CMVLF - Cellectis: End Of 2023 Data Readouts To Boost CAR-T Prospects

2023-11-03 18:57:50 ET

Summary

• Preliminary data from two early-stage studies are going to be shown at the ASH 2023 conference, showcasing its cell therapy candidates for non-Hodgkin lymphoma and B-cell acute lymphoblastic leukemia.
• The company recently entered into a collaboration agreement with AstraZeneca, receiving $245 million in cash and potential milestone payments for the development of up to 10 cell therapy candidates.
• Cellectis now has sufficient funds to run clinical trials for its candidates, including UCART20X22, UCART22, and UCART123, which are not part of the collaboration deal made with AstraZeneca.
• The global non-Hodgkin Lymphoma [NHL] market is expected to reach $14.4 billion by 2029.

Cellectis S.A. ( CLLS ) has made great progress in advancing its pipeline, especially in light of the fact that it is gearing up to report results from two early-stage studies at the upcoming American Society of Hematology 65th Annual Meeting [ASH 2023], which is going to take place between December 9th - 12th of 2023. This is going to be with respect to data from the study using UCART20X22 for the treatment of patients with relapsed/refractory non-Hodgkin lymphoma [NHL] and then UCART22 for the treatment of patients with relapsed/refractory B-cell acute lymphoblastic leukemia [B-ALL]. The upcoming data releases from both of these early-stage studies is not the only reason to look at this name. That's because just a few days ago AstraZeneca PLC ( AZN ) generated a collaboration agreement, whereby both companies would jointly develop up to 10 cell therapy candidates for consideration. This deal is expected to bring in about $245 million in cash, with potential for additional milestone payments along with tiered royalties for net products sold. Cellectis now has the cash it needs to run clinical trials of UCART22, UCART20X22 and UCART123. All of these candidates are not part of the collaboration agreement with AstraZeneca and will remain under Cellectis control.

Two Cell therapy Candidates With Preliminary Data To Shed Light On Technology

As I stated above, Cellectis is gearing up to present results from two of its cell therapy candidates from its pipeline. These results are going to be presented at poster presentations at the upcoming American Society of Hematology 65th Annual Meeting [ASH 2023], which is going to take place between December 9th - 12th of 2023. The release of preliminary results as poster presentations for both of these programs could act as catalysts to cause the stock to trade higher. The first of such candidates is known as UCART20X22, which is as the name suggests is a dual allogeneic CAR-T cell product that is targeting both CD20 and CD22. Specifically, it is going to be used as a dual target mechanism to treat patients with relapsed/refractory non-Hodgkin Lymphoma [NHL] . The use of this cell therapy candidate is being explored in the phase 1/2a open-label dose-finding and dose-expansion study known as NatHaLi-01 . What is the promise as it relates to this specific CAR-T candidate? Well, it is all because of the dual targeting that it has. The hope is that by targeting both the CD20 and CD22 proteins, that it might be able to prevent immune escape that occurs with other single-agent CAR-T targeting agents. The global non-Hodgkin Lymphoma [NHL] market is expected to reach $14.4 billion by 2029 . NatHaLi-01, is a Phase 1/2a open-label dose-finding and dose-expansion study to evaluate the safety, expansion, persistence and clinical activity of UCART20x22 in patients with relapsed and refractory B-Cell Non-Hodgkin Lymphoma. The goal of this preliminary study is to first look at safety of UCART20X22, but other items of important will be therapy persistence [duration of response], expansion of cells and clinical activity that is observed.

The second of such clinical candidates to be presented at this ASH 2023 medical conference is going to be UCART22, which is an anti-CD22 allogeneic CAR-T being advanced to treat patients with relapsed/refractory CD22+ B-cell Acute Lymphoblastic Leukemia [B-ALL]. The use of this CAR-T is being explored in the ongoing phase 1 BALLI-01 trial. Acute lymphoblastic leukemia occurs when the body develops to many abnormal B-cells and T-cells in the bone marrow. Such abnormal leukemia cells crowd out the healthy cells from the body, which leads to a person not being able to fight off infections or other diseases like pneumonia. With respect to B-cell Acute lymphoblastic leukemia , it occurs as a result of the abnormal development of B-cells in the bone marrow. B-cells are important, because they are a type of white blood cell that actually helps the body to fight off infections. This phase 1/2a open-label study is going to pretty much evaluate the same items I listed above, which are safety, persistence, expansion and clinical activity of this specific UCART22. The acute lymphoblastic leukemia market is expected to exceed $4.5 billion by 2031 . This is a very large market opportunity for sure, but what about B-cell ALL specifically? Well, B-cell ALL is the most common subtype of ALL, accounting for about 75% of cases . I believe that both of these data readouts could bring value to shareholders and thus why I believe it was important to bring them up.

Partnership Deal Brings In Cash Along With Huge Stake

As I noted above, Cellectis was able to accomplish something very big recently, which was that it was able to obtain a partnership with AstraZeneca recently. Such a partnership established was that the company would receive up to $245 million in cash, milestone payments and tiered royalties all on the basis of being able to advance certain cell therapy candidates. As part of this collaboration agreement with AstraZeneca, Cellectis received an upfront payment of $25 million for starters. In addition, the big pharma made an $80 million equity investment and intends to make another $140 million investment in the early part of 2024 as well. If it does do this, then it would have a 44% stake in Cellectis . The deal entails the ability for AstraZeneca to develop up to 10 candidates from 25 genetic targets. From there, it has the option to exclusively license such a candidate prior to any IND filing being achieved. Under this deal Cellectis could also receive an IND option fee, development, regulatory and sales-related milestone payments, ranging anywhere from $70 million - $220 million per each of the 10 candidates being advanced. Along with the typical tiered royalties established with many other deals like this.

Financials

According to the 6-K SEC Filing , Cellectis S.A. had $89 million in cash, cash equivalents and restricted cash as of June 30, 2023. It believed that this would be enough cash to fund its operations into Q3 of 2024. Of course, this was before the $25 million it just received as part of an upfront payment, plus the $220 million it still expects to receive as part of an equity investment from AstraZeneca. All of this is possible, because of the deal that Cellectis was able to establish with AstraZeneca which is expected to bring in all these additional funds to help fund UCART20X22, UCART22 and UCART123. With this newly added cash, this should greatly extend its runway. Thus, the risk of any near-term dilution or cash raise is off the table for now.

Risks To Business

There are several risks that investors should be aware of before investing in Cellectis. The first risk to consider would be with respect to the advancement of UCART20X22, which is being advanced in the phase 1/2a open-label NatHali-01 study for the treatment of patients with relapsed/refractory non-Hodgkin Lymphoma. Preliminary results from this early-stage study are going to be presented as a poster presentation at the upcoming American Society of Hematology 65th Annual Meeting [ASH 2023] medical conference, which is going to take place between December 9th - 12th of 2023. There is no guarantee that UCART20X22 will show an excellent safety profile, nor that it will be able to achieve persistence/clinical activity in this specific patient population. In addition, that it might be able to achieve its intended mechanism of action which is to prevent immune escape, especially since it is being developed as a dual antigen CAR-T. A second risk to then consider would be with respect to the other CAR-T candidate that is going to be presented at this very same medical conference.

A poster presentation of preliminary results from the ongoing phase 1 BALLI-01 trial, which is using UCART22 for the treatment of patients with CD22+ B-cell Acute Lymphoblastic Leukemia [B-cell ALL] is also going to be shown. There is no assurance that this CAR-T candidate will be shown to be safe either, nor that it will be able to produce substantial clinical activity. The third and final risk to consider would be with respect to the recent AstraZeneca deal, which was just established. That's because the equity investment of $80 million and then $140 million subsequently is expected later on. There is no guarantee that Cellectis will receive such equity investments from AstraZeneca. Also, the deal that was established entails that the big pharma would choose up to 10 candidates to develop before an IND filing. There is no guarantee that one or any of these candidates will be advanced into later testing, nor that these candidates will ultimately be able to produce the expected milestone payments that are to range between $70 million - $220 million.

Conclusion

Cellectis has made excellent progress in being able to use its technology to advance several CAR-T candidates. These candidates entail the ones I highlighted above, which were UCART20X22, UCART22 and UCART123. All of these candidates are being developed to treat patients with relapsed/refractory non-Hodgkin Lymphoma, relapsed/refractory B-cell ALL and also relapsed/refractory acute myeloid leukemia [AML]. I believe that there is an opportunity here for investors because two of the clinical candidates I noted directly above are going to be presented at the upcoming ASH 2023 medical conference as poster presentations.

Thus, if the preliminary results to be released at this medical conference are positive, then I expect the share price to trade higher as a result of them. Not only that, but Cellectis also has plenty of cash runway now to reach these clinical milestones. That's because it just established a very good deal with AstraZeneca, which already brought in $25 million in cash and then could bring about an additional $220 million in equity investments in the next several months. With the upcoming data releases from the early-stage studies using UCART20X22 and UCART22, plus the expected equity investments to come about from AstraZeneca, I believe that investors might be able to capitalize on any potential gains made.

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