2023-08-09 23:47:22 ET
Summary
- Cellectis, once a leader in the allogeneic CAR-T space, has lost its edge over the years.
- There is a renewed interest in allogeneic CAR-T with the emergence of safer options, but Cellectis may not regain its former status.
- Cellectis' current pipeline includes UCART22 targeting acute lymphoblastic leukemia and CD123 targeting AML, but the company still has a long way to go before it can bring a product to market.
Cellectis S.A. ( CLLS ) has been around for a quarter of a century, and there was a time a few years ago when it was an emerging leader in the allogeneic CAR-T space. I, too, used to think that way back in 2018. However, investors and scientists are now re-evaluating the CAR-T focus. My current opinion is that autologous CAR-T is beneficial but expensive, and the high expense does not justify the quantum of benefit from approved drugs, and their durations of effect. On the other hand, allogeneic CAR-T is going to be a bit less expensive, however its development has been beset with safety and efficacy problems. The field has taken so long to develop that other non-CAR-T options have caught on, as in the case of Cellectis’ own UCARTCS1, which was targeting multiple myeloma, and had to be given up. Not to forget, in 2020 a patient died in this program from treatment related cardiac arrest, and the trial was put on hold for a few months. Cellectis has just lost its edge over the years.
There seems to be a second round of interest in allogeneic CAR-T again, with the emergence of theoretically safer options, led by the likes of Allogene, with which Cellectis has a collaboration. It could well turn out that some of the technologies developed at Cellectis over the last two and half decades will have a renewed value. However, it is unlikely that Cellectis will ever be the behemoth it had once probably hoped to be.
The current pipeline looks like this:
Lead asset UCART22 is in a phase 1 dose escalation study targeting acute lymphoblastic leukemia or ALL. A second product, CD123, is targeting AML. Cellectis uses TALEN, which is a technology a generation earlier than CRISPR, and it has its own advantages and disadvantages. Its main advantage is precision and fewer off-target effects, while its main disadvantage is manufacturing difficulty and less robust editing efficiency.
In the UCART22 trial, in later line ALL, the molecule has shown a robust safety profile so far, with the following data from their Corporate Presentation :
0 dose limiting toxicity
0 ICANS (immune effector cell associated neurotoxicity)
0 severe UCART22-related TEAEs (treatment emergent adverse events)
8 patients with mild to moderate CRS (cytokine release syndrome), Grade 1/2
1 patient with Grade II GvHD; skin only (not confirmed by biopsy)
There are other datapoints that have emerged from the trial. While it is difficult to understand the data without context, let me place the data first:
Host lymphocytes remained suppressed using FCA lymphodepletion
2/7 patients in DL2 and DL2i achieved blast reductions to < 5% by day 28 using FCA lymphodepletion
1 patient in DL2: MRD negative CRi
1 patient in DL2i: MLFS
50% ORR observed in DL3 (3/6 patients)* with FCA lymphodepletion
1 patient MRD negative CR
1 patient MRD negative CRi
1 patient MRD negative MLFS
To understand some of that, here’s some context from the earnings call :
Last month, we announced that we have implemented the use of Sanofi's alemtuzumab as only selective investigational medicine product Coded as CLLS52 as part of the lymphodepletion regimen for UCART22 in the BALLI-01 clinical trial, for UCART12 in the AMELI-01 clinical trial and for UCART20X22 in the NATHALI clinical trial.
FC lymphodepletion is the use of chemo drugs Fludarabine and cyclophosphamide to suppress the immune system before the administration of various treatments, like stem cell or bone marrow transplantation etc. In this trial, Cellectis has added Sanofi’s alemtuzumab and produced the “A” of the FCA, and data shows that while the effect of FC lasts only 14 days, FCA immune suppressive effects last for over 28 days. The same effect was also noticed in the UCART123 phase 1 trial. I guess that is a good thing - for Sanofi.
What seems to be good for CLLS also is that using alemtuzumab resulted in increased UCART123 expansion, which led to one patient in the FCA arm achieving an MRD negative complete response that has remained durable for over a year. To put that in context, there were two responses each in each of the two arms, however the responses in the FCA arm were more robust.
Again, this is all good, but after 25 years of existence, investors are naturally going to ask - what else you got? I think Cellectis does not have a great answer to that very relevant question. They are still a work in progress, and this is going to take a number of years before it matures. Meanwhile, investors keep remembering how they waited for one other such promising product to produce mature data, which then went to ruin.
Financials
CLLS has a market cap of $105mn and a cash balance of $88mn. They raised some $23mn through a secondary offering, and they are also eligible for a €20mn credit facility from the European Investment Bank. The company noted:
“...$6 million of payments for R&D expenses, $4 million for SG&A suppliers, $15 million for staff costs, $4 million for our rent and taxes, $1 million of reimbursement of the PGE loan and a $23 million net cash inflow from the capital raise closed in February. This cash position is expected to be sufficient to fund selective stand-alone operations into the third quarter of 2024.”
Risks
Investing in CLLS is risky because its future is uncertain, and that too, years away from now. It has a history of failures. The allogeneic CAR-T space is not mature and is simply taking too long to produce value. The company’s cash runway is not enough to make it last the 3-5 years it might need for allogeneic CAR-T to mature.
Bottomline
I have a special place in my heart for cutting edge R&D companies - but I try to avoid investing from the heart. CLLS has potential; I will give them that. But they need to really shed that R&D mentality and aim to get a product into the market, either self-owned or licensed, as soon as possible. Until I see signs of that happening, I am going to stay firmly on the sidelines.
For further details see:
Cellectis: Potential That Seems Perennially Unrealized