Cellectis - Annual Report 2007

CORPORATE PRESENTATION 2007

Genome Engineering

Key events in 2007

Strengths and potential

Statement from the CEO

History

Activities and markets

Sources of revenue

Shares and fi nancial communication

Scientifi c foundations of the company

Product portfolio

Intellectual property

Strategy and business model

Corporate governance

Main fi nancial items

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SUMMARY

KEY EVENTS IN 2007

Corporate events• A successful IPO on Alternext at NYSE Euronext (February 7th 2007) with the issue of new shares,

raising over €24 million to increase the company’s production, sales & marketing and R&D capacities.• Most of Cellectis’ longstanding shareholders and employees subscribed to the share offer.

Reinforced leadership • Recruitment of 8 new R&D and Business Development staff.• An increase in staff numbers, from 40 to 48 (including 17 PhDs).• Reinforcement of the Scientifi c Advisory Board and the Board of Directors, with the nominations

of Professor Alain Fischer (Necker Children’s Hospital, Paris) as a new member of the Scientifi c Advisory Board and of Mr. Alain Godard (a former President of the Executive Board at Aventis CropSciences) and Professor Richard Mulligan (Professor of Genetics at Harvard Medical School) as independent Members of the Board.

Commercial activity• Signature in April of a commercial license agreement with Celonic, a German custom recombinant

protein biomanufacturing company. This deal demonstrates the successful validation of Cellectis technology in an industrially produced cell line.

• Delivery in May of fi rst meganuclease with custom-modifi ed specifi city to Bayer CropSciences, as part of a collaboration initiated in 2006. This technical milestone demonstrates Cellectis’ ability to deliver a modifi ed-specifi city meganuclease within just 9 months of the discovery of a genomic target.

• Signature in May of a research license agreement with GlaxoSmithKline in the fi eld of homologous recombination. This type of agreement is likely to be extended to other “big pharma” companies in the months and years to come.

• Signature in October of a contract with Laboratoires Servier in the cell engineering fi eld.• Signature in October of a license agreement with the Japanese company TransGenic on the

use of homologous recombination technology.

Intellectual property (148 patents and patent applications): Portfolio extension:• 8 new granted patents, including 3 in Europe and 5 in the United States (an increase from 27 to

35 patents delivered in a year).• 44 new patent applications (an increase from 69 to 113 patent applications in a year).

R&D• Positive results with cells from patients (xeroderma pigmentosum group C) – September• Delivery of 2 Meganuclease Recombination Systems (MRSs) for p53 to the European NetSensor

Consortium – July.• Delivery of a meganuclease targeting the RAG1 gene (responsible for a severe immunodefi ciency)

to Professor Luigi Notarangelo’s research group at Boston Children’s Hospital – November.• Delivery of a meganuclease targeting IL2RG to Professor Alain Fischer at Necker Children’s Hospital,

Paris – August.• Collaboration with the CNIO and CRG research institutes (Spain) – one paper submitted

and another in press.• Collaboration with Necker Children’s Hospital (Paris) on a mouse model – paper submitted• Scientifi c publications (4): - Nucleic Acid Research (2007;35(10):3262-71) - Current Gene Therapy (2007 Feb;7(1):49-66) - Journal of Molecular Biology (2007 Aug 3;371(1):49-65)Journal of Biological Chemistry (2008 Feb 15;283(7):4364-74)

l Cellectis l Corporate Presentation 2007 l Key events in 2007 l 4

Cellectis traite de sujets scientifi ques

complexes et apporte des solutions

simples et innovantes.

l Cellectis l Corporate Presentation 2007 l Présentation de Cellectis l 5

AMBITIONIT’S IN OUR DNATo become the world leader in DNA programming or genome engineeringTo become the world leader in DNA

• A dominant international position in rational genome engineering, underpinned by cutting-edge technology validated through a large number of scientifi c publications (including 4 in 2007), together with an optimal intellectual property strategy.

• A unique and aggressive intellectual property policy (both protecting and extending the existing portfolio), guaranteeing Cellectis the freedom to exploit its technology and strengthening its technological lead and know-how. As of December 31st 2007, the company held rights to 30 patent families, corresponding to 35 granted patents and 113 pending applications in France and elsewhere throughout the world (see the table in the “Intellectual Property” section page 19).

• Validation of Cellectis technology by partners worldwide (GlaxoSmithKline (GSK), Servier, Bayer CropSciences, Celonic, Transgenic, etc.), raising the profi le of Cellectis and increasing its credibility in three of its target markets: healthcare, agribiotech, biomanufacturing & research.

• Collaborations with internationally renowned academic institutions (INSERM, Institut Gustave Roussy, CNRS, Pasteur Institute, Boston Children’s Hospital, Necker Children’s Hospital, etc.) in the research and reagents market.

• A diversifi ed portfolio with 18 products currently in development with balanced prospects for short-, mid- and long-term revenues.

• Prudent management of the company’s ample assets.

• An experienced management team with complementary skills, supported by a team of motivated individuals.

POTENTIAL

One of Cellectis’ main strengths is its ability to increase its annual MRS production capacity substantially thereby achieving steady revenue growth:• 8 MRSs produced in 2006• 10 MRSs produced in 2007• A capacity of 20 in 2008• A capacity of more than 20 by 2010• A target of 40 MRSs in active use by partners and customers in 2010

In 2007, Cellectis achieved its annual production objective of 10 new meganucleases. More than 18 applications have been developed since the company’s inception. The fi rst Cellectis meganucleases (MRSs) were produced in Q4 2005, leading to the initiation of partnerships focusing primarily on the existing client portfolio. The fi rst deal led to the delivery of a fi rst MRS to a major agrochemicals fi rm (Bayer CropSciences) and the delivery of three biotherapeutic MRSs – one to Professor Alain Fisher’s INSERM research group at Necker Children’s Hospital (France), the second to Professor Luigi Notarangelo’s group at Boston Children’s Hospital and the third to Professor Sarasin’s CNRS unit at the Institut Gustave Roussy (France). Cellectis estimates that by 2010, around 40 MRSs will be actively used by its strategic customers and partners.

Cellectis has signed over 48 accords with pharmaceutical companies (GlaxoSmithKline, AstraZeneca, Merck & Co., Wyeth, Shire, Servier, etc.), agrochemical multinationals (Bayer CropSciences, DuPont, Pioneer HiBred, BASF, Limagrain, etc.) and biotech fi rms (Genentech, Regeneron, Lexicon Genetics, Celonic, Transgenic Inc., etc.). Cellectis is focusing its R&D efforts on high-potential markets such as monogenic diseases, DNA virus and retrovirus infections (herpes, hepatitis B and HIV), allogenic transplantation and cancer.

CELLECTIS’ STRENGTHS

l Cellectis l Corporate Presentation 2007 l Cellectis‘ Strengths l 6

3 different meganucleases

fi xed on their targets.

Meganucleases are naturally

occurring DNA cutters that are

able to recognize and cut a large specifi c

sequence of DNA in a genome

l Cellectis Genome Engineering l Annual Report 2006 l Présentation de Cellectis l 7

DIVERSITYIT’S IN OUR DNAFour high-potential target markets for meganucleases: healthcare, agronomy, research and biomanufacturing

F hi h t ti l t t k t

Researchers, life science companies and physicians now have access to a huge amount of genomic information. Signifi cant human and material resources have been devoted to understanding how genes and genomes work, with a view to improving human health, quality of life and environment. However, adequate therapeutic solutions are still lacking for many diseases and the world is still looking for new, environmentally friendly sources of energy and renewable materials. An understanding of the way in which genomes operate and of way of repairing and modifying them with a high degree of precision will enable us to address many of these needs. Cellectis’ technology makes use of scientifi c knowledge generated over more than 20 years at the Pasteur Institute. It lies at the interface between three now mature disciplines: genetic engineering (recombinant DNA), structural biology and robotics. The products that Cellectis designs and produces herald a new revolution in biotechnology – rational genome reprogramming and therapeutically focused genome surgery.

2007 has been a year of change for Cellectis, with the transition from privately held to listed company status and the achievement of a number of signifi cant technological milestones.

• On February 7th 2007, Cellectis made a successful IPO on Alternext, a NYSE Euronext market. This operation enabled us to increase our gross share capital to €24.4 million, thereby increasing our ability to produce novel meganucleases, to amplify our R&D efforts and to strengthen our commercial activity.

• We have obtained the fi rst evidence of gene repair (in the human XPC gene) in a human cell line. Mutations in the XPC gene cause a very severe skin disease in humans, the victims of which are often referred to as “moon children”. This work (in collaboration with the Institut Gustave Roussy) showed that a meganuclease programmed by Cellectis to target the defective XPC gene can induce gene repair in a skin cell line in culture.

• We have reached a signifi cant milestone in our research collaboration with Bayer Biosciences, with the on-schedule delivery of a meganuclease with modifi ed specifi city for use in a plant species. This achievement opens us new opportunities for broadening our collaboration and new horizons in the agricultural biotech sector.

Building and improving our meganuclease production platformSince the creation Cellectis in 2000, we have concentrated our efforts on the discovery and implementation of a technology platform for the design and selection of new molecules inducing the targeted recombination of DNA in living cells. To this end, we have made use of and improved technologies discovered and patented by researchers at the Pasteur Institute. By investing signifi cant human and material resources in these technologies, we have improved our understanding of how meganucleases work and have broadened their application. By the end of 2007, our production capacity for meganucleases with a custom DNA target had doubled. In parallel, we have improved our production process, leading to signifi cant productivity gains. The time-line for the production of custom meganucleases remains the same (9 months), but we have obtained spectacular results in terms of improved product specifi city and effi cacy. The molecules that we are now producing open the way to applications in the treatment of patients by high-precision genome surgery.

Cellectis is a world leader in meganuclease R&D and the use these tools in genome reprogramming, as demonstrated by the high quality and frequency of our scientifi c publications and the impressive number of patent applications fi led over the last year. However, the impact of a technology can also be measured by the spread and success of its use within the scientifi c community. More than 60 scientifi c

STATEMENT FROM THE CEO

André Choulika PhD.Chief Executive Offi cer

l Cellectis l Corporate Presentation 2007 l Statement from the CEO l 8

articles citing the use of meganucleases for the induction of DNA recombination were published in 2006, and this fi gure rose to more than 100 in 2007, with a diverse range of organisms targeted: tomato, frog, mosquito (malaria vector), fungi, mycobacteria and human cell lines. The success of a technology as a benchmark in genome reprogramming depends not only on its designers, but also on its users.

Building strong industrial collaborationsIn recent years, the demand for rational genome engineering technologies has been increasing, as demonstrated by strong industrial interest in the Cellectis approach. Since the creation of the company, we have signed 48 licensing and collaboration agreements with companies from the biotech, pharmaceutical and agrochemistry sectors. These fi rms have used or are using our technologies to generate innovative products based on rational genome modifi cation. This year, we engaged in 5 new collaborations with Celonic (Germany), Glaxo SmithKline (the USA and the UK), Bayer Biosciences (Germany and France), Servier (France) and TransGenic (Japan). These agreements refl ect the importance of our technology worldwide and the opportunities that it offers for value creation.

In some cases, these agreements correspond to technology licenses for use in the validation of genomic targets, with a view to understanding the role of certain genes and developing novel therapeutic molecules. In other cases, certain partners use our technologies to manufacture industrial and commercial quantities of proteins and to create new protein drugs. Finally, in some collaborations, our technologies are also used to improve species in a controlled, clean manner by avoiding the need for random gene modifi cation and the transfer of foreign DNA. Cellectis is not a service company and all our partners work with us in collaborative alliances, rather than short-term contracts. In 2007, Cellectis engaged in no new industrial alliance concerning the production of meganucleases for therapeutic use. This promising technology remains prospective and is being developed through a number of academic and clinical collaborations.

Genome surgery with meganucleases – a revolution in tomorrow’s medicineMeganucleases for therapeutic use constitute a major strategic development axis for Cellectis. These high-precision “DNA scissors” are programmed to cut only at a specifi c target site. In theory, if a cell does not contain the meganuclease’s target sequence (even among the 3 billion pairs of G, A, T, and C bases forming the DNA double helix in humans), the meganuclease will remain inactive. By contrast, if the target is present, the meganuclease will cut the sequence with a high degree of precision. Today, Cellectis is developing meganucleases for four different types of therapeutic application: (i) the repair of mutations involved in genetic diseases, (ii) destruction of the DNA of certain viruses in infected cells, (iii) the inactivation of genes responsible for graft rejection in cells or organs before transplantation and (iv) the weakening of cancer cells or the induction of their death through effects on certain genes involved in carcinogenesis.

We have published several scientifi c articles demonstrating our ability to produce therapeutic meganucleases and setting out certain principles of genome surgery in international, peer-reviewed journals, such as Nucleic Acid Research, Current Gene Therapy and the Journal of Molecular Biology. We have have delivered more than six different meganucleases in research collaborations targeting genes involved in cancer, severe combined immunodefi ciency syndrome (SCID or “bubble boy” disease), xeroderma pigmentosum (XP, the disease suffered by moon children) sickle-cell anemia and for use as R&D tools.

For the fi rst time, and as part of Cellectis’ collaboration with the CNRS-FRE2939 research unit directec by Dr Alain Sarasin at the Institut Gustave Roussy, a mutation in a cell line isolated from an XP patient has

l Cellectis l Présentation Corporate 2007 l Lettre du Directeur Général l 9

been corrected by meganuclease-based genome surgery. Meganuclease-induced gene correction now appears to be a viable alternative to standard gene therapy approaches, which are often based on gene transfer with a viral vector. These data are still very preliminary and replication and more detailed study are required. Nonetheless, this work constitutes a fi rst step towards the use of meganuclease-mediated gene targeting in the treatment of inherited monogenic diseases.

Implementing a balanced business model with an ambitious outlookCellectis’ business model stands out in terms of its long-term nature. Modern biotechnology results from man’s ability to modify the genetic program and the trend within the industry is to move toward ever greater control over genome engineering, in ever-broadening fi elds of application. Cellectis occupies a key position in this trend and has considerable potential for value creation. It generates short-term revenue from the granting of patent licenses to partners and collaborators working on the development of research and production tools and in agribiotech. The revenue raised from these licensing and collaboration activities generates turnover and makes it possible to preserve the inherent long-term value of our technology. Our customers and collaborative partners are increasing in number. Furthermore, the spectrum of certain collaborations has broadened. In 2007, we were involved in collaborations in the fi elds of biomanufacturing, research and agribiotech. Over the year, we initiated the development of a fi rst kit for use in biological research, and other products in the same range are also in preparation. A signifi cant proportion of our resources have been invested in the development of products for potential use in treatment, and this will continue to be the case in the coming years. We intend to develop and validate these products, right up to use in patients in collaboration with the pharmaceutical industry. This portfolio of therapeutic products will constitute a major asset for Cellectis in the future.

On February 7th 2007, our IPO raised €24.4 million in equity. At the end of the 2007 fi scal year, our cash reserves stood at €25 million. The IPO stimulated considerable enthusiasm among investors, and most of our employees also subscribed to the equity issue, bearing witness to their long-term confi dence in the company’s prospects. Since its creation, Cellectis has prudently managed its cash base, keeping its burn rate (a feature of biotech companies) under tight control. We expect to have to increase our short-term capital consumption to achieve our stated goals, but we intend to maintain cash reserves at suffi ciently high levels to construct highly valuable assets and to meet our short- and mid-term objectives.

As a trailblazer with breakthrough technology, Cellectis is extremely active in the intellectual property arena. As of late 2006, our portfolio featured 96 patents and patent applications, either fully owned or exclusively licensed from the Pasteur Institute. In the space of a year, we have succeeded in gaining 8 granted patents and have fi led 44 new applications – taking our IP portfolio to 148 patents and patent applications. This intense inventive activity by our researchers is the product of their creativity and rigorous, technologically advanced science. We are also defending our freedom to exploit our discoveries by protecting our portfolio against potential opponents and successfully contesting patents held by our competitors that we consider to be unjustifi ed.

In 2007, the governance of Cellectis progressed with the arrival of several new expert Supervisory Board and Scientifi c Advisory Board members. In July, Professor Richard C. Mulligan – an internationally recognized pioneer in the development of new gene transfer technologies with longstanding experience in biotech – joined the Board to strength our strategy in terms of therapeutic orientation. In September following the resignation of Edmond de Rothschild Investment Partners from our Board, Alain Godard (a former President of the Executive Board at Aventis) joined us to strengthen our strategy for the agribiotech sector. We would like to thank Gilles Nobécourt from Edmond de Rothschild Investment Partners for his membership of the Board membership and hard work over the last fi ve years.



VISIONIT’S IN OUR DNAA naturally occurring “cut & paste” system for DNA, discovered by researchers at the Pasteur Institute in the 1980s

A naturally occurring “cut & paste” system

His professionalism, exceptional network of contacts and farsighted vision of the biotech industry have been of great benefi t to Cellectis. Finally, Professor Alain Fisher (with whom we have collaborated for a number of years) joined our Scientifi c Advisory Board strengthening it by his scientifi c and medical skills in the fi eld of the inherited genetic diseases and gene therapy approaches.

At the origin of a paradigm change in the biotech industryFirst and foremost, Cellectis is about the people who work for it. At the end of the 2007 fi scal year, the company had 48 salaried employees, most of whom have been with the company for a long time (including some who joined Cellectis in the year it was set up!). Thanks to their inventiveness, hard work, strong team spirit and unfl agging commitment to a shared project and a common vision, we have succeeded in creating major technological breakthroughs in biotechnology. Following in the footsteps of the Pasteur Institute researchers who discovered these technologies, we founded this company eight years ago in the fi rm belief that meganucleases had therapeutic and commercial potential for genome engineering. Many challenges lie ahead before this approach can be applied to patients suffering from diseases for which no adequate treatment currently exists or new biological products generated by rational genome engineering released onto the market. However, in 2007, we made a signifi cant step forward in the new approach to molecular medicine – genome surgery – opening the way to a huge number of applications for the genetic programming of living organisms in a wide range of high-potential markets.

Finally, we would like to thank our shareholders for their support and trust in Cellectis.

With my best wishes,

André ChoulikaCEO



INNOVATIONIT’S IN OUR DNAGenome engineering: to cure genetic disorders fi ght infections and improve transplantation.

HISTORY

l Cellectis l Corporate Presentation 2007 l Historicl 14

High tech laboratories located in a biotech campus:

the Biocitech Park

Cellectis’ innovative approach is based on a true technological breakthrough and opens up new perspectives in high-precision genome engineering and modifi cation of the DNA of living organisms.

The business idea behind Cellectis developed from the combination of two technologies developed from research carried out at the Pasteur Institute in Paris: homologous recombination and intron endonuclease. During his postdoctoral studies in Professor Richard Mulligan’s laboratory at Harvard Medical School, André Choulika came up with a business idea based on the development and exploitation of artifi cial systems for repairing or modifying DNA based on a combination of two technologies: meganucleases (natural proteins that cut DNA at precisely defi ned sites in vivo) and homologous recombination (the targeting of one genome sequence by another, absed on the presence of similar sequences upstream and downstream from the target gene).

In 1999, André Choulika moved back to France and presented his project to the Director and technology transfer staff of the Pasteur Institute, which held the key patents. After winning the 1999 National Business Plan Competition run by the French government, André Choulika teamed up with another young researcher (David Sourdive) to found Cellectis as a Pasteur Institute spin-off.

Cellectis is a true biotech company with a very innovative technological approach and business model. The company – which aims to become a world leader in DNA programming – designs, produces and sells a new class of products (meganuclease recombination systems, MRSs) for high-precision in vivo genome engineering.

Cellectis’ MRS (for the “copying and pasting” of DNA) represents a true technological breakthrough in the world of biotech.

Most of the industrial biotech applications introduced since the 1970s (e.g. therapeutic proteins and cell and gene therapy) have involved random gene insertion. Cellectis technology is more accurate, effi cient and powerful: it involves the design and development of a meganuclease specifi c for a given gene, making it possible to modify the sequence of that gene in a precise manner, to modulate its expression or to repair it in any living organism or cell.

Cellectis can modify genomes with meganucleases alone – destroying infectious DNA or inactivating cancer genes. Cellectis also develops meganuclease recombination systems or MRSs, composed of two elements: meganuclease “DNA scissors” and a DNA matrix, for the transmission of genetic information to a chromosome in any living organism (humans, animals, plants, microorganisms). The MRS enters the cell and targets the DNA of chromosomes, replacing all or part of a gene with another gene, correcting defects in an accurate and controlled manner or simply inserting or destroying a DNA sequence.

Cellectis’ specifi c know-how and the market launch of its new technology will open up new fi elds of application for the scientifi c knowledge acquired over the last 30 years in biology, particularly in genomics.


THE FUTUREIIT’S IN OUR DNAA mature portfolio of wide-ranging patents providing opportunities for collaboration and revenue for today and maintaining competitiveness for tomorrow

A mature portfolio of wide ranging patents providing

ACTIVITIES & MARKETS

From its foundation until 2006, Cellectis sublicensed technology originally developed at the Pasteur Institute, signing over 48 agreements with pharmaceutical companies (GlaxoSmithKline, AstraZeneca, Merck & Co., Wyeth, Shire, Servier, etc.), agrochemical multinationals (Bayer CropSciences, DuPont Pioneer Hi-Bred, BASF, Limagrain, etc.) and biotech fi rms (Genentech, Regeneron, Lexicon Genetics, Celonic, Transgenic Inc., etc.). Over this same period, Cellectis developed its own technology (based on the engineering of meganucleases to modify their specifi city). It has been moving towards a direct MRS sales model since 2006. The MRSs manufactured by Cellectis are currently sold (and will continue to be sold) to industrial customers who make use of these tools in the company’s four main target markets:

• Healthcare/therapeutics – this is Cellectis’ broadest fi eld of application, in which meganucleases act on a defective gene, tackling the cause of the disease rather than simply treating its effects. This approach can be used to treat diseases not treatable by standard approaches. Furthermore, meganucleases can be used to induce a strand break in a target DNA sequence and to alter the genetic information present at this site in a precise manner, thereby eliminating the defective genetic element. Cellectis’ “surgical” approach – targeting the underlying genetic cause of disease – is a truly revolutionary, innovative approach. The company is currently developing MRSs targeting severe combined immunodefi ciency (SCID). This work includes a collaborative project with Professor Alain Fischer (Necker Children’s Hospital), underway since 2005, for the treatment of “bubble children” (X-SCID). Finally, we are also developing a range of innovative products, such as antiviral drugs against hepatitis B or products for use in cell and organ transplantation.

• Agribiotech – a market estimated at $8 billion in 2007 – meganucleases avoiding the need to insert a foreign gene into plants and/or eliminating an allergenic component by gene deletion are of major interest. As a result, Cellectis is opening up very signifi cant opportunities in both the food sector and the emerging bioenergy fi eld.

• Biomanufacturing – a global market estimated at $1.7 billion in 2007 – the accuracy of targeting and ease of use of Cellectis technology are major assets for industrial applications. This is a very competitive market and some of the steps involved are costly. Cellectis MRSs will help to improve these processes by improving performance, predictability and stability. Here, MRSs are integrated into industrial processes (the IT model) and may even lead to improvements in the intrinsic quality of the end product.

• Research tools – a market demanding constant innovation and setting the standards for tomorrow’s industry. This market is modest in size (estimated at $8 billion in 2007), but its short-term profi tability is good and it also opens up possibilities for populizing MRS technology in academic and industrial laboratories, thus laying the foundations for Cellectis technology to become the worldwide standard for DNA programming.

l Cellectis l Corporate Presentation 2007 l Activities & Markets l 16

Research

Biomanufacturing

Agribiotech

Health


EXCELLENCEIT’S IN OUR DNAInvesting in our product quality and performance and reinforcing our technological lead by accelerating our collaborative research on diverse types of application

Investing in our product quality

Today, Cellectis sells its own products, which should generate most of its revenues in the mid-term. The company has a portfolio of 18 products at various stages of development and is focusing its R&D efforts on high-potential markets, such as new-generation antivirals drugs, genetic diseases, cancer and products for allogeneic transplantation.

MRS revenues consist of fees for access to the technology (“upfront” payments), annual intellectual property fees, payments associated with the achievement of technical/development milestones and royalties on sales of fi nished products.

SHARES & FINANCIAL COMMUNICATION

One of the key events of 2007 was Cellectis’ successful IPO on the NYSE Euronext Alternext market.Cellectis has already set up a fi nancial PR program, based on the regular provision of clear information via:

• Press releases in French and English.

• Individual and group meetings (fi nancial/analyst seminars, road shows, business breakfasts, webcasts and conference calls) in France and abroad with analysts, fund managers and individual shareholders (notably during the Actionaria show in Paris) and journalists from the business and fi nancial press.

• A web site in French and English, with in-depth corporate information and a dedicated Investor Relations section.

• A corporate presentation in French and English.

Capital structure in 2007

SOURCES OF REVENUE

l Cellectis l Corporate Presentation 2007 l Revenue Sources & Financial Communication l 18

Quality, traceability, and demand are

the foundation of Cellectis’ research

Odysee Venture 6%

LCF Rothschild 6%

AGF Private Equity 12%

Kaminvest 12%

Fondateurs, Personnel & Dirigeants 19% 8%

Institut Pasteur 5,5%

Bankinvest 16,5%

Flottant 23%


VALUESIT’S IN OUR DNACellectis aims to develop a new generation of antiviral drugs that destroy the DNA of certain viruses by highly specifi c cleavage

The business idea behind Cellectis arose from the following observation: the information encoded in the genome of living organisms is only fully accessible and exploitable if genomic DNA can be rationally and accurately reprogrammed. Cellectis designs artifi cial systems for inducing natural DNA repair and “copying and pasting” fo any defi ned gene.

Cellectis is the fi rst company in the world to commercially exploit a technology for high-precision, in vivo DNA surgery in a broad range of genomes commercially. Thanks to Cellectis technology, we can now correct a defective gene in situ without damaging the rest of the genome and without adding imprecise and poorly tolerated foreign genes. DNA is the blueprint for the functions of all living organisms. The fi rst work on reprogramming living cells (in the 1970s) launched the biotech revolution. However, the major applications of this early work are still based on the random genomic insertion of DNA sequences in vivo. This is true for gene therapy and the production of therapeutic proteins such as insulin (the fi rst biotech drug, approved in 1982), growth hormone and erythropoietin (EPO – the most commercially successful therapeutic protein worldwide, with sales of nearly $10 billion in 2005 (source: Arthur D. Little)).

The random insertion of genetic material is currently the main barrier to the development of gene therapy as it may have a certain number of detrimental consequences. The full sequence of the human genome has been known since 2000. Following the achievement of this signifi cant milestone in modern science, the sequencing of an increasingly large range of genomes has provided researchers with a huge volume of data on the genetic programs of many species and has contributed to our understanding of many diseases. However, access to this information – particularly for its correction or exploitation – remains very limited.

In 2000, the business idea behind Cellectis was based on the design and development of an artifi cial system for repairing DNA or modifying the DNA composition by combining two fundamental technologies developed at the Pasteur Institute: meganucleases (natural proteins that cut DNA precisely at defi ned sites in vivo) and homologous recombination (the targeting of one genome sequence by another through the presence of similar sequences upstream and downstream from the gene in question).

Individually, these two technologies have limited numbers of applications. On the one hand, the low targeting effi ciency of homologous recombination restricted its use to a small number of species (the mouse, yeast, moulds) and to academic research. On the other, the small number of natural meganucleases available could cut DNA at only a few DNA sequences so the chances of fi nding a useful target were close to zero. This led to the development, by Cellectis, of the fi rst ever technology for industrial-scale, rational, in vivo genome engineering (the meganuclease recombination system, MRS), making it possible to cut DNA at any desired, predefi ned site in a given genome.

Over the last 6 years, Cellectis has moved from product design to the sale of its products and is developing its own proprietary technology platform.

Today, Cellectis is the world leader in rational genome engineering, with a growing, diversifi ed product portfolio, cutting-edge technology (validated by many scientifi c publications, including 4 in 2007) and an optimal intellectual property strategy: 8 new patents granted and 44 patent applications fi led in 2007 alone, for a portfolio of 30 patent families.

THE SCIENTIFIC FOUNDATIONS OF THE COMPANY

l Cellectis l Corporate Presentation 2007 l Cellectis‘ Scientifi c Foundations l 20

Excellence in team spirit and support to the company project

are Cellectis’ strengths


The therapeutic meganuclease porfolio includes proof-of-concept products for the treatment of rare diseases. These products were selected because they are may provide therapeutic solutions for disorders for which there is currently no appropriate treatment. They also make it possible to treat target cells outside the patient’s body (ex vivo treatment), to facilitate MRS access to the gene and to check the accuracy of DNA repair after genome surgery. These products should lead the way to the application of meganucleases in the treatment of diseases affecting a larger number of patients. Cellectis is developing products for the treatment of certain hereditary types of anemia (sickle-cell anemia and thalassemia), latent infections caused by persistent DNA viruses (hepatitis B), products against certain forms of cancer and products for reprogramming the DNA of a graft to reduce its incompatibility with the recipient.

In agricultural biotechnology, meganucleases can be used to eliminate the random element of transgenesis and to respect the integrity of genomes. Many specifi c meganucleases may be designed and marketed for a single plant species. Each of these products, through its application, may help to improve a specifi c agronomic feature of the plant: digestibility, potential for use in the manufacture of biofuel and degradation of the resulting biomass, decreasing sensitivity to various industrial treatments for transformation into a food product, the manufacture of new biofi bers and compliance with constraints linked to the depletion of natural resources and pollution.

Meganucleases make it possible to reprogramme a genome in a controlled and rational way. They are therefore useful tools for researchers seeking to understand how genes and genomes function. Cellectis is developing for ready-to-use kits for precise genetic modifi cation in biological research.

The industrial production of some therapeutic proteins is based on the use of Celectis meganucleases for the development of certain bioproducts lines. The use of these enzymes saves time and reduces costs in setting up of a production process for a therapeutic protein. Cellectis sells these products to pharmaceutical and biotech companies.

PRODUCT PORTFOLIO

Maladies Génétiques Cancer de la Peau

Immunodéfi cience

Anémie Falciforme

Antiviraux Hépatite B

Autres affections Transplantation Allogenique

Cancer

Conception du MRS Test In Vitro Phase Pré Clinique Phase Clinique I/II

2007 2008 2009 2010DÉVÉLOPPEMENT THÉRAPEUTIQUE

Kits de Recherches Ciblage CHO

Constitutif Souris

Constitutif CHO

Constitutif Humain

BioProduction Métabolisme CHO

Plantes Cibles confi dentielles

2007 2008 2009 2010

Conception du MRS Test In Vitro Ventes de Licences

AUTRES DÉVÉLOPPEMENTS

l Cellectis l Présentation Corporate 2007 l Product portfolio l 21

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1: this fi gure includes PCT international applications, covering Europe and the USA in particular.2: patents in Japan and Singapore.3: patent applications in Canada, Australia, Japan, China and PCT international applications.4: this fi gure includes European and French patents resulting from French priority applications.

In June 2007, the European Patent Offi ce (EPO) refused an appeal concerning a European Patent owned by Johns Hopkins University and licensed to Sangamo Biosciences, Inc. (“Sangamo”) revoked in May 2005 by the EPO’s Opposition Division. Patent EP 0682699, entitled “Functional Domains In Flavobacterium Okeanokoites (FOKI) Restriction Endonuclease”, had been granted on May 7th 2003 and constituted the basis of regional phase patents in France, Germany, the United Kingdom, Ireland and Switzerland. The granted (and now revoked) claims covered technologies used in Sangamo’s targeted recombination and gene correction programs.

Cellectis ensures the protection of its technology, products, know-how and data through non disclosure agreements with its employees, consultants, partners, licensees and certain subcontractors.

As of December 31st 2007, the company held rights to 30 patent families, corresponding to 35 granted patents (33 of which belong to the Pasteur Institute) and 113 pending applications (of which 64 were fi led by the Pasteur Institute and 49 were fi led by Cellectis) in France and elsewhere throughout the world. The table below details the number of granted patents and patent applications pending by country/geographic zone.

INTELLECTUAL PROPERTY

l Cellectis l Corporate Presentation 2007 l Intellectual Property l 22

Families of patents

and patent applications

Patents Patent

Applications

Zone 31 December 2007 ∆2006 31 December 2007 ∆2006

Homologous recombination Europe 34 +2 2 =

USA 3 = 3 +1

Other2 5 = 0 =

Meganucleases Europe 1 +1 10(25)1 +2

USA 18 +5 18(26)1 +9

Other3 0 = 57 +23

Other Europe 24 = 5 +2

USA 1 = 11 +7

Other4 2 = 7 =

Total pour 30 patent families 35 +8 113(51)1 +44

l Cellectis l Présentation Corporate 2007 l Strategy & Business Model l 23

To achieve its ambition of becoming the world leader in genome engineering and the global standard for genome surgery, Cellectis has defi ned and initiated a clear strategy in which efforts are focused on its core excellence: the design and the manufacture of genome programming systems.

Cellectis implements this strategy by

• Signing commercial agreements in its four target fi elds of application: healthcare, biomanufacturing, agribiotech and research.

• The active diffusion of its technology as a research tool in leading academic and industrial laboratories.

• The high-priority commercialization of therapeutic products for the treatment of rare genetic diseases and some types of viral infections, the development of new products to fi ght cancer and of products for use in allogeneic transplantation.

• The development and sale of off-the-shelf research products (products designed and produced by Cellectis and then sold extensively to public and private research laboratories to generate short-term revenues).

• The strengthening of alliances with major industrial players in agribiotech.

• The underpinning of its competitive advantage by further enrichment of its patent portfolio and knowledge-based extension of its technological lead.

The funds raised in Cellectis’ February 2007 IPO are being used (and will continue to be used) for

• Increasing the company’s current production capacity to reach a target of 20 MRSs per year by 2008.

• Strengthening its sales, marketing and communication teams.

• Intensifying its R&D efforts in the areas of meganuclease engineering, homologous recombination and MRS production processes.

STRATEGY & BUSINESS MODEL

GOALS FOR 2007 & MILESTONES ACHIEVED AS OF DECEMBER 31ST 2007

Goal set at IPO Delivered as of December 2007

Contract 5 to 7 in agribiotech and biomanufacturing 5 - Celonic (April), GSK (May), Servier (October), Transgenic (October) and Bayer

MRS delivery Delivery of 1 to 3 MRSs 1 MRS delivered to Bayer CropSciences

Delivery of 1 biotherapeutic MRS 3 - a fi rst biotherapeutic MRS delivered to Professor Fisher’s group (INSERM/Necker Hospital, France), a second to Professor Sarasin’s group (Institut Gustave Roussy/CNRS, France) and a third to Professor Notarangelo’s group (Boston Children’s Hospital)

Results Results for gene repair in patient cells Positive results obtained from the cells of a patient with XP

MRSs designed 10 MRSs 18 MRS au total en portefeuille

André Choulika, PhD, company founder, is one of the pioneers in the analysis of meganucleases and their applications in the modifi cation of complex genomes. He obtained his PhD in Molecular Virology from the Pierre and Marie Curie University – Paris VI before undertaking postdoctoral research in genetics at Harvard

Medical School. At the Molecular Medicine Department of Boston Children’s Hospital he developed the initial basis for the therapeutic applications of meganucleases in humans. André Choulika also graduated from the “Challenge+” business administration program (HEC School of Management, Paris).

David Sourdive, PhD, company cofounder. After obtaining a doctorate in Molecular Virology at the Pasteur Institute, David Sourdive joined one of the leading laboratories in anti-viral immunology at the University of Emory (Atlanta) to work on immune memory. Before cofounding Cellectis,

he managed the Biotechnology Laboratory at the French Ministry of Defense’s Boucher Research Centre from 1998 and 1999. He is a graduate of the Ecole Polytechnique (Paris) and the “Challenge+” business administration program (HEC School of Management, Paris).

Marc Le Bozec, was Chief Operations Offi cer at Alfact Innovation (Paris, France) until September 2006. He has over 10 years’ experience in the biotech sector, fi rst as a consultant (Arthur D. Little, Paris offi ce) and then as founder,

Chairman and CEO of BioProtein Technologies (France), a company specializing in the production of recombinant proteins in the milk of transgenic animals. He is a graduate of the HEC School of Management in Paris.

Frédéric Pâques, PhD, joined the company in October 2001 as R&D Director and was appointed CSO in June 2002. He has internationally recognized expertise in DNA recombination mechanisms. After graduating from the Ecole Normale Supérieure (Paris), he gained a

PhD at the University of Paris XI in 1994 before taking up a postdoctotal post at Brandeis University (Waltham, MA) where he performed seminal work on DNA recombination in yeast. On returning to France, he worked as a researcher at the National Center for Scientifi c Research (CNRS).

CORPORATE GOVERNANCE AS OF DECEMBER 31ST 2007

André Choulika, PhD. Chief Executive Offi cer

David Sourdive, PhD.Vice President Corporate Development

Marc Le BozecChief Finance Offi cer

Frédéric Pâques, PhD.Chief Scientifi c Offi cer

l Cellectis l Corporate Presentation 2007 l Governance l 24

BOARD OF DIRECTORS

Christian Policard, PhD, ChairmanMartin Bitsch, MD, (representing KamInvest)André Choulika, PhD, MemberAlain Godard, Independent MemberRaffy Kazandjian, Independent MemberThierry Laugel, PhD, (representing AGF)Richard C. Mulligan, PhD, Independent MemberDavid Sourdive, PhD, MemberThomas Tscherning, MD, (representing BankInvest)Alain Guédon, censor (representing the Pasteur Institute)

SCIENTIFIC ADVISORY BOARD

François Jacob, MD, Honorary Chairman and Nobel Prize winnerRodney J. Rothstein, PhD, ChairmanFrederick W. Alt, PhDBernard Dujon, PhDAlain Fischer, MDJames E. Haber, PhD Denis Pompon, PhDLuis Serrano, PhD

Management team

l Cellectis Genome Engineering l Présentation Corporate 2006 l Présentation de Cellectis l 25l Cellectis l Présentation Corporate 2007 l Présentation de Cellectis l 25

CREATIVITYIIT’S IN OUR DNA48 committed, expert staff, including 17 PhDsAn experienced and complementary management team providing strong support for the company‘s projects

MAIN FINANCIAL ITEMS

An icrease in running costs (+ 27%) similar to the one in sales (+ 22%)

Profi t & LossIn IFRS format for the fi scal year 2007, plus a comparison with the fi scal year 2006:

200712 months

200612 months Deviation

l Cellectis l Corporate Presentation 2007 l Main Financial Items l 26

Operating RevenueSales grew by 22% between 2006 and 2007, thanks to:• The fi rst contract for the delivery of a meganuclease with modifi ed specifi city (Bayer Biosciences), followed by a second order.• The signing of four additional contracts (Celonic, GSK, Servier and TransGenic).

Other revenue is mostly linked to public funding, which rose by more than 5% for the same period (thanks notably to two European Commission grants). In 2007, Cellectis obtained another new grant from the ANR (the French National Research Agency), the effects of which should start to appear in 2008.

Year-on-year operating revenue rose by 13% (from €2.48 million in 2006 to €2.81 million in 2007).

Figures in thousands of euros

Chiffre d‘affaires 1 448 1 188 22%

Other revenue 1 365 1 291 6%

Total revenue 2 813 2 480 13%

Purchases consumed (1 013) (577) 76%

Personnel costs (2 934) (2 226) 32%

Other operating expenses (3 433) (2 975) 15%

Tax (185) (197) -6%

Amortization (383) (390) -2%

Provisions (202) (28) 616%

Total operating expenses (80150) (6 393) 27%

Current operating income (5 337) (3 914) 36%

Other non-current income and expenses 5 (0)

Operating loss (5 332) (3 914) 36%

Cash & cash equivalents income 573 174 229%

Cost of fi nancing, gross (20) (213) -91%

Cost of fi nancing, net 553 (38)

Other fi nancial income and expenses (2) (2) -12%

Income tax 1793 1 531 17%

Net loss for the year (2 988) (2 423) 23%

Résultat net (2 988) (2 423) 23%

Operating ExpensesPurchases consumed are essentially consumables for research activities, which increased dramatically from 2006 to 2007 – mostly due to a 127% increase in the purchase of reagents (up from €196,000 in 2006 to €445,000 in 2007). The number of staff (headcount) increased signifi cantly over the period and the company is performing additional activities downstream from the meganuclease platform (e.g. cell biology to validate the potency and safety of meganucleases in cells), accounting for the €464,000 increase in purchases consumed from 2006 to 2007.

Personnel costs increased by more than 30%, due to the increase in headcount from 36 to 47 FTEs (mostly in R&D) between the end of 2006 and the end of 2007.

Other expenses rose by over 15% between 2006 and 2007 (up from €2.975 million in 2006 to €3.433 million in 2007). The major changes are related to:

1. Leasing, covering equipment worth about €1.5 million.

2. A 96% increase in laboratory space rental costs (up from €287,000 in 2006 to €567,000 in 2007) mainly due to the application of a full (unsubsidized) rental rate and the rental of additional space.

3. An increase in outsourcing, due to greater research activity (+€21,000 to Millegen, up from €348,000 in 2006 to €369,000 in 2007; €29,000 to APPLERA, a new subcontractor in 2007).

4. Royalties to the Institut Pasteur grew less rapidly than operating revenue (+7% vs. +22%), as the rate payable by Cellectis on its sales is much lower than the that gained by the company from the out-licensing of Pasteur Institute technology.

5. Travel expenses rose by about €45,000 between 2006 and 2007, due to intense business development activity.

In parallel, one item (advertising) decreased signifi cantly (-€100,000 between 2006 and 2007), as the IPO advertising budget was included entirely in 2006 fi gures.

Provisions rose by €175,000 – mostly due to the depreciation of tangible assets related to the fi tting out of new laboratory space (€200,000). These provisions will no longer be incurred once the company’s move to the Fleming building (under an agreement signed in early December 2007) has been completed.

l Cellectis l Présentation Corporate 2007 l Main Financial Items l 27


ASSETS

Net intangible assets 9 17 -47%

Gross values 2 622 3 047 -14%

Depreciation, amortization and impairment losses (1 607) (1 260) 28%

Net tangible assets 1 015 1 787 -43%

Non-current fi nancial assets 68 68 -0%

Deferred tax assets 6 550 4 985 31%

Total non-current assets 7 642 6 857 11%

Inventories 119 155 -23%

Trade receivables 434 685 37%

Current tax assets 2 314 2 132 9%

Other current assets 1 244 920 35%

Cash & cash equivalents 25 197 4 971 407%

Total current assets 29 308 8 864 231%

TOTAL ASSETS 36 950 15 721 135%

LIABILITIES v

Share capital 461 254

Share premiums and reserves 32 392 6 240 419%

Net loss for the year (2 988) (2 423) 23%

Equity 29 865 4 071 634%

Retirement benefi t obligation 26 20

Other fi nancial liabilities 1 446 6 460 -78%

Total non-current liabilities 1 472 6 480 -77%

Short-term provisions 69 69 0%

Trade payables 4 558 4 412 3%

Other current liabilities 986 690 43%

Total current liabilitiess 5 613 5 171 99%

TOTAL EQUITY & LIABILITIES 36 950 15 721 135%

Balance SheetIn IFRS format for the fi scal year 2007, plus a comparison with the fi scal year 2006:

Decemberst 2007 Decemberst 2006 Deviation

AssetsTangible assets felt by over 40%, mainly because of (i) lease-back on fi xed assets (laboratory equipment) amounting to over €300,000 and (ii) depreciation in the value of fi tting-out work (see above) amounting to over €200,000.

Deferred tax assets grew by €1.5 million between the end of 2006 and the end of 2007. Deferred tax assets essentially include accumulated losses (growing constantly, since the company has generated losses ever since its creation).

Cash & cash equivalents jumped from €5 million at the end of 2006 to €25 million at the end of 2007, due to the equity increase at IPO (€22.2 million in net proceeds).

LiabilitiesEquity at the end of 2007 mostly refl ects Cellectis’ IPO on the NYSE-Euronext Alternext market in February 2007 (€22.2 million in net proceeds).

Other fi nancial liabilities fell by €5 million – essentially because of €5.6 million in bonds issued in May 2005, which were reimbursed in shares at the IPO price (€10.25 per share).

l Cellectis l Corporate Presentation 2007 l Main Financial Items l 28

Cash Flow Statement In IFRS format for the fi scal year 2007, plus a comparison with the fi scal year 2006:


Net loss for the year (2 988) (2 423)

Depreciation; amortization and impairement losses 585 419

Change in fair value of fi nancial instruments (11) 203

Net income from sale of tangible assets (319)

Change in deferred taxes (1 593) (1 318)

Share-based payment expense 241 51

Cash fl ow from operating activities before change in working capital (4 086) (3 068)

(Increase) / decrease in accounts receivables 252 687

(Decrease) / increase in accounts payables 145 965

Change in taxes payables (182) (732)

Change in other operating assets and liabilities 14 (243)

Change in working capital 230 677

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (3 857) (2 391)

Acquisition of intangible assets (6)

Acquisition of tangible asset (95) v (479)

Net income from sale issuance of common stock 319

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 217 (479)

Additional long-term borrowings 550 200

Repayment of long-term borrowings (5 410) (36)

Proceeds from issuance of common stock 28 724 26

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 23 864 191

CHANGE IN CASH & CASH EQUIVALENTS 20 225 (2 679)

Opening cash ans cash aquivalents 4 971 7 650

Closing cash ans cash aquivalents 25 197 4 971

CHANGE IN CASH & CASH EQUIVALENTS 20 225 (2 679)

The net increase in cash and cash equivalents over the fi scal year 2007 was around €20 million, corresponding to the balance between the cash used in operations (about €4 million, including the net loss for the year of about €3 million) and just over €24 million provided by fi nancing activities (essentially the gross proceeds of the IPO).

l Cellectis l Présentation Corporate 2007 l Main Financial Items l 29

20062007

© Cellectis SA, 2008

Rédaction :

Caroline Carmagnol (AlizeRP) et Céline Toral

Couverture :

Ramon Martinez (Compression et photographie)

Photos :

Karim Daher / Cédric Porchez (portraits page 24)

Conception Graphique :

Valentina Herrmann / Reto Zollinger

Impression :

STIPA, Montreuil Cedex

Cellectis SA, Parc Biocitech,

102 Avenue Gaston Roussel, F-93230 Romainville

Tél. +33 1 41 83 99 00, Fax +33 1 41 83 99 03

[email protected], www.cellectis.com

www.cellectis.com

Cellectis - Annual Report 2007

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