Cellectis - Annual Report 2009

8/9/2019 Cellectis - Annual Report 2009

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ACTIVITY REPORT

2009


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CONTENTS

Cellectis in a Nutshell

Word rom the CEO

Activity and Markets

Our Strategic Goals

Product Porolio

1999 2009: 10 YEARS IN PICTURES

2009 HIGHLIGHTS

Scientic Updates

Intellectual Property

New Contracts and Partnership Agreements

COMPANY

Governance

Subsidiaries

Human Resources and Communications

FINANCIAL STATEMENTS


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INNOVATION

ITS IN OUR DNA


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l Cellectis l Activity Report 200 9 l 5

CELLECTIS IN A NUTSHELL

Cellectis is a pioneer in the feld o genome engineering.The company designs and markets meganucleases

innovative tools that enable targeted modifcations

to DNA with three primary aims: understanding,

production and treatment. These meganucleases are

applied in the research, biomanuacturing, agrobio-

technology and therapeutic sectors.To date, Cellectis has established more than 50 agree-

ments with pharmaceutical laboratories, seed producers

and biotech companies across the world, and has

ormed over 20 academic research partnerships.

Cellectis was ounded in 1999 by scientists Dr. AndrChoulika and Dr. David Sourdive with an exclusive

technology license rom the Institut Pasteur. Rodney

Rothstein o Columbia University chairs the companys

Scientifc Advisory Board, composed o internationally

renowned scientists.

Since 2007, Cellectis has been listed on the NYSE-

Euronext Alternext market in Paris and has secured

over70 million in unding since inception.

While pursuing an aggressive plan or growth, the

company has maintained a low cash burn because

o increasing revenue streams rom product sales,production and partnering, and licensing activities.

Worldwide pioneer in genome engineering

Established in 1999, listed on the

NYSE-Euronext Alternext market

in Paris since 2007

Operating Revenues 2009: 12.1 M

(80% rom international revenues)

Sta: 85 including 32 PhDs

3 afliates:Cellectis bioresearch,Cellectis genome surgery, Ectycell

Applications: research and biomanuac-

turing, agrobiotechnology, human health

Main technologies: meganuclease-based

genome engineering, meganuclease

engineering

IP portolio: 60 patents granted plus

over 200 pending

Location: Paris area


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6 l Cellectis l Activity Report 2009 l

In 2009, Cellectis celebrated 10 years o sustained growth in research, development,

application and marketing o meganucleases, the sequence-specifc enzymes that

are the basis o our business. These DNA scissors induce cut and paste o DNA

sequences at very specifc locations in living cells, oering powerul applications

and potential in the felds o human therapeutics, agriculture and biouels, among

others. The genome engineering technology based on meganucleases that we have

developed can potentially be applied to any living organism. During my years in

research, I recognized that changing the specifcity o these enzymes allowing

them to target desired sites precisely would make a tremendous tool or genome

surgery and an excellent basis or a company.

As we look orward to accomplishing uture goals, this 10-year anniversary is an

opportunity to take stock o what we have achieved. We have initiated and led the

eld o genome engineering internationally, thanks to unwavering dedication to our

initial vision. We have grown rom three enthusiastic scientists in the Institut Pasteurs

incubator to a company o almost 90 today. And because o our strong growth over

the years, we are now in a position not only to expand organically but also throughacquisition.

We ounded the company in December 1999, but when I look back, Cellectis actually

had its beginnings more than a decade earlier. In the late 80s, a research team at In-

stitut Pasteur, which I was honored to be part o, discovered meganucleases, enzymes

that promote DNA transer inSaccharomyces cerevisiae (bakers yeast). Shortly there-

ater, I began working on retroviruses and DNA recombination in mice. When we

began experimenting with meganucleases in mammalian cells, we incorporated the

recognition site o a meganuclease we were working on into a retrovirus. We thentried these DNA scissors out on inected cells. Suddenly the retrovirus disappeared.

We could remove the virus rom a cell, which was a total paradigm shit at the time in

terms o our way o thinking about antivirals.

The adventure that is Cellectis began at the end o 1999. In 2000, the Institut Pasteur

agreed to sign exclusive licenses with us or six amilies o patents relating to ho-

mologous recombination and meganucleases. That year we also won a competition

sponsored by the French Higher Education and Research Ministry, meant to help inthe development o technologically innovative companies.

Dr Andr Choulika

WORD FROM THE CEO

It all began with ordinary bakers yeast


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There were many milestones in the progress o our young company. We raised sub-

stantial venture capital in 2002, despite a dicult nancial environment. In 2004, we

moved to our current headquarters. That year also marked our rst major research

breakthrough we discovered a way to generate meganucleases on an industrial

scale, a crucial step to successully commercializing our technology. In January 2007,

Cellectis announced an initial public oering on the NYSE-Euronext Alternext market

in Paris. We raised24.4 million, and the IPO was more than six times oversubscribed.

Throughout this initial period, industry leaders such as Merck, Glaxo SmithKline, Shire,

BASF Plant Science and Limagrain had the oresight to see the potential o our tech-

nology. Our revenues have been growing steadily rom year to year.

This brings us to our 10th anniversary year, during which we had several major ac-

complishments. Our subsidiary, Cellectis bioresearch, which markets research and pro-

duction kits, launched ve new products. Cellectis genome surgery, our therapeutic

subsidiary, obtained consistent saety data supporting the potential o meganucleases

in human medicine. We ounded a new subsidiary, Ectycell, dedicated to the industrial

applications o stem cells. We completed a capital increase o 22 million. And wesigned our largest deal yet, a research, development and commercial agreement with

the agriculture biotechnology leader Monsanto.

For these successes, and those throughout Cellectis history, we must above all credit

the unwavering commitment o our sta, which has been the key success actor or

Cellectis. At all levels, in all departments rom research to accounting to the Board

o Directors Cellectis employees have exhibited strong loyalty and dedication, or

which we will continue to be thankul as we ace challenges in the uture. And as

we orge ahead in our role as industry innovators, well also try to remember howwe turned something small and ordinary, bakers yeast, into an extraordinary tool or

improving human health and well being in the coming decades.

Andr Choulika,Chie Executive Ofcer

Cellectis leads the eld

o genome engineering

internationally, thanks to

unwavering dedication

to our initial vision.


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ACTIVITY AND MARKETS

Since its ounding, Cellectis has sublicensed its intellectualproperty portolio based on meganucleases and

homologous recombination, originally licensed rom the

Institut Pasteur, but urther complemented by Cellectis

proprietary patents.

The technologies designed and implemented by Cellectis are applicable to all DNA types (hu-

man, animal, plant, viral and bacterial) and all genes o interest. They can unlock or restoreDNAs potential and are thereore open to a broad range o applications:

Human health: the replacement o a deective gene by a unctional gene (monogenic dis-

eases such as muscular dystrophy or hemophilia), the suppression o persistent viral DNA (HIV,

hepatitis B or herpes viruses) and the creation o stem cell lines with particular characteris-

tics. Cellectis is particularly involved in the research and development o therapeutic solutions

in cooperation with AFM (the French Muscular Dystrophy Association), the Necker-Enants

Malades Hospital and the Vision Institute.

Agrobiotechnology: the improvement o certain properties o plant crops through the re-

placement, addition or suppression o genes o interest or the modulation o their expression.

Five o the worlds leading seed producers BASF, Bayer Cropsciences, Pioneer, Limagrain and

Monsanto already use Cellectis technologies.

Research and biomanuacturing: through its subsidiary Cellectis bioresearch, the company

markets its cGPS (cellular Genome Positioning System) and cGPS Custom amilies o kits or

the in vitro modication o cell lines.


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The main biotechnology tools developed by Cellectis are based on the properties o mega-

nucleases, natural molecular scissors that can cut DNA at a highly precise site specic to eachmeganuclease. Once the cut has been made, it is possible to remove, integrate or substitute

a portion o the DNA with the same high degree o precision. Cellectis has exclusive usage

rights to nine Institut Pasteur amilies o granted or pending patents relating to the technolo-

gies underpinning this mechanism, in particular homologous recombination. Cellectis currently

holds about 60 granted patents, its complete portolio comprising over 260 patents granted or

pending, including the rights linked to Vectocell, a technology platorm acquired in 2009 by

Cellectis (see p24).

Each year, Cellectis designs and produces dozens o meganucleases with modied specic-ity, tailor-made or researchers and engineers in state-unded and private laboratories and or

clients in industry. These enable controlled, rapid, sae and reproducible modications o the

targeted portion o DNA. These collaborations, along with an active technology outlicensing

program and a rapidly expanding line o commercial research kits, have led to steady revenue

growth or the company. Cellectis expects to launch tens o new commercial research products

in 2010 and aims to reach sustainable protability in 2011 or 2012.

Any industry that dealswith living organisms be

they animals, plants or

microorganisms is potentially

a Cellectis market.Marc Le Bozec, CFO

DNA cut with incredibletarget specicity andDNA repair/insertion

Cut

Meganuclease

Human genome size:6.4 billion bases

(G, A, T, C).

Paste

2500nm

ChromosomeCell

The frst in vivocut and paste

Meganucleases are DNA scissors that cut DNA at a unique target site, creating an opening toallow sequence deletion, insertion and/or repair.


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Today we are proud to have established a business model that will continue to support us in

the coming decades as we pursue our role as innovators in the eld. Inherent to our strategic

mission are several types o challenges.

Maximizing Technology and Creating Innovation

The frst part o our fnancial strategy is to maximize our existing technology, based on the Institut

Pasteur technologies exclusively licensed to us, or optimal nancial return. In this respect, we

look to license access to our engineering platorm and homologous recombination patents and

maximize the monetization o our intellectual property.

In order to grow, we are simultaneously working to create, develop and commercialize new

products, such as the six innovative turnkey research kits we put on the market through oursubsidiary Cellectis bioresearch since 2008.

Our ocus as we grow will be to increase the value o our technology when and where it can

be useully applied. We thereore aim not only to enable others to create desired products, but

also to identiy and create them ourselves, establishing subsidiaries in select areas ranging rom

healthcare to academic research.

Pursuing Excellence in Diverse Fields

Cellectis strategy is to selectively diversiy its technology across dierent markets, leading

to short, medium and long-term revenue generation.

Capitalizing on current technologies

Our aim is to set the industry standard in DNA recombination through our research tools.

We thereore market our technologies to industry and academia. We want to be where

innovation begins.

OUR STRATEGIC GOALS

A single-minded ocus has driven us throughout ourhistory: to create a genome engineering market leader.

Although this sounds straightorward, this business model

did not exist when we ounded Cellectis 10 years ago.

Scientic data are led and protected.


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Building solid partnerships

The rapidly growing agrobiotechnology sector is investing heavily in technologies to gen-erate plant species or human consumption that are easy to grow, environmentally sae

and have high added-value or the consumers compared to classical plants. Our targeted

technology is perectly suited to these needs.

Investing in the uture

The development o human therapeutics to cure genetic or viral diseases is an exciting eld that

holds perhaps the highest growth potential or Cellectis though there still is a lot o work to

accomplish. This research necessitates a signicant investment o both time and capital, but we

are now beginning to obtain results and proos o concept sustaining the incredible potential oour technology in the eld o molecular medicine.

Upstream Research

Cellectis has succeeded in capitalizing on its leadership position. It is vital to strengthen this

position by investing in upstream genome engineering research, however. Our researchers are

leading us to urther advances in our knowledge o meganucleases the current basis o our

technology.

In addition to cutting-edge research, a critical area o growth or Cellectis will be combining

meganucleases with other technologies, mainly in the eld o vectorization, to be able to bring

the meganucleases in vivo to the cells where they are needed.

Strong Growth with an Eye on the Future

Our overall nancial strategy is to build a strong equity base. To do so, we need to achieve

strong internal and external growth. In the last two years, we have created three subsidiaries, each

dedicated to a specic market, while exploring several other promising avenues or growth.

External growth is the key component o our long-term strategy. It is largely or this reason that

we raised 22 million in capital in October 2009. We actively seek to develop organically and

acquire companies that will complement our technology and help speed up our development.

We want to be whereinnovation begins.David Sourdive, Executive VP,

Corporate Development


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PRODUCT PORTFOLIO

The purpose o the modifcation can be to

Understand the function of a given gene

Manufacture tools for research and development

Create biological products, such as therapeutic proteins or antibodies Improve the characteristics of certain plant species

Treat the cause of diseases resulting from a disruption in genetic

programming or rom a persistent viral inection

Our product portolio includes projects developed by Cellectis and our subsidiaries as well as

collaborative projects, particularly in the eld o agrobiotechnology. Cellectis devotes a large

part o its internal research eorts to therapeutic projects, which carry a greater risk but oer

high added-value in the long term.

Research and production tools using our meganucleases or academic and industrial research

laboratories are our other area o ocus. These have a short development cycle, they should

thus generate revenue in the short term and provide broad visibility or the Cellectis brand

worldwide.

Meganuclease Kits

Cellectis bioresearch has created the industry standard in targeted gene integration: cellular

Genome Positioning Systems (cGPS) and cGPS Custom, so named because the kits bring

the users choice DNA directly to a very specifc genomic address. To date, Cellectis bioresearch

has a total o six kits on the market fve o which were launched in 2009, a particularly

successul year.

The value o our precise system over more conventional random integration is that the results

obtained are ully predictable a single copy o the gene o interest will be integrated at the

same place in the genome every time and are thereore reproducible. This is not the case

with classical transection, which inserts a gene at random in the genome. Our systems also

result in stable integration, which is not the case or cells produced by random integration. The

cGPS and cGPS Custom kits also oer speed a process that once might have taken six to 18months may now take as little as our weeks.

Cellectis commercializes

products, not services.

We chose this route because

it has greater commercial

potential and it helps brand

Cellectis more broadly as best

in class and a game changing

technology provider.

Marc Le Bozec, CFO

Cellectis products are designed or targeted gene modi-cation. Their purpose is to modiy the DNA in a living cell,

or the benet o human health and wellness, with three

primary aims: understanding, production and treatment.


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The application o the kits is threeold:

1. Biological production: integration o a gene into a cell allows it to express a protein o interestsuch as a biodrug, or enables the engineering o post-translational pathways

2. Drug screening: modiying a cell line to express a receptor specic o a disorder, or example,

allow drug candidates to be screened

3. Functional genomics: comparison o two genes, identication o the role o a specic gene or

o genes are made possible, as well as the stable expression o shRNA or research purposes

Each cGPS kit contains a vectorized meganuclease and an engineered mammalian cell line

with a pre-integrated meganuclease recognition site, enabling 10 experiments:

cGPS CHO-K1: this kit is for using CHO cells to express therapeutic targets and for gene

unction studies

cGPS CHO-K1 Duo: enables targeted integration at two distinct genomic sites in CHO cells,

ideal or expressing multimeric proteins and establishing inducible expression systems

cGPS CHO-S Cemax: the ideal cell line i high titers o proteins are needed

cGPS NIH3T3: this product targets the murine cell line NIH3T3

For clients who wish to work with a particular wild type cell line, they can use cGPS Custom.

These kits contain a meganuclease that Cellectis has engineered to change its recognition site

sequence. Cellectis is constantly expanding the list o cell lines that can be customized in this

way. Products currently available include:

cGPS Custom CHO-K1: the frst engineered meganuclease targeting the original CHO cell line

cGPS Custom HEK293: our rst research kit for use on human cell lines

Meganucleases or Agrobiotechnology

Meganucleases can be engineered or use in any plant species. Cellectis uses its technology

and expertise to provide seed producers with meganucleases to make targeted modications in

plant genomes and develop the next generation o quality crops. The modications that bring

added value to existing plants include gene stacking, gene knock-out, as well as modulation o

gene unction.

One o the kits commercialized by Cellectis bioresearch.


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Therapeutic Products

Cellectis genome surgery is devoted to developing human therapeutic products that use mega-

nucleases as their active component. The companys targets are genetic diseases, such as sickle

cell anemia, muscular dystrophy and severe combined immunodeciency (SCID), as well as

certain viral diseases, such as hepatitis B, AIDS and herpes.

Genetic diseases: In many genetic diseases, such as sickle cell anemia, there is currently no

available therapy to treat the cause o the disease, but only to relieve the symptoms. Among

other projects underway, Cellectis genome surgery is developing meganuclease-based products

in partnership with the French Muscular Dystrophy Association (lAssociation ranaise contreles myopathies or AFM) to address such diseases as sickle cell anemia, beta thalassaemia and

Duchenne and Becker muscular dystrophies. The 7.3 million program, unded by AFM, is

working on the potential o a meganuclease-based therapy to correct a mutation that is respon-

sible or an inherited disease.

Viral diseases: In its development o antiviral products, Cellectis genome surgery obtained in

2009 a proo o concept o the eectiveness or anti-HSV (Herpes simplex virus) meganucle-

ases in cells as well as preliminary animal saety data supporting the use o vectorized antiviral

meganucleases. Most antiviral agents block the lie cycle o the virus at a certain stage but they

do not kill it. Meganucleases, acting as DNA clippers, can excise the virus rom cells, thereby

disabling it.

The structure o DNA, the nucleic acid that containsthe genetic inormation.


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1999 2009:

10 YEARS IN PICTURES


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1999 2009: 10 YEARS IN PICTURES

2

000

2

001

Cellectis original home, at the Institut Pasteur.

Cellectis is ounded. First in-licensing. Signature o the rst

licensing agreements.

Tridimensionalmodeling o a meganucleasecoupled to DNA.

The team in 2000.

The rst robots arrive.1

999


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002

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003

Establishment o the Scientic Advisory Board,

chaired by Pro Franois Jacob.

Engineering o the rst synthetic

hybrid meganuclease.

Pro Franois Jacob, recipient o the Nobel Prize inMedicine in 1965, currently Honorary Chairmano the Scientic Advisory Board.

Team discussions take place at every opportunity.

The Parc Biocitech.

The Fleming building,Cellectis headquarters.

The number oweekly screeningtests increases.

The frst screen-ing tests ormeganucleases.

A new stepin screening.

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004

Cellectis moves to Romainville


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Cellectis holds its

initial public oering.

First publication showing

the in vivo eectiveness

o meganucleases.

First custom meganuclease

engineered in the laboratory.2

005

2

006

2

007



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High-throughput screening.

The Cellectis team today.

Inception o

Cellectis bioresearch and

Cellectis genome surgery.

Cellectis bioresearch

launches its rst

meganuclease kits.

Cellectis is granted its 58th patent.

Inception o Ectycell.

Cellectis Wall o Patents, displaying some o the 58 patents granted to the company.

2

008

2

009


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2009 HIGHLIGHTS


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SCIENTIFIC UPDATES

Ten years ago, Cellectis was

established to industrialize

the design and develop-

ment o an articial system

or using the ull power

o genome engineering to

modiy any genomeprecisely at any location.

This system involved the combination o two

undamental technologies developed at theInstitut Pasteur, meganucleases (proteins that

cut DNA precisely at dened sites in vivo)

and homologous recombination (a naturally

occurring process whereby DNA can be

precisely replaced).

Individually, these two technologies have

limited applications. The low targeting e-

ciency o homologous recombination restrictsits use to a small number o species (such as

mice or yeast) and to academic research.

At the same time, the small number o natu-

ral or engineered meganucleases available

could cut DNA at only a ew predened

sequences, so the challenge was to indus-

trialize the production o meganucleases to

target a larger number o DNA sequences.

Thereore, using its capacity to create new

meganucleases with new and chosen recog-nition sites, Cellectis developed the rst-ever

technology or industrial scale, targeted in

vivo genome engineering using meganucle-

ases, which makes it possible to cut DNA

at any desired, predened site in a given

genome.

Today, Cellectis is a world leader in targeted

genome engineering, with a growing,diversied product portolio, cutting-edge

technology (validated by numerous scientic

publications, including ve in 2009) and a

strong intellectual property strategy.

The Mechanism o Meganucleases

There are numerous actors that can alter

the DNA o a cells genome, such as X-rays,

chemical products, certain enzymes and

even ordinary processes in the lie o any

cell (cell division, DNA replication). The

cells o all living species have a nely tuned

mechanism that enables them to repair

these alterations in the genome with the

aim o preserving its integrity.

Cellectis technologies are based on this

undamental mechanism that is common

to all living species. The cells endogenous

maintenance and repair system can be

used judiciously to introduce targeted

modifcations, in a precise and rational way.

Meganucleases are among the tools that

organisms use to repair DNA. They are a

particular class o endonucleases or DNA

scissors, capable o cutting a chromosomeat a specic site in a living cell. In nature,

meganucleases come rom single-cell

organisms such as bacteria, yeast, algae

and some plant organelles.

Meganucleases perorm cut-and-paste-

type operations at the site o their target

sequence. Meganucleases have a long re-

cognition site o 12 to over 32 base pairs,

which would potentially occur only once in a

genome. This is the key to their precision.This high degree o specifcity is what gives

meganucleases the potential to be the

ultimate tools or precise genome surgery

in living cells and organisms. Cellectis has

harnessed the power o meganucleases by

developing a unique method o redefning

the amino acids that play a role in DNA

recognition. We analyze the target DNA

sequence in which the modication is to

take place and select the preerred locali-zation o the target sites.



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l Cellectis l Activity Report 2009 l

Major Breakthroughs

Thanks to its protein-

engineering platorm,

which in 2009 increased

its production capacity

to almost 100 new mega-

nucleases per year, Cellectisis targeting very diverse

applications, rom antivirals

to crop improvement and

rom research and produc-

tion tools to therapeutic

molecules. Some o the

highlights rom a year that

saw the ruition o many

o our research projects are

described here.

Production Time Signicantly Reduced

Over the past ve years, Cellectis has built

an archive o more than 20,000 well-

characterized meganucleases the Omega-

base which Cellectis researchers have

used to generate signicant improvements

in the manuacture o new meganucleases.

By constantly improving its meganuclease

engineering processes, Cellectis made abreakthrough in 2009 in the eciency o

its technology platorm. This has resulted in

a reduction in the time required to produce

a new meganuclease, rom nine to three

months, in a large number o cases. Improve-

ments have resulted in an increase in capac-

ity while urther raising quality standards.

We created a milestone o 96 engineered

meganucleases in 2009, surpassing ourtarget o 20 set at the beginning o the year.

The 40th meganuclease was delivered to

the French Muscular Dystrophy Association

(lAssociation ranaise contre les myopa-

thies), the rst step toward what could be

a new class o drugs to ght Duchenne

muscular dystrophy.

Conrming the Power o Meganucleases

as Viral Clippers

In 2009, our R&D team obtained the rst

data strongly supporting the proo o

concept o the antiviral power o meganucle-

ases. In addition to correcting mutations

responsible or inherited disease, we can, or

viral diseases, introduce a meganuclease to

clear the cell o a virus. This method is called

virus clipping. Most antiviral agents cur-rently available block the lie cycle o a virus

at one stage during DNA or RNA synthesis,

or virus adsorption or instance but do

not kill it. Our researchers have shown that

meganucleases can directly destroy a virus by

removing it rom the genome o an organism.

A Look at the Meganuclease Portolio

Cellectis produces meganucleases or a broadvariety o targets o interest. During the

course o 2009, the product portolio was

expanded with many new meganucleases

and ve new cGPS kits, or a total o six kits

on the market (see p13). Today, Cellectis has

meganucleases that target the human ge-

nome, as well as that o the mouse, hamster,

plant, sh and several viruses.



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Spotlight on Two o Our Scientic

Publications

In 2009, Cellectis published, among others,

two papers in peer-reviewed scientic

journals detailing research that could aid in

the treatment o severe combined immuno-

deciency (SCID), an extreme orm o

heritable immunodeciency. SCID patients

oten die very early because o their

susceptibility to inectious diseases.

In July, Cellectis announced the publication

o Ecient Targeting o a SCID Gene by an

Engineered Single Chain Homing Endonucle-

ase in Nucleic Acids Research. This paper

is the rst to report the induction o gene

targeting in an endogenous gene by an en-

gineered meganuclease. The targeted region

was within the human RAG-1 gene, whose

inactivation results in SCID. Meganuclease-induced gene targeting could be achieved

in up to 6% o the treated cells, a level

compatible with therapeutic applications.

Further studies will be conducted with these

meganucleases in order to correct mutations

in patient cell lines and, potentially, to cure

SCID patients.

In August, work conducted by a team romthe French National Institute or Health and

Medical Research (INSERM unit U768) and

Cellectis was detailed in the paper Reduced

Immunoglobulin Class Switch Recombina-

tion in the Absence o Artemis, published in

Blood. The Artemis gene is involved in the

repair o double-strand DNA breaks; muta-

tions in this gene are responsible or SCID.The INSERM and Cellectis researchers bred

lines o mice in order to study the disease.

The results conrmed that Artemis is in-

volved in the maturation o B and T lympho-

cytes, and in immunoglobulin, the crucial

components o the adaptive immune system.

This work will make it possible to test new

approaches or treating SCID, particularly

using meganucleases.

Advances in Therapeutic Programs

Pharmacokinetic and toxicity experiments

have been conducted with I-CreI and with

anti HBV (hepatitis B virus) meganucleases

vectorized with AAV8. No acute toxicity

was detected with the I-CreI protein. There

seems to be a moderate immune responseagainst the AAV vector but it is still too early

at this point to make conclusions about

the toxicity o the vectorized protein itsel.

Publications in 2009

S. Grizot, J.C. Epinat, S. Thomas, A. Duclert,

S.Rolland, F. Pques and P. Duchateau

Generation o Redesigned Homing

Endonucleases Comprising DNA-Binding

Domains Derived From Two Dierent

Scaolds

Nucleic Acids Research, Advance Access,

published online December 21, 2009

P. Rivera-Munoz, P. Soulas-Sprauel,

G. Le Guyader, V. Abramowski, S. Bruneau,

A. Fischer, F. Pques and J.P. de Villartay

Reduced Immunoglobulin Class Switch

Recombination in the Absence of Artemis

Blood, 2009 Oct 22, 114 (17): 3601-3609

R. Galetto, P. Duchateau and F. Pques

Targeted Approaches for Gene

Therapy and the Emergence of EngineeredMeganucleases

Expert Opinion on Biological Therapy,

October 2009, 9 (10): 1289-1303

S. Grizot, J. Smith, F. Daboussi, J. Prieto,

P. Redondo, N. Merino, M. Villate,

S. Thomas, L. Lemaire, G. Montoya,

F.J. Blanco, F. Pques and P. Duchateau

Efcient Targeting o a SCID Gene

by an Engineered Single Chain HomingEndonuclease

Nucleic Acids Research, 2009, 37 (16):

5405-5419

J.P. Cabaniols, L. Mathis and C. Delenda

Targeted Gene Modifcations in Drug

Discovery and Development

Current Opinion in Pharmacology, 2009,

9 (5): 657-663



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One o our companys oremost assets is the

strong position o its intellectual propertyestate. The Institut Pasteur patent amilies

covering the use o homologous recombina-

tion and the use o endonucleases rom the

meganuclease amily to induce DNA recom-

bination ormed the initial basis o Cellectis

ounding. We have also since developed a

healthy proprietary portolio.

Cellectis patents all into three broad catego-

ries patents on general principles, patents

on specic meganucleases and applications,

and patents covering the manuacturing o

modied meganucleases.

At the end o 2009, Cellectis owned the

rights to 53 patent amilies, including 58

patents granted and over 200 patent appli-

cations. In 2009 alone, Cellectis was granted

our new patents and led 15 new patentapplications.

Our strategy involves building up an intel-

lectual property portolio that protects our

products, their applications and the corre-

sponding body o technological knowledge.

INPI Innovation Award

In December 2009, Cellectis was honored to

receive the Paris Ile-de-France Region Inno-

vation Award conerred by the French Patent

and Trademark Oce (Institut national de la

proprit industrielle or INPI).

INPIs annual awards honor small and

medium-sized companies whose success can

be attributed to their pro-innovation policies.

These rms use a comprehensive intellec-

tual property strategy to leverage business

growth.

Vectocell

When Cellectis acquired Vectocell intracel-

lular delivery technology in September 2009,

it expanded its intellectual property portolio

by an additional nine patent amilies.

Vectocell technology is a peptide technol-

ogy that can carry proteins and other com-

ponents inside the cells. It was developed

rom internalizing human antibodies and

can be used to optimize the ecacy o drug

candidates. Its ability to provide an entry into

any chosen mammalian cell type, including

humans, with no detectable immunogenicitygives it a broad spectrum o applications.

Cellectis envisions that the use o this tech-

nology in tandem with meganucleases

will make it a valuable property in biothera-

peutics and or many other applications.

INTELLECTUAL PROPERTY

Evolution o Cellectis IP portolio

Number o patents granted

In 2009, in addition to its 58 granted patents, Cellectiscomplete portolio comprises over 200 pending patents.

Andr Choulika, CEO, and Michle Paquier,IP Manager, receive the INPI Innovation Award.

60

50

40

30

20

10

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


NEW CONTRACTS AND PARTNERSHIP AGREEMENTS


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Monsanto

In September 2009, Cellectis announced a

landmark deal with Monsanto. The nonex-

clusive research and commercial agreement

or Cellectis proprietary meganuclease-

based technology includes a 3 million

upront payment, a 1 million equity invest-

ment and ees payable to Cellectis or each

meganuclease developed or Monsanto.

In addition, Cellectis is eligible to receive

milestone payments at multiple development

stages (worth over100 million) as well as

royalties on certain traits commercialized by

Monsanto.

This agreement with Monsanto, a leader

in agrobiotechnology, could allow Cellectis

genome engineering technology to be put

to use in developing the next generationo quality crops. In addition, it oers the

opportunity or Cellectis technology to be

used by the largest discovery engine in the

agricultural eld. The scope o the agree-

ment stands as recognition that the industry

leader believes in Cellectis approach.

Other Agreements

In May, Cellectis signed a nonexclusive

licensing agreement with the pharmaceutical

group Servier or the use o Cellectis modi-

ed cell lines or high-throughput screening.

This contract ormalized a well-established

research relationship between the two com-

panies and should accelerate the develop-

ment o high perormance screening tools or

innovative drug targets.

In June, following a successful research

program, the international cooperative group

Limagrain exercised its option or a nonex-

clusive commercial license to use the I-Scel

meganuclease to develop its agricultural

products.

Also in June, Cellectis bioresearch signed a

license agreement with the biomanuacturingorganization Celonic AG or its patented

CEMAX technology, which will allow

Cellectis bioresearch to use CEMAX or

the development o its commercial products.

By optimizing it, Cellectis bioresearch has

already used the technology in one o its

production kits launched in November 2009,

cGPS CHO-S Cemax.

In December, Cellectis bioresearch and

tebu-bio, which supplies and distributes

biological research reagents in Europe,

decided to join orces or the distribution o

Cellectis bioresearchs research kits. Cellectis

bioresearch will be responsible or the design

and production o the targeted integration

kits rom its cGPS and cGPS Custom lines.

tebu-bio will be responsible or distributing

these kits to research laboratories across

Europe. tebu-bio will have exclusive distribu-

tion rights or the major European marketswhere it has a physical presence. This

partnership will oer Cellectis bioresearch a

oothold in the academic research market,

a major target in terms o the number o

potential users.

In December, BASF Plant Science broad-

ened its license to use Cellectis mega-

nuclease technology. Under a nonexclusive

license, BASF Plant Science will use mega-

nucleases engineered by Cellectis to make

targeted modications o plant genomes.

Finally, in December, Bayer HealthCare,

the healthcare subgroup o Bayer, acquired

a license to use Cellectis patent amily

WO9011354 covering homologous recom-

bination aimed at introducing new eatures

into the genome. This global license includesthe use o the Institut Pasteur technology

relating to homologous recombination to

obtain and utilize certain transgenic animals

in pharmaceutical research, in all countries,

including Japan.

NEW CONTRACTS AND PARTNERSHIP AGREEMENTS



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COMPANY

GOVERNANCE


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GOVERNANCE

Dirk Pollet, PhD,

Chie Business Ofcer

David J.D. Sourdive, PhD,

Executive Vice President,

Corporate Development

Frdric Pques, PhD,

Chie Scientifc Ofcer

Andr Choulika, PhD,

Chie Executive Ofcer

Marc Le Bozec,

Chie Financial Ofcer

Sylvie Delassus, PhD,

Senior Vice President,

Corporate Communication

Executive Committee

The Executive Committee is composed othe senior-level management o Cellectis,

which implements the companys strategy

and directs its day-to-day operations. (photo)

Board o Directors

The Board o Directors determines the

company strategy and oversees Cellectis ac-

tivities. Members o the Board o Directors

serve or a term o three years; the Chair-

man convenes meetings when it is deemed

necessary or desirable. In 2009, the Board o

Directors met seven times.

On December 31, 2009:

Christian Policard, Chairman

Martin Bitsch, MD

Andr Choulika, PhD,Chie Executive Ofcer, Cellectis

Alain Godard

Roger J. Hajjar, MD.,

Kaminvest Holding Representative

Ray Kazandjian

Richard C. Mulligan, PhD

David J.D. Sourdive, PhD, Executive VicePresident, Corporate Development, Cellectis

Pascale Altier, Observer, The Institut Pasteur

Representative

During 2009, AGF Private Equity decided

to resign as a member o Cellectis Board o

Directors. We would like to warmly thank

Dr. Thierry Laugel as its representative or his

dedication and the wonderul job he did while

he held this position. We very much appreci-

ated working with him during these past years.

Scientifc Advisory Board

The Scientic Advisory Board, set up in2002, is composed o eight active members,

appointed or one year and meets twice a

year. Its mission is to outline Cellectis broad

scientic orientations. It presents Cellectis

management team with methods and strat-

egies to achieve the companys technological

goals. It evaluates the work achieved

during the year and the results obtained.

On December 31, 2009:

Pro. Franois Jacob, Honorary Chairman,

MD, Collge de France, Paris, France

Pro. Rodney J. Rothstein, PhD, Chairman,

Columbia University, New York, United

States

Pro. Frederick W. Alt, PhD, Howard Hughes

Medical Institute, Chevy Chase, UnitedStates; Harvard Medical School, Boston,

United States

Pro. Bernard Dujon, PhD, Universit Pierre

et Marie Curie (Paris VI) - Institut Pasteur,

Paris, France

Pro. Alain Fischer, MD, Hpital Necker -

Enants Malades, Paris, France

Pro. James E. Haber, PhD, BrandeisUniversity, Waltham, United States

Pro. Denis Pompon, PhD, Center o Mo-

lecular Genetics, Gi-sur-Yvette, France

Pro. Jos-Alain Sahel, MD, Hpital des

Quinze-Vingts, Paris, France

Pro. Luis Serrano, PhD, Center or

Genomic Regulation, Barcelona, Spain

Executive Committee, rom let to right:

SUBSIDIARIES


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Cellectis genome surgery

Cellectis genome surgery is dedicated to the development o innovative therapeutic approaches

using meganucleases to treat genetic diseases, cancers and persistent viral inections.

Cellectis genome surgery seeks to treat patients suering rom serious diseases resistant to

conventional treatment. Its prospective therapy targets the very DNA sequence responsible or

the disease. This DNA sequence may be o congenital origin (in the case o genetic disease) or

acquired (in the case o a viral inection or a cancer).

The mission o this subsidiary is to ulll unmet medical needs, giving patients new hope. The

genome surgery approach aims to attack the cause o a disease and cure the patient, rather

than merely treat its symptoms.

In 2009, Cellectis genome surgery took important steps orward, establishing preliminary data

supporting a proo o concept or the antiviral power o meganucleases against HIV, hepatitis

B or herpes viruses, or example.

Since its establishment in June 2008, Cellectis genome surgery has worked together with its

partners academic research groups and clinicians all over the world to transorm its research

into an eective medical treatment.

SUBSIDIARIES

In the last two years, Cellectis has established three

subsidiaries. Their mission is to develop the applications

o our technology each in a given market sector. The

core activity o the company research and development

o the technology, the meganuclease platorm and

the database, as well as intellectual property remain the

central activities o Cellectis.

Genome surgery aims

to attack the cause o a disease

and cure the patient rather than

merely treat its symptoms.Frdric Pques, CSO


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Cellectis bioresearch

Established in 2008, Cellectis bioresearch develops and markets research and production kits

that make genome engineering accessible to biological researchers and companies worldwide.

It oers turnkey solutions, enabling biologists to design their daily work tools with control and

precision, such as cell lines with the eatures o a healthy or diseased organ or tissue.

Cellectis bioresearch commercializes ready-to-use products, designed to attract rst adopters o

the technology with their ease o use.

The kits are a simple and eective means o using Cellectis meganuclease-based technologies,

as they all contain a cell line and a meganuclease. The kits enable a gene to be integrated into

a very precise area o a genome. In 2009, Cellectis launched ve kits and plans to multiply that

number in 2010. The long-term objective is to make the kits universally accepted and used,

integrated as standard genome engineering tools.

The technology has already succeeded in penetrating the industrial market. The current chal-

lenge is to place Cellectis bioresearch products in the majority o the worlds genetic research

laboratories, enabling researchers, technicians and engineers to benet rom meganuclease

technology.

Ectycell

Ectycell was established in September 2009 to research and commercialize industrial uses o

stem cells. The initial goals are to develop:

Tools for generating induced pluripotent stem cells from adult cells

Robust, reproducible differentiation of stem cells

Cell libraries for testing drug candidates

Stem cells can divide or sel-renew indenitely, or dierentiate into many distinct cell types.

They are believed to have the potential to revolutionize medical research and care.

Cellectis core technologies can potentially have a major impact on the stem cell eld. Ectycell is

tackling such key issues as reducing the high attrition rate in drug development by using early-

stage assays that better predict a molecules eect on the organism as a whole or on a genetical-

ly diverse population. Ectycell may also open new paths or regenerative medicine especially

or pathologies like Alzheimers and Parkinsons diseases.

HUMAN RESOURCES AND COMMUNICATIONS


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The majority o Cellectis employees work in the companys corporate headquarters in the ParcBiocitech, located near Paris. The state-o-the-art acil ities occupy about 5 ,000 m2 in two buil-

dings, including 3, 700 m2 o lab space. For the purposes o some partnerships, employees are

occasionally assigned to work at academic laboratories.

Cellectis Employees: Our Chie Asset

A large number o employees have been working at the company or a long time, some o

them since its establishment. Almost hal o the frst 30 employees hired at Cellectis are still

with us today.

Two words characterize the Cellectis employee: creative and versatile. Its not the technology

that drives us, but its application. We have and need people who are able to evolve their think-

ing along with the developing technology.

The Team Vision

The team is united by a common goal and vision to improve human health and wellness

through genome engineering. This creates an atmosphere where there is a ree exchange o

ideas. Cellectis osters this team spirit through biannual seminars or all employees and weeklygeneral meetings, where the most recent scientic advances are discussed, as well as many

inormal events.

At the same time, we have a very ambitious recruitment objective: we want to be at the cutting

edge. About 85% o our sta come rom a scientic background. A high proportion o Cellectis

employees have at least a masters degree, 32 members o our sta hold a PhD.

Since our ounding as a startup company with only a hand-

ul o employees (eight by the end o 2000) to end o 2009

with a ull sta o 85, we have ostered an open, nurturing

atmosphere inused with a pioneering spirit. As we continue

to expand, we aim at keeping this pioneering spirit while

providing the best, most efcient work environment possible.

79%

80%

5%

3%

13%63%

25%

18%

Scientic Departments

Business Development

Administration

15%

Sta breakdown by categories

The percentage o people employed inthe scientic departments has increasedin the last three years.

2009

2008

2007


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Making Technological Innovation Happen

Thanks to the innovation, enthusiasm and commitment o our sta, Cellectis has succeeded in

making signicant technological advances in biotechnology, always remaining at the oreront

o its eld.

To encourage the generation o new ideas, we provide many opportunities or our sta to have

discussions with their peers, both in-house and at exterior events. Cellectis employees regularly

attend scientic meetings and seminars, business conventions and nancial conerences. The

agenda o these events is available on our website www.cellectis.com.

Communicating with Our Stakeholders

Besides communicating within the scientic community, we also want to share our enthusiasm

or what we do and communicate it to our various stakeholders. For this purpose, we created a

Communications department in 2009.

By proessionalizing our eorts in this area, we will be better able to explain our work to inves-

tors, industrial partners and the nancial community as well as to other research scientists. An

improved understanding o our activities by our stakeholders will help us, in turn, to carry out

our work within productive partnerships.

The team is united by a

common goal and

vision to improve humanhealth and wellness through

genome engineering.Delphine Jay,Director o Human Resources

Total Female

Number o Employees

00 01 02 03 04 05 06 07 07 08 09

100

80

60

40

20

0


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FINANCIAL

STATEMENTS


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1

6

2 3

4

5

1. Free foat 43%

2. Corporate Partners 3% (Regeneron, Monsanto)

3. Institut Pasteur 4%

4. Founders & Management 20%

5. Bus Angel 8%

6. Venture Capitals 22%

Shareholders Breakdown as o Decembre 31, 2009

Share Prices and Capital Structure in 2009

2009

15

12

9

6

2010Apr Jul Oct

100

200

300

0

Share Price Evolution In millions o

100 million market capitalizat ion. About 10,000 share average volume. NYSE-Euronext ACLS.PA

Share Volume Evolution in thousands o shares

FINANCIAL STATEMENTS


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Figures in thousands o euros December 31, 2009 December 31, 2008

Net intangible assets 16 17

Gross values 2 878 3 177

Depreciation, amortization and impairement losses (1 990) (1 741)

Net tangible assets 888 1436

Investment in other equity 0 0

Other non-current nancial assets 231 230

Non-current fnancial assets 231 230

Deerred tax assets 10 438 7 365

Total non-current assets 11573 9048

inventories 118 121

Trade receivables 1 761 722

Current tax assets 3 082 2 891

Other current assets 1 622 2 074

Cash & cash equivalents 45 595 28 723

Total current assets 52178 34531

TOTAL ASSETS 63751 43579

Balance Sheet Assets

Net tangible assets gures refect a nancing policy to use leasing extensively. The company

operates a large pool o robots representing an initial value o over6 million but this has been

ully nanced over a three-year period by two banks (BNP Paribas and DLL).

Deerred tax assets relate to accumulated losses, which can be indenitely deducted rom earn-

ing beore tax.

The cash position at the end o the period has improved by almost 60% compared to the end

o 2008 (45.6 million compared to 28.7 million).

Financial items are presented

according to IFRS


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Equity was strengthened at the end o fscal year 2009, amounting to over 51 million on

December 31, 2009, compared to 33 million on December 31, 2008.

The company has a limited amount o debt (1.8 million at the end o 2009). This debt rep-

resents a set o reimbursable advances granted by the French government innovation agency

OSEO. These advances are to be reimbursed only i a series o ongoing research programs reach

commercial success.

The total current liabilities increased by less than 20% between the end o 2008 and the end

o 2009, demonstrating managements ability to grow the company while managing cash e-

ectively.

Balance Sheet Liabilities

Figures in thousands o euros December 31, 2009 December 31, 2008

Share capital 582 479

Share premium and reserves 54 375 32 583

Net income/ loss o the year (3 852) 123

Equity 51105 33185

Retirement benet obligation 42 32

Other nancial liabilities 1 826 1 304

Total non-current liabilities 1868 1336

Short term provisions 71 88

Trade payables 4 731 5 372

Other current liabilities 5 975 3 598

Total current liabilities 10778 9058

TOTAL EQUITY & LIABILITIES 63751 43579


according to IFRS


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Total operating revenues increased by about 14% between 2008 and 2009. Importantly, 2009

revenues were impacted signifcantly by several deals (Limagrain, Monsanto, Bayer Healthcare,

BASF Plant Science) and existing contracts, whereas 2008 revenues were driven primarily by asingle contract (over7 million rom Regeneron Pharmaceuticals) representing nearly 70% o

total operating revenues.

Total operating expenses increased almost 50% between 2008 and 2009, rising rom 14 mil-

lion to20.8 million. Approximately2.5 million in expenses related to preclinical activities that

were outsourced, including pre-GMP batch manuacturing and GLP preclinical testing. About

2.5 million was attributable to expenses and success ees relating to intellectual property mon-

etization.

The headcount went rom 68 at the end o 2008 to 85 at the end o 2009, resulting in a 30%increase in personnel expenses.

Proft & Loss

Figures in thousands o euros2009

12 months2008

12 months

Sales 11 951 10 600

Other revenues 136 10

Total operating revenues 12 088 10 610

Purchases consumed (1 623) (1 111)

Personnel costs (5 564) (4 298)

Other operating expenses (12 425) (8 149)

Tax (870) (222)

Amortization (342) (348)

Provisions 0 60

Total operating Expenses (20 825) (14 068)

Current operating income/loss (8 737) (3 458)

Other non-current income & expenses (683) 0

Operating income/loss (9 420) (3 458)

Cash & cash equivalent income 1 248 812

Cost o fnancing, gross (6) (10)

Cost o fnancing, net 1 242 802

Other fnancial income & expenses 0 v 0

Income tax 4 327 2 779

Net operating income/loss (3 852) 123

NET INCOME OF THE YEAR (3 852) 123


according to IFRS


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Operating activities consumed approximately 5 million in 2009, compared to a 1.4 million

generation in 2008. This refects a signicant eort by the company to accelerate the develop-

ment o meganuclease-based products downstream in the value chain: preclinical activities and

research kit development were a primary ocus o Cellectis investments in 2009.

Overall Cellectis strengthened its cash position by almost 17 million year on year, increasing

rom 28.7 million at the end o 2008 to 45.6 million at the end o 2009.

Cash Flow Statement

Figures in thousands o euros 2009 2008

Net income/ loss o the year (3852) 123

Change in amortizations & provisions 257 288

Change in taxes payable (3 073) (882)

Change in other operating assets and liabilities 289 202

Change in working capital 1 459 1 707

Net cash provided (used) by operating activities (4920) 1432

Acquisition o intangible assets (18) (21)

Acquisition o tangible assets (480) (555)

Acquisition o nancial assets (1) (236)

Net income orm sale o tangible assets 720 0

Net cash provided (used) by investing activities 221 (812)

Repayment o long-term borrowings (268) (157)

Proceeds rom issuance o common stock 21 839 3 063

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 21571 2906

Change in cash & cash equivalents 16872 3526

Opening cash and cash equivalents 28 723 25 197

Closing cash and cash equivalents 45 595 28 723

CHANGE IN CASH & CASH EQUIVALENTS 16872 3526


according to IFRS


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Cellectis

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

Photo copyright:Cdric PorchezInstitut Pasteur(Jean Pierre Dacbert/Cabinet Dacbert)

Ramon MartinezCellectisKarim DaherBiocitechiStockphotoGetty ImagesMichle Paquier

Graphic Designer:Valentina Herrmann

Redaction and layout support:Avec des Mots

Printer:GraphiCentre

This report was printed with vegetal inkson PEFC certied paper

Cellectis makes available on its website(www.cellectis.com) the legal and nancialinormation, including in particular it sannual accounts and semi-annual report,required to be made available to thepublicpursuant to article 221-1 o the rules o

the French Autorit des marchs nanciersand article 4 o the rules o the Alternextmarket o NYSE Euronext Paris.


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MADE BY CELLECTIS

Documents

Cellectis - Annual Report 2009