2009

ACTIVITY REPORT
 CONTENTS

5 Cellectis in a Nutshell

6 Word from the CEO

8 Activity and Markets

10 Our Strategic Goals

12 Product Porfolio

15 1999 – 2009: 10 YEARS IN PICTURES

20 2009 HIGHLIGHTS

21 Scientific Updates

24 Intellectual Property

25 New Contracts and Partnership Agreements

26 COMPANY

27 Governance

28 Subsidiaries

30 Human Resources and Communications

32 FINANCIAL STATEMENTS
INNOVATION
IT’S IN OUR DNA
CELLECTIS IN A NUTSHELL

Cellectis is a pioneer in the field of genome engineering.

Worldwide pioneer in genome engineering
The company designs and markets meganucleases – Established in 1999, listed on the

innovative tools that enable targeted modifications NYSE-Euronext Alternext market

to DNA – with three primary aims: understanding,
production and treatment. These meganucleases are
applied in the research, biomanufacturing, agrobio-
technology and therapeutic sectors.
in Paris since 2007
Operating Revenues 2009: € 12.1 M
(80% from international revenues)
Staff: 85 including 32 PhDs
3 affiliates: Cellectis bioresearch,
Cellectis genome surgery, Ectycell

To date, Cellectis has established more than 50 agree- Applications: research and biomanufac-
turing, agrobiotechnology, human health
ments with pharmaceutical laboratories, seed producers Main technologies: meganuclease-based

and biotech companies across the world, and has genome engineering, meganuclease
engineering

formed over 20 academic research partnerships. IP portfolio: 60 patents granted plus

over 200 pending
Cellectis was founded in 1999 by scientists Dr. André
Location: Paris area
Choulika and Dr. David Sourdive with an exclusive
technology license from the Institut Pasteur. Rodney
Rothstein of Columbia University chairs the company’s
Scientific Advisory Board, composed of internationally
renowned scientists.
Since 2007, Cellectis has been listed on the NYSE-
Euronext Alternext market in Paris and has secured
over € 70 million in funding since inception.
While pursuing an aggressive plan for growth, the
company has maintained a low cash burn because
of increasing revenue streams from product sales,
production and partnering, and licensing activities.
l Cellectis l Activity Report 2009 l 5
WORD FROM THE CEO

It all began with ordinary baker’s yeast

In 2009, Cellectis celebrated 10 years of sustained growth in research, development,
application and marketing of meganucleases, the sequence-specific enzymes that
are the basis of our business. These “DNA scissors” induce “cut and paste” of DNA
sequences at very specific locations in living cells, offering powerful applications
and potential in the fields of human therapeutics, agriculture and biofuels, among
others. The genome engineering technology based on meganucleases that we have
developed can potentially be applied to any living organism. During my years in
research, I recognized that changing the specificity of these enzymes – allowing
them to target desired sites precisely – would make a tremendous tool for genome
Dr André Choulika
surgery and an excellent basis for a company.

As we look forward to accomplishing future goals, this 10-year anniversary is an

opportunity to take stock of what we have achieved. We have initiated and led the
field of genome engineering internationally, thanks to unwavering dedication to our
initial vision. We have grown from three enthusiastic scientists in the Institut Pasteur’s
incubator to a company of almost 90 today. And because of our strong growth over
the years, we are now in a position not only to expand organically but also through
acquisition.

We founded the company in December 1999, but when I look back, Cellectis actually
had its beginnings more than a decade earlier. In the late 80’s, a research team at In-
stitut Pasteur, which I was honored to be part of, discovered meganucleases, enzymes
that promote DNA transfer in Saccharomyces cerevisiae (baker’s yeast). Shortly there-
after, I began working on retroviruses and DNA recombination in mice. When we
began experimenting with meganucleases in mammalian cells, we incorporated the
recognition site of a meganuclease we were working on into a retrovirus. We then
tried these DNA scissors out on infected cells. Suddenly the retrovirus disappeared.
We could remove the virus from a cell, which was a total paradigm shift at the time in
terms of our way of thinking about antivirals.

The adventure that is Cellectis began at the end of 1999. In 2000, the Institut Pasteur
agreed to sign exclusive licenses with us for six families of patents relating to ho-
mologous recombination and meganucleases. That year we also won a competition
sponsored by the French Higher Education and Research Ministry, meant to help in
the development of technologically innovative companies.

6 l Cellectis l Activity Report 2009 l

There were many milestones in the progress of our young company. We raised sub- “Cellectis leads the field
stantial venture capital in 2002, despite a difficult financial environment. In 2004, we
moved to our current headquarters. That year also marked our first major research of genome engineering
breakthrough – we discovered a way to generate meganucleases on an industrial internationally, thanks to
scale, a crucial step to successfully commercializing our technology. In January 2007,
Cellectis announced an initial public offering on the NYSE-Euronext Alternext market unwavering dedication
in Paris. We raised €24.4 million, and the IPO was more than six times oversubscribed. to our initial vision.”
Throughout this initial period, industry leaders such as Merck, Glaxo SmithKline, Shire,
BASF Plant Science and Limagrain had the foresight to see the potential of our tech-
nology. Our revenues have been growing steadily from year to year.

This brings us to our 10th anniversary year, during which we had several major ac-
complishments. Our subsidiary, Cellectis bioresearch, which markets research and pro-
duction kits, launched five new products. Cellectis genome surgery, our therapeutic
subsidiary, obtained consistent safety data supporting the potential of meganucleases
in human medicine. We founded a new subsidiary, Ectycell, dedicated to the industrial
applications of stem cells. We completed a capital increase of €22 million. And we
signed our largest deal yet, a research, development and commercial agreement with
the agriculture biotechnology leader Monsanto.

For these successes, and those throughout Cellectis’ history, we must above all credit
the unwavering commitment of our staff, which has been the key success factor for
Cellectis. At all levels, in all departments – from research to accounting to the Board
of Directors – Cellectis employees have exhibited strong loyalty and dedication, for
which we will continue to be thankful as we face challenges in the future. And as
we forge ahead in our role as industry innovators, we’ll also try to remember how
we turned something small and ordinary, baker’s yeast, into an extraordinary tool for
improving human health and well being in the coming decades.

André Choulika, Chief Executive Officer

l Cellectis l Activity Report 2009 l 7

ACTIVITY AND MARKETS

Since its founding, Cellectis has sublicensed its intellectual

property portfolio based on meganucleases and
homologous recombination, originally licensed from the
Institut Pasteur, but further complemented by Cellectis’
proprietary patents.
The technologies designed and implemented by Cellectis are applicable to all DNA types (hu-
man, animal, plant, viral and bacterial) and all genes of interest. They can unlock or restore
DNA’s potential and are therefore open to a broad range of applications:

• Human health: the replacement of a defective gene by a functional gene (monogenic dis-
eases such as muscular dystrophy or hemophilia), the suppression of persistent viral DNA (HIV,
hepatitis B or herpes viruses) and the creation of stem cell lines with particular characteris-
tics. Cellectis is particularly involved in the research and development of therapeutic solutions
in cooperation with AFM (the French Muscular Dystrophy Association), the Necker-Enfants
Malades Hospital and the Vision Institute.

• Agrobiotechnology: the improvement of certain properties of plant crops through the re-
placement, addition or suppression of genes of interest or the modulation of their expression.
Five of the world’s leading seed producers – BASF, Bayer Cropsciences, Pioneer, Limagrain and
Monsanto – already use Cellectis technologies.

• Research and biomanufacturing: through its subsidiary Cellectis bioresearch, the company
markets its cGPS® (cellular Genome Positioning System) and cGPS® Custom families of kits for
the in vitro modification of cell lines.

8 l Cellectis l Activity Report 2009 l

The main biotechnology tools developed by Cellectis are based on the properties of mega- “Any industry that deals
nucleases, natural molecular scissors that can cut DNA at a highly precise site specific to each
meganuclease. Once the cut has been made, it is possible to remove, integrate or substitute with living organisms – be
a portion of the DNA with the same high degree of precision. Cellectis has exclusive usage
rights to nine Institut Pasteur families of granted or pending patents relating to the technolo- they animals, plants or
gies underpinning this mechanism, in particular homologous recombination. Cellectis currently microorganisms – is potentially
holds about 60 granted patents, its complete portfolio comprising over 260 patents granted or
pending, including the rights linked to Vectocell®, a technology platform acquired in 2009 by a Cellectis market.”
Cellectis (see p24).
Marc Le Bozec, CFO
Each year, Cellectis designs and produces dozens of meganucleases with modified specific-
ity, tailor-made for researchers and engineers in state-funded and private laboratories and for
clients in industry. These enable controlled, rapid, safe and reproducible modifications of the
targeted portion of DNA. These collaborations, along with an active technology outlicensing
program and a rapidly expanding line of commercial research kits, have led to steady revenue
growth for the company. Cellectis expects to launch tens of new commercial research products
in 2010 and aims to reach sustainable profitability in 2011 or 2012.

The first in vivo “cut and paste”

Meganucleases are DNA scissors that cut DNA at a unique target site, creating an opening to
allow sequence deletion, insertion and/or repair.

Cell Chromosome Meganuclease

“Cut”

“Paste”

Human genome size: DNA cut with incredible

2 500nm

6.4 billion bases target specificity and

(G, A, T, C). DNA repair/insertion

l Cellectis l Activity Report 2009 l 9

OUR STRATEGIC GOALS

A single-minded focus has driven us throughout our

history: to create a genome engineering market leader.
Although this sounds straightforward, this business model
did not exist when we founded Cellectis 10 years ago.
Today we are proud to have established a business model that will continue to support us in
the coming decades as we pursue our role as innovators in the field. Inherent to our strategic
mission are several types of challenges.

Scientific data are filed and protected. Maximizing Technology and Creating Innovation

The first part of our financial strategy is to maximize our existing technology, based on the Institut
Pasteur technologies exclusively licensed to us, for optimal financial return. In this respect, we
look to license access to our engineering platform and homologous recombination patents and
maximize the monetization of our intellectual property.

In order to grow, we are simultaneously working to create, develop and commercialize new
products, such as the six innovative turnkey research kits we put on the market through our
subsidiary Cellectis bioresearch since 2008.

Our focus as we grow will be to increase the value of our technology when and where it can
be usefully applied. We therefore aim not only to enable others to create desired products, but
also to identify and create them ourselves, establishing subsidiaries in select areas ranging from
healthcare to academic research.

Pursuing Excellence in Diverse Fields

Cellectis’ strategy is to selectively diversify its technology across different markets, leading
to short, medium and long-term revenue generation.

• Capitalizing on current technologies

Our aim is to set the industry standard in DNA recombination through our research tools.
We therefore market our technologies to industry and academia. We want to be where
innovation begins.

10 l Cellectis l Activity Report 2009 l

• Building solid partnerships “We want to be where
The rapidly growing agrobiotechnology sector is investing heavily in technologies to gen-
erate plant species for human consumption that are easy to grow, environmentally safe innovation begins.”
and have high added-value for the consumers compared to classical plants. Our targeted
David Sourdive, Executive VP,
technology is perfectly suited to these needs.
Corporate Development
• Investing in the future
The development of human therapeutics to cure genetic or viral diseases is an exciting field that
holds perhaps the highest growth potential for Cellectis though there still is a lot of work to
accomplish. This research necessitates a significant investment of both time and capital, but we
are now beginning to obtain results and proofs of concept sustaining the incredible potential of
our technology in the field of molecular medicine.

Upstream Research

Cellectis has succeeded in capitalizing on its leadership position. It is vital to strengthen this
position by investing in upstream genome engineering research, however. Our researchers are
leading us to further advances in our knowledge of meganucleases – the current basis of our
technology.

In addition to cutting-edge research, a critical area of growth for Cellectis will be combining
meganucleases with other technologies, mainly in the field of vectorization, to be able to bring
the meganucleases in vivo to the cells where they are needed.

Strong Growth with an Eye on the Future

Our overall financial strategy is to build a strong equity base. To do so, we need to achieve
strong internal and external growth. In the last two years, we have created three subsidiaries, each
dedicated to a specific market, while exploring several other promising avenues for growth.

External growth is the key component of our long-term strategy. It is largely for this reason that
we raised €22 million in capital in October 2009. We actively seek to develop organically and
acquire companies that will complement our technology and help speed up our development.

l Cellectis l Activity Report 2009 l 11

 PRODUCT PORTFOLIO

Cellectis products are designed for targeted gene modifi-

cation. Their purpose is to modify the DNA in a living cell,
for the benefit of human health and wellness, with three
primary aims: understanding, production and treatment.
The purpose of the modification can be to
• Understand the function of a given gene
• Manufacture tools for research and development
• Create biological products, such as therapeutic proteins or antibodies
• Improve the characteristics of certain plant species
• Treat the cause of diseases resulting from a disruption in genetic
programming or from a persistent viral infection

“Cellectis commercializes Our product portfolio includes projects developed by Cellectis and our subsidiaries as well as
collaborative projects, particularly in the field of agrobiotechnology. Cellectis devotes a large
products, not services. part of its internal research efforts to therapeutic projects, which carry a greater risk but offer
high added-value in the long term.
We chose this route because
it has greater commercial Research and production tools using our meganucleases for academic and industrial research
laboratories are our other area of focus. These have a short development cycle, they should
potential and it helps brand thus generate revenue in the short term and provide broad visibility for the Cellectis brand
Cellectis more broadly as best worldwide.

in class and a game changing Meganuclease Kits

technology provider.” Cellectis bioresearch has created the industry standard in targeted gene integration: cellular
Marc Le Bozec, CFO Genome Positioning Systems (cGPS®) and cGPS® Custom, so named because the kits bring
the user’s choice DNA directly to a very specific genomic address. To date, Cellectis bioresearch
has a total of six kits on the market – five of which were launched in 2009, a particularly
successful year.

The value of our precise system over more conventional random integration is that the results
obtained are fully predictable – a single copy of the gene of interest will be integrated at the
same place in the genome every time – and are therefore reproducible. This is not the case
with classical transfection, which inserts a gene at random in the genome. Our systems also
result in stable integration, which is not the case for cells produced by random integration. The
cGPS® and cGPS® Custom kits also offer speed – a process that once might have taken six to 18
months may now take as little as four weeks.

12 l Cellectis l Activity Report 2009 l

The application of the kits is threefold:
1. Biological production: integration of a gene into a cell allows it to express a protein of interest
such as a biodrug, or enables the engineering of post-translational pathways
2. Drug screening: modifying a cell line to express a receptor specific of a disorder, for example,
allow drug candidates to be screened
3. Functional genomics: comparison of two genes, identification of the role of a specific gene or
of genes are made possible, as well as the stable expression of shRNA for research purposes

Each cGPS® kit contains a vectorized meganuclease and an engineered mammalian cell line
with a pre-integrated meganuclease recognition site, enabling 10 experiments:

• cGPS CHO-K1: this kit is for using CHO cells to express therapeutic targets and for gene
function studies One of the kits commercialized by Cellectis bioresearch.

• cGPS CHO-K1 Duo: enables targeted integration at two distinct genomic sites in CHO cells,
ideal for expressing multimeric proteins and establishing inducible expression systems

• cGPS CHO-S Cemax®: the ideal cell line if high titers of proteins are needed

• cGPS NIH3T3: this product targets the murine cell line NIH3T3

For clients who wish to work with a particular wild type cell line, they can use cGPS® Custom.
These kits contain a meganuclease that Cellectis has engineered to change its recognition site
sequence. Cellectis is constantly expanding the list of cell lines that can be customized in this
way. Products currently available include:

• cGPS Custom CHO-K1: the first engineered meganuclease targeting the original CHO cell line

• cGPS Custom HEK293: our first research kit for use on human cell lines

Meganucleases for Agrobiotechnology

Meganucleases can be engineered for use in any plant species. Cellectis uses its technology
and expertise to provide seed producers with meganucleases to make targeted modifications in
plant genomes and develop the next generation of quality crops. The modifications that bring
added value to existing plants include gene stacking, gene knock-out, as well as modulation of
gene function.

l Cellectis l Activity Report 2009 l 13

 Therapeutic Products

Cellectis genome surgery is devoted to developing human therapeutic products that use mega-
nucleases as their active component. The company’s targets are genetic diseases, such as sickle
cell anemia, muscular dystrophy and severe combined immunodeficiency (SCID), as well as
certain viral diseases, such as hepatitis B, AIDS and herpes.

The structure of DNA, the nucleic acid that contains
the genetic information.
Genetic diseases: In many genetic diseases, such as sickle cell anemia, there is currently no
available therapy to treat the cause of the disease, but only to relieve the symptoms. Among
other projects underway, Cellectis genome surgery is developing meganuclease-based products
in partnership with the French Muscular Dystrophy Association (l’Association française contre
les myopathies or AFM) to address such diseases as sickle cell anemia, beta thalassaemia and
Duchenne and Becker muscular dystrophies. The €7.3 million program, funded by AFM, is
working on the potential of a meganuclease-based therapy to correct a mutation that is respon-
sible for an inherited disease.

Viral diseases: In its development of antiviral products, Cellectis genome surgery obtained in
2009 a proof of concept of the effectiveness for anti-HSV (Herpes simplex virus) meganucle-
ases in cells as well as preliminary animal safety data supporting the use of vectorized antiviral
meganucleases. Most antiviral agents block the life cycle of the virus at a certain stage but they
do not kill it. Meganucleases, acting as “DNA clippers”, can excise the virus from cells, thereby
disabling it.

14 l Cellectis l Activity Report 2009 l

1999 – 2009:
10 YEARS IN PICTURES
1999 – 2009: 10 YEARS IN PICTURES

1999

2000

2001
Cellectis’ is founded. First in-licensing. Signature of the first
licensing agreements. The first robots arrive.

The team in 2000.

Cellectis’ original home, at the Institut Pasteur.

Tridimensional
modeling of a meganuclease
coupled to DNA.

16 l Cellectis l Activity Report 2009 l

2002

2003

2004
Establishment of the Scientific Advisory Board, Engineering of the first synthetic Cellectis moves to Romainville
chaired by Prof François Jacob. hybrid meganuclease.

A new step
in screening.

The first screen- The number of

ing tests for weekly screening
meganucleases. tests increases.

Prof François Jacob, recipient of the Nobel Prize in

Medicine in 1965, currently Honorary Chairman
of the Scientific Advisory Board.

The Parc Biocitech.

Team discussions take place at every opportunity.

The Fleming building,

Cellectis’ headquarters.

l Cellectis l Activity Report 2009 l 17

2005

2006

2007
First custom meganuclease First publication showing Cellectis holds its
engineered in the laboratory. the in vivo effectiveness initial public offering.
of meganucleases.

18 l Cellectis l Activity Report 2009 l

2008

2009
Inception of Cellectis bioresearch Cellectis is granted its 58th patent.
Cellectis bioresearch and launches its first Inception of Ectycell.
Cellectis genome surgery. meganuclease kits.

Cellectis’ “Wall of Patents”, displaying some of the 58 patents granted to the company.

High-throughput screening.

The Cellectis team today.

l Cellectis l Activity Report 2009 l 19

2009 HIGHLIGHTS
SCIENTIFIC UPDATES
Ten years ago, Cellectis was
established to industrialize
the design and develop-
ment of an artificial system
for using the full power
of genome engineering to
modify any genome
precisely at any location.
This system involved the combination of two
fundamental technologies developed at the
Institut Pasteur, meganucleases (proteins that
cut DNA precisely at defined sites in vivo)
and homologous recombination (a naturally
occurring process whereby DNA can be
precisely replaced).
Individually, these two technologies have
limited applications. The low targeting effi-
ciency of homologous recombination restricts
its use to a small number of species (such as
mice or yeast) and to academic research.
At the same time, the small number of natu-
ral or engineered meganucleases available
could cut DNA at only a few predefined
sequences, so the challenge was to indus-
trialize the production of meganucleases to
target a larger number of DNA sequences.
Therefore, using its capacity to create new
meganucleases with new and chosen recog-
nition sites, Cellectis developed the first-ever
technology for industrial scale, targeted in
vivo genome engineering using meganucle-
ases, which makes it possible to cut DNA
at any desired, predefined site in a given
genome.
Today, Cellectis is a world leader in targeted
genome engineering, with a growing,
diversified product portfolio, cutting-edge
technology (validated by numerous scientific
publications, including five in 2009) and a
strong intellectual property strategy.
The Mechanism of Meganucleases
There are numerous factors that can alter
the DNA of a cell’s genome, such as X-rays,
chemical products, certain enzymes and
even ordinary processes in the life of any
cell (cell division, DNA replication). The
cells of all living species have a finely tuned
mechanism that enables them to repair
these alterations in the genome with the
aim of preserving its integrity.
Cellectis technologies are based on this
fundamental mechanism that is common
to all living species. The cell’s endogenous
maintenance and repair system can be
used judiciously to introduce targeted
modifications, in a precise and rational way.
Meganucleases are among the tools that
organisms use to repair DNA. They are a
particular class of endonucleases or “DNA
scissors”, capable of cutting a chromosome
at a specific site in a living cell. In nature,
meganucleases come from single-cell
organisms such as bacteria, yeast, algae
and some plant organelles.
Meganucleases perform cut-and-paste-
type operations at the site of their target
sequence. Meganucleases have a long re-
cognition site of 12 to over 32 base pairs,
which would potentially occur only once in a
genome. This is the key to their precision.
This high degree of specificity is what gives
meganucleases the potential to be the
ultimate tools for precise genome surgery
in living cells and organisms. Cellectis has
harnessed the power of meganucleases by
developing a unique method of redefining
the amino acids that play a role in DNA
recognition. We analyze the target DNA
sequence in which the modification is to
take place and select the preferred locali-
zation of the target sites.
l Cellectis l Activity Report 2009 l 21
Major Breakthroughs Production Time Significantly Reduced
Over the past five years, Cellectis has built
Thanks to its protein- an archive of more than 20,000 well-
engineering platform, characterized meganucleases – the Omega-
base – which Cellectis researchers have
which in 2009 increased used to generate significant improvements
in the manufacture of new meganucleases.
its production capacity
to almost 100 new mega- By constantly improving its meganuclease
engineering processes, Cellectis made a
nucleases per year, Cellectis breakthrough in 2009 in the efficiency of
its technology platform. This has resulted in
is targeting very diverse a reduction in the time required to produce
applications, from antivirals a new meganuclease, from nine to three
months, in a large number of cases. Improve-
to crop improvement and ments have resulted in an increase in capac-
ity while further raising quality standards.
from research and produc-
tion tools to therapeutic We created a milestone of 96 engineered
meganucleases in 2009, surpassing our
molecules. Some of the target of 20 set at the beginning of the year.
The 40th meganuclease was delivered to
highlights from a year that the French Muscular Dystrophy Association
saw the fruition of many (l’Association française contre les myopa-
thies), the first step toward what could be
of our research projects are a new class of drugs to fight Duchenne
described here. muscular dystrophy.
22 l Cellectis l Activity Report 2009 l
Confirming the Power of Meganucleases
as Viral Clippers
In 2009, our R&D team obtained the first
data strongly supporting the proof of
concept of the antiviral power of meganucle-
ases. In addition to correcting mutations
responsible for inherited disease, we can, for
viral diseases, introduce a meganuclease to
clear the cell of a virus. This method is called
“virus clipping”. Most antiviral agents cur-
rently available block the life cycle of a virus
at one stage – during DNA or RNA synthesis,
or virus adsorption for instance – but do
not kill it. Our researchers have shown that
meganucleases can directly destroy a virus by
removing it from the genome of an organism.
A Look at the Meganuclease Portfolio
Cellectis produces meganucleases for a broad
variety of targets of interest. During the
course of 2009, the product portfolio was
expanded with many new meganucleases
and five new cGPS® kits, for a total of six kits
on the market (see p13). Today, Cellectis has
meganucleases that target the human ge-
nome, as well as that of the mouse, hamster,
plant, fish and several viruses.
Spotlight on Two of Our Scientific
Publications
In 2009, Cellectis published, among others,
two papers in peer-reviewed scientific
journals detailing research that could aid in
the treatment of severe combined immuno-
deficiency (SCID), an extreme form of
heritable immunodeficiency. SCID patients
often die very early because of their
susceptibility to infectious diseases.
In July, Cellectis announced the publication
of “Efficient Targeting of a SCID Gene by an
Engineered Single Chain Homing Endonucle-
ase” in Nucleic Acids Research. This paper
is the first to report the induction of gene
targeting in an endogenous gene by an en-
gineered meganuclease. The targeted region
was within the human RAG-1 gene, whose
inactivation results in SCID. Meganuclease-
induced gene targeting could be achieved
in up to 6% of the treated cells, a level
compatible with therapeutic applications.
Further studies will be conducted with these
meganucleases in order to correct mutations
in patient cell lines and, potentially, to cure
SCID patients.
In August, work conducted by a team from
the French National Institute for Health and
Medical Research (INSERM unit U768) and
Cellectis was detailed in the paper “Reduced
Immunoglobulin Class Switch Recombina-
tion in the Absence of Artemis”, published in
Blood. The Artemis gene is involved in the
repair of double-strand DNA breaks; muta-
tions in this gene are responsible for SCID.
The INSERM and Cellectis researchers bred
lines of mice in order to study the disease.
The results confirmed that Artemis is in-
volved in the maturation of B and T lympho-
cytes, and in immunoglobulin, the crucial
components of the adaptive immune system.
This work will make it possible to test new
approaches for treating SCID, particularly
using meganucleases.
Advances in Therapeutic Programs
Pharmacokinetic and toxicity experiments
have been conducted with I-CreI and with
anti HBV (hepatitis B virus) meganucleases
vectorized with AAV8. No acute toxicity
was detected with the I-CreI protein. There
seems to be a moderate immune response
against the AAV vector but it is still too early
at this point to make conclusions about
the toxicity of the vectorized protein itself.
Publications in 2009
S. Grizot, J.C. Epinat, S. Thomas, A. Duclert,
S. Rolland, F. Pâques and P. Duchateau
“Generation of Redesigned Homing
Endonucleases Comprising DNA-Binding
Domains Derived From Two Different
Scaffolds”
Nucleic Acids Research, Advance Access,
published online December 21, 2009
P. Rivera-Munoz, P. Soulas-Sprauel,
G. Le Guyader, V. Abramowski, S. Bruneau,
A. Fischer, F. Pâques and J.P. de Villartay
“Reduced Immunoglobulin Class Switch
Recombination in the Absence of Artemis”
Blood, 2009 Oct 22, 114 (17): 3601-3609
R. Galetto, P. Duchateau and F. Pâques
“Targeted Approaches for Gene
Therapy and the Emergence of Engineered
Meganucleases”
Expert Opinion on Biological Therapy,
October 2009, 9 (10): 1289-1303
S. Grizot, J. Smith, F. Daboussi, J. Prieto,
P. Redondo, N. Merino, M. Villate,
S. Thomas, L. Lemaire, G. Montoya,
F.J. Blanco, F. Pâques and P. Duchateau
“Efficient Targeting of a SCID Gene
by an Engineered Single Chain Homing
Endonuclease”
Nucleic Acids Research, 2009, 37 (16):
5405-5419
J.P. Cabaniols, L. Mathis and C. Delenda
“Targeted Gene Modifications in Drug
Discovery and Development”
Current Opinion in Pharmacology, 2009,
9 (5): 657-663
l Cellectis l Activity Report 2009 l 23
INTELLECTUAL PROPERTY

One of our company’s foremost assets is the INPI Innovation Award

André Choulika, CEO, and Michèle Paquier,
IP Manager, receive the INPI Innovation Award.
strong position of its intellectual property
estate. The Institut Pasteur patent families
covering the use of homologous recombina-
tion and the use of endonucleases from the
meganuclease family to induce DNA recom-
bination formed the initial basis of Cellectis’
founding. We have also since developed a
healthy proprietary portfolio.
Cellectis patents fall into three broad catego-
ries – patents on general principles, patents
on specific meganucleases and applications,
and patents covering the manufacturing of
modified meganucleases.
At the end of 2009, Cellectis owned the
rights to 53 patent families, including 58
patents granted and over 200 patent appli-
cations. In 2009 alone, Cellectis was granted
four new patents and filed 15 new patent
applications.
Our strategy involves building up an intel-
lectual property portfolio that protects our
products, their applications and the corre-
sponding body of technological knowledge.
Evolution of Cellectis’ IP portfolio
Number of patents granted
60
50
40
30
20
In December 2009, Cellectis was honored to
receive the Paris Ile-de-France Region Inno-
vation Award conferred by the French Patent
and Trademark Office (Institut national de la
propriété industrielle or INPI).
INPI’s annual awards honor small and
medium-sized companies whose success can
be attributed to their pro-innovation policies.
These firms use a comprehensive intellec-
tual property strategy to leverage business
growth.
Vectocell®
When Cellectis acquired Vectocell® intracel-
lular delivery technology in September 2009,
it expanded its intellectual property portfolio
by an additional nine patent families.
Vectocell® technology is a peptide technol-
ogy that can carry proteins and other com-
ponents inside the cells. It was developed
from internalizing human antibodies and
can be used to optimize the efficacy of drug
candidates. Its ability to provide an entry into
any chosen mammalian cell type, including
humans, with no detectable immunogenicity
gives it a broad spectrum of applications.
Cellectis envisions that the use of this tech-
nology in tandem with meganucleases
will make it a valuable property in biothera-
peutics and for many other applications.

10

0
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

In 2009, in addition to its 58 granted patents, Cellectis’

complete portfolio comprises over 200 pending patents.

24 l Cellectis l Activity Report 2009 l

NEW CONTRACTS AND PARTNERSHIP AGREEMENTS
Monsanto
In September 2009, Cellectis announced a
landmark deal with Monsanto. The nonex-
clusive research and commercial agreement
for Cellectis’ proprietary meganuclease-
based technology includes a €3 million
upfront payment, a €1 million equity invest-
ment and fees payable to Cellectis for each
meganuclease developed for Monsanto.
In addition, Cellectis is eligible to receive
milestone payments at multiple development
stages (worth over €100 million) as well as
royalties on certain traits commercialized by
Monsanto.
This agreement with Monsanto, a leader
in agrobiotechnology, could allow Cellectis
genome engineering technology to be put
to use in developing the next generation
of quality crops. In addition, it offers the
opportunity for Cellectis technology to be
used by the largest discovery engine in the
agricultural field. The scope of the agree-
ment stands as recognition that the industry
leader believes in Cellectis’ approach.
Other Agreements
• In May, Cellectis signed a nonexclusive
licensing agreement with the pharmaceutical
group Servier for the use of Cellectis’ modi-
fied cell lines for high-throughput screening.
This contract formalized a well-established
research relationship between the two com-
panies and should accelerate the develop-
ment of high performance screening tools for
innovative drug targets.
• In June, following a successful research
program, the international cooperative group
Limagrain exercised its option for a nonex-
clusive commercial license to use the I-Scel
meganuclease to develop its agricultural
products.
• Also in June, Cellectis bioresearch signed a
license agreement with the biomanufacturing
organization Celonic AG for its patented
CEMAX® technology, which will allow
Cellectis bioresearch to use CEMAX® for
the development of its commercial products.
By optimizing it, Cellectis bioresearch has
already used the technology in one of its
production kits launched in November 2009,
cGPS® CHO-S Cemax®.
• In December, Cellectis bioresearch and
tebu-bio, which supplies and distributes
biological research reagents in Europe,
decided to join forces for the distribution of
Cellectis bioresearch’s research kits. Cellectis
bioresearch will be responsible for the design
and production of the targeted integration
kits from its cGPS® and cGPS® Custom lines.
tebu-bio will be responsible for distributing
these kits to research laboratories across
Europe. tebu-bio will have exclusive distribu-
tion rights for the major European markets
where it has a physical presence. This
partnership will offer Cellectis bioresearch a
foothold in the academic research market,
a major target in terms of the number of
potential users.
• In December, BASF Plant Science broad-
ened its license to use Cellectis’ mega-
nuclease technology. Under a nonexclusive
license, BASF Plant Science will use mega-
nucleases engineered by Cellectis to make
targeted modifications of plant genomes.
• Finally, in December, Bayer HealthCare,
the healthcare subgroup of Bayer, acquired
a license to use Cellectis’ patent family
WO9011354 covering homologous recom-
bination aimed at introducing new features
into the genome. This global license includes
the use of the Institut Pasteur technology
relating to homologous recombination to
obtain and utilize certain transgenic animals
in pharmaceutical research, in all countries,
including Japan.
l Cellectis l Activity Report 2009 l 25
COMPANY
GOVERNANCE
Executive Committee, from left to right:
Dirk Pollet, PhD,
Chief Business Officer
David J.D. Sourdive, PhD,
Executive Vice President,
Corporate Development
Frédéric Pâques, PhD,
Chief Scientific Officer
André Choulika, PhD,
Chief Executive Officer
Marc Le Bozec,
Chief Financial Officer
Sylvie Delassus, PhD,
Senior Vice President,
Corporate Communication
Executive Committee
The Executive Committee is composed of
the senior-level management of Cellectis,
which implements the company’s strategy
and directs its day-to-day operations. (photo)
Board of Directors
The Board of Directors determines the
company strategy and oversees Cellectis ac-
tivities. Members of the Board of Directors
serve for a term of three years; the Chair-
man convenes meetings when it is deemed
necessary or desirable. In 2009, the Board of
Directors met seven times.
On December 31, 2009:
Christian Policard, Chairman
Martin Bitsch, MD
André Choulika, PhD,
Chief Executive Officer, Cellectis
Alain Godard
Roger J. Hajjar, MD.,
Kaminvest Holding Representative
Raffy Kazandjian
Richard C. Mulligan, PhD
David J.D. Sourdive, PhD, Executive Vice
President, Corporate Development, Cellectis
Pascale Altier, Observer, The Institut Pasteur
Representative
During 2009, AGF Private Equity decided
to resign as a member of Cellectis’ Board of
Directors. We would like to warmly thank
Dr. Thierry Laugel as its representative for his
dedication and the wonderful job he did while
he held this position. We very much appreci-
ated working with him during these past years.
Scientific Advisory Board
The Scientific Advisory Board, set up in
2002, is composed of eight active members,
appointed for one year and meets twice a
year. Its mission is to outline Cellectis’ broad
scientific orientations. It presents Cellectis’
management team with methods and strat-
egies to achieve the company’s technological
goals. It evaluates the work achieved
during the year and the results obtained.
On December 31, 2009:
Prof. François Jacob, Honorary Chairman,
MD, Collège de France, Paris, France
Prof. Rodney J. Rothstein, PhD, Chairman,
Columbia University, New York, United
States
Prof. Frederick W. Alt, PhD, Howard Hughes
Medical Institute, Chevy Chase, United
States; Harvard Medical School, Boston,
United States
Prof. Bernard Dujon, PhD, Université Pierre
et Marie Curie (Paris VI) - Institut Pasteur,
Paris, France
Prof. Alain Fischer, MD, Hôpital Necker -
Enfants Malades, Paris, France
Prof. James E. Haber, PhD, Brandeis
University, Waltham, United States
Prof. Denis Pompon, PhD, Center of Mo-
lecular Genetics, Gif-sur-Yvette, France
Prof. José-Alain Sahel, MD, Hôpital des
Quinze-Vingts, Paris, France
Prof. Luis Serrano, PhD, Center for
Genomic Regulation, Barcelona, Spain
l Cellectis l Activity Report 2009 l 27
 SUBSIDIARIES

In the last two years, Cellectis has established three

subsidiaries. Their mission is to develop the applications
of our technology each in a given market sector. The
core activity of the company – research and development
of the technology, the meganuclease platform and
the database, as well as intellectual property – remain the
central activities of Cellectis.
Cellectis genome surgery

Cellectis genome surgery is dedicated to the development of innovative therapeutic approaches

using meganucleases to treat genetic diseases, cancers and persistent viral infections.

Cellectis genome surgery seeks to treat patients suffering from serious diseases resistant to
conventional treatment. Its prospective therapy targets the very DNA sequence responsible for
the disease. This DNA sequence may be of congenital origin (in the case of genetic disease) or
acquired (in the case of a viral infection or a cancer).

“Genome surgery aims
to attack the cause of a disease
and cure the patient rather than
merely treat its symptoms.”
Frédéric Pâques, CSO
The mission of this subsidiary is to fulfill unmet medical needs, giving patients new hope. The
genome surgery approach aims to attack the cause of a disease and cure the patient, rather
than merely treat its symptoms.
In 2009, Cellectis genome surgery took important steps forward, establishing preliminary data
supporting a proof of concept for the antiviral power of meganucleases against HIV, hepatitis
B or herpes viruses, for example.
Since its establishment in June 2008, Cellectis genome surgery has worked together with its
partners – academic research groups and clinicians all over the world – to transform its research
into an effective medical treatment.

28 l Cellectis l Activity Report 2009 l

Cellectis bioresearch

Established in 2008, Cellectis bioresearch develops and markets research and production kits
that make genome engineering accessible to biological researchers and companies worldwide.
It offers turnkey solutions, enabling biologists to design their daily work tools with control and
precision, such as cell lines with the features of a healthy or diseased organ or tissue.

Cellectis bioresearch commercializes ready-to-use products, designed to attract first adopters of

the technology with their ease of use.

The kits are a simple and effective means of using Cellectis meganuclease-based technologies,
as they all contain a cell line and a meganuclease. The kits enable a gene to be integrated into
a very precise area of a genome. In 2009, Cellectis launched five kits and plans to multiply that
number in 2010. The long-term objective is to make the kits universally accepted and used,
integrated as standard genome engineering tools.

The technology has already succeeded in penetrating the industrial market. The current chal-
lenge is to place Cellectis bioresearch products in the majority of the world’s genetic research
laboratories, enabling researchers, technicians and engineers to benefit from meganuclease
technology.

Ectycell

Ectycell was established in September 2009 to research and commercialize industrial uses of
stem cells. The initial goals are to develop:

• Tools for generating induced pluripotent stem cells from adult cells
• Robust, reproducible differentiation of stem cells
• Cell libraries for testing drug candidates

Stem cells can divide or self-renew indefinitely, or differentiate into many distinct cell types.
They are believed to have the potential to revolutionize medical research and care.

Cellectis’ core technologies can potentially have a major impact on the stem cell field. Ectycell is
tackling such key issues as reducing the high attrition rate in drug development by using early-
stage assays that better predict a molecule’s effect on the organism as a whole or on a genetical-
ly diverse population. Ectycell may also open new paths for regenerative medicine – especially
for pathologies like Alzheimer’s and Parkinson’s diseases.

l Cellectis l Activity Report 2009 l 29

HUMAN RESOURCES AND COMMUNICATIONS

Staff breakdown by categories

Since our founding as a startup company with only a hand-
The percentage of people employed in
ful of employees (eight by the end of 2000) to end of 2009
the scientific departments has increased
in the last three years. with a full staff of 85, we have fostered an open, nurturing
atmosphere infused with a pioneering spirit. As we continue
25% to expand, we aim at keeping this pioneering spirit while
2007
providing the best, most efficient work environment possible.
13%
63% The majority of Cellectis employees work in the company’s corporate headquarters in the Parc
Biocitech, located near Paris. The state-of-the-art facilities occupy about 5,000 m2 in two buil-
dings, including 3,700 m2 of lab space. For the purposes of some partnerships, employees are
occasionally assigned to work at academic laboratories.

18% Cellectis Employees: Our Chief Asset

3%
2008
A large number of employees have been working at the company for a long time, some of
79% them since its establishment. Almost half of the first 30 employees hired at Cellectis are still
with us today.

Two words characterize the Cellectis employee: creative and versatile. It’s not the technology
that drives us, but its application. We have and need people who are able to evolve their think-
15% ing along with the developing technology.
5%
2009 The Team Vision
80%
The team is united by a common goal and vision – to improve human health and wellness
through genome engineering. This creates an atmosphere where there is a free exchange of
ideas. Cellectis fosters this team spirit through biannual seminars for all employees and weekly
general meetings, where the most recent scientific advances are discussed, as well as many
Scientific Departments informal events.
Business Development

Administration At the same time, we have a very ambitious recruitment objective: we want to be at the cutting
edge. About 85% of our staff come from a scientific background. A high proportion of Cellectis’
employees have at least a master’s degree, 32 members of our staff hold a PhD.

30 l Cellectis l Activity Report 2009 l

Making Technological Innovation Happen

Thanks to the innovation, enthusiasm and commitment of our staff, Cellectis has succeeded in
making significant technological advances in biotechnology, always remaining at the forefront
of its field.

To encourage the generation of new ideas, we provide many opportunities for our staff to have
discussions with their peers, both in-house and at exterior events. Cellectis employees regularly
attend scientific meetings and seminars, business conventions and financial conferences. The
agenda of these events is available on our website www.cellectis.com.

Communicating with Our Stakeholders

Besides communicating within the scientific community, we also want to share our enthusiasm
for what we do and communicate it to our various stakeholders. For this purpose, we created a
Communications department in 2009.

By professionalizing our efforts in this area, we will be better able to explain our work to inves- “The team is united by a
tors, industrial partners and the financial community as well as to other research scientists. An
improved understanding of our activities by our stakeholders will help us, in turn, to carry out common goal and
our work within productive partnerships.
vision – to improve human
health and wellness through
Number of Employees genome engineering.”
100
Delphine Jay,
Director of Human Resources
80

60

40

20

0
00 01 02 03 04 05 06 07 07 08 09

Total Female

l Cellectis l Activity Report 2009 l 31

 FINANCIAL
STATEMENTS

32 l Cellectis l Activity Report 2009 l

Share Prices and Capital Structure in 2009

Share Price Evolution In millions of € Share Volume Evolution in thousands of shares

15
300

12
200

100

0
Apr Jul Oct
2009

2010
€100 million market capitalization. About 10,000 share average volume. NYSE-Euronext ACLS.PA

Shareholders Breakdown as of Decembre 31, 2009

1. Free float 43%

2. Corporate Partners 3% (Regeneron, Monsanto) 6

3. Institut Pasteur 4%

4. Founders & Management 20%

1
5. Bus Angel 8%
5
6. Venture Capitals 22%

4
2 3

l Cellectis l Activity Report 2009 l 33

FINANCIAL STATEMENTS

Balance Sheet – Assets

Figures in thousands of euros December 31, 2009 December 31, 2008

Financial items are presented
Net intangible assets 16 17
according to IFRS
Gross values 2 878 3 177
Depreciation, amortization and impairement losses (1 990) (1 741)
Net tangible assets 888 1 436
Investment in other equity 0 0
Other non-current financial assets 231 230
Non-current financial assets 231 230
Deferred tax assets 10 438 7 365
Total non-current assets 11 573 9 048
inventories 118 121
Trade receivables 1 761 722
Current tax assets 3 082 2 891
Other current assets 1 622 2 074
Cash & cash equivalents 45 595 28 723
Total current assets 52 178 34 531
TOTAL ASSETS 63 751 43 579

Net tangible assets figures reflect a financing policy to use leasing extensively. The company
operates a large pool of robots representing an initial value of over €6 million but this has been
fully financed over a three-year period by two banks (BNP Paribas and DLL).

Deferred tax assets relate to accumulated losses, which can be indefinitely deducted from earn-
ing before tax.

The cash position at the end of the period has improved by almost 60% compared to the end
of 2008 (€45.6 million compared to €28.7 million).

34 l Cellectis l Activity Report 2009 l

Balance Sheet – Liabilities

Figures in thousands of euros December 31, 2009 December 31, 2008

Financial items are presented
Share capital 582 479
according to IFRS
Share premium and reserves 54 375 32 583
Net income/ loss of the year (3 852) 123
Equity 51 105 33 185
Retirement benefit obligation 42 32
Other financial liabilities 1 826 1 304
Total non-current liabilities 1 868 1 336
Short term provisions 71 88
Trade payables 4 731 5 372
Other current liabilities 5 975 3 598
Total current liabilities 10 778 9 058
TOTAL EQUITY & LIABILITIES 63 751 43 579

Equity was strengthened at the end of fiscal year 2009, amounting to over €51 million on
December 31, 2009, compared to €33 million on December 31, 2008.

The company has a limited amount of debt (€1.8 million at the end of 2009). This debt rep-
resents a set of reimbursable advances granted by the French government innovation agency
OSEO. These advances are to be reimbursed only if a series of ongoing research programs reach
commercial success.

The total current liabilities increased by less than 20% between the end of 2008 and the end
of 2009, demonstrating management’s ability to grow the company while managing cash ef-
fectively.

l Cellectis l Activity Report 2009 l 35

 Profit & Loss
2009 2008
Figures in thousands of euros 12 months 12 months
Financial items are presented
Sales 11 951 10 600
according to IFRS
Other revenues 136 10
Total operating revenues 12 088 10 610
Purchases consumed (1 623) (1 111)
Personnel costs (5 564) (4 298)
Other operating expenses (12 425) (8 149)
Tax (870) (222)
Amortization (342) (348)
Provisions 0 60
Total operating Expenses (20 825) (14 068)
Current operating income/loss (8 737) (3 458)
Other non-current income & expenses (683) 0
Operating income/loss (9 420) (3 458)
Cash & cash equivalent income 1 248 812
Cost of financing, gross (6) (10)
Cost of financing, net 1 242 802
Other financial income & expenses 0 v0
Income tax 4 327 2 779
Net operating income/loss (3 852) 123
NET INCOME OF THE YEAR (3 852) 123

Total operating revenues increased by about 14% between 2008 and 2009. Importantly, 2009
revenues were impacted significantly by several deals (Limagrain, Monsanto, Bayer Healthcare,
BASF Plant Science) and existing contracts, whereas 2008 revenues were driven primarily by a
single contract (over € 7 million from Regeneron Pharmaceuticals) representing nearly 70% of
total operating revenues.

Total operating expenses increased almost 50% between 2008 and 2009, rising from € 14 mil-
lion to € 20.8 million. Approximately € 2.5 million in expenses related to preclinical activities that
were outsourced, including pre-GMP batch manufacturing and GLP preclinical testing. About
€ 2.5 million was attributable to expenses and success fees relating to intellectual property mon-
etization.

The headcount went from 68 at the end of 2008 to 85 at the end of 2009, resulting in a 30%
increase in personnel expenses.

36 l Cellectis l Activity Report 2009 l

Cash Flow Statement

Figures in thousands of euros 2009 2008

Financial items are presented
Net income/ loss of the year (3 852) 123
according to IFRS
Change in amortizations & provisions 257 288
Change in taxes payable (3 073) (882)
Change in other operating assets and liabilities 289 202
Change in working capital 1 459 1 707
Net cash provided (used) by operating activities (4 920) 1 432
Acquisition of intangible assets (18) (21)
Acquisition of tangible assets (480) (555)
Acquisition of financial assets (1) (236)
Net income form sale of tangible assets 720 0
Net cash provided (used) by investing activities 221 (812)
Repayment of long-term borrowings (268) (157)
Proceeds from issuance of common stock 21 839 3 063
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 21 571 2 906

Change in cash & cash equivalents 16 872 3 526

Opening cash and cash equivalents 28 723 25 197
Closing cash and cash equivalents 45 595 28 723
CHANGE IN CASH & CASH EQUIVALENTS 16 872 3 526

Operating activities consumed approximately €5 million in 2009, compared to a €1.4 million

generation in 2008. This reflects a significant effort by the company to accelerate the develop-
ment of meganuclease-based products downstream in the value chain: preclinical activities and
research kit development were a primary focus of Cellectis’ investments in 2009.

Overall Cellectis strengthened its cash position by almost €17 million year on year, increasing
from €28.7 million at the end of 2008 to €45.6 million at the end of 2009.

l Cellectis l Activity Report 2009 l 37

®Cellectis

Contact:
Cellectis
102 avenue Gaston Roussel
93230 Romainville
France
Tel: +33 (0)1 41 83 99 00
investors@cellectis.com
www.cellectis.com

Photo copyright:
Cédric Porchez
Institut Pasteur
(Jean Pierre Dacbert/Cabinet Dacbert)
Ramon Martinez
Cellectis
Karim Daher
Biocitech
iStockphoto
Getty Images
Michèle Paquier

Graphic Designer:
Valentina Herrmann

Redaction and layout support:

Avec des Mots

Printer:
GraphiCentre

This report was printed with vegetal inks

on PEFC certified paper

Cellectis makes available on its website

(www.cellectis.com) the legal and financial
information, including in particular its
annual accounts and semi-annual report,
required to be made available to thepublic
pursuant to article 221-1 of the rules of
the French Autorité des marchés financiers
and article 4 of the rules of the Alternext
market of NYSE Euronext Paris.
MADE BY CELLECTIS