structure

APPENDICES

3

4

5

1

6

21. Free float 62%

2. Corporate Partners 4%

3. Founders & Management 15%

4. Business Angel 10%

5. Venture Capitals 5%

6. Institut Pasteur 4%

Shareholders Breakdown as of December 31, 2010

Cellectis’ share price saw a downturn during the 2010 financial year. In fact, the first trading day of 2010 finished at a price of ! 10.95 per share and the last day (December 31st) finished at a price of ! 7.40 per share, thus showing a net fall of 32.4%. Several factors explain this downturn: the continued exit of venture capitalists as historical shareholders, low daily trade volumes and market volatility linked to significant macro-economic uncertainty.

The capital structure has continued to evolve by the exit of venture capital shareholders and changes resulting from the capital increase at the end of 2009. The free float has now reached more than 60% but the “hard core” holding, centered around the two founders, the Institut Pasteur, the business angel present in the capital since 2000 and the industrial companies that entered in 2008 (Regeneron) and 2009 (Monsanto), remains unchanged.

Share Price Evolution

Share Price in ! !!!!!!!Share Volume in thousands of shares

! 100 million market capitalization. About 10,000 share average volume.

NYSE-Euronext ACLS.PA

2010

2009 Apr Jul Oct

12

11

10

9

8

7

6

40

20

0

60

80

100


Share Price and Capital Structure

APPENDICES

3

4

5

1

6

21. Free float 62%

2. Corporate Partners 4%

3. Founders & Management 15%

4. Business Angel 10%

5. Venture Capitals 5%

6. Institut Pasteur 4%

Shareholders Breakdown as of December 31, 2010

Cellectis’ share price saw a downturn during the 2010 financial year. In fact, the first trading day of 2010 finished at a price of ! 10.95 per share and the last day (December 31st) finished at a price of ! 7.40 per share, thus showing a net fall of 32.4%. Several factors explain this downturn: the continued exit of venture capitalists as historical shareholders, low daily trade volumes and market volatility linked to significant macro-economic uncertainty.

The capital structure has continued to evolve by the exit of venture capital shareholders and changes resulting from the capital increase at the end of 2009. The free float has now reached more than 60% but the “hard core” holding, centered around the two founders, the Institut Pasteur, the business angel present in the capital since 2000 and the industrial companies that entered in 2008 (Regeneron) and 2009 (Monsanto), remains unchanged.

Share Price Evolution

Share Price in ! !!!!!!!Share Volume in thousands of shares

! 100 million market capitalization. About 10,000 share average volume.

NYSE-Euronext ACLS.PA

2010

2009 Apr Jul Oct

12

11

10

9

8

7

6

40

20

0

60

80

100


Executive Commitee, from left to right:David Sourdive, André Choulika, Frédéric Pâques,

Dirk Pollet, Sylvie Delassus, Marc Le Bozec

GOVERNANCE

Executive Committee The Executive Committee is composed of the senior-level management of Cellectis, which establishes consolidated objectives, monitors the strategic projects and decides on priorities. Its members implement the company’s strategy and direct its day-to-day operations. The Committee includes André Choulika and David Sourdive, the company’s co-founders.

André Choulika, PhD, Chief Executive Officer

André Choulika, PhD, founder of Cellectis SA, has served as Chief Executive Officer since the company’s inception. Dr. Choulika is a pioneer in the analysis and use of meganucleases to modify complex genomes. He has made many of the critical observations in the field and is an author of the most significant patents on the use of meganucleases in vivo. Dr. Choulika received a PhD in Molecular Virology form University of Paris VI / Institut Pasteur. Dr. Choulika has made post-doctoral studies at the Harvard Medical School within the department of Molecular Medicine of Boston’s Children’s Hospital.

David Sourdive, PhD, Executive Vice President, Corporate Development

David Sourdive, PhD, co-founded Cellectis SA with Dr Choulika, and has served as Director since 2000. Prior to inception of the company, Dr Sourdive was the head of Biotechnology Laboratory at the Centre d’Etudes du Bouchet (French Ministry of Defense). At the same time, Dr Sourdive was heading a research group in Immunology at the Pasteur Institute. Dr. Sourdive attended Ecole Polytechnique and received a PhD in Molecular Virology form University of Paris VII/ Institut Pasteur. Dr Sourdive then applied recombination tracking technologies to anti-viral immune memory, at the Emory University Vaccine Center in Atlanta.

Frédéric Pâques, PhD, Chief Scientific Officer

Marc Le Bozec, Chief Financial Officer

Dirk Pollet, PhD, Chief Business Officer

Sylvie Delassus, PhD, Senior Vice President, Corporate Communication

Board of DirectorsThe Board of Directors determines the company strategy and oversees Cellectis activities. Members of the Board of Directors serve for a term of three years; the Chairman convenes meetings when it is deemed necessary or desirable.

On December 31, 2010:

Christian Policard, PhD Chairman, co-founder of Biotech Developpement Conseils

Martin Bitsch, MDIndependent director, Consultant

André Choulika, PhDDirector, Chief Executive Officer, Cellectis

Alain GodardIndependent director, Former Head of Aventis Cropscience board of directors, Consultant

Roger J. Hajjar, MDDirector, Kaminvest Holding Representative

Richard C. Mulligan, PhDIndependent director, Mallinckrodt Profes-sor of Genetics at Harvard Medical School and Director of the Harvard Gene Therapy Initiative

David Sourdive, PhDDirector, Executive Vice President, Corporate Development, Cellectis

Pascale AltierObserver, Institut Pasteur Representative

Scientific Advisory Board The Scientific Advisory Board, set up in 2002, is composed of eight active members, appointed for one year and meets twice a year. Its mission is to outline Cellectis’ broad scientific orientations. It presents Cellectis’ management team with methods and strategies to achieve the company’s techno-logical goals. It evaluates the work achieved during the year and the results obtained.


Prof. François Jacob, Honorary Chairman, PhDCollège de France, Paris, France

Prof. Rodney J. Rothstein, PhD, ChairmanColumbia University, New York, USA

Prof. Frederick W. Alt, PhDHoward Hughes Medical Institute, Chevy Chase, USA; Harvard Medical School, Boston, USA

Prof. Bernard Dujon, PhDUniversité Pierre et Marie Curie (Paris VI) - Institut Pasteur, Paris, France

Prof. Alain Fischer, MD, PhD Hôpital Necker - Enfants Malades, Paris, France

Prof. James E. Haber, PhDBrandeis University, Waltham, USA

Prof. Denis Pompon, PhDCenter of Molecular Genetics, Gif-sur-Yvette, France

Prof. José-Alain Sahel, MD, PhDHôpital des Quinze-Vingts, Paris, France

Prof. Luis Serrano, PhDCenter for Genomic Regulation, Barcelona, Spain


Executive Commitee, from left to right:David Sourdive, André Choulika, Frédéric Pâques,

Dirk Pollet, Sylvie Delassus, Marc Le Bozec

GOVERNANCE

Executive Committee The Executive Committee is composed of the senior-level management of Cellectis, which establishes consolidated objectives, monitors the strategic projects and decides on priorities. Its members implement the company’s strategy and direct its day-to-day operations. The Committee includes André Choulika and David Sourdive, the company’s co-founders.

André Choulika, PhD, Chief Executive Officer

André Choulika, PhD, founder of Cellectis SA, has served as Chief Executive Officer since the company’s inception. Dr. Choulika is a pioneer in the analysis and use of meganucleases to modify complex genomes. He has made many of the critical observations in the field and is an author of the most significant patents on the use of meganucleases in vivo. Dr. Choulika received a PhD in Molecular Virology form University of Paris VI / Institut Pasteur. Dr. Choulika has made post-doctoral studies at the Harvard Medical School within the department of Molecular Medicine of Boston’s Children’s Hospital.

David Sourdive, PhD, Executive Vice President, Corporate Development

David Sourdive, PhD, co-founded Cellectis SA with Dr Choulika, and has served as Director since 2000. Prior to inception of the company, Dr Sourdive was the head of Biotechnology Laboratory at the Centre d’Etudes du Bouchet (French Ministry of Defense). At the same time, Dr Sourdive was heading a research group in Immunology at the Pasteur Institute. Dr. Sourdive attended Ecole Polytechnique and received a PhD in Molecular Virology form University of Paris VII/ Institut Pasteur. Dr Sourdive then applied recombination tracking technologies to anti-viral immune memory, at the Emory University Vaccine Center in Atlanta.

Frédéric Pâques, PhD, Chief Scientific Officer

Marc Le Bozec, Chief Financial Officer

Dirk Pollet, PhD, Chief Business Officer

Sylvie Delassus, PhD, Senior Vice President, Corporate Communication

Board of DirectorsThe Board of Directors determines the company strategy and oversees Cellectis activities. Members of the Board of Directors serve for a term of three years; the Chairman convenes meetings when it is deemed necessary or desirable.


Christian Policard, PhD Chairman, co-founder of Biotech Developpement Conseils

Martin Bitsch, MDIndependent director, Consultant

André Choulika, PhDDirector, Chief Executive Officer, Cellectis

Alain GodardIndependent director, Former Head of Aventis Cropscience board of directors, Consultant

Roger J. Hajjar, MDDirector, Kaminvest Holding Representative

Richard C. Mulligan, PhDIndependent director, Mallinckrodt Profes-sor of Genetics at Harvard Medical School and Director of the Harvard Gene Therapy Initiative

David Sourdive, PhDDirector, Executive Vice President, Corporate Development, Cellectis

Pascale AltierObserver, Institut Pasteur Representative

Scientific Advisory Board The Scientific Advisory Board, set up in 2002, is composed of eight active members, appointed for one year and meets twice a year. Its mission is to outline Cellectis’ broad scientific orientations. It presents Cellectis’ management team with methods and strategies to achieve the company’s techno-logical goals. It evaluates the work achieved during the year and the results obtained.


Prof. François Jacob, Honorary Chairman, PhDCollège de France, Paris, France

Prof. Rodney J. Rothstein, PhD, ChairmanColumbia University, New York, USA

Prof. Frederick W. Alt, PhDHoward Hughes Medical Institute, Chevy Chase, USA; Harvard Medical School, Boston, USA

Prof. Bernard Dujon, PhDUniversité Pierre et Marie Curie (Paris VI) - Institut Pasteur, Paris, France

Prof. Alain Fischer, MD, PhD Hôpital Necker - Enfants Malades, Paris, France

Prof. James E. Haber, PhDBrandeis University, Waltham, USA

Prof. Denis Pompon, PhDCenter of Molecular Genetics, Gif-sur-Yvette, France

Prof. José-Alain Sahel, MD, PhDHôpital des Quinze-Vingts, Paris, France

Prof. Luis Serrano, PhDCenter for Genomic Regulation, Barcelona, Spain

®Cellectis

Contact:Cellectis102 avenue Gaston Roussel93230 RomainvilleFranceTel: +33 (0)1 41 83 99 [email protected]

Photos:Ramon MartinezFranck BeloncleCellectisTim RummelhoffEric MerleINRA Christophe MaitreCédric PorcheziStockphoto

Graphic Design:Valentina Herrmann

Printing:GraphiCentre

Printed on FSC certified recycled paper using vegetable based inks.

DisclaimerThis publication and the information contained herein do not constitute an offer to sell or subscribe, or a solicitation of an offer to buy or subscribe, for shares in Cellectis in any country. This publication contains forward-looking statements that relate to the Company’s objectives based on the current expectations and assumptions of the Company’s management only and involve unforeseeable risk and uncertainties that could cause the Company to fail to achieve the objectives expressed by the forward-looking statements bove.

®Cellectis

Contact:Cellectis102 avenue Gaston Roussel93230 RomainvilleFranceTel: +33 (0)1 41 83 99 [email protected]

Photos:Ramon MartinezFranck BeloncleCellectisTim RummelhoffEric MerleINRA Christophe MaitreCédric PorcheziStockphoto

Graphic Design:Valentina Herrmann

Printing:GraphiCentre

Printed on FSC certified recycled paper using vegetable based inks.

DisclaimerThis publication and the information contained herein do not constitute an offer to sell or subscribe, or a solicitation of an offer to buy or subscribe, for shares in Cellectis in any country. This publication contains forward-looking statements that relate to the Company’s objectives based on the current expectations and assumptions of the Company’s management only and involve unforeseeable risk and uncertainties that could cause the Company to fail to achieve the objectives expressed by the forward-looking statements bove.

MADE BY CELLECTIS

Documents

Cellectis - Activity Report 2010