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Edited Transcript of ALCLS.PA earnings conference call or presentation 7-Nov-19 1:00pm GMT

Q3 2019 Cellectis SA Earnings Call

Romainville Nov 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Cellectis SA earnings conference call or presentation Thursday, November 7, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* André Choulika

Cellectis S.A. - Co-Founder, Chairman & CEO

* Eric Dutang

Cellectis S.A. - CFO

* Simon Harnest

Cellectis S.A. - VP of Corporate Strategy & Finance

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Conference Call Participants

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* Amanda Louise Murphy

BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst

* Christopher N. Marai

Nomura Securities Co. Ltd., Research Division - MD & Senior Analyst of Biotechnology

* Hartaj Singh

Oppenheimer & Co. Inc., Research Division - Research Analyst

* Huidong Wang

Barclays Bank PLC, Research Division - Research Analyst

* Michael Werner Schmidt

Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD

* Raju Yashaswi Prasad

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Ross Howard Weinreb

Goldman Sachs Group Inc., Research Division - Research Analyst

* Soumit Roy

JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst

* Wangzhi Li

Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology

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Presentation

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Operator [1]

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Greetings and welcome to Cellectis Q3 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Simon Harnest, Vice President, Strategy and Finance. Please go ahead.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [2]

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Thank you, [Rob]. And thank you, everyone. Welcome to Cellectis's Third Quarter 2019 Corporate Update and Financial Results Conference Call. Joining me on the call today with prepared remarks are André 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 third quarter ended September 30, 2019. This press release is available on our website at cellectis.com.

Just as a reminder, we will make forward-looking statements regarding financial outlook in addition to regulatory and product development plan. 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 20-F on file with the SEC.

I would now like to turn the call over to André. André, please go ahead.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [3]

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Thank you, Simon. Good morning, and thank you, everyone, for joining us today on our third quarter financial and corporate update call. On our call today, I would like to give you a brief update of the Cellectis-sponsored allogeneic CAR-T cell Phase I clinical trials and the progress we have made over the past quarter and since the beginning of 2019.

The past quarter has been key for our execution strategy in the progression of our 3 leading proprietary allogeneic CAR-T cell assets to Phase I clinical trials. Furthermore, we are building out our clinical leadership team with the addition of Dr. Francisco Esteva as Vice President, Clinical Development. Following the acquisition of CELLforCURE by Novartis, we strengthened our manufacturing capacity with the addition of a CMO partner to replace CELLforCURE, Lonza, in addition to MolMed while we remain on track with our construction of our in-house manufacturing facility, SMART and IMPACT. And we're thrilled to announce the first patient building for MELANI-01 clinical trial for UCARTCS1, our first wholly owned allogeneic CAR-T cell product candidate in relapsed/refractory multiple myeloma.

With 3 partners and 3 stand-alone clinical development programs totaling 6 clinical programs ongoing in hematology, we're proud of how far we have come. Cellectis is persistent in the pursuit to cure for cancer, and we intend to sustain this determination in the years to come.

Regarding our clinical trial, AMELI-01, our first -- our new U.S. Phase I dose escalation trial for UCART123 targeting relapsed/refractory acute myeloid leukemia, will open soon for enrollment as the new manufactured cell batches are to be released for the use of these -- in these clinical trials. We obtained clearance for the new IND number in July for this year after manufacturing the product under revised process. This trial will be conducted at Weill Cornell, MD Anderson, Lee Moffitt and Dana-Farber Cancer Institute. Based on clinical data so far with autologous CAR-T cell therapy targeting CD123, we strongly believe in CD123 as a high value target for the treatment of AML, and we're excited to bring this new treatment option forward with our allogeneic approach.

BALLI-01, our Phase I dose escalation clinical trial for UCART22 targeting relapsed/refractory B-cell acute lymphoblastic leukemia or BLL is open for enrollment at Weill Cornell Medicine and will open at MD Anderson and The University of Chicago Cancer Center soon. We are excited about the new treatment option for this product candidate brings to patient, which includes those patients that have relapsed following a prior CD19-directed CAR-T cell treatment.

Finally, I'm very excited to announce that the first patient has recently been dosed in our MELANI-01 Phase I clinical trial for UCARTCS1 targeting relapsed/refractory multiple myeloma, another CAR-T cell targeting -- targeted in this space. We've picked CS1, also named SLAMf7, as a target because of its relevance in the treatment of multiple myeloma by elotuzumab, a monoclonal antibody. This trial officially commenced at MD Anderson Cancer Center and is also open at Hackensack Meridian Cancer Center. We're looking forward to presenting interim data from these Phase I dose escalation trials in 2020.

We have previously covered the design and the intent of these studies but would like to remind you that these all are Phase I dose escalation studies where we look at the following main parameter. First of all, our first-in-human study are Phase I dosing -- dose-finding studies. We have learned from historic analysis and other autologous and allogeneic CAR-T programs that an early strong expansion of CAR-T cell is an indicator for affirmative performance. We believe that allogeneic CAR-T cells are very capable T cells as they are derived from healthy donors. It's important to determine the right dose before moving into the expansion and registration phase. At the current stage, we are starting with very low doses and try to find the effective and maximum tolerated dose.

Second, we are looking closely at the safety profile of our allogeneic CAR-T cell program, which includes the familiar side effect of autologous CAR-T cell therapy including cytopenia, cytokine release syndrome and CNS cytotoxicity as well as graft versus host disease or GvHD, which is unique in the allogeneic CAR-T therapies. No signs of GvHD over grade 2 in any of the selective sponsored or licensed clinical trial has been seen so far. This is an encouraging sign and is an achievement for the manufacturing process established by us.

Third, we are looking at an early sign -- early signs of antitumor activity. Here, we would like to reiterate that the initial dose start at level which are below the dose level approved for autologous CAR-T cell therapies such as Yescarta or Kymriah in the DLBCL and ALL. Following safety as the primary end point, we determined the antitumor response at day 28 post CAR-T injection as secondary endpoint in these Phase I dose escalation trials. This leads me to the life point of the preconditioning and CAR-T persistence, which has been a widely discussed topic of the allogeneic CAR-T cell approach.

The patient we're seeing in our Phase I study are usually heavily pretreated patient, including failed autologous CAR-T cell therapy, presenting low T-cell count and considerable tumor burden. Here, a careful preconditioning regimen prior to CAR-T cell infusion is necessary. On one hand, the initial depth of the response is a good indicator for long-term durable remission. On the other hand, long-term CAR-T cell persistence leads to longer-term side effect. In our Phase I studies, we would like to measure the cell expansion and persistence for the few first weeks following the initial dosing.

Coming to our partner program, our licensees, Servier and Allogene, have made progress with the filing of INDs and opening enrollment for UCART219 (sic) [UCART19] in non-Hodgkin lymphoma, also called L-501 (sic) [L-0501], and UCART BCMA multiple myeloma, also called ALLO-715 as well as the driving the clinical progress for UCART19 in ALL, complementing our effort in covering the majority of hematological malignancies, an area of large and unmet medical need. I would like to say a few words about our manufacturing, which is a central and a key point for our future success.

We're currently building out our U.S. manufacturing site in Raleigh, North Carolina. This is a 92 square foot (sic) [82,000 square foot] facility which is designed to ensure the stable supply of our latest generation of gene-edited cGMP CAR-T cell for both clinical and commercial cell doses and is expected to go live in 2021. We're very excited that as of November last year, Bill Monteith has joined us as our Lead of -- Head of Manufacturing and Technical Operation (sic) [Operations], previously Head of Manufacturing at Dendreon. Bill has been building our team in Raleigh, which is growing fast and will be fundamental in building blocks for selected successes in the future, but he's also heading all of the technical operation, including SMART in Paris. As we reach our manufacturing independence, we're expected to go live with an in-house facility in Paris in 2020, which is designed to manufacture certain starting material for our CAR-T cell production, which is also expected to support the work of our contract manufacturing partners: MolMed and Lonza.

As on all fronts, we're investing in an exceptional talent in area of high impact. One of these area of focus is our clinical leadership team. Professor Francisco Esteva, MD, PhD, joined our team as Vice President, Clinical Development in October. Dr. Esteva is a Board-certified medical oncologist with more than 20 years of experience in academic drug development. Dr. Esteva is a veteran in the oncology space with an exceptional experience and track record that includes leadership roles in more than 100 clinical trials and an impressive number of peer-reviewed publication. He currently serves as Adjunct Professor of Pathology at New York -- NYU School of Medicine. We're excited to enter this next clinical development phase with him. Together with our licensee, Allogene and Servier, Cellectis is extending its leadership position in the allogeneic CAR-T cell space with now a total of 5 different target in clinical development. We continue to benefit from strong operational flexibility to achieve our clinical milestones given our strong cash position.

With that, I would like to hand the call over to our CFO, Eric Dutang. Eric, please go ahead.

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Eric Dutang, Cellectis S.A. - CFO [4]

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Thank you, André. I will provide a brief summary of the consolidated financials of Cellectis. As a reminder, Cellectis is a 69% shareholder of Calyxt, our publicly traded subsidiary. You can get the breakdown of the consolidated financials prepared under IFRS between Cellectis and Calyxt in the Appendices of our third quarter 2019 financial results press release. I would like to only present the Cellectis financial performance since the Calyxt management has already presented their Q3 2019 earnings.

First off, I would like to reiterate that we focus our cash spending at Cellectis on the following objectives: developing our deep pipeline of product candidates, including the manufacturing and clinical trials of UCART123, UCART22 and UCARTCS1; building our state of the art manufacturing capabilities, IMPACT and SMART; and strengthening our manufacturing and clinical development, including hiring talented personnel such as Francisco Esteva.

As of September 30, 2019, Cellectis, on a stand-alone basis without Calyxt, had close to $300 million in consolidated cash, cash equivalents, current financial assets and restricted cash. This cash position will be sufficient to fund Cellectis standalone operations into 2022. The net cash burn, which corresponds to net cash flows used by operating activities, capital expenditures and net debt payments, was $52 million for the first 9 months of 2019, of which $19 million is attributable to the third quarter of 2019.

Operating losses were $57 million for the first 9 months of 2019, of which $16 million is attributable to the third quarter of 2019. R&D expenses increased by $3 million to $53 million for the first 9 months of 2019 compared to 2018. And SG&A expenses decreased by $7 million to $15 million for the same period.

Revenues and other income decreased by $5 million to $13 million due to a decrease in recognition of upfront payments already received and R&D cost reimbursement in relation to the therapeutic collaborations. This was partially offset by $5 million milestone revenue in relation to ALLO-501 (sic) [ALLO-715] clinical development recognized in the third quarter of 2019. Finally, financial gains were $11 million in the first 9 months of 2019.

To conclude, I would like to say a few words on the consolidated financials. The consolidated cash, cash equivalents, current financial assets and restricted cash position was $367 million as of September 30, 2019. The consolidated net loss attributable to shareholders of Cellectis was $65 million or $1.52 per share in the first 9 months of 2019. This represents an increase of $9 million over 2018, which was mostly explained by an increase in consolidated operating losses. The consolidated adjusted net loss attributable to shareholders of Cellectis, which excludes noncash stock-based compensation expenses, was $48 million or $1.12 per share in the first 9 months of 2019, an increase of $20 million over 2018.

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

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [5]

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Thank you very much, Eric. And this concludes our prepared remarks, and we would now like to move over to Q&A. Operator, please go ahead.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question today is from Gena Wang of Barclays.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [2]

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The first question is regarding the UCART123 and the new R&D filing. Just wondering, I mean, was that due to the production process change? Can you give a little bit more color exactly what that is? And would that apply to other programs?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [3]

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Simon, do you want to take that?

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [4]

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Yes. Gena, thanks so much for the question. So this was particularly for UCART123. We've remanufactured this program throughout the winter of 2018 into 2019. And we've previously expressed that this new product has been following a new manufacturing process, and this new manufacturing process actually yielded a product with higher potency specifications than we had previously -- was yielded in the manufacturing. And so that triggered the FDA asking for basically a new IND filing to show more follow-up data. So this was the background specifically for UCART123, and we've now concluded those discussions. And we're actually really, really excited about the target and the product, and we're entering this into clinical development now. But this necessitated a new IND filing.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [5]

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Yes. The definition of a product in the cell therapy space is essentially defined more than 80%, like, close to 85%, 90% by the process. If you change your process, and we changed our process for UCART123 trying to build a better product. The first batches were manufactured in 2016. And so the second one, like, in second half 2018, as we changed the manufacturing process, we saw that potentially we could bridge that, like, the product showed quite different from the initial product we manufactured, then the FDA required us to file a new IND. IND filed in July -- June. Plan is July and then we can move forward.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [6]

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Okay. So how does that translate into the new dose now -- initial dose with the new manufacturing process?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [7]

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So interestingly -- well, interestingly, initially, we started at per kg 1.25x10^5, which was the initial start dose. Then when we had the whole from the FDA, we resumed the trial with a dose that was 10x lower, which is 6.25x10^4. And then we re-escalated up to 2.5x10^5. And currently, we were able to convince the FDA to bridge the initial dose that we stopped with, with a former product, and the new product exactly had the same dose, which is 2.5x10^5. We now start dose with this trial at 2.5x10^5, would give us continuation on the initial escalation that we were doing. So we're not going back at the lower dose.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [8]

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And even with the higher yield with this new manufacturing process, and if they allow you to go back to 2.5x10^5, that's as initial dose?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [9]

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Yes.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [10]

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Okay. And then with this new manufacturing process, is that -- do you apply the new manufacturing process also to the CS1, 22, the other programs as well?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [11]

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Well, every CAR and every target has its own constraints. Sometimes, the target is slightly expressed on the T-cell and can induce, for example, small expansion. Sometimes the cell -- like the expression of the target slightly on the T-cell can induce fratricide killing during expansion, sometimes not. So every CAR has a different type of process. But there are certain rules that you can keep from one manufacturing to another. And 22 is under the former -- has been manufactured under the former process. CS1 is an evolution of the former process that requires, for example, certain editing that would allow to suppress the fratricide killing. And 123 is -- has been developed essentially due to certain conditions to go in particular to 123 where we now have a process that maintains very much the potency of the cell pristine from -- up to the end. It's a learning lesson from, like, from manufacturing to manufacturing. And what we're doing, we're trying to summarize this to work on the evolved version that we're preparing to -- for the -- [to those trial].

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [12]

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Okay. And my last question is more like a scientific question. Just wondering, what criteria or -- what will be the criteria for you to determine if certain goals -- the cell expansion is enough?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [13]

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It's a very -- it's a hard question. And it's not an untough question. Unfortunately, I'm not going to be able to answer this question because there is a lot of translational researches conducted around this, and it depends. For example, potentially peripheral blood disease, then you can measure the expansion essentially of peripheral blood. If it's, for example, such as BLL confined in the bone marrow, it's absolutely not the same case, for example, for ML where most of the blood are present in the bone marrow of the patients or multiple myeloma, where the -- not that much like peripheral blood that you can find in there.

So the behavior of the CAR -- and when you look at what's going on for autologous CAR-T therapies, for example, for CS1 or 123, and the time -- or even for BCMA, the delay in the expansion over this one, the CRS or the peaking of the CRS happens is totally different between in ALL and in multiple myeloma. And the cells are not present at the same place, so it's difficult to measure this. At the end, it's more like the tumor response that you would like to see and also certain targets, the surrogate marker of the expansion that you could see or measure and compare it to and so all the things like that, but it's really an open question. And we are putting a lot of energy in translational medicine to understand this. And I think that's part of the know-how that you build up with the CAR [I know we're just working on that].

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Operator [14]

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The next question is from Christopher Marai of Nomura Instinet.

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD & Senior Analyst of Biotechnology [15]

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Just to follow up on some of the manufacturing questions earlier. Could you remind me, for each of the 3 programs you now have running in the clinic, are your manufacturing processes the processes that you will be using through commercialization? Or do you expect to change these in between? And then secondarily, and perhaps more focused on the CD22 and the CS1 program. Remind us how you chose your first lowest dose. If you think that's going to be efficacious. And then if dose expansion opportunities will allow you to put together data sets that may be suitable for registration.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [16]

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This is a very good question. And the size of the dose for CS1 is higher than for 123 and 22, we start on 1 million cells per kg. It's very difficult to know exactly because, as I said, the tumor burden is totally different. It's closer to what we would consider as an effective dose that fill a goal dose in there. And what we're interested in is also try to find the MTD around these doses. It's very difficult to translate from what you've seen in preclinical development and also in comparison with what's happened with -- what's happening with autologous CAR-T trials, including CS1 trials, to understand what is the proper dose at the end with patients.

So we hope, of course, to see some general response in there. But would it lead to derive those? I don't think so at start. But at least I -- we believe that we will be able to see certain finds. What is interesting also is -- UCARTCS1 is that CS1 is SLAMf7 is present on a number of different type of live blood cells, such as NK cells, T-cells, B cells, macrophages, et cetera. So that will be part of the effort of these T cells that would be not only focused on the tumor itself but also focusing potentially on the immune system, which is a good thing because it could deepen the length of depletion on its one side but would divert the effect of the T-cells out from the tumor. And so maybe the dose should be higher at the end. See what I mean?

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [17]

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And Chris, on your -- to follow up on the manufacturing question. I just wanted to mention that the way we're manufacturing right now is so sophisticated and it's under cGMP requirements that we believe we have a very stable product, and we place utmost importance on the fact that the manufacturing of the cells now has to be consistent throughout the clinical trials and then potentially into registration.

So that's why we're doing all this work on manufacturing process development, that we have basically a very stable product that yields the same specifications batch after batch from donor to donor. And this is, I would say, an area where we have made some of the most progress over the last couple of years to really come to a uniform product in specifications from batch to batch from donor to donor to make this true off-the-shelf concept work. And so I think we're really setting the bar very high there also in the space of our peers. But we're very proud of that achievement, that we have such a good product.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [18]

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The BLA version of the product, the process for BLA version has to be as close to what you have during the expansion, i.e., the dose escalation and expansion. However, certain things should be -- like BLA-proof. So there is a bit of

(technical Difficulties]

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [19]

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Operator, can you hear me? I believe we lost Andre.

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Operator [20]

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Yes. His line is still connected. Would you like me to move on to the next question?

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [21]

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Sure. We'll come back to that, yes.

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Operator [22]

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The next question is from Michael Schmidt of Guggenheim.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [23]

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I have Simon (inaudible). If you maybe could remind us of your -- the preconditioning protocol for CS1 and UCART123. And maybe talk a little bit about how you think about, I guess, balancing expansion of the cells and persistence. And how are you -- maybe talk a little bit about how you decided to use alemtuzumab in this program.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [24]

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Yes, that's a very important question, and something that we're really focusing a lot of attention on is the lymphodepletion for these. So the lymphodepletion with cyclophosphamide and fludarabine is pretty standard. And we're using -- we haven't disclosed exactly the doses yet because this has also been dialed in for each program separately. But it's along the lines what you would see for the autologous CAR-T. And we believe the data we've seen so far really shows a robust expansion of our CAR-T cells in that environment. We have invented and brought forward the concept with alemtuzumab pre-injection and concurrent p52 knockout in our CAR-T cells.

And so this is a concept that we think is a very efficient one to basically prolong the lymphodepletion and to also prolong the persistence of the CAR-T cells. And it really depends on the program, how long we actually want CAR-T cell persistence. So we will update the details of this lymphodepletion regimen as we're reporting the first set of clinical data, which we're very excited about. But we think we have a very differentiated approach to the lymphodepletion, meaning some programs will have alemtuzumab. Some programs will not have alemtuzumab. And in some cases, we reserve the option to add alemtuzumab later on.

So it's something that we're really differentiating between the patient populations that we're seeing, and we see that alemtuzumab can have a very long-lasting effect on the reconstitution of the immune system of the patients we're seeing. Given that these patients are heavily pretreated, it's maybe not always the most ideal strategy to go for alemtuzumab. And at the same time, we are very encouraged with the early expansion and persistence of allogeneic CAR-T cells we've seen just after cyclo/fluda preconditioning but without alemtuzumab preconditioning. So it's something that we're exploring, and we strongly believe this necessitates a differentiated approach.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [25]

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Sorry. We're back. One thing I would like to add, it depends also from the indication. BLL is different than -- AML is different than multiple myeloma. So each time, we had to assess this. But the enablement of using alemtuzumab goes here.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [26]

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Got you. How much optimization, if they are still necessary, based on what you see? And/or how likely is it that you get it right, I guess, the first try in terms of the exact protocols that are being used?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [27]

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Well, so far, we potentially think that we might not need some optimization. You have to go through the dose escalation to understand this. But we think that the protocol, which we have currently, is a good protocol. It depends if we definitely see a problem where we need to optimize, et cetera. There is the potential to optimize this. But we think we're starting here with an optimized protocol, and we definitely think that this could go up to the expansion and the (inaudible). And we hope so.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [28]

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Okay. And then just maybe regarding the AMELI trial. As we understand it, AML patients may be a little bit more frail, for example, than multiple myeloma patients just given the prior therapies. Maybe talk a little bit about your patient selection process for the UCART123 study and sort of what you're doing to minimize potential of safety risk in that study, particularly.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [29]

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Well, the patient selection is, of course, one of the many things we've been working on in term of like age, having a, like, young patient below a certain stage and evolve, for example, the fact of having too poor quality patient. Also not too heavily pre-treated before is something that's really important. No previous other type of carcinoma or cancer that they have. The weight of the patient is also important. And also the expression of the target on the surface of the cell. And so all these selection criteria are quite consistent from our [trials]. BALLI, AMELI and MELANI-01 have like a very similar selection process, which might be, like, constrained at the beginning but would help us to have a more consistent set of data at the end to determine the dose with a high consistency from, like, cohort to cohort while we're moving up the doses. If you have this too lax type of criteria, then we lose sharpness of the data that we're gathering at the end, and the cleaning of the data will potentially hamper your potential to develop this -- the right protocol for the expansion and the good [lift].

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [30]

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Okay. And then maybe one last sort of a bigger picture question. There's obviously a lot of excitement around BCMA, and there's going to be a fair amount of data at the upcoming ASH conference around BCMA-targeted CAR-T cell therapies. And just philosophically, I guess, what are some of the key advantages of CS1? And how do you see CS1, UCARTCS1 fit into the multiple myeloma landscape in context of a lot of programs going after BCMA?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [31]

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Well, first of all, we like BCMA because it's one of the Cellectis partner program. Like UCART, BCMA has been developed by Cellectis as a group and licensed to Pfizer, and it became Allogene. It's now under the name ALLO-715, and we definitely like this target. But to tell you the formula is that there is a lot of positive trials which are coming after -- either investigative sponsor or company-sponsored trial of BCMA. And all the patient is [currently] are relapsing from BCMA. The fact that BCMA is relative to -- are quite heavily secreted protein in the blood, quenches the activity on the FCMvs, which is less or not the case with CS1. And to tell you the truth, actually, when we look at CS1, and that's why I was saying that elotuzumab is a good proof-of-concept there. Like, we don't have the same proof-of-concept within monoclonal antibody for BCMA. If you -- monoclonal antibody that had been developed for BCMA or bispecific, et cetera, it does give you similar data as the monoclonal antibody for elotuzumab where you have 5% complete response and 35% partial response. Look at 19, look at 22, et cetera, all of the CARs that has been developed is being developed to try to find the level of expression that would be low enough -- that's high enough to make a CAR work but never works in monoclonal antibody. Got a proof of concept that monoclonal antibody, I think, is a good sign of the better performance of the product at the end. That's why we're encouraged and we're excited about CS1 as a target, but we definitely like also BCMA and as it's develop by our partners.

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Operator [32]

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The next question is from Salveen Richter of Goldman Sachs.

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Ross Howard Weinreb, Goldman Sachs Group Inc., Research Division - Research Analyst [33]

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This is Ross on for Salveen. As you think about the recent CD123 CAR-T that was terminated on the ClinicalTrials.gov out of Nanjing Legend. Is there any read-through from that study, which has the same target as CD -- as UCART123 in terms of safety and adverse events?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [34]

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Well, CD123 is they're [door trials, for example] (inaudible) positive CD123 CAR-T, and you have, like, very interesting data that are produced there. And like I [were to] invite you to check the data that has been produced so far, it's also licensed by, I think, Mustang Bio. But for the Legend, it depends on how the CAR is built for autologous therapy. If the CAR persist, then you have a problem because CD123 is expressed on myeloid progenitors. If you keep the pressure with the CAR on an autologous basis where the CAR persists with pressure over the myeloid progenitors, then you won't be able to rebuild blood. Even red blood cells come from myeloid progenitors, T-cells, et cetera.

So it could be extremely toxic. It's not like CD19 where you can keep the CAR floating in the blood for 8 years, the patient will end up with cytopenia, it's fine. So lymphopenia -- sorry, not cytopenia, it's lymphopenia, it's fine because you can supplement it in the hemoglobin in the patient. In the case of the CD123, the target leads to cytopenia and also inability to build red blood cells. So it might be a reason why that came out to this point, which is not the case of [PTSO], and that's why also we like very much the allogeneic approach because it's a hit and run procedure where you can clean up only CD123 -- all CD123-preventing cells and then less the bone marrow because it doesn't hit the hematopoietic stem cells, then, I think, stem cells rebuild blood afterwards. If you maintain the pressure, then we have a problem.

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Operator [35]

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The next question is from Amanda Murphy of BTIG.

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Amanda Louise Murphy, BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst [36]

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And to the question on -- you've presented data on a number of different next-generation, say, edits across multiple different indications. I'm just wondering when we might start to see that come into some of the products or come into the clinic?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [37]

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I'm not sure. Like, I didn't hear well the question. Can you repeat the question, sorry, I'm in a bit -- I drop something [in here].

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Amanda Louise Murphy, BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst [38]

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Yes. No problem. I was just saying that you've -- at various conferences, you've presented data just around some of the edits that you're pursuing sort of in the next-gen ways. You're thinking about PD-1 knockout and things like that. Probably presented more data than others on that front. So I just was curious that when we might [start to see products come] in the sort of pipeline if you will?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [39]

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Well, [shortly] the product that were developed in CD123, CS1 and 123 don't have the double PD-1 knockout. The next-generation CAR -- and we think the CAR that we will be having in the pipeline to treat solid tumors definitely make a difference with the PD-1 knockout. Not only this, but there is more sophistication over the technology we're having. We have potential options to, for example, use PD-1 as a land pass to other type of genes in using this.

I guess, probably in the coming year, we will present, either us or partners, certain evolution under use of our gene-editing technology to, for example, such as the use of PD-1 in an approach for solid tumors, either by in-house projects or external projects also. So it's something we've been working for a long period of time, and now I think it's reaching maturity. It's probably not in 2020 that we're going to file an IND on our side because I think they have a lot of CARs on our plate. But a potential partner, I think, could go for an IND quite soon.

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Amanda Louise Murphy, BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst [40]

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And are those -- in terms of the partner products, I'm not sure how much you can disclose, but is there efforts to partner their next-gen talent out now? Or -- I'm just curious how much interest there's been from partnerships in licensing those from you already.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [41]

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No. It's like sooner because we're trying to do this in a non-competing way, which Cellectis is developing. So we're not going to develop the technology of our partners and potential partners, actually. And that's why we think that it could be sooner than later.

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Operator [42]

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The next question is from Hartaj Singh of Oppenheimer.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [43]

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I just got a couple. One is just on the UCART123 on the -- with starting the new IND. Are there steps in terms of just the IND approval for various sites? Could those be -- happen quicker? And then the other thing is what's the time between the dosing cohorts? I know we had [variance] for as little as 2 weeks and as much as about 1.5 months. Where are you at that now with the -- with UCART123? And then I have a follow-up on [CS1].

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [44]

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So always, between the first patient and second at each cohort, it's like 4 weeks or 28 days in total, between the first and the second dose. For CS1, we can include 2 patients for the second dose and perhaps close the cohort as soon as possible. So it's parallel, you can immediately disposition. It depends on what you create, like, every 14 days afterwards. And for 22, I think, it's like every 28 days. So every trial is different. And we will probably -- while we're walking through these trials, trying to manage cost, we try to line up all the trials together, but we would like to be very cautious at the first dose of every cohort in keeping the 28 days, to be sure that the (inaudible) has been rectified.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [45]

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Yes, that makes a lot of sense. Sorry, go ahead, Simon.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [46]

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Okay. Just in terms of your question on the IRB. So we have been very fast in progressing through the IRB approvals and getting our hospitals basically to sign off on the clinical trials and the protocols following the new IND. That was a very good question, by the way, because sometimes people forget that after getting an IND approval, you have to work through the IRB, you have to work through budgets with hospitals. But given that we have such long-standing partners there, those discussions went really fast.

And on top of that, specifically in AML, the centers we're working with really are saying to us that there is such a huge unmet need for the relapsed/refractory AML patient population, that they are just waiting for these studies to get initiated. And we get, on a daily basis, requests for potential compassionate use for the product and even other centers with some very well-known doctors want to initiate studies with this product. So the pull from the clinic and what they're seeing for the patient's need is really there for this product, and that's also why we're very excited to get this on track.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [47]

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Yes. No, that makes sense, Simon. André. And I mean, I think that biosimilar companies had experienced some problems with manufacturing [goods], right? Those are the branded products, for example, Rituxan and Herceptin. That was actually a big meeting with the FDA a few years ago. So the fact that you're seeing a kind of a manufacturing blip also, to me, is not out of the ordinary. I mean this is a biologics. It's not optimal. This sort of happens in biologics. I guess with CS1. The question I have is what kind of patients do you think you'll be treating, André? Would it be second, third, fourth, fifth line patients? Will you include or exclude elotuzumab failure? Just any thought. I mean multiple myeloma had -- has lots of different dosing regimens. So you got any thoughts on where you'll be kind of trying to slide in at this early stage?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [48]

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Well, this is very -- I -- you -- as always, it's a very good question, Hartaj, here. The -- currently, the patient we're seeing for multiple myeloma are heavily pretreated. It's like patient that has over 10 lines of treatment before. Most of the time, of course, failed autologous, they rule out after an autologous treatment, most of the time is BCMA. And the objective that we try to show here is trying to move up the line. We prefer to avoid having people treated with elotuzumab because the half-life of the (inaudible) -- and you block the target at the end if you do [that]. Dara is way more used than elotuzumab at the end so daratumumab.

And to say that the sad thing is that most of the multiple myeloma patient is treated for a long period of time, but they always fail. The target CS1 is preserved up to the end. It's a very stable islet found within multiple myeloma patient. So that's why we think that we can move up the line while proving the state of the patient is (inaudible) and we hope with the ease of use of these (inaudible) and also performance potentially, that at the end, we would be able to move up. Interestingly, also, we're a strong believer in combo studies. And we think that our CAR -- most of our technology could potentially lead us to make combo studies with other type of drugs that are used in multiple myeloma that could enhance the activity of the CAR, like skyrocket the chances of the recovery for the patient at the end.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [49]

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Great. One last specific question is that just to remind us for UCART123, CS1 and 22, how many patients were in the first cohort? And then how many patients in the next cohort? Is it 3 plus 3? I think in that case, is it 1 or 2? Then to 2? If you could just kind of give us a quick reminder then.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [50]

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Hartaj, to your question, we have the possibility to include between 2 and 5 patients in each dose cohort. And we have a little bit of flexibility here because, obviously, we want to go through a dose escalation quickly to come to the optimal dose as fast as we can but also as safely as we can. So if we see a suboptimal cell expansion, we would move quicker after a few patients to the next dose cohort. And if we see a very good response, we can extend up to 5 patients. So the -- we sometimes give like the overall number of patients, let's say, up to 18 patients in a Phase I dose escalation study. But that does not mean that we're running 5 patients on a suboptimal dose. So that's why it's a little hard for us to give the exact guidance. But we will definitely keep The Street updated. And I'll keep you updated in terms of how quickly we're progressing through the dose escalation.

We believe, although, that now we're at doses with 2.5x10^5 cells per kilogram for UCART123 going to 6.25x10^5, for example, that we're just ahead of the optimal dose. And we're excited to get there. For UCARTCS1, we're starting at 1x10^6 cells per kilogram, which is the highest starting dose we ever had in any of our trials. So we're very excited to look at the antitumor effect in that cohort as well. And then for UCART22, we're starting at the same dose, 1x10^5, as UCART19 originally started. And just as a reminder, at that starting dose already, we've seen some very impressive complete remission rates. So we're excited to see the next couple of patients in each of those trials. And we'll keep you updated on how large the cohorts will be.

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Operator [51]

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The next question is from Raju Prasad of William Blair.

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Raju Yashaswi Prasad, William Blair & Company L.L.C., Research Division - Senior Research Analyst [52]

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I had a question about the redosing protocol in the studies. I just want to get your thoughts on actually the dosing, and at what point do you kind of trigger that with the protocol design?

And then a lot has been [laid] about CD8 positive (inaudible) activity, just wanted to get your thoughts there.

And just last question, it sounds like earlier in your remarks, you talked about you're already seeing some ALLO -- or sorry, autologous relapsed patients in their trial enrollment. Do you think that your cohorts for CS1 and 22 studies will have a majority of previously treated autologous patients?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [53]

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Yes, we do see a lot of previously treated patients for the simple reason that there are a lot of, like, multiple myeloma, BLL and -- like, we do have like (inaudible) CD19 CAR for 22. And for multiple myeloma, you have BCMA. It's not the case for AML because AML, there are no CAR currently. It's only CAR that is blocking this indication. I think that we're seeing no pretreated patients. The strategy of free dosing is, for me, very important. We are convinced in the company that this type of therapy could be developed in a different way than the single dose that was the initial way (inaudible) when the CAR was supposed to pursue the rest of the life of the patient.

And we're -- you still have to go through the dose escalation to determine the right dose, plus to determine -- the determination of the right dose has been identified, then we plan to go to a more sophisticated way of injecting this, for example, we give one dose at day 0, a second one at day 14 and then 2 other doses at 28 and potentially like 1 month later. Or do also a couple of studies with like a different type of CAR or potentially a different type of molecules that could be combined with it, which we -- could be built from like (inaudible) to other type of chemotherapy that can be given in combination, and that would require certainly certain number of repeated injections. So we do believe in that. Now it's -- it depends also of the state of what the patient has received before, of course.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [54]

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And maybe, Roger, to add to that, this is Simon. I think this is a very important question that you're bringing up with redosing, as we're also looking further into the future and into the bridge into solid tumor treatment. I think with the off-the-shelf allogeneic gene-edited CAR-T cell approach, we really open the door to a completely new horizon of treatment strategies. And we're able to redose patients. We have successfully shown that in our ALL trials, and we are looking forward to showing that potentially in other trials as well.

And you will see a lot of publications and updates on the R&D side come up. Where we're actually working on very sophisticated gene edits in our CAR-T cells that enable either redosing or combination therapy with other biologics or chemotherapies. And then also specific targeting and toxicities release against tumor cells. So we're really entering kind of this era of engineered cell therapy with our platform of gene editing, and we're just blown away by the possibilities we have.

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Operator [55]

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The next question is from Wangzhi Li of Ladenburg Thalmann.

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [56]

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Most of them are already answered. But I want to ask about UCARTCS1, it's a very interesting target. And you're -- and expressing multiple different type of cells and then you're studying at -- a medium cell, but if you look around, it a very high dose. So I just wonder, do you have extra measures for safety precaution [for this trial]?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [57]

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We don't consider it as high dose, actually. It's a lower dose and normally, it's like the floor dose for like single -- like a CAR activity, which is 1 million cell per kg. We do monitor with a very -- a lot of precautions all the environment around the CAR-T term of like no talk, the activity, the hematopoietic stem cells. So the bone marrow stem cells is something that's really important for CS1 also. But also everything concerning the GvHD and the distribution of the cells in the patient. And of course, like the expansion of [details]. We don't consider that the dose we're injecting is -- I think can definitely have other level of injection that's likely go through. You have to keep in mind, as I said this previously, but I think it's a really important point. Part of the activity of the CAR will be focusing on other type of immune cells, most of the -- of tumor on target cells are immune cells so it will probably divert part of the problem to deepen the length of depletion, and that's why we think that the dose has to be higher also. So yes, there are a lot of different safety monitoring around this, but we don't think that this CAR is going to be (inaudible).

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [58]

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Got it. [Been] helpful. And then also a question about UCART123. You mentioned the -- for AML because the target expressed on the stem cells, you don't want to carry the disease too long because of [monotoxicity]. But do you have any color on what you think of the optimum persistence to be or the balance to both the efficacy and safety?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [59]

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Normally, when you look at literature, the persistence itself has to be around like 2 weeks. So that's the window where the cells would act. After this, what is the main parameter of functioning is the expansion. If the expansion is high and very strong, then you have a deep activity at the end. It's totally different than the persistent itself. So what we're targeting are is at least to have the cell persist during the -- like the 28 days or like the [18-month] period. But what has to be monitored is substantially the deepness of the response at the end.

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Operator [60]

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The next question is from Soumit Roy of JonesTrading.

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Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [61]

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It might be a bit of a repeat question, but the UCART123 for the AML, do we know when the first patient is going to be dosed? And so what I could understand is from the dose level, the time difference between dose level 1 and 2 would be 28 days apart and maybe from 2 to 3 would be 14 days apart. But within the dose level cohort 1, are they 28 days apart or how frequently are they enrolled, with that level 1, level 2? Any color on that?

And the second question is if you can give us any color on change in the product characteristic between the previous manufacturing and this that led to a new IND.

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [62]

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Simon, do you want to take this question?

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [63]

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Yes. So in terms of the first patient dose from 1 to 3, this should be imminently, like we have -- as we said earlier, we have really gone through a lot of paperwork here. We've done our homework. We remanufactured. We filed a new IND. We went through the hospital approval. We're working with some of the best hospitals in the space. Weill Cornell, MD Anderson, The University of Chicago, like, these are all really amazing centers that we're very happy to work with. So we think that the first patient dosing should be very soon, and then we will hopefully give you updates on an ongoing basis where we are with enrollment. But we're very excited for this to kick off.

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Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [64]

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And the gap between the patient in the first dose cohort, the second dose cohort, how frequent is that going to be? Just to get a sense when we should -- should we expect early data in mid '20? Or is it really going to be end of 2020? Just to get a sense of that.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [65]

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The enrollment timelines is 4 weeks between the first 2 patients on each dose cohort. And then 2 weeks between each patient on subsequent patients in the same dose cohort. So that gives you a little bit of a timeline idea, how fast we can enroll patients. We also want to be very careful with the patient selection just in these first few patients because we do, unfortunately, see patients that have gone through multiple lines of treatment. Relapsed/refractory AML, as you know, is a very, very difficult-to-treat disease. And so we want to be very careful with our patient selection as well. And again, we have some of the best centers with a lot of selection of patients for these trials. But the timelines are, as we said, 4 weeks between the first 2 patients and then 2 weeks thereafter.

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Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [66]

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And any color on the -- what really changed between the product characteristics between prior manufacturing and this because with new -- more important product comes -- adverse event worries come in, if it's going to be triggering more adverse events.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [67]

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So I think one important aspect is that we have really perfected the reproducibility of the product. So our, let's say, average power and expansion potential of the product is higher but also it gives us more confidence in our centers and patients more confidence that they're getting the optimal product. So I think that's of utmost importance.

And the higher potency of the product that we measured in our preclinical testing for this product, it's difficult to say how this is directly going to translate into clinical development. And we believe the doses that we are injecting into patients are still way below the currently approved autologous CAR-T cell doses. Just as a reference point. Of course, these are different diseases, but we think that we're at a good dose expansion place currently, and we're at a good dose in general. And the new products, it just gives us more confidence that we're moving forward with the best possible product.

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Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [68]

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Okay. Just one last, maybe a little broader question. As we know in the allogeneic setup, there is 2 early match, probably, at the most. And that essentially would limit the persistence of these cells and which is perfect for AML kind of setup where you don't want the cells to persist very long. But in case of multiple myeloma and other ones, do you think that's a limiting factor for an allogeneic approach versus an autologous approach?

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André Choulika, Cellectis S.A. - Co-Founder, Chairman & CEO [69]

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No, we don't think so for the simple reason that the big power of an allogeneic approach is the ability to rebuild cell target [or the product]. We don't -- seriously, I don't see any advantage over an autologous approach because either a -- like all these are [linked] and then persistence of the CAR is fine because you can live with it -- without these cells. But a lot of other targets such as, for example, CS1, you definitely don't want to target, like, the CAR to stay there forever. So you see a lot of CAR, such as, for example, BCMA CAR for autologous therapies that are used currently, they don't persist forever. It's better to be able to develop a protocol with repeat dosing or like a real [structure] with monitoring, for example, the tumor burden, and you can repeat-dose the patient at a time so you don't have this problem of the persistence instead of having like a random -- like you flip a coin, and you don't know if the CAR's going to persist or not. The T memory cells are going to be here, whatever. It's not the right way to do it because the material they are going to inject in the patient was derived from patient depletion. If the patient has been heavily pretreated, we see, for example, 10 lines or 11 lines, like treat them with daratumumab, whatever, elotuzumab in it, et cetera. And the CAR can do one shot (inaudible) like you make an apparatus to the patient, the quality of your T-cells are not going to be -- are going to be suboptimal, and you cannot exactly predict what's going to happen. And that's why you see most of these patient reacting after a certain period of time. So I think it's better at the end to have a consistent protocol to be developed in there. And if you need the cell to stay for a long period of time, then give more cells.

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Operator [70]

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This concludes today's conference. I'll now hand the call back over to Simon Harnest for closing remarks.

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Simon Harnest, Cellectis S.A. - VP of Corporate Strategy & Finance [71]

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Yes, again, thank you, everyone, for your wonderful questions. And we appreciate your patience during the Q&A session. We think this is important to spend a lot of time going through these. And if you have any further questions, feel free to just shoot me an e-mail, and we're happy to get back on the call. But again, thank you so much, and we're excited for the next few weeks and months to come. Thank you.

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Operator [72]

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You may now disconnect your lines at this time. Thank you for your participation.