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Cellectis Sees Independent Future After Pfizer Deal

Tickers in this article: PFE

NEW YORK ( The Deal ) -- The chairman and CEO of French biotech Cellectis said the company intends to preserve its independence after agreeing to sell a 10% stake to Pfizer PFE as part of a partnership that could trigger multiple milestone payments of $185 million and undisclosed royalties.

The New York company last week agreed to pay Cellectis $80 million up front for exclusive rights to develop and commercialize Cellectis' chimeric antigen receptor T-cell immunotherapies for 15 oncology targets chosen by Pfizer.

The companies will work together on preclinical research on four Cellectis-selected targets, on which Pfizer has the first right of refusal, and Cellectis will work independently on eight additional targets. Pfizer will contribute an undisclosed amount of R&D funding for the 19 targets it has a stake in and pay Cellectis undisclosed royalties on future sales. The agreement specifies milestone payments of up to $185 million per product; each target -- the surface protein on which cancer cells are displaying -- could yield several products.

Cellectis chairman and CEO Andre Choulika said the two companies have for almost a decade been collaborating on gene editing technology and the "chemistry" between the two sets of scientists prompted Cellectis to select Pfizer from a pool of pharma companies from the U.S., Japan and elsewhere with whom the French company had held advanced talks.

Provided two-thirds of Cellectis shareholder concur, Pfizer will also buy new Cellectis shares equivalent to 10% of the share capital at 9.25 euros ($12.58) per Cellectis share, but Choulika said a takeover isn't in the cards.

"Pfizer is really interested in the fact that we are very creative and innovative and are making breakthroughs, while Pfizer has the know-how to convert technologies into high-growth products," said Choulika. "They have no intention of killing the spirit."

Cellectis shares closed at 6.20 euros on Tuesday, just before the Pfizer deal was announced. They were trading on Thursday afternoon in Paris at 10.28 euros, up 66%, on the pre-deal value, and translating into a market value of 257.8 million euros for all the equity.

The Pfizer injection comes after Cellectis in March issued 4 million new shares, equivalent to just under 16% of the company, at a price of 5.13 per share, to U.S. biotech investors including OrbiMed Advisors, venBio, Ridgeback Capital Management, Aquilo Capital Management and Merlin Nexus.

The two sources of funding, plus a 7.2 million euro payment from LFB Group's Cellforcure unit, with whom Cellectis struck a manufacturing deal in June, will leave Cellectis with sufficient cash for the foreseeable future, Choulika said.

Cellectis' so-called CAR-T technology targets surface antigens on cells. Antigens are substances that trigger the development of antibodies.

Choulika estimated that the first products could hit the markets in five or six years and noted that the results of University of Pennsylvania clinical tests on the technology's impact on sufferers of acute lymphoblastic leukemia were "very compelling."