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Cellectis SA (ALCLS: PA and CLLS: NASDAQ)
Cellectis is a gene-editing company focused on developing immunotherapies based on
gene edited engineered CAR-T cells (UCART). They develop a new generation of cancer therapies
based on engineered T-cells. With 15 years of expertise in genome engineering - based on
its flagship TALEN™ products and meganucleases and pioneering electroporation
PulseAgile technology, the company successfully creates a new generation of immunotherapies.
CAR technologies are designed to target surface antigens expressed on cells. Using its life-science-focused, pioneering
Genome-engineering technologies, Cellectis’ goal is to create innovative products in multiple fields and with various target markets.
Cellectis also have 1 fully owned subsidiary Cellectis Plan Sciences (CPS). CPS’s mission is to offer healthier foods for a better life
through development of gene-edited plants. These new plant and crop breeds offer not only healthier properties but also abilities to grow
in context of climate change and the needs of a growing population.
Investment Thesis: Strong growth biotech company with promising future in Engineered T cell therapies – a Living drug,
A new paradigm in Oncology and bright future as a leader in AgBiotech.
Gene engineering has been rapidly progressing from just being a research tool to the new innovation in drug development, molecular
and cell therapy. Cellectis as a pioneer in this field have been developing proprietary technologies in gene editing such as TALEN,
Magenucleases and CRISPR for 15 years. These technologies allow the company to become a leader in Immunotherapy especially
engineered CAR T-cell for multiple uses in cancers treatment. CAR T-cell therapy has recently been a new promising way to help
patients overcome cancer by editing patients’ immune cells to fight their cancers, it is essentially a living drug. This method is regarded
as the fifth pillar of cancer treatment due to its ability to recognize and attack tumors precisely. With growing excitement in
immunotherapy, many large pharmaceutical companies start to invest heavily in R&D. Cellectis also successfully grasped that
opportunity by collaborating with Servier and Pfizer to develop innovative cancer treatment products. Undoubtedly, many partnership
agreements could bring stream of recurring revenue which can drive growth on both Sales and Earning tremendously. The company
also utilize its gene-editing technologies to break strong entry barrier of AgiBiotech market via its fully owned subsidiary, Cellectis
Plant Sciences (CPS). CPS have been developing new plant breeds that provide healthier properties to answer demands from healthy
eating awareness. Large market size in AgBio (~$30B for potato and soybean) should open up more opportunity for CPS to design and
develop products tailored to the needs. Thus, it is clear that rapidly growth and multiple usages of gene engineering should lead
Cellectis into a bright future in cancer treatment – immunotherapy and AgiBiotech. Moreover, rising and accelerated earning will attract
many investors/traders which will drive the company’s stock price higher.
Key Thesis Points:
Numbers of developing products in pipeline for Billions dollar markets
3 fully owned programs: UCART123 for Acute myeloid leukemia (AML), UCART38 and UCARTCS1 for Multiple
UCART19 for CD19+ B-cell malignancies (Acute lymphocytic leukemia-ALL and Chronic lymphocytic leukemia-CLL)
and 5 targets in solid tumors under partnership with Servier. UCART19’s Phase I will be launched in Q3 2015.
15 Pfizer-owned targets and 12 Cellectis-owned targets in solid and liquid tumors.
Multiple products under development for AgBiotech field e.g. Cold induced sweetening resistant potato, High oleic
soybean, Gluten reduced wheat, Healthier oil in Canola (self owned) and other products with industrial partners.
New service to serve prominent regenerative medicine, another potential Billions dollar market
Cellectis launched Sceil service in 2013 to offer clients to store induced pluripotent stem cells (iPS) processed from their
own skin for future purposes as regenerative medicine technique become more accessible.
Best in class proprietary technologies
Nuclease based genome engineering – TALEN and Meganucleases “The DNA scissors” – Cellectis is a pioneer and leader
in genome editing with 15 years of expertise in the field.
Multi-chain Chimeric Antigen Receptor – The next CAR which is designed to multiply potential of 3rd
generation CAR. It
will improve clinical outcomes significantly due to its flexibility to be gene-edited for any design.
Proprietary electroporation technologies – PulseAgile, UCL, CellforCure which allow Cellectis to manufacture “Off-the-
shelve” cell therapy products efficiently.
Strong recurring revenue from series of agreements
Alliances with Servier on UCART19 and 5 targets in solid tumors. Upfront payment of $10 M and up to $140 M for each
of the six candidates potentially developed throughout the development and commercialization milestones. Cellectis will
also collect royalties on the sales of commercialized products.
Alliances with Pfizer on multiple oncology targets (15 Pfizer targets and 12 Cellectis targets). Upfront payment of $80 M
and up to $185 M for each of the 15 Pfizer targets potentially developed throughout the development and
commercialization milestones. Cellectis will also collect royalties on the sales of commercialized products.
Cost-Effective trait development at CPS and Collaboration with Big players for AgBiotech market-Concentrated and strong entry
Typically in AgBio industry, it will take at least 13 years and ~$136M to develop a trait to answer Farmers’ needs. But
2015 An innovative Biotech company with products in cell therapies and Genome engineering. Poon Panichpibool
CPS’ process takes only 6-10 years with significantly lower cost ~6M per trait due to Cellectis expertise and proprietary
genome engineering technologies. Thus, AgBio market is not an easy place to penetrate for startups due to high upfront
cost and unattractive risk/reward for investors to help them.
CPS selectively establish partnership with many industrial companies such as Bayer, Monsanto, Syngenta, Mitsubishi,
Pepsico, SES Vanderhave, Limagrain to develop new plant breeds with healthier properties. CPS also work with breeders
to market Elite germplasms.
Similar to other biotech/biopharmaceutical companies, there is a chance that product might fail during any phase of clinical trials.
Thus, more developing products in pipeline could reduce this risk.
Due to an agreement with Pfizer, Cellectis will not engage in another preclinical CAR-T partnership in Oncology for 4 years. It
could limit numbers of cancer therapies that Cellectis could potentially develop.
LANGUAGE BARRIER: Some of Cellectis’ press releases or financial reports are in French. Investors who don’t know French
might not understand these materials in a timely manner. It could delay decision making which essentially introduce some risks.
Due to its effectiveness to suppress growth of cancer, Genetic
engineered CAR-T cells is the new hope for cancer therapies
as shown in many scientific researches. There will be huge
demand for immunotherapies in near future.
Healthy eating has been increasingly popular lately. It will
open up market with strong growth for Gene-edited products
Massive ECB’s QE program will inject a lot of liquidity into
the market which will drive equity price.
Non-GMO trend could negatively impact the growth of
AgBiotech market. However, there is no clear academic
research showing that GMO products are harmful.
Ineffectiveness of ECB’s QE program could potentially
trigger equities sell off. Hence, any EU zone’s economic data
is critically important e.g. GDP growth, Inflation.
Greece exit the EU or Grexit and geopolitical risks could
affect Europe equities market negatively in a short term.
Important Data Points:
Market Cap: EUR 1.137 Billions
Growth YoY: Revenue MRQ +208%, EPS MRQ +128%, Revenue TTM +303% and EPS TTM +105%
Financial Strength: Quick Ratio MRQ 1.76, Current Ratio MRQ 1.76, Long term debt to Equity MRQ 4.65%
ROE TTM(%) ~ 8.95 vs. Industry’s ROE ~ -2.62 and ROI TTM(%) ~ 5.24 vs. Industry’s ROI ~ -0.84
After signed partnership agreement with Pfizer, Pfizer also bought 10% of Cellectis’ capital via newly issued shares.
A pipeline addressing 33 targets in oncology (Cellectis) and 14 AgBiotech products (Cellectis Plant Sciences).
Though, Cellectis is an interesting company with promising future due to its strong growth in Sales and Earnings from its
innovative products. Investors should not blindly invest in the company without looking at Cellectis’ stock performance i.e.
understand the price/volume action of ALCLS.
It is extremely important that investors know when to buy, hold and sell and reasons for these decisions. Good companies are
not necessary equal to profitable stocks. For ALCLS, I think I could offer an opportunity from both investing and trading.
After carefully checked ALCLS’ chart, I believe that the stock is holding well against 40-day SMA (Simple Moving
Average) support line. However, I will not initiate my position unless the stock price and volume meet following criteria
1. If stock price slides below 50 day-SMA line, it must rebounds from 50 day-SMA with higher than average volume (show
sign of institutional investors buying).
2. “Pocket Pivot buypoint” If want to buy within the next 5 trading sessions, ALCLS’ price must goes up with volume > 1.13
3. “Constructive base breakout”, I will initiate my position whenever the price breaks out from nicely formed base on a
Trade strategy: Investing 50% of allocated capital when price/volume meet above criteria, then pyramiding positions as
price keeps going up (30% of capital at +2.5% from a proper buypoint – not your cost! and 20% of capital at +4.5% from
buypoint). Placing Stop loss Good Until Cancelled – GTC order at -8%. Considering a profit taking when return hit 20%-
25% mark, if stock goes up 20% within 3 weeks, hold for another 8 weeks and place trailing stop order.
ALCLS’ daily chart
From the daily chart, there were many entry opportunities if deploy “pocket pivot buypoint” i.e. price goes up with high
volume that is greater than the highest down-day’s volume over the prior 10 days. It’s a sign that institutional investors are
buying and accumulating shares.
ALCLS’ weekly chart
From weekly chart, ALCLS formed a cup with handle base during May14 to July14 with strong volume on breakout week. It
also formed a large saucer base from July14 to Jan15, again high volume on breakout. During Jan15 to Mar15, it formed
Volatility Contraction Pattern (VCP) with strong volume on breakout. There is no sign of topping stage or climax top yet
(extreme gain in short period and extremely high volume), so there is more room for this stock to grow. However, a healthy
stock needs a correction, no doubt that ALCLS might have a reasonable correction soon.
*Disclosure: I found ALCLS on 06/25/2014 through the Bloomberg terminal screening by ranking YTD return of Western
To understand more about immunotherapies, I highly recommend people to read investor presentation from Cellectis’ IR
page http://www.cellectis.com/en/essential/investor as well as http://www.cancer.gov/cancertopics/research-