TxCell Announces First-Half 2016 Financial Results and Provides Strategy Update

  • Recent strategic refocus already generating results
  • Launch of wide ranging CAR-Treg discovery programs
  • Significant progress in manufacturing process

Conference call and webcast in English on Wednesday, September 28 at 3:30pm CET

VALBONNE, France--()--Regulatory News:

TxCell SA (Paris:TXCL) (FR0010127662 – TXCL), a biotechnology company developing innovative, personalized cellular immunotherapies using regulatory

T-cells to treat severe chronic inflammatory and autoimmune diseases, today announces its consolidated financial results for the first half of 2016 and provides an update on its strategy and outlook.

The TxCell Half Year Financial Report as of June 30, 2016 is available (in French) on the company’s website www.txcell.com.

More than 10 new CAR-Treg discovery programs initiated

TxCell has intensified the research efforts on its second technology platform, ENTrIA, composed of engineered regulatory T cells (CAR-Treg). Over the last twelve months, these efforts have led to the initiation of more than 10 new CAR development programs.

Initially, and following the advice of its recently formed Scientific Advisory Board (SAB), TxCell will focus its resources on 4 to 5 programs targeting notably lupus nephritis, bullous pemphigoid, multiple sclerosis and transplantation. TxCell’s objectives are: firstly, to generate several additional preclinical proof-of-concept data within the next 12 months and, secondly, to start at least one first-in-man clinical study before the end of 2018. A number of these programs are being developed through collaboration agreements with leading academic laboratories, such as Ospedale San Raffaele (OSR) and the Lübeck Institute of Experimental Dermatology (LIED), as communicated in the first half of 2016.

These objectives are in line with TxCell’s strategic roadmap disclosed in March 2016. As a result of recent positive findings, additional resources are being allocated to the ENTrIA platform to enable a further intensification of activity.

Development of less expensive and more efficient manufacturing processes

In February 2016, TxCell launched a new manufacturing process development and technology transfer unit with the primary objective of: (i) enhancing the manufacturing process for TxCell’s first platform ASTrIA and (ii) developing a new process for the manufacturing of its engineered ENTrIA Treg programs. Within its first nine months of operation, TxCell has identified a new isolation method for its non-engineered Treg cells (ASTrIA). This innovative procedure should enable a reduction of approximately 50% of both the production costs and the overall manufacturing leadtime, as well as a reduction of the risk of non-compliant manufacturing for future clinical trials and a potential commercial launch.

Combining these encouraging preliminary results and TxCell’s strict cost control policy, TxCell has decided to finalize and GMP-prove this new manufacturing process prior to the initiation of new clinical trials from the ASTrIA platform. Resulting from this decision, the clinical development of Ovasave® in refractory Crohn’s disease will not restart immediately.

In addition, a manufacturing process for the ENTrIA platform should be validated by 2018 for the start of a clinical study with a first CAR-Treg program.

Ongoing business discussions to establish relevant partnerships

Since the beginning of the year, TxCell has met a significant number of pharma or large biotech companies and started several confidential business discussions. Regularly signing R&D partnerships with pharma or biotech companies is a key objective of TxCell’s strategic plan.

There has been considerable progress made on a variety of R&D fronts in the first 12 months following the strategic repositioning initiated by TxCell in mid-2015. In particular, the key recent process improvement for the ASTrIA platform, if and when GMP-proven, would greatly reinforce the viability of our economic model,” said Stéphane Boissel, CEO of TxCell. In addition, TxCell’s initiation of over ten promising CAR-Treg programs gives us a roadmap to multiple preclinical catalysts in the next 24 months. TxCell will continue to increase development on these promising technologies to maintain its first mover advantage in this fast-growing field.”

TxCell has, and will continue to make sure that resources are optimally used to bring innovation and value by carefully monitoring costs throughout TxCell’s structure,” said Raphael Flipo, CFO of TxCell. “Following the decision to focus on manufacturing process improvement and new CAR-Treg programs, as well as strict cost control measures, we are revising our operating cash burn guidance for 2016, from €15 million initially down to approximately €12 million. In addition, we are very pleased that TxCell has effectively implemented in August 2016 the convertible bonds line of €20 million plus warrants to ensure the financing of its preclinical research activities.

Financial highlights for the first half of 2016

The interim TxCell financial statements as of June 30, 2016, established according to IFRS standards, have been subject to a limited review by the statutory auditors and approved by the Company’s Board of Directors on September 21, 2016.

TxCell’s 2016 half-year financial results are a result of the strategic shift initiated in 2015. The net loss amounted to €7.1 million as of June 30, 2016, compared to €5.7 million at the same date in 2015. The net loss increase is for the following reasons:

  • The termination by TxCell of its agreement with Ferring/Trizell in order to regain full rights to its lead product Ovasave®. As a result, this has led to no revenue for the first half of 2016, compared to €0.5 million for the same period in 2015.
  • A non-recurring €0.6 million increase in TxCell’s general and administrative expenses following:
    • the launch of new process industrialization laboratories and technology transfer academy
    • an increase in legal consultancy fees, especially for collaboration and license agreements signed during the reporting period.

Research and development investments remain the largest expense for TxCell. As of June 30, 2016, R&D expenses totaled €5.6 million, compared to €5.7 million as of June 30, 2015. For the first six months of 2016, these R&D expenses were mostly invested in:

  • investments to accelerate the development of TxCell’s second platform ENTrIA, specifically through the collaboration agreements signed with OSR and LIED and the exclusive worldwide license on the key CAR-Treg patent
  • activities enabling the technology transfer to the CMO MaSTherCell
  • manufacturing process improvement for TxCell’s ASTrIA platform.

As of June 30, 2016, TxCell’s cash and cash equivalents totaled €3.2 million. This increased in August 2016 when TxCell received €2.9 million following the issue of a first tranche of convertible notes, as a part of the €20 million financing approved by TxCell’s extraordinary general Shareholders’ meeting on August 1, 2016. TxCell also received €1.1 million in August 2016 for the partial pre-funding of its 2016 research tax credit. By the beginning of 2017, TxCell expect to receive approximately €2 million following the issue of a second tranche of convertible notes, as well as an additional €1 million of research tax credit pre-funding.

In parallel, thanks to strict cost control measures applied as part of TxCell’s development strategy, TxCell is lowering its guidance regarding the operating cash burn for the full year 2016, which is now expected to be around €12 million. This was previously planned to be €15 million.

Statement of net income (in thousands of euros)   06/30/2016   06/30/2015
Revenue 0 534
Other income 1,422 1,438
Revenue and other income 1,422 1,972
Research and development expenses (5,624) (5,709)
General and administrative expenses (2,509) (1,862)
Expenses related to share-based payments (372) (129)
Current operating profit / (loss) (7,083) (5,728)
Other operating expenses (785) 0
Other operating income 792 0
Operating profit / (loss) (7,076) (5,728)
Income from cash and cash equivalents 3 27
Cost of gross financial debt 0 0
Cost of net financial debt 3 27
Other financial income 19 2
Other financial expenses (29) (22)
Net profit / (loss) before tax (7,084) (5,721)
Income taxes 0 0
Net profit / (loss) (7,084) (5,721)
Basic earnings per share (in €) (0.55) (0.49)

Operational highlights since January 1, 2016

Significant progress on the ENTrIA CAR-Treg platform

  • In June 2016, TxCell was granted an exclusive worldwide licensing agreement on the CAR-Treg patent from the Weizmann Institute of Science (Israel). The patent covers all redirected, genetically engineered T regulatory cells (CAR-Treg) and their use in the suppression of autoimmune and inflammatory diseases. This key patent has already been granted to TxCell in Europe and is under review in the United States.
  • TxCell signed two CAR-Treg collaborations with prestigious European research institutions:
    • In April 2016, TxCell signed a first collaboration agreement with Ospedale San Raffaele (OSR), one of the most prestigious research institutions in Europe in the field of cell and gene therapy. The collaboration focuses on the non-clinical development of CAR-Treg cells for the treatment of one of the most serious complications of Lupus – Lupus Nephritis. In parallel, OSR is also performing research for TxCell on the design and biology of other chimeric antigen receptors.
    • In June 2016, TxCell signed a second collaboration agreement with the Lübeck Institute of Experimental Dermatology (LIED) in Germany, a leading institution in the field of translational research on skin blistering diseases. This collaboration covers the development of a CAR-Treg-based cellular immunotherapy for bullous pemphigoid, a rare, potentially fatal autoimmune disease characterized by tense inflammatory skin blisters and in some patients, erosions on mucous membranes.

Working with world-leading experts in immunology, T-cell biology and chimeric antigen receptors

  • TxCell's Scientific Advisory Board (SAB) is now composed of four world-leading experts:
    • Professor Zelig Eshhar (Chairman), Professor of Immunology, Chair of Immunology Research, Weizmann Institute of Science, Rehovot (Israel), a CAR pioneer who received the Novartis Prize for Clinical Immunology in August 2016
    • Professor Chiara Bonini, Head of Unit, Experimental Hematology, San Raffaele Hopital, Milan (Italy)
    • Olivier Danos, PhD, Senior Vice President of Cell and Gene Therapy at Biogen (Unites States)
    • Bernard Malissen, PhD, Research Director, Immunology, Center of Marseille-Luminy, Marseille (France).
  • In June 2016, Arnaud Foussat, Chief Scientific Officer of TxCell, chaired the world’s first workshop dedicated to adoptive T cell therapy with Tregs for treating autoimmunity, inflammation and transplantation. This workshop was held at the North American Adoptive T Cell Therapy Congress in Boston on June 28, 2016. The panel of speakers included world-leading authors on the pioneering field of Tregs and CAR-Tregs.

Other key milestones

  • In February 2016, TxCell launched new a manufacturing process development and technology transfer unit primarily dedicated to the improvement of the existing TxCell manufacturing process for its first platform ASTrIA as well as to the development of a manufacturing process for its second platform ENTrIA.
  • In April 2016, the Japan Patent Office granted a key patent for Ovasave®, in line with the intent-to-grant notification received in March 2016.
  • In March 2016, TxCell appointed PCT as its contract manufacturing organization (CMO) in the US.

Conference call and webcast

A conference call and webcast in English will be held on Wednesday, September 28 at 3:30pm CET. To participate:

Following the live call, a replay will be available for 90 days. To listen to the replay, please dial: +33 (0)1 72 00 15 00 / 303497#

Next financial publication

  • November 8, 2016 (after market close): third quarter 2016 revenue and cash position

About TxCell – www.txcell.com

TxCell is a biotechnology company that develops platforms for innovative, personalized T cell immunotherapies for the treatment of severe chronic inflammatory and autoimmune diseases with high unmet medical need. TxCell is targeting a range of autoimmune diseases (both T-cell and B-cell-mediated) including Crohn’s disease, lupus nephritis, bullous pemphigoid and multiple sclerosis, as well as transplantation-related inflammatory disorders.

TxCell is the only clinical-stage cellular therapy company fully dedicated to the science of regulatory T lymphocytes (Tregs). Tregs are a recently discovered T cell population for which anti-inflammatory properties have been demonstrated. Contrary to conventional approaches based on non-specific polyclonal Tregs, TxCell is exclusively developing antigen-specific Tregs. This antigen specificity may either come from pre-existing Treg T-Cell Receptor (TCR) or from genetic modifications with a Chimeric Antigen Receptor (CAR). TxCell is developing two proprietary technology platforms, ASTrIA, which is composed of non-modified naturally antigen-specific Tregs, and ENTrIA, which is composed of genetically-engineered Tregs.

Based in Sophia-Antipolis, France, TxCell is listed on Euronext Paris and currently has 49 employees.

Next events

Financial and business conferences

Oct 5-7, 2016       Cell & Gene Meeting on the Mesa       La Jolla (US)
Oct 5-6, 2016 European Large & Midcap Event Paris (France)
Oct 26, 2016 GGS Equity Forum Heilbronn (Germany)
Nov 3, 2016 ARM EU Advanced Therapies Investor Day London (UK)
Nov 7-9, 2016 BIO Europe Cologne (Germany)
Nov 18-19, 2016 Actionaria Paris (France)
Nov 21-23, 2016 German Equity Forum Frankfurt (Germany)

Scientific conferences

Sept 30-Oct 2, 2016       ISCT North America Regional Meeting       Memphis (US)
Oct 10-11, 2016 Adoptive T-cell Therapy Summit Europe 2016 London (UK)
Oct 15-19, 2016 United European Gastroenterology Week 2016 Vienna (Austria)
Oct 18-21, 2016 European Society of Gene and Cell Therapy (ESGCT) Annual Meeting 2016 Firenze (Italy)
Nov 29-30, 2016 Cell Therapy Manufacturing & Gene Therapy Congress Amsterdam (NL)

Disclaimer – TxCell

This press release contains certain forward-looking statements relating to the business of TxCell, which shall not be considered per se as historical facts, including TxCell’s ability to develop, market, commercialize and achieve market acceptance for specific products, estimates for future performance and estimates regarding anticipated operating losses, future revenues, capital requirements, needs for additional financing. In addition, even if the actual results or development of TxCell are consistent with the forward-looking statements contained in this press release, those results or developments of TxCell may not be indicative of their in the future.

In some cases, you can identify forward-looking statements by words such as "could," "should," "may," "expects," "anticipates," "believes," "intends," "estimates," "aims," "targets," or similar words. Although the management of TxCell believes that these forward-looking statements are reasonably made, they are based largely on the current expectations of TxCell as of the date of this press release and are subject to a number of known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by these forward-looking statements. In particular, the expectations of TxCell could be affected by, among other things, uncertainties involved in the development of the Company’s products, which may not succeed, or in the delivery of TxCell’s products marketing authorizations by the relevant regulatory authorities and, in general, any factor that could affects TxCell capacity to commercialize the products it develops, as well as, any other risk and uncertainties developed or identified in any public documents filed by TxCell with the AMF, included those listed in chapter 4 “Risk factors” of the 2015 document de référence approved by the AMF on May 24, 2016 under number R.16-048. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements made in this press release will in fact be realized. Notwithstanding the compliance with article 223-1 of the General Regulation of the AMF (the information disclosed must be “accurate, precise and fairly presented“), TxCell is providing the information in these materials as of this press release, and disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.


Caroline Courme, Tel: +33(0) 4 97 21 83 00
IR & Communication Director
Image Box – Press relations
Neil Hunter / Michelle Boxall, Tel: +44(0) 20 8943 4685
NewCap – Investor relations
Julien Perez / Pierre Laurent, Tel: +33 (0)1 44 71 98 52


Caroline Courme, Tel: +33(0) 4 97 21 83 00
IR & Communication Director
Image Box – Press relations
Neil Hunter / Michelle Boxall, Tel: +44(0) 20 8943 4685
NewCap – Investor relations
Julien Perez / Pierre Laurent, Tel: +33 (0)1 44 71 98 52