Cellectis - Annual Report 2006

2006 CORPORATE PROFILE

Genome Engineering

INNOVATION.IT’S IN OUR DNA.Cellectis, genome engineering: the first ”cut & paste“ for living organisms.

Presentation of Cellectis

Important events in 2006

Letter from the CEO

Cellectis: origin and approach

Markets and products

Product portfolio

Strategy and business model

Sales policy

Governance

Main financial items

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TABLE OF CONTENTS

Cellectis, unique know-how in genome engineering at the service of health, agronomy and biotechnology.

CREATIVITY.IT’S IN OUR DNA.A revolution in the field of biotechnology, Cellectis technology is one of the few available means of intervening in any living cell in any predetermined position.

l Cellectis l 2006 Corporate Profile l Presentation of Cellectis l 5

Cellectis is a biotech company specialising in an innovative approach to genome engineering: rational genome engineering. This revolutionary technology has enabled Cellectis to open up new possibilities for astute, precise genome engineer-ing, making it possible to rewrite the genetic code of any living organism.

Cellectis has constructed its proprietary technology on the basis of Institut Pasteur patent licences. Thisnew DNA reprogramming system, the Mega-nuclease Recombination System or MRS, makes it possible to ”cut & paste” DNA. It involves the ar-tificial induction of the natural DNA repair system present in cells. It has been patented and can be used on any living organism.

A world leader in the design and manufacture of the MRS, Cellectis is continuing to invest and to innovate, to perpetuate its technological advance. Cellectis sells its MRS to industry, in which it is used in three highly commercial fields:

1. Human health (genetic and viral diseases, transplantation and cell therapy)

2. Agronomy (plant improvement – seeds and biomass)

3. Biotechnology (improvement of recombinant protein production and quality, bio-drugs)

Cellectis actively distributes its technology to the leading academic laboratories for use as a research tool, and this system is rapidly becoming a world-wide technological standard.

From its foundation until 2005, Cellectis generated income through sub-licensing agreements based on the Institut Pasteur portfolio of patents for technology protecting homologous recombination and natural meganucleases, to which the Institut Pasteur has acquired exclusive rights. During this period, Cellectis developed its revolutionary tech-nology, making it possible to modify the specificity of meganucleases for natural genomic targets. In 2006, this new MRS proprietary technology enabled the Company to adopt a product-driven business model, with the capacity to generate innovative products. Cellectis MRS technology has already been the subject of a first agreement with an agricultural biotech company (BayerBiosciences) and should give rise to more than five commercial agreements with international groups in the agricultural biotech field by 2008. In 2006, the Cellectis product portfolio included 10 mega-nucleases, including six designed for therapeutic purposes and one for research purposes (IGR). TheCompany intends to increase its annual production capacity from 8 to 20 MRS per year by 2008, with the objective of having 40 MRS actively in use by 2010.

Cellectis has already entered into 45 agreements worldwide with pharmaceutical companies (inclu-ding AstraZeneca, Merck & Co., Wyeth and Shire Pharmaceuticals), agrochemical groups (including Bayer, Limagrain Biogemma, DuPont and BASF)and biotech companies (including Genentech, Celonic, Regeneron and Lexicon Genetics).

Cellectis’ considerable Research & Development efforts are supported by a sustained policy of academic and technological partnerships with the CNRS, INSERM, CNIO (Centro Nacional de Inves-tigaciones Oncologicas, Spain), and the European Molecular Biology Laboratory in Germany.

Founded in 2000 by André Choulika and David Sourdive, Cellectis has its headquarters in Romain-ville (France) and has 40 employees, including 16 with PhDs. By December 31 2006, Cellectis had raised a total of 17.5 M euros in two rounds of financing with AGF Private Equity, BankIn-vest Biomedical Venture, Edmond de RothschildInvestment Partners, Kaminvest Holding (BA) and Odyssée Venture.

PRESENTATION OF CELLECTIS

Change in Cellectis’ economic model, moving from the sale of technology sublicences granted as exclusive licences by the Institut Pasteur, to the sale of products derived from our own proprietary technology.

Signing of first significant contract with Bayer Biosciences, in the domain of agronomy.

Signing of a licence swap agreement concerning homologous recombination, with Lexicon Genetics Inc. (US), a world leader in this field.

Delivery of a first MRS for therapeutic purposes.

Arrival of Marc Le Bozec, founder and former CEO of BioProtéine Technologies, as Financial Manager.

Production of 8 MRS, including five for therapeutic purposes, over a period of 12 months.

Publication of three articles in renowned international journals including:

January 2006: Publication in the Journal of Molecular Biology of an article concerning the large-scale production of specifically modified meganucleases (validating the Company’s commercial potential).

March 2006: Publication in the Journal of Gene Medicine of an article on the first known attempt at meganuclease genomic surgery in vivo (in animals).

November 2006: Publication in Nucleic Acids Research of an article on the production of ameganuclease targeting genes involved in human immunodeficiency.

Preparation of a stock exchange flotation procedure to obtain further funds to consolidate the Company’s growth and increase its market presence.

Confirmation of Cellectis’ capacity to deliver a product within a relatively stable deadline, based on an identified target DNA (9 months on average).

First full production year for specifically modified meganucleases (MRS based on Cellectis technology).

Filing of three further patents and issue of a new patent title for the Company.

Success of its initial public offering on the Alternext market of Euronext Paris. Cellectis raised 24.4 million euros (prior to deduction of bank commissions and legal & administration fees associated with the offering).

IMPORTANT EVENTS IN 2006

2006

June 2006

July 2006

September 2006

October 2006

November 2006

January, March and November 2006

November 2006

Q3 2006

2006

2006

February 2007

l Cellectis l 2006 Corporate Profile l Important events in 2006 l 6

l Cellectis Genome Engineering l Annual Report 2006 l Présentation de Cellectis l 7

AMBITION.IT’S IN OUR DNA.2006, a transition year, was marked by a change in gear for the economic model,significant advances concerning products, the delivery of 8 MRS and the preparation of a flotation on Euronext Paris Alternext.

2006 was an eventful and decisive year in the life of Cellectis, marked by our entry into a significant and thrilling development phase – the first full year of production of a series of 8 meganucleases with new DNA target specificities and preparation for our subsequent IPO on the Alternext market of Euro-next (completed in 2007).

In 2006, Cellectis changed up a gear in its business model by moving from technology licensing toward sales of self-made products, with our proprietary product platform generating Meganuclease Recombi-nation Systems (MRSs) to unprecedented timelines.

We also made significant progress in (i) our novel approach to ”genome surgery“ for treating viral and genetic diseases and (ii) the MRS production process. These unique products for ultraprecise DNAreprogramming are capable not only of improving drug discovery & manufacturing processes and boosting varietal improvement programs for plants of agricultural or horticultural importance but are also revolutionizing approaches to molecular medicine.

I am proud to say that we have achieved our first objective – the production of meganucleases with new specificities for targeting genes of interest in our three strategic markets: human healthcare, agriculture and biotechnology. Over the summer of 2006, we signed our first custom meganuclease production contract in the agricultural sector (with Bayer BioScience). In October 2006, we delivered our first therapeutic candidate (an MRS enabling correction of a mutation responsible for xeroderma pigmentosum, a type of skin cancer) to our academic partner, the CNRS government research lab at the renowned Gustave Roussy Institute. During the same period, we signed a cross-licensing agree-ment in the field of homologous recombination with a major US player in this field, Lexicon Genetics Inc. We equally initiated the production of 5 novel, therapeutically-focused MRSs, designed to address several forms of monogenic severe immune deficiencies as well as broader applications in allogenic transplantation, anemia and hepatitis. Other MRSs have been designed as biotechnological reagents for enabling industrial or academic research centers to accelerate their drug and target discovery and development processes. We have also created products which help rationalize or accelerate industrial manufacturing timelines for biotherapeutics.

We have invested significant resources in order to create a solid portfolio of innovative and diversified products, generated by a platform which constitutes a true technological breakthrough in the biotech industry.

We have seized a world-leading position in the discovery and manufacture of meganucleases with modified specificities, and our cutting-edge results are regularly published in international peer-reviewed journals, such as the Journal of Molecular Biology and Nucleic Acid Research. These articles testify to the quality of our highly innovative research. We have solved complex biological problems – giving us a significant competitive advantage, supported by an aggressive patent policy.

Our priority markets – the pharmaceutical, biotech and agricultural industries – are increasingly oriented towards the exploitation of discoveries generated through molecular biology, biochemistry, and geno-mics. Hence, we integrate perfectly into this value chain and provide it with additional depth. In fact, our molecules are able to act on (and thus correct) the genetic information itself, for a variety of therapeutic or industrial purposes. We offer these industries a rational way of exploiting genomic data from biological systems, in order to extract and make use of the information needed to develop tomorrow’s drugs and bioproducts. Furthermore, our products enhance and rationalize the manufacturing processes for tomor-row’s biotherapeutics, biofuels, biofibers and other natural extracts.

Over the last 7 years, we have heavily invested to make Cellectis the world leader in genome engineering and meganucleases with tailor-made specificities. We are continuing to broaden our self-owned patent portfolio and expand the intellectual property exclusively licensed to us by Institut Pasteur.

We regularly invite critical appraisal and comment from our Scientific Advisory Board – composed of world-renowned, independent experts in our field of activity and who act as guarantors of our scientific excellence.

LETTER FROM THE CEO

Dr. André ChoulikaCEO

l Cellectis l 2006 Corporate Profile l Letter from the CEO l 8

Our strategy – focusing on our strengths and exploiting them fullyCellectis is a pioneering company in the field of meganuclease-based genome engineering. We are exploit-ing (and will continue to exploit) our privileged positioning and innovative products in order to seize sig-nificant market share in our three target markets. We believe that the value of our company is proportio-nal to our scientific excellence, the range of highly innovative active substances we own and our ability to create new ones, our alliance management capacities, the size of the markets that our current and future products are targeting, our financial strength in developing and commercializing these products and the skills and talent of the people who are contributing to Cellectis’ success.

Our scientific researchOur R&D platform has already generated 12 novel meganucleases targeting high value genomic DNAtargets, 8 of which were created and produced in 2006. Each meganuclease makes a unique, site-specific break in the genome of a given living species, in order to induce DNA repair and recombination. Thus, each meganuclease has a unique application in a single organism and is covered by a specific patent. We are exploiting our technology in order to reprogram cellular DNA in a rational and effective way. Our ability to generate a large variety of meganucleases with novel, dedicated specificities prompts us to envisage a broad range of business opportunities for our products. A meganuclease can act as a therapeutic product if it enables the repair of a gene responsible for a human disease (restoring healthy cellular functions) but can also be used as a production tool for biologicals such as recombinant therapeutic proteins and novel prod-ucts from agricultural biotechnology (in order to reduce soil pollution or optimize biomass management, for example). Lastly, targeted DNA recombination enables researchers to achieve a better understanding of genetic programs and helps them develop new drugs and therapies.

Our target marketsIn the mid to long-term, our objective is to develop a range of therapeutic products for (i) treating monogenic genetic diseases, (ii) fighting persistent viral infections and (iii) reducing graft rejection (the healthcare market). In addition, we are manufacturing products which generate revenue in the short to mid-term as research reagents (the research market) and processing aids in protein production and biomanufacturing (the biotechnology market). Lastly, we aim to develop products which would enable the generation of new varieties of seeds, produce biofuels and create novel biofibers and biomaterials in the agricultural biotechnology market. Since the company’s incorporation, Cellectis has signed over 45 international industrial agreements in these three target markets.

Our intellectual property portfolioIn seven years, we have built up a portfolio of almost a hundred patents and patent applications – some of which are exclusively licensed to us by Institut Pasteur and others of which have been filed by our researchers - and we shall continue to grow this portfolio by exploiting our unique know-how in protein design and genome engineering. In fact, the portfolio is composed of 27 granted patents and 69 pending patent applications covering commercially valuable territories such as Europe, the USA and Japan (one of which was granted to the company and with 3 new filings in 2006). Even though the portfolio of patents in-licensed from Institut Pasteur is maturing, the recently-filed patent applications and those wholly owned by Cellectis are giving greater protection to our technologies and products.

Our financial statusThe last few years have featured intensive investments in fitting out and furnishing our labs. In 2006, our income statement showed an operating loss of 3.7 million. As of December 31st, 2006, the company held 5 million in cash and cash equivalents, i.e. a decrease of 2.5 million relative to 2005. Revenuesamounted to 2.5 million and reflect the product shift in our business model – that is to say our migration to a business model based on commercialization of MRSs generated by our platform, which thus limits revenues from our sales of sublicenses to Institut Pasteur’s technologies. 2006 was the launch year for our own MRS sales; we have initially focused on our custom offering of meganucleases with dedicated specificities in the field of agricultural biotech in order to start building our product portfolio – represent-ing the company’s current and future assets and value – and have generated our first revenues from sale of our own MRSs.


The people behind CellectisWe have strengthened our management team and have been able to attract Marc Le Bozec (the former CEO and founder of BioProtein Technologies) to act as the company’s CFO. Marc’s arrival also enabled us to initiate the IPO preparation process in October 2006. David J. D. Sourdive took up his new position as VP Corporate Development and immediately boosted the company’s commercial activity with the strong emergence of our dedicated-specificity meganucleases. Our Board of Directors (chaired by Christian Policard) tragically lost one of its distinguished members – François Hyafil, Scientific Director of Glaxo SmithKline’s research center in Les Ulis, south of Paris. Our Board of Directors, Scientific AdvisoryBoard and management team are all composed of highly qualified individuals capable of taking the company to the top in this industry and who fully endorse our corporate mission through their demon-strated day-in, day-out commitment to growing Cellectis.

Thus, 2006 was truly a year of exciting change for Cellectis, as the company triggered a new phase of its business model based on sales of self-made products. 2006 was also the year during which we laid the foundations for our future development and robust & enduring value creation for our shareholders. I am convinced that 2007 will see us confirming our ability to translate our innovations into a variety of breakthrough products. Thanks to the support of our shareholders and the commitment of our people, I have great confidence in the pursuit of our efforts to confirm and strengthen our position as leaders in rational genome engineering in what is a highly competitive biotechnology market. We shall also rein-force our visibility and impact thanks to demonstrated proofs-of-concept for Cellectis technologies. Ourproducts will constitute the cornerstones of tomorrow’s biotechnology and will deliver improved quality of life to millions of individuals – by respecting what makes them individuals, in fact!

I wish to thank you for your ongoing support and confidence in Cellectis.

André Choulika,Chief Executive Officer



RESPECT.IT’S IN OUR DNA.The only available technology for precise intervention in the DNA genomes of diverse organisms, to correct a defective gene without damaging the rest of the genome or adding foreign genes.

DNA is the blueprint for all the functions of living organisms. The first attempts at DNA modification, aiming to reprogramme cells, were initiated in the 1970s and fostered the biotechnological revolution. However, the major applications of this work are still based on the random insertion of DNA sequences in the genomes of living organisms. This is the case for gene therapy and the production of therapeutic proteins, such as insulin (the first biotechnological drug, approved in 1982), growth hormone and erythropoietin (EPO), the best-selling therapeutic wordwide, accounting for over 10 billion dollars of sales in 2005 (source: Arthur D. Little).

The random insertion of genetic material is currently the main obstacle to the development of gene therapy, as it may entail a certain number of deleterious consequences. The entire human genome has been sequences and has been available since 2000. This important milestone in scientific progress has led to an acceleration in the decoding of many other genomes. As a result, huge amounts of data are now available to researchers, concerning the genetic programmes of diverse species and the underlying basis of many diseases. However, access to this information, for its correction or exploitation, remains very limited.

Cellectis is the first company in the world to commercialise a technology for in vivo intervention in the genomes of various species. For the first time, thanks to Cellectis technology, a defective gene can be corrected in situ, without damaging the rest of the genome or adding foreign genes.

The foundation of the Company was based on the following idea: we will only be able to exploit what is encoded by the genome of living organisms once we know exactly how to reprogramme the DNA in a rational and precise manner. Cellectis has designed an artificial system, based on induction of the natural DNA repair system, making it possible to “cut & paste” genetic material in any specifically selected gene.

Cellectis invested seven years in the transition from the design stage to the commercialisation of its products and development of its platform based on proprietary technology: a new type of “molecular scissors” – meganucleases – capable of very specifically recognising, fixing and cutting DNA. The Company designs and manufactures meganuclease recombination systems (MRS),which associate the “molecular scissors” with a DNA matrix. The MRS can be used to modify and correct DNA sequences in vivo, in a precise and reliable manner, without the need to add foreign genes. An MRS consists of a protein, the meganuclease, which reliably recognises and cuts the target DNA sequence, and a repair matrix containing the information to be inserted at the cleavage site, to modify the gene in the desired manner.

CELLECTIS ORIGIN AND APPROACH

l Cellectis l 2006 Corporate Profile l Cellectis origin and approach l 12


DIVERSITY.IT’S IN OUR DNA.Applications in three target markets with high commercial potential: biotechnology, agronomy and health.

MARKETS AND PRODUCTS

Biotechnology (a booming market estimated at several billion dollars – source: Datamonitor, April 2005) In the field of therapeutic protein production, Cellectis MRS applications have unique competitive advantages in terms of production processes, decreases in cycle time and improvements in therapeutic protein quality. The specificity of MRS ensures the safe and reliable targeting of active genome sequen-ces. MRS are also very simple to use in the development of manufacturing processes.

Agronomy (seed market estimated at 30 billion dollars in 2005 – source: Vilmorin, July 2006)In this field, few traditional approaches meet the need for improvements in agronomic traits and for rapid, rational and safe intervention. MRS applications can increase productivity, limit environmental impact and improve the biomass and qualitative nutritional qualities of seeds. The specificity of MRSmakes it possible to control the end product and reduces the time required to develop improved seeds. This system also has the advantage of avoiding the insertion of foreign DNA (the SAGE – SansAdjonction de Gène Etranger, without the addition of a foreign gene – system). It can also replace a given allele of a given gene in the plant by a different allele from the same plant and remove traits considered undesirable by certain consumers.

Health (a booming market with enormous potential)The main applications of ”DNA surgery“ concern genetic diseases (gene reparation), viral diseases (virus excision) and cell therapy (tissue transplantation and engineering), for which traditional pharma-ceutical approaches have proved ineffective. The potential clinical benefits to patients are significant. Therapeutic meganucleases have tremendous commercial potential and represent a totally innovative approach to medicine. Therapeutic mega-nucleases can be used to modify the defective gene, thereby treating the cause of the disease rather than its effects. They can be used to treat diseases resistant to conventional pharmacological approaches: they can repair, insert or inactivate a genomic target, including certain viral DNA genomes, with surgical precision. Finally, therapeutic meganucleases can also be used alone, in the absence of a reparation matrix, to induce cleavage in a DNA target. The genetic information at the cleavage site can then be modified or eliminated (inserted DNA viruses, for example) to restore normal cell functioning.

In the field of researchFinally, specifically modified meganucleases have many potential applications as research tools, particularly for studies of gene function. Commercial prospects in this field are more limited, but the widespread use of the Company’s innovative technology in this field could lead to its being adopted as the global standard for rational and precise genome modification.

PRODUCT PORTFOLIO

Products Pipeline

Building a diversified

pipeline. Securing

mid-term profitability

an long-term upside.

Therapeutic DevelopmentProof of Concept Skin Cancer

ImmunodeficiencyPotential Blockbusters Sickle Cell Anemia

Hepatitis BAllogenic transplant

MRS Design In vitro Testing Preclinical Trials Phase I/II

MRS Design In vitro Testing Licensing Out

2006 2007 2008 2009 2010

Commercialisation of ToolsPharmacogenomic 10 BioProduction Mouse constitutive

CHO constitutiveHuman constitutive

Plants N. D. Target

2006 2007 2008 2009 2010

l Cellectis l 2006 Corporate Profile l Markets and products l 14


VALUES. IT’S IN OUR DNA.Construction of an extensive portfolio of products to secure income generation.

PRODUCT PORTFOLIO

An extensive and solid patent portfolio protecting the Company’s technology, products, know-how and data

On October 1 2006, the Company held the rights to 20 families of patents, corresponding to 27 patents already granted (26 belonging to the Institut Pasteur) and 69 under examination (38 filed by the Institut Pasteur and 31 by the Company), in France and abroad. In 2006, Cellectis obtained one patent in its own right and filed three new patent applications.

The Company has decided to protect its technology, products, know-how and data (the accumulation of genomic sequence data for many organisms has continued since the genomic revolution in the 1990s when the human genome sequencing programme began) not only by patents, but also through the conclusion of confidentiality agreements with its employees, consultants, certain subcontractors, its partners and licensees.

Homologous Recombination Europe 1 2 0

USA 3 2 0

Others 5 0 0

Meganucleases Europe 0 8 0

USA 13 9 6

Others 0 34 12

Others Europe 2 3 1

USA 1 4 2

Others 2 7 3

Total 27 69 24

Granted Patent Application Being examined

CLS

l Cellectis l 2006 Corporate Profile l Product portfolio l 16


EXCELLENCE.IT’S IN OUR DNA.State-of-the-art science, unique in the world, with no equivalent intellectual property in rational genome engineering.

Cellectis is following a clear, defined strategy to achieve this goal. We are focusing our efforts on our field of excellence: the design and manufacture of genomic programming systems. This will enable the Company to implement its strategy as follows:

• The signature of commercial agreements in its three priority fields of application: health, biotechnology and agronomy.

• The active distribution of its technology as a research tool for leading academic and industrial laboratories.

• The priority commercialisation of on-shelf products (products designed and manufactured by Cellectis and sold on a large scale in a non-exclusive manner, as opposed to tailor-made products, ordered by a customer and sold exclusively).

• The consolidation of privileged partnerships in health and agronomy concluded with certain key accounts.

• The perpetuation of its competitive position by the ongoing expansion of its patent portfolio and continuing technological advance through its know-how.

To date, the income of the Company has been derived from the sale of sublicences for technologies stemming from its historical partnership with the Institut Pasteur (40% of royalties owed to the Institut Pasteur). Since 2006, Cellectis has entered a new stage of its economic development and now genera-tes income by the sale of products based on its own technology (3% of royalties owed to the Institut Pasteur).

The funds that the Company intends to raise in 2007 will be used:

• To increase current production capacity to the level of 20 MRS per year by 2008.

• To strengthen the sales, marketing and communication teams.

• To intensify its research and development efforts concerning meganuclease engineering, homologous recombination and the MRS manufacturing process.

STRATEGY AND BUSINESS MODEL

Within the next three to five

years, Cellectis intends to become

the world leader in genome

engineering and the worldwide

reference in genomic surgery.

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THE FUTURE.IT’S IN OUR DNA.2006: The year of the commercial launch of MRS.

Each MRS concerns a single application, relating to a given gene in a given organism. Indeed, the mega-nuclease “scissors” cut at a unique DNA sequence, existing only at the desired site in the given organism. The meganuclease cannot cut at other sites and is therefore of no use for other applications.

Meganucleases are manufactured in two stages: meganuclease manufacture and MRS manufacture (meganuclease recombination system). This entire process takes about nine months and requires several highly qualified individuals and complex robotic equipment in specialised laboratories. At the end of this process, Cellectis has an MRS that modifies the identified target genome for a customer (tailor-made product) or for the general market (on-shelf product or therapeutic product).

There are many thousands of potential targets in human or animal genetic diseases, viruses, genes involved in transplant rejection, plant genes for the production of ”green“ fuel or biofibres, chromosome positions in mammal cells for the production of biotechnological drugs, and so on. Cellectis’ strategy is to invest its efforts in targets with a very high commercial potential (on-shelf products and therapeutic pro-ducts), and to satisfy requests from current and future customers to manufacture products in the scope of the value chain of high-potential markets.

Cellectis’ first products were released during the third quarter of 2006 and their commercialisation was based principally on the existing customer portfolio. A first contract was signed in spring 2006 with BayerBiosciences, an agrobiotech company (tailor-made product). Several other contracts of the same type are being negotiated, five to seven of which should be signed in 2007, principally in the agronomic and biotechnology fields (bioproduction).

MRS are commercialised in three ways:

For therapeutic products – Cellectis identifies an interesting target and develops an MRS up to the vali-dation stage, with the possible intervention of third parties (academic partners, service providers, research companies under contract, etc.). Once validated, the product is offered, under exclusive licence, to a pharmaceutical group or a biotechnology company, which can then continue clinical trials in humans to obtain an authorisation for market release.

For tools – Cellectis identifies an interesting target and develops an MRS up to the validation stage, with the possible intervention of third parties (academic partners, service providers, research companies under contract, etc.). It then sells the manufactured product (kit), non-exclusively, to various customers (on-shelf product).

For tailor-made products – the customer defines its specific needs and Cellectis develops a tailor-made MRS for its exclusive use. This type of contract involves advance financing by the customer, before the delivery of the MRS (tailor-made product). Cellectis is paid based on the profit generated by the MRS in the product value chain developed by the customer.

Income resulting from MRS sales:

• Lump-sum licence payment for access to the technology (“upfront”).

• Payments once technical and/or regulatory milestones have been overcome.

• Annual lump-sum payments for intellectual property maintenance (“annual fees”).

• Payment of royalties on finished product sales.

SALES POLICY

l Cellectis l 2006 Corporate Profile l Sales policy l 20


PRECISION.IT’S IN OUR DNA.A team of 40 employees, including 16 with a PhD.

André Choulika (aged 42), PhD, founder of the company. Dr. Choulika is one of the pioneers in the field of meganuclease analysis and applications for complex genome modification. He obtained his PhD in molecular virology from the Pierre and Marie Curie University - Paris VI, before moving on to a postdoctoral position in the Genetics

Department of the Harvard Medical School.Subsequently, at the Molecular Medicine depart-ment of Boston Children’s Hospital, he developed the first approaches to the use of meganucleases in human therapy. He also trained at the HEC (Challenge +).

David Sourdive (aged 40), PhD, and cofounder of the company. After completing his PhD in molecular virology at the Institut Pasteur, Dr. Sour-dive joined one of the leading laboratories in the field of anti-viral immunology, at the Universityof Emory (Atlanta, USA), where he worked on

immunological memory. Before founding the Company, he directed the Biotechnology Labo-ratory at the Centre d’études du Bouchet / DGA(Ministry of Defence) between 1998 and 1999. He also trained at the prestigious Ecole Polytechni-que and the HEC (Challenge +).

Marc Le Bozec (aged 37). Until September 2006, Marc Le Bozec was Operations Manager with Alfact Innovation (Paris, France). He has over ten years’ experience in biotechnologies as both a consultant (Arthur D. Little, Paris office), and then

as founder and CEO of BioProtein Technologies(France), a company dedicated to the production of recombinant proteins in the milk of transgenic animals. He holds an HEC degree.

Frédéric Pâques (aged 40), PhD, joined the Company in October 2001 as Research and Deve-lopment Manager. Frédéric Pâques is a world-renowned expert in the field of DNA recombina-tion mechanisms. A former student at the Ecole Normale Supérieure (Ulm), he obtained his

PhD from University Paris XI in 1994 before under-taking postdoctoral studies at Brandeis University(Waltham, MA, United States of America),where he led major projects on DNA recombination in yeast. On his return to France, he took up a position as a researcher at the CNRS.

GOVERNANCE

Dr. André ChoulikaCEO

Dr. David SourdiveVice President

Corporate Development

Marc Le BozecCFO

Dr. Frédéric PâquesCSO

l Cellectis l 2006 Corporate Profile l Governance l 22

BOARD OF DIRECTORS

Chairman of the Board of Directors: Christian Policard (aged 58) holds a PhD in biochemistry. After founding and developing various biotech-nology companies in France and the United States(1972–1983), he worked for Sanofi Synthelabo(1983–1999), becoming a member of the Execu-tive Committee in 1988. He served as Valorisa-tion and Industrial Partnerships Manager at the

Institut Pasteur (2000–2005), and then became Vice Chairman of the Israeli virtual biotechnology company incubator, EAGER BIO. In early 2002, he also cofounded the joint-venture company BiotechDéveloppement Conseils, of which he is still a shareholder.

Martin Bitsch (aged 62), permanent representative of Kaminvest Holding, administrator, MD, for-mer intern of hospitals in Denmark and Sweden.After ten years of medical practice, he joined the pharmaceutical industry by becoming Director of Clinical Investigations with Roche for Scandina-via and then for America and Europe and finally, the world. In 1996, he joined the IBAH group,

firstly as director of the Scandinavian zone, then as supervisor in Russia, Belarus and the Ukraine.Between 1998 and 2004, he was an independent investment advisor for Bankinvest Venture, a fund specialising in French biotech companies. He is also a former permanent representative of Bankinveston the Company’s Board of Directors.

André Choulika, CEO and founder

Raffy Kazandjian (aged 46), Administrator, holds a chemical engineering degree from the ENSCP, an MIT (MS 1985) degree and an INSEAD business administration degree (MBA 1990). With 15 years of experience in venture capital management, Raf-fy Kazandjian started his professional career with-in the multinational company Procter & Gamble (1985). Between 1990 and 1994 he founded and managed two French biotechnology companies

(Biovector and Medafor), then joined Synthélabo(1994) as director of over-the-counter drugs group strategy. Raffy Kazandjian became Chairman and Executive Committee member of CDC-Innova-tion (1998–2000), one of the most important French funds, which he joined in 1996. Finally, he founded Unicorn BioTutors, a consultancy com-pany providing counselling and assistance for small and medium-sized companies in the biotech and

Thierry Laugel (aged 40), permanent representa-tive on the AGF Private Equity Board of Directors, holds a doctorate in Pharmacy, a PhD in pharma-cology and an MBA from INSEAD. He joined AGFPrivate Equity in 2006. From 1998 to 2006, he was Managing Director of PharmaVent Partners, after working as a health investment manager with CDC Entreprises Innovation. During these years, he was

a reference investor in more than ten companies in Europe and the United States and was a member of the Boards of Directors of most of these compa-nies. Before becoming involved in venture capital management, Thierry Laugel held managerial positions in pharmaceutical (Fournier Japan) and biotech (Flamel Technologies) companies.

David Sourdive, Corporate Commercial Manager and co-founder

Thomas Tscherning (aged 39), a permanent re-presentative of Bankinvest, joined the BankInvest Group (Denmark) health and biotechnology team in 1997. As a former clinical investigator, Thomas Tscherning has solid experience in the clinical stages of therapy development. He holds an MD

from the University of Copenhagen, which awar-ded him first prize for his thesis on neuroimmuno-logy. He also worked as a postdoctoral research at the Karolinska Institute (Sweden), and has written more than 20 scientific articles and a monograph on venture capital financing.

Marc Mortureux is the permanent representative of the Institut Pasteur (censor): a former Ecole Polytech-nique student and engineer in the Mines Inspecto-rate, he has both public and private experience. He began his career as a civil servant, spending ten years in regional industrial and research management in Ile-de-France, then at the Ministry of Industry. He then spent four years as a research and development

manager, before becoming a manager at the Com-pagnie Générale de Géophysique, a private company in the oil sector. He then joined the Laboratoire National de Métrologie et d’Essais (LNE), which he directed for six years. Marc Mortureux joined the Institut Pasteur on December 1, 2005 as Deputy Chief Executive Officer in charge of resources.

Scientific CommitteePr. François Jacob

(Honorary Chairman)Rodney J. Rothstein

(Chairman)Bernard Dujon

James E. HaberLuis Serrano

Denis PomponFrederick W. Alt

Finance CommitteeRaffy Kazandjian

(Chairman)Thomas Tscherning

Marc MortureuxMarc Le Bozec

Remuneration CommitteeChristian Policard

(Chairman)Raffy Kazandjian

AGF Private Equity(T. Laugel)

l Cellectis l 2006 Corporate Profile l Governance l 23

VISION. IT’S IN OUR DNA.Vision: we aim to become the world leader in genome engineering and the worldwide reference for rational genome engineering.Implementation of a clear and ambitious strategy.

l Cellectis l 2006 Corporate Profile l Main financial items l 25

MAIN FINANCIAL ITEMS ANDCAPITAL STRUCTURE ON DECEMBER 31 2006

AssetsAmounts expressed in euros

ASSETS 31 December 2005 31 December 2004

GrossAmortis. & provisions

Net Net Net

Trade marks 66,703 0 66,703 66,703 66,703

Software & software licenses 192,521 175,951 16,570 34,707 43,162

Patents 359,867 31,742 328,125 188,109 102,739

Biological licenses 36,083 36,083 0 0 8,083

Advanced payments and desposits 0 0 0 0 0

Intangible assets 655,174 243,776 411,398 289,519 220,687

Land 0 0 0 0 0

Building 0 0 0 0 0

Technical facility, equipment 2,532,822 1,063,526 1,469,296 1,562,345 1,585,902

General facility 261,567 4,392 257,175 5,383 0

Office equipment & hardware, furniture 252,352 191,641 60,711 87,032 100,770

Ongoing tangible assets 0 0 0 25,150 0

Tangible assets 3,046,741 1,259,559 1,787,181 1,679,909 1,686,673

Investment in equity 0 0 0 0 0

Credits attached to investment in equity 0 0 0 0 0

Other financial assets 68,250 0 68,250 68,250 0

Financial assets 68,250 0 68,250 68,250 0

Total fixed assets 3,770,165 1,503,336 2,266,829 2,037,678 1,907,360

Raw material 0 0 0 117,909 93,635

Work in progress 0 0 0 0 0

Finalized products 0 0 0 0 0

Consumables 155,233 0 155,233 0 0

Contract works 0 0 0 0 0

Goods 0 0 0 0 0

Inventories 155,233 0 155,233 117,909 93,635

Advanced payments on orders 1,640 0 1,640 1,640 1,640

Customers & related accounts 685,296 0 685,296 1,372,754 387,644

Other receivables 2,981,559 0 2,981,559 2,079,809 1,401,434

Receivables 3,666,855 0 3,666,855 3,452,562 1,789,079

Financial instruments 287,188 0 287,188 0 0

Cash & cash equivalents 4,684,198 0 4,684,198 7,650,102 1,936,355

Miscellaneous 4,971,387 0 4,971,387 7,650,102 1,936,355

Total current assets 8,795,116 0 8,795,116 11,222,213 3,820,709

Prepaid charges 68,775 0 68,775 91,340 35,196

Unrealized exchange loss 95 0 95 49 0

Adjustment accounts 68,870 0 68,870 91,389 35,196

TOTAL ASSETS 12,634,151 1,503,336 11,130,815 13,351,281 5,763,265

31 December 2006


Liabilities

Amounts expressed in euros

LIABILITIES 31 December 2006 31 December 2005 31 December 2004

Share Capital 253,834 126,917 126,913

Share Premium 11,587,719 11,745,954 11,745,577

Legal reserves 0 0 0

Regulated reserves 57,791 0 0

Other reserves 0 0 0

Retained earnings (9,161,172) (8,389,194) (5,790,826)

Net loss (3,395,858) (771,979) (2,598,367)

Equity (657,686) 2,711,698 3,483,297

Income from the issuance of other securities 5,689,828 5,633,908 0

Other equity 927,286 762,898 547,200

Other equity 6,617,115 6,396,806 547,200

Provisions for liabilities 68,636 40,425 0

Provisions for charges 0 0 3,300

Prov. Liabilities & Charges 68,636 40,425 3,300

Borrowings 0 0 0

Financial loans & debts 595 595 1,301

Suppliers debts & related accounts 4,372,743 3,405,503 960,060

Tax & social debts 518,562 599,140 408,999

Liabilities on fixed assets 39,706 41,591 354,104

Other liabilities 30,000 0 0

Liabilities 4,961,606 4,046,829 1,724,464

Prepaid Income 141,130 155,521 4,970

Unrealized exchange gain 15 1 34

Miscellaneous 141,145 155,522 5,004

Total Liabilities 11,130,815 13,351,281 5,763,265


Profit & Loss account

Amounts expressed in euros 2006 2005 2004

Sales & Licensing revenues 0 0 0

Services 1,188,478 5,904,915 699,380

Miscellaneous 0 0 0

Sales 1,188,478 5,904,915 699,380

Subsidies 1,290,790 242,828 209,031

Provision recovery 3,223 3,300 169,390

Other revenues 238 17 259

Operating revenue (Subtotal I) 2,482,729 6,151,060 1,078,060

Purchase of goods 0 0 0

Inventories deviation 0 0 0

Puchase of raw material 614,294 582,654 533,275

Raw material inventories deviation (37,324) (24,274) (70,132)

Other external expenses 2,356,070 1,673,204 1,158,835

Tax 197,128 103,512 30,742

Employee benefit & compensation 1,763,736 1,695,739 1,444,034

Social charges 409,106 422,551 443,267

Depreciation

on fixed assets 405,549 394,862 344,026

on current assets 0 0 0

for liabilities and charges 28,165 40,376 2,175

Other expenses 463,385 2,508,327 401,578

Total operating expenses (Subtotal II) 6,200,109 7,396,952 4,287,800

R.1. Operating income (I-II) (3,717,379) (1,245,891) (3,209,740)

Other interests & related revenues 174,885 57,061 72,748

Provision recovery 49 0 23,146

Positive exchange deviation 487 2,895 2,145

Net revenues on financial instruments 0 0 0

Total financial revenues (Subtotal III) 175,420 59,956 98,039

Financial depreciation 95 49 0

Interests & related charges 63,658 38,383 1,618

Negative exchange deviation 2,998 520 982

Total financial expenses (Subtotal IV) 66,751 38,953 2,600

R.2. Financial income (III-IV) 108,669 21,003 95,438

R.3. Loss before tax (R.1+R.2) (3,608,710) (1,224,888) (3,114,301)

Exceptional revenue on operations 0 0 0

Exceptional revenues on equity 0 1,095 0

Provision recovery 0 0 0

Total exceptional revenues (Subtotal V) 0 1,095 0

Exceptional charges on operations 0 0 17,062

Exceptional charges on equity 0 1,059 0

Exceptional charges on depreciation 0 0 0

Total exceptional charges (Subtotal VI) 0 1,059 17,062

R.4. Exceptional income (V-VI) 0 36 (17,062)

Research tax credit (VII) (212,852) (452,873) (532,996)

Net loss (R.5+VII) (3,395,858) (771,979) (2,598,367)


Capital structure in 2006

OdysseeVenture

8%

Founders,Personnel &Managers

25%

InstitutPasteur

7%

BankInvest21%

Kaminvest16%

AGF PrivateEquity15%

LCFRothschild

8%

Cash flow table


Amounts expressed in euros 2006

Cash and cash equivalents 7,650,102

Short term financial debts

Net opening cash position 7,650,102

Operations

Net Loss (3,395,858)

Depreciation & provision deviation 433,760

Intangible depreciation deviation 405,549

Tangible depreciation deviation 28,165

Financial depreciation deviation 95

Subsidies

Gain / Loss on assets assignment

Changes in working capital 671,299

Net cash generated from / (used in) operating activities (2,290,799)

Investment

Intangible investment deviation (155,500)

Tangible investment deviation (479,200)

Financial investment deviation

Net cash used in investing activities (634,700)

Equity

Capital increase

Share premium

Bonds to be reimbursed in shares 82,394

Financial debts / Refundable advances 200,000

Loans & financial debts repayment (35,611)

Net cash generated from financing activities 246,783

Net increase / (decrease) in cash & cash equivalents (2,678,716)

Cash & cash equivalents at the end of the year 4,971,386

© Cellectis SA, 2007

Photos: Cellectis SA and Cédric Porchez (portraits)

Printed by Bowne International, Paris

Cellectis SA, 102 route de Noisy

93235 Romainville Cedex, France

Phone +33 1 41 83 99 00, Fax +33 1 41 83 99 03

[email protected]

www.cellectis.com

www.cellectis.com

Documents

Cellectis - Annual Report 2006