Cellectis SA (CLLS) 2015 Q4 法說會逐字稿

Greetings, and welcome to the Cellectis fourth-quarter and full-year 2015 financial results conference call. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Simon Harnest, Vice President of Corporate Strategy and Finance. Please go ahead, sir.

Thank you. Thanks, everyone, and welcome to the Cellectis fourth-quarter and year-end 2015 financial results conference call.

Joining me on the call today with prepared remarks are Andre Choulika, our Chairman and Chief Executive Officer, and Eric Dutang, our Chief Financial Officer. Yesterday evening, Cellectis issued a press release reporting our financial results for the fourth quarter and year ended December 31, 2015. This press release is available on our website at www.cellectis.com.

As a reminder, we will make forward-looking statements regarding financial outlook, in addition to regulatory and product development plans. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent Form 10-K on file with the SEC.

I would now like to turn the call over to Andre.

Thank you very much, Simon. Good morning, everyone. Thank you for joining us today as we discuss recent update and reviews for year 2015.

So, for 16 years, Cellectis has pioneered the field of gene editing and we have been developing in this arena since then. We have been working on a number of gene editing technologies such as meganucleases which are homing endonucleases, CRISPR, Mega-TAL, and we finally selected TALEN as the best gene editing tool currently available. TALEN allowed us to edit genes, like any genes, with high precision insertion, deletion, repair and replacement of DNA sequences.

We are leveraging TALEN's transformative potential in two ways. First, as you are probably most familiar with, through cell engineering platforms to deliver therapeutics. Second, our wholly owned subsidiary Calyxt has built a plant engineering platform to deliver healthier food to consumers.

At this time, I'd like to review some of the 2015 highlights, and then I will turn the call over to our newly appointed Chief Financial Officer, Eric Dutang, who will review the financial results.

So, in 2015, Cellectis made significant strides towards achieving our underlying vision, realizing the therapeutic potential of gene editing. This progress ultimately culminated in the first in man compassionate use of UCART19, the first off the shelf CAR-T ever used in humans.

In June, under a special license granted to the Great Ormond Street Hospital in London, UCART19 was administered to an infant with an aggressive form of ALL who had exhausted all available treatment options. The poster detailing GOSH clinical experience in this single patient was presented at the 2015 ASH Annual Meeting in December.

In November 2015, pursuant to an amendment to the collaboration agreement we signed with Servier in February 2014, Servier exercised its license option on UCART19 ahead of schedule. As a result of this option exercise, Servier entered into a license and collaboration agreement with Pfizer. In consideration for the execution of this amendment, Cellectis received from Servier an upfront payment of $38.5m.

In addition, we may receive up to $974m in milestones and option exercise payment from Servier, as well as a high single-digit royalty on potential sales in addition to R&D cost reimbursement.

We are truly proud of the great teamwork between Servier and Pfizer and us, leading us to a seamless transition of responsibility regarding UCART19.

In December, Cellectis submitted a clinical trial application, a CTA, to the Medicines and Healthcare product Regulatory Agency, the MHRA, requesting an approval to initiate a Phase I clinical trial of UCART19 in leukemia in the United Kingdom.

Following this option exercise, our focus has turned to the development of our wholly owned program. The first product candidate, UCART123, is a CD123 targeted off the shelf CAR-T therapeutic candidate for the treatment of AML, as well as an orphan type of cancer, BPDCN.

Last year, we were thrilled to sign a series of clinical collaborations with world-class research institutions. For UCART123, Weill Cornell Medical College under the leadership of Professor Gail Roboz, who has taken charge of clinical trials for AML. BPDCN is one of the targets we partner with MD Anderson Cancer Center under the leadership of Professor Robert Orlowski.

It is truly an honor to work with these principal investigators in these institutions. Their expertise in patient care and their leadership in translational medicine are guiding the development of our intended clinical trial.

In close collaboration with these two institutions, Cellectis is developing UCART123 in order to meet the needs of patients and the accessibility to the drug. We expect to file investigational new drug IND applications with the FDA by the end of 2016 to begin Phase I clinical trial for UCART123.

CAR-T cell therapeutics have demonstrated a new level of efficacy in certain types of hematological malignancies. Gene editing allows us to develop CAR-T cell products with the potential to treat an expanded universe of patients, including patients that were previously not eligible for an autonomous CAR-T therapy. We are very enthusiastic about our pipeline of UCART programs to meet the need of global population and to be compatible with different combination therapies.

UCARTCS1 is being developed in multiple myeloma, and we intend to start manufacturing of this product in the second half of 2016. UCART38 is being developed in multiple myeloma, T-cell ALL and mantle cell lymphoma. UCART22 is being developed in ALL and refractory relapse CD19 negative ALL patients.

As we have said before, one of the most important components of CAR-T therapeutics is manufacturing. Last year, we reached a major milestone with the implementation of our manufacturing process for UCART19 in GMP conditions. We are now translating our knowledge gained from UCART19 to the manufacturing of UCART123 in clinical batches during the first half of 2016. In March 2015, we opened our US research facility in the Alexandria Center for Life Science center in New York, home to our R&D lab and offices.

Our program advances, our team has grown to include several new key hires as well as an expanded research team. So in March 2015, Arjan Roozen joined our management team as Vice President of Manufacturing. He has done a tremendous job in building out our GMP manufacturing process and capabilities. Before joining Cellectis, Arjan headed the cell manufacturing at Pharmacell and previously also at Crucell and a number of other pharma companies.

In January 2016, we announced that Dr. Loan Hoang-Sayag joined Cellectis as Chief Medical Officer. Building our clinical capability team into key priorities, I'm honored to have Dr. Hoang-Sayag join our team. Dr. Hoang-Sayag joins from Quintiles Transnational, where she was more recently Senior Director of Medical Science. She will work closely with our clinical collaborators overseeing Cellectis' transition into a clinical stage company.

In February 2016, we appointed Eric Dutang to the position of Chief Financial Officer. Eric previously served as Deputy Chief Financial Officer and we welcome him to this new role. Eric was formerly with KPMG.

Now I would like to speak about Calyxt, our wholly owned subsidiary focused on plant sciences. I'm extremely excited by the progress this company has made in a very short period of time, based on the power and precision of TALEN gene editing platform.

Calyxt is a Minnesota based company that has Professor Dan Voytas as the Chief Scientific Officer. Dan is one of the key inventors of TALEN technology together with Feng Zhang, our Chief Operating Officer, and is a world key opinion leader in the field of plant biotechnology. The growing of Calyxt team is developing -- the growing Calyxt team is developing new crop and seeds with clear health benefit to consumer as well as advantages to farmers.

From mid-2014 and throughout 2015, the USDA granted non-regulated status to four of our wheat crop developing programs, one potato, two soybean breed, and lastly the wheat. The status was granted on the basis that TALEN gene editing disable genes but do not insert genes or any foreign DNA in the organism of the plant.

In practical terms, the power of gene technology and knowhow translates into a path to market and development costs that are a fraction of traditional GMO approaches. From the R&D up to the commercialization, we can develop a new crop within six years for about $6m.

Calyxt's lead program is a non-transgenic variety of soybean that has the highest oil content in the industry, as well as a low linolineic oil content. When used for frying, our soybean oil does not create trans fats. This program supports recent US government guidance to get rid of all trans fats by 2018 from the food chain. Calyxt's variety has a fatty acid profile similar to olive oil.

Our Calyxt soybeans are already in the field. We have agreement in place with farmers both in the US as well as in Argentina, where we also received non-regulated status for our crops. The two geographic locations enable two harvests per year, so two harvests per year.

In full 2015, we harvested over 1 ton of soybean in the US, which we shipped to Argentina. We expect a 30-fold increase by spring 2016. We anticipate this amplification to continue up to commercial launch in 2018.

We also have a non-transgenic improved quality potato. In Calyxt's potato, the enzyme responsible for cold induced degradation of sugar in the tuber is inactivated. This reduced the sugar conversion of cold stored potato which could otherwise lead to the creation of acrylamide, a carcinogen when fried. Our cold storable potatoes are already in the field in the US and we anticipate a commercial launch by 2019.

This plan will anticipate the entry in the field of our first wheat product, a powdery mildew resistant wheat. It will suppress the need of using fungicides and reduces pollution in nature. Early stage programs include lower saturated fat canola oil and gluten reduced wheat and high starch wheat for lower sugar intake and a better digestibility.

In addition to consumer oriented program, Calyxt is developing a series of farmer (inaudible) traits such as non-transgenic glyphosate resistance, high yield production, virus and pest resistance such as nematode resistant traits, as well as nitrogen use efficiency and drought resistance.

In December 2015, Calyxt signed a research collaboration agreement with Plant Biosciences Limited or PBL. This collaboration includes the option to exclusive license to certain new crops developed with gene editing by the Institute of Genetics and Developmental Biology, so the IGDB of the Chinese Academy of Science in Beijing. Gene edited wheat, rice and corn with new traits are currently at various stages of development. Gene editing is utilized in this research collaboration to improve the quality and increase the yields.

To accommodate Calyxt's rapid expansion, we are currently building and expanding the facility. The Calyxt team is growing and currently has 22 employees. We will be opportunistic about building our management team with a focus on key hires. We will keep our focus on getting better crops to consumers and access to better organic germplasms on the market.

In 2015, pursuant to our plans, Cellectis made a $40 million investment in Calyxt. As our progress continues to accelerate, we remain opportunistic about the future strategic and financing options.

Cellectis today is well capitalized to pursue its mission on all fronts. In March 2015, we raised $228m in gross proceeds in an IPO in the US under NASDAQ. The proceeds from this listing, as well as our partnership revenue stream, puts Cellectis in a strong financial position to fund our operations through 2018, with a current cash position over $350m.

With that, I'll turn it over to Eric for a discussion on our financial results.

Thank you, Andre.

As of December 31, 2015, Cellectis had EUR314.2m in cash and cash equivalents compared to EUR112.3m as of December 31, 2014. This increase of EUR201.9m was primarily attributable to $228m of gross proceeds from the US IPO in March 2015 and EUR42.8m of proceeds, including taxes, received from Servier in connection with the amendment signed in November 2015. This was partly offset by EUR39.5m of net cash flows used in operating activities and EUR7m used in investing activities during the 12 months of 2015.

Cellectis expects that its balance of cash, cash equivalents and investments will be sufficient to fund the Company's operations until end of 2018.

Total revenues and other income were EUR29.2m for Q4 2015, and primarily comprised EUR26.8m of collaboration revenues. For the 12-month period, total revenues and other income were EUR56.4m, an increase of EUR27.2m compared to the full year 2014, and primarily comprised EUR48.3m of collaboration revenues.

Total operating expenses and other operating income were EUR28m for Q4 2015 and EUR84.3m for the 12 months, representing an increase of EUR56.3m over the full year 2014, witnessing the strong investment strategy of the Company. These operating expenses include non-cash stock-based compensation expense of EUR12.6m for Q4 and EUR30.1m in the full year 2015, and cash social charges on stock-based compensation of EUR12.2m in 2015.

Adjusted net income attributable to shareholders of Cellectis for the Q4 2015, which excludes the non-cash stock-based compensation expense of EUR12.6m, was EUR20.9m or EUR0.59 per share on a basic and diluted basis. For the full year 2015, adjusted net income attributable to shareholders of Cellectis, which excludes the non-cash stock-based compensation expense of EUR30.1m, was EUR9.6m or EUR0.28 per share on a basic and diluted basis compared to EUR9m in 2014, notwithstanding a strong increase in operating expenditures.

Our objective is to grow the Company at high speed, while maintaining the Company well financed with a long cash horizon.

I now turn the presentation back over to Andre for closing remarks.

Thanks, Eric.

Well, with this exceptional P&L for 2015 and the IPO on the NASDAQ, Cellectis has today a strong balance sheet and we remain well positioned to continue our progress into the years ahead. I want to reiterate what a remarkable year 2015 was, for Cellectis and for the field of gene editing altogether. I believe I speak for the other leaders in our field when I say that we look forward to building on this momentum to create advancement in the field of medicine that would create a real difference to patients and their families.

The translation of many years of science into potential product that was used for the first time in 2015 to treat a patient is a milestone that will continue to inspire everything that we work for at Cellectis. I look forward to updating you on our progress over the next -- the coming months.

I want to thank you very much for your attention and I'd like to open the call to questions. Joining me for the Q&A will be Eric Dutang, our CFO, Dan Voytas, our Chief Scientific Officer of Calyxt. Operator, please go ahead.

(Operator Instructions). Colin Bristow, Bank of America.

This is Sara Blum on for Colin. Thanks for taking our questions. First, on the status of the infant which was treated through the compassionate use program, can you provide an update on that?

And then can you walk us through the key update data readouts we should expect this year?

And then lastly, with the CTA application filed, what is the timeline for approval on trial start and are there any other gating factors?

Well, actually, you have like -- one thing that should be clear is that the UCART19 clinical development are within the hands of Servier. One thing that I can definitely say is that the patient that has been disclosed at ASH is, to our knowledge, still in complete remission today. So there was dose in June and up to March, which is significant, I would say. So we're still in CR.

And for the start of the Phase I, actually, I cannot disclose this because I would think that it's more on the Servier side to speak about that.

Okay. And then any updates or data readouts this year?

Well, we are extremely eager to communicate on data for 2016. We know that this has to be discussed with our partners, Servier and Pfizer. Nevertheless, we would be looking at at least producing certain intermediary data during 2016, and this is something Cellectis would be extremely positive on moving on.

Okay. Great. Thank you.

So it will have to be discussed. Potentially, we would make all our best efforts to have this information disclosed.

Okay. And then I guess lastly, just on 123 and CS1, could you just describe the role of CellCure in the manufacturing processes and what else needs to be put in place this year?

Well, we've started manufacturing of UCART123 now. All the process of transferring the technology to our CMO is under process. This should be, I hope, completed by the second half. We're doing two indications, which is AML and BPDCN, and BPDCN we'd like to do pivotal trial because it's a niche indication. Therefore, it will require to produce a lot of doses, so it will be a long process to do all this.

We will have to go through a series of different actions to produce all the vials to do this pretty large scale clinical -- two large scale clinical trials that we're envisaging for this. We hope that at least the AML IND will be filed this year. For BPDCN we'll try to target 2016, but it could potentially be 2017. CS1, the product will start manufacturing probably during second half 2016. So currently we're preparing the process development and the transfer, but we're not there yet.

Okay. Thanks.

Chris Marai, Oppenheimer.

Hi. Good morning and thanks for taking the questions. Congrats on the quarter and the year. First, really just on the manufacturing, to touch upon that again, what's the biggest gating factor there? Is it just that you haven't -- getting that all scaled up for the first time is going to take you longer, or are there technical concerns and considerations that you need to solve prior to getting material ready for your upcoming potential trials?

And then secondly, with respect to your cash run rate guidance, I was wondering if that includes a potential spinout of the plant sciences division. Thank you.

I'll answer the first question second and then the second question first. So, no, it does not include any potential new spinout of Calyxt or anything like this. It's the execution of a very aggressive business plan and roadmap for the Company without any new financing through 2018. This is it. So it's et al, as we would say, on the Company, so the run rate for the Company.

Coming back to the first question, the manufacturing, well, the question was the gating factor is -- we don't have any gating factor. I think that currently the manufacturing runs well. We would like to raise, of course, the yields, but the idea is to manufacture products that are GMP and that are QC'ed, QA'ed, that are totally standardized, and this requires a lot of volume at the end.

It doesn't infer that much of producing, for example, monoclonal antibodies or others. It's a new type of product. It's a totally new kind of product that we're producing. It's primary cells that are gene edited and where there's also a gene transfer, which is a very sophisticated product. We've been very successful running a series of batches on UCART19. We would like to raise the yields at the end and reduce the cost of goods as much as possible, but one thing that we're putting a lot of emphasis is reproducibility and quality of the products.

And the gating factor that we had at the start of this, which was essentially the reproducibility of this, has been solved for more than a year now, and the Company would like to translate all the knowledge that has been developed on UCART19, in UCART123 and CS1. And we'll probably do current 2016 or maybe current 2017 an update on the progress that has been done in this space, because the Company has evolved since the first batch was made on UCART19. And I think all the knowledge that has been built in the Company in the ability to produce high quality products has been spectacular up to now.

Okay. Great. And then just you mentioned the yields, to follow-up on that. With respect to cost of goods and I guess previous guidance within that range, are your yields sufficient to get you to COGS in the prior guidance range, or do you still need more work there?

The prior guidance range that we had for the first batches for the Phase I for UCART19 is approximately $15,000 a dose. Our goal is to keep the same target, which is less than $5,000 per dose. We're not there yet, but still we think that this is an achievable target by the end because we're processing only one-quarter of a liquipack, so we can fill liquipack and with the same cost at the end.

The second thing that we're working on is the filtration, because there is a lot of retention of product on the column and we would like to have a better filtration process, which would also increase the yield, so that's the second axis or fork that we're developing on. And the third axis is of course automating the fill, finish and freeze, which is a limiting factor.

And we think that all these problems or these technical issues that are in the current development of the product would help us probably to achieve our goals in the coming future, but we think that the current pricing that we get for the COGS on the first vials that we have are pretty, already, interesting, compared to our competition.

Great. And then one more, if I may, just on the additional knockouts that you might be able to include in some of the upcoming products. How far are you on ramping that up? How many knockouts can you incorporate at reasonable yields, let's say yields that get you to that $15,000 per dose?

And then lastly, would we expect any updates on pre-clinical data at ACR or ASH or ASCO later this year? Thanks.

Yes. Cellectis will present a series of clinical data at the coming conferences. And I strongly invite you to come and look at them, because I think it will be interesting for all of you to be informed by the advances that we've been having on these products.

The knockouts that we have, we think that with the current electroporation technology that we've been developing for the past five years, Pulsagile, Cellectis has reached a very high yield of knockouts, so we can do single, double, triple, quintuple knockouts in a single cell. We're working on the process development to improve this efficiency and also on the machine, Pulsagile itself, which we own, and we think that this is a very strong point on the Company in owning our own electroporation technology. And developing on this technology allowed us to have large volume electroporation chamber, which allowed us to do this 1b cell electroporation.

The two things that are very important about this, TALEN combined with Pulsagile, is that you can have over 90% of cells that are transduced with Pulsagile. The survival of the cells post electroporation is over 90% and the health of the cells is really great, so the quality of the cells that come out.

And the knockout efficiency in manufacturing, I don't mean this is like a research result that would not be reproducible, it means vials that can expand, that can survive post-electroporation and that can be used be used as a product, that can be QC'd is, for example, for a double knockout around 60%, 70% and we're close to over 50% for a triple knockout for UCART19, which is a spectacular result considering the quality of the product that you get at the end.

Electroporation gets you a high quality product that we have, a high quality product, and also is a factor of reduction of cost of goods at the end.

Great. And sorry, just to clarify on the first point, you said clinical data would be expected later this year or did you mean pre-clinical data later this year at upcoming conferences? Thanks.

Pre-clinical. You asked if pre-clinical data will --

Pre-clinical, okay. I missed that. Thank you. Excellent. Thanks so much, guys.

Yes, thanks.

Biren Amin, Jefferies.

Yes. Hi, guys. Thanks for taking my question. Maybe on UCART19, can you tell us if there were any new patients that were treated under compassionate use?

Hi, Biren. I feel I cannot answer this question. Sorry about that.

Okay. Andre, you've got a couple of titles that have been disclosed for ACR, one disclosing a non-lethal switch poster. Are any of the current programs, like UCART123 or CS1, are they incorporating the switch?

Not yet, no. This is a new type of technology that is currently coming out from innovation before it goes into production. It's the second step, though, so not 2016. So this switch is very interesting, because what we would like to do is harness the expansion and the compartment where the CART must be active, and what we would like to have is something that is very responsive, an immediate response.

For example, if the CAR can be activated at the DNA level, you have a lag of time where the DNA has to express RNA, the RNA has to be translated into protein and the protein is expressed on the surface of the cell, like say a CAR, for example. And if you want to stop the expression, so you can shut down the DNA and the expression of the protein has to disappear on the surface of the cell. It's like braking in a car and have a long brake, so you need miles to stop the car.

In this case, the stop occurs immediately at the level of the protein on the surface of the cell, where you have the CAR that is switched off with the small molecule, and you can add the small molecule to turn the CAR on within minutes and then the CAR is on while the small molecule is here. When you clear out the small molecule with a short half-life, you can get the T-cells that are totally shut down very rapidly.

So it helps to monitor the space, for example, where the CAR-T should be active, for example the blood, and if the T-cell gets out in certain compartment where the T-cell should not be active, for example crossing the blood-brain barrier, then the T-cell would be shut down because the small molecule won't cross the blood-brain barrier at the same time, and so you reduce neurotoxicity in such cases.

It's a very important type of switch that we have developed here and we have a second version that is the opposite of this that will come up also. So it's something that will be key in the development of our drug in certain indications where you have to monitor exactly the T-cell expansion and don't lose your T-cells if you want to stop the therapy itself. So it can keep the T-cell present and the T-cell won't be active, but can resume activity once you add again the small molecule. This is a very important point. You don't have to re-dose the patient with T-cells, but can only re-dose the patient with the small molecule.

Also, one thing that is important about this T-cell is that it's -- this CAR, it's a multi-chain CAR, which is our new version of CAR that we think is extremely powerful because it's allowed to work in certain conditions where a single-chain CAR cannot work. And these developments are going to come not in 2016, in the coming years after. But we're very bullish on this product, as we are bullish on UCART19 and the results that we could produce likely this year.

Okay. And then maybe if I could ask a question on the Ag business, I think you said the commercial launch for soybean is in 2018. How do you plan to compete with -- I guess 90% of the soybean market is Roundup Ready, whereas your seeds would not be Roundup Ready.

First of all, we are working on a Roundup Ready resistant that is non-GM that we think is very powerful. But the second thing that we have is that the strategy of Calyxt is to launch our crops in niche markets. Here, the launch will occur in the non-transgenic, non-GMO space and also where competition have breeds that don't grow in the same geographic region as ours.

So the strategy of Calyxt is having niche launches first. It's similar to a niche market for a drug. And then if the thing works well, then you can outbreed the soybean and expand it after this for high yield or maybe glyphosate resistance, or other types of resistance that Calyxt is working currently, and expand this product into the commodity markets, meaning the largest markets.

Nevertheless, already in the niche market, the soybean market is a $40b market and if you're at 0.5% of the market, which is expected to be our first market launch for our soybean, which is definitely a piece of the niche, it's already a critical asset on our side.

Great. Thank you.

So, launch the niche and expand after this in commodity current to the success of the product, as I said.

Jerry Yang, Piper Jaffray.

Hi. This is Jerry for Josh. Thank you for taking our questions. We were just wondering what's the current soybean yield for your product. And then, over the next two or three years, how do you plan to expand and also scale up your production? Thank you.

Okay. So the current yield of our soybean is approximately 3 tons per hectare, which is definitely in the mean of high -- like an elite germplasm. Of course, you can go up to 5.5 tons or 6 tons per hectare in very specific regions and for a specific yield, but this is something -- more the standard is around 3 tons.

Initially, we initiated this trial with [Bird]. We were very positively impressed by the yield that Bird produced, which was around 3 tons per hectare. We're currently using, of course, like South of Argentina farmers and in Minnesota, Wisconsin and North Dakota farmers and expanding by doing transportation of our soybean between south and north and north and south. So we have two seasons a year, and each new plantation is a multiplication by 30 to 45.

Maybe, Dan, you want to speak on this. Actually, I forgot about you, you're on the call. You should tell me, guys.

Yes. And then, as Andre said, we're happy with the yields of the soybean variety that we've developed to date, and then we're going to continue to move our traits into a more elite germplasm as we stage the product launch.

Thank you.

Peter Lawson, SunTrust Robinson Humphrey.

Andre, I wonder if you could just talk about which candidate you think you could see Phase I data for first, if it's 123 or CS1.

123. Of course, UCART123 will be the first CAR to product data for our own pipeline, besides of course UCART19.

And do you think that's more so an ASH event or an ASCO event?

I don't know. It's difficult to say.

Do you think we could see -- go ahead.

It will be 2016 now. Wait a second. UCART19 may be 2016, but for UCART123 it's 2017.

Got you. And do you think we could see data at ASCO for -- or any data at ASCO for Cellectis?

We will present pre-clinical data for these CARs, not patient data.

Got you. And then just as we think about that cash guidance, does that also include any milestones?

For UCART123 and UCARTCS1 there is of course no milestones, no royalty, nothing. It's only self-owned CARs. It means these CARs belong 100% to Cellectis and there is no strings attached to these. We intend to push forward these products as far as possible in our pipeline to reach the market, if we could finance the development of these products up to the market, but this is definitely the goal that we have set ahead of us. Therefore, Pfizer or Servier have no access to these products today.

Got you. Okay. And the small molecule switch, is that a dose dependent effect? Can that be turned on gradually?

Yes, it is totally dose dependent. It's not a binary effect. So you can definitely turn up the expansion or reduce the expansion according to the dose, which is a very, very powerful feature of this technology.

Great. And then on the manufacture insight, is there any way you can talk about how much you produce for, say, UCART19 versus UCART123?

So, for UCART123, we're not currently disclosing any data on the manufacturing, but we are extremely positive on the current process that we have. One thing is that you have to look at this product. We describe it as maybe more basic than UCART19, because it has only one knockout compared to UCART19 that has a triple knockout; one knockout, which is TCR Alpha, compared to UCART19 that has a triple knockout, for two (inaudible) for CD52 and one for TCR Alpha. CD52 is to give the T-cell resistance to alemtuzumab.

We have a second version of UCART123 that should have a dCK indication that should be similar to UCART19, but this is probably a version two that we're pushing forward.

Currently, the yields that we have with UCART19 is within hundreds of doses per batch. We are not reaching the 1,000 per batch. Per batch, we've done six batches. But you have to expect that there is probably a big chunk of it. It means in tens, over 50 doses that go at least for the QC, QA, stability effect and so on, and all the backups that you should get. So 100s of doses should be reduced of all the vials that you use for QC at the end. Currently, our goal is to reach at least over 1,000 doses per batch. (Multiple speakers).

Great. Thank you. Just a minor question -- yes, that's great. And then just a minor question for Eric, just on the other operating expense line item in the P&L. It's like a EUR2.8m expense. What's in there, because it's jumped up quarter over quarter? I just wondered what's in that component.

So in this caption you have indemnities, increase in provisions and several things, but it's mainly this kind of expenses that you have in this caption.

But there's not one thing that's jumped up quarter over quarter?

No. I think it was only Q4, but for the rest of the year you don't have any major increases in this caption.

Got you. Okay. Thank you so much.

Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.

Thank you, everyone, for participating. We appreciate your continued interest in Cellectis and we look forward to updating you with more good news over the rest of this year. Thank you.

Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.