Valbonne, France, March 9, 2017, 6.30pm CET
TxCell SA (FR0010127662 – TXCL), a biotechnology company developing innovative, personalized cellular immunotherapies using regulatory T cells (Treg) to treat severe inflammatory and autoimmune diseases as well as transplant rejection, today announces its financial results for 2016.
“TxCell is now focused on the new engineered Treg products where the antigen specificity comes from a chimeric antigen receptor (CAR) introduced into the Treg cell. TxCell has been a specialist in Treg cells for the last 15 years. As a first mover, TxCell is positioned to be the first organization to put a CAR-Treg product in clinical development. We aim to achieve this by the end of 2018,” said Stéphane Boissel, Chief Executive Officer, TxCell. “In cancer immunotherapy, the first CAR-T products are expected to reach commercial stage in 2017. We expect that this will increase attention towards using a similar backbone technology with regulatory T cells in autoimmunity, inflammation and transplantation. TxCell is a pioneer in this area.”
“TxCell recently successfully completed a financing round with support from our shareholders as well as international investors. The transaction was structured to finance TxCell through its multiple preclinical validation catalysts in 2017 and, if all the warrants attached to new shares are exercised, up to the start of its first-in-man study with its new generation of products,” said Raphael Flipo, CFO of TxCell. “We will continue to carefully monitor costs throughout TxCell’s structure. We estimate that TxCell’s operating expenses for 2017 should amount to approximately €13 million.”
Main 2017 objectives
TxCell aims to be the first company in the world to start a clinical trial with a CAR-Treg, in 2018. To achieve this goal, TxCell has set the following objectives for 2017:
- Generate additional preclinical proof-of-concept data sets, both from the CAR-Treg solid organ transplantation program and from the CAR-Treg programs targeting autoimmune diseases (lupus nephritis, bullous pemphigoid and multiple sclerosis).
- Develop a manufacturing process for the ENTrIA CAR-Treg platform and initiate transfer to a third-party Contract Manufacturing Organization (CMO).
- With respect to its first-generation platform ASTrIA (including Ovasave®), TxCell expects to confirm the 2016 manufacturing process improvement and to take a decision whether or not to resume clinical development. In 2016, TxCell identified an innovative isolation method for non-engineered Treg cells which should enable a reduction of production costs and manufacturing lead-time.
2016 business highlights: Research efforts focused on CAR-Treg platform
Throughout 2016, TxCell intensified the research efforts on its second technology platform, ENTrIA, composed of engineered regulatory T cells (CAR-Treg).
Transplant rejection is currently TxCell’s most advanced CAR-Treg indication. For this program, TxCell is building on the first-ever preclinical proof-of-concept with human CAR Tregs in a transplantation model. This was published in 2016 by one of TxCell’s academic partners, the University of British Columbia (UBC) in Canada.
TxCell is also targeting lupus nephritis, bullous pemphigoid and multiple sclerosis, either internally or in collaboration with academic partners. The development of lead candidates in all three indications has been initiated, with the achievement of an in vitro validation for several CAR Treg cells.
Throughout 2016, TxCell continued strengthening its intellectual property portfolio, both through internal research and academic collaborations. Notably, TxCell secured worldwide rights to both an ‘umbrella’ CAR-Treg patent family from the Weizmann Institute of Science (Rehovot, Israel) and to two patent families covering CD8+Tregs from the Center for Research in Transplantation and Immunology (Nantes, France). TxCell also filed new patent families in 2016 to cover specific CAR Treg products and mechanisms of action.
In the second half of 2016, TxCell also completed an organizational transformation to deliver results from its new strategic priorities. TxCell notably appointed François Meyer, PhD, Executive Chairman of TxCell, to head its new research group, and Li Zhou, PhD as Vice President, Cell Engineering.
François Meyer was recently appointed to the Executive Committee, together with Stéphane Boissel (CEO) and Raphael Flipo (CFO). Arnaud Foussat, PhD, Senior Vice President, Corporate Development, will leave TxCell in March and will not be replaced.
Key 2016 financial highlights
The financial statements for the year ended December 31, 2016 were approved by TxCell’s Board of Directors on March 8, 2017. The 2016 financial statements have been audited and the auditors' report will be issued in March. TxCell's annual financial report, included in the registration document, will be available in April 2017.
Financial highlights are as follows:
- Operational cash burn of €10.9 million in 2016 (compared to €12.3 million in 2015)
- Cash and cash equivalents of €3.5 million as of December 31, 2016 (compared to €9.2 million as of December 31, 2015), excluding proceeds from the February 2017 capital increase (€11.1 million gross proceeds)
- Revenue and other income of €2.9 million (compared to €4.6 million in 2015). In 2016, these consist mainly of the 2016 research tax credit. The decrease of revenue and other income between 2015 and 2016 is due to the termination of the Ovasave® partnership with Trizell on December 2, 2015.
- R&D expenses of €10.5 million (compared to €10.8 million in 2015) representing 67% of the Company's current operating expenses. R&D expenses include the costs of the technology transfer of Ovasave® to MaSTherCell, and of research, development and license agreements related to CAR-Tregs signed in 2016. These costs were partially offset by lower outsourcing costs following the halt of the Ovasave® Phase IIb clinical trial.
- G&A expenses of €4.5 million (compared to €3.5 million in 2015). The increase is mainly due to the launch of new process development laboratories and technology transfer academy, and to the increase of legal fees, notably related to the research, development and license agreements signed over the period.
- Other operating expenses of €0.1 million, consisting of restructuring costs
- Other financial expenses of €0.8 million, mainly due to the accounting of convertible notes at fair value according to IFRS, with no impact on cash
- Full-year net loss of €13.6 million (compared to €11.3 million in 2015).
Please download the press release in PDF to see the IFRS income statement for the year ended December 31, 2016.
As per its current development plan, TxCell expects that its operational cash burn should be of approximately €13 million in 2017.
Post-reporting period: successful completion of a €11.1 million capital increase
In February 2017, TxCell successfully completed a capital increase through the issue of 5,549,300 new shares with warrants attached. The offer has been subscribed at 100% and raised €11.1 million in gross proceeds. These proceeds will cover TxCell’s cash requirements for 2017, which include the costs of the CAR-Treg research and manufacturing process development programs as well as TxCell’s ongoing expenses and overheads.
The warrants which were attached to new shares have a maturity of one year and are traded on a separate Euronext line (FR0013231792). At any time up to February 26, 2018 (included), 4 warrants will entitle holders to subscribe for 3 TxCell’s new shares at a subscription price of €2.60 per new share. The additional proceeds from the potential exercise of all the warrants would enable TxCell to further finance its activities through to the IND approval to initiate a first-in-man study with a CAR-Treg candidate. This is expected by the end of 2018.