Participated in productive CMC Type A Meeting
with the FDA
Maintained strong balance sheet with $175M in
cash and cash equivalents as of September 30, 2021
Sesen Bio (Nasdaq: SESN), a late-stage clinical company
developing targeted fusion protein therapeutics for the treatment
of patients with cancer, today reported operating results for the
third quarter ended September 30, 2021. During the quarter, the
Company continued to work on its path forward to address chemistry,
manufacturing, and controls (CMC) and clinical issues identified by
the US Food & Drug Administration (FDA) in its Complete
Response Letter (CRL) regarding the Company’s Biologics License
Application (BLA) for the Company’s lead program, Vicineum™ for the
treatment of BCG-unresponsive non-muscle invasive bladder cancer
(NMIBC).
“Our team is making progress in advancing our dialogue with the
FDA as we work toward potential resolution of the issues raised in
the CRL for Vicineum, as demonstrated by our recent CMC Type A
Meeting with the agency,” said Dr. Thomas Cannell, president and
chief executive officer of Sesen Bio. “We remain dedicated to
saving and improving the lives of patients, and we look forward to
continuing to work collaboratively with the FDA in our upcoming
Clinical Type A Meeting, expected later this year, to carry our
mission into the next stage of the regulatory process and
beyond.”
Regulatory Update
US:
- On August 13, 2021, Sesen Bio announced that it had received
a CRL from the FDA regarding its BLA for the Company’s lead
program, Vicineum for the treatment of BCG-unresponsive NMIBC.
The FDA determined that it could not approve the BLA for Vicineum
in its present form and provided recommendations specific to
additional clinical/statistical data and analyses, in addition to
CMC issues pertaining to a recent pre-approval inspection and
product quality.
- On October 29, 2021, Sesen Bio participated in a productive
CMC Type A Meeting with the FDA (CMC Type A Meeting). The
purpose of the meeting was to discuss questions related to CMC
raised in the CRL. During the meeting, the Company and the FDA
reviewed issues related to CMC to be further discussed during the
review of the BLA for Vicineum upon potential resubmission. Key
takeaways from the meeting include:
- The FDA confirmed that Vicineum manufactured using the proposed
commercial process is comparable to Vicineum used in prior clinical
trials.
- The FDA confirmed that Sesen Bio can utilize Vicineum
manufactured during process validation for any potential future
clinical trials needed to address issues raised in the CRL, and
that these potential trials can proceed while addressing CMC
issues.
- The Company believes it has a clear understanding of the path
forward regarding CMC for resubmission of the BLA.
Sesen Bio is preparing for a separate Type A
Meeting to discuss the recommendations specific to additional
clinical/statistical data and analyses that the FDA raised in the
CRL (Clinical Type A Meeting), which the Company expects to occur
later this year. As previously disclosed, the Company anticipates
needing to conduct an additional clinical trial with 90-100
patients, and will provide further guidance after the Clinical Type
A Meeting.
The Company intends to use the information
from the CMC Type A Meeting and the Clinical Type A Meeting to
synchronize the regulatory reviews of Vicineum for the treatment of
BCG-unresponsive NMIBC in the US and the European Union.
European Union:
- On August 20, 2021, Sesen Bio withdrew its marketing
authorization application (MAA) to the European Medicines Agency
(EMA) for Vysyneum™1 for the treatment of BCG-unresponsive
NMIBC. Given that certain components in the EMA’s review are
interrelated with elements of the FDA’s decision to issue a CRL for
Vicineum, the Company decided to pause its plans to pursue
regulatory approval of Vysyneum in the European Union until there
is more clarity from the FDA on next steps in the United
States.
Other Business Updates
- On August 30, 2021, Sesen Bio approved a restructuring plan
to reduce operating expenses, to better align its workforce with
the needs of its business following receipt of the CRL from the FDA
for Vicineum, and to better position the Company to execute on next
steps as they are determined. The Company expects the plan to
decrease its annual cash costs by approximately $5.7 million.
- The Company also implemented a program designed to retain
employees as the Company continues to work toward the potential
resolution of the issues detailed in the CRL. This retention
program applies to all current employees except for the Chief
Executive Officer.
Third Quarter 2021 Financial Results
- Cash Position: Cash, cash equivalents and restricted
cash were $175.3 million as of September 30, 2021, compared to
$55.4 million as of December 31, 2020.
- R&D Expenses: Research and development expenses for
the third quarter of 2021 were $5.0 million compared to $10.2
million for the same period in 2020. The decrease of $5.2 million
was primarily due to lower costs associated with technology
transfer and manufacturing ($6.3 million), partially offset by
increased license fees related to a milestone payment to the
University of Zurich triggered by the completion of the BLA review
by the FDA ($0.5 million), regulatory fees triggered by withdrawal
of the Company’s MAA to the EMA for Vysyneum ($0.3 million), and
regulatory consultant fees ($0.2 million).
- G&A Expenses: General and administrative expenses
for the third quarter of 2021 were $8.7 million compared to $4.1
million for the same period in 2020. The increase of $4.6 million
was due to increases in sales and marketing expense for Vicineum
pre-commercial launch planning ($2.4 million), employee-related
compensation driven by increased headcount as part of the
commercial build ($1.3 million), and professional fees for
accounting services ($0.2 million). The majority of these expenses
were incurred prior to receipt of the CRL in August 2021.
Additionally, an increase in legal fees was driven primarily by
legal proceedings and the on-going independent review related to
Vicineum ($0.9 million). Such increase was partially offset by
certain other decreases in G&A expenses, none of which were
individually material ($0.2 million).
- Restructuring Charges: Restructuring charges for the
third quarter of 2021 were $5.5 million, which were due to one-time
costs of approximately $2.7 million associated with the termination
of certain contracts, and severance and other employee-related
costs of approximately $2.8 million.
- Non-Cash Related Expenses:
- Intangibles impairment charge for the third quarter of 2021 was
$31.7 million. In light of the CRL, the Company performed an
interim impairment test for In-Process Research and Development
(IPR&D) assets, which resulted in the decrease in fair value of
Vicineum’s US rights.
- The change in fair value of contingent consideration was a
decrease of $114.0 million compared to an increase of $18.4 million
for the same period in 2020. This was primarily due to management’s
assessment of a lower probability of regulatory success and a
refinement of timelines given the CRL.
- Income Tax Benefit (Provision): Benefit from income tax
was $8.6 million compared to $1.1 million tax expense for the same
period in 2020. In connection with the intangibles impairment
charge for the third quarter of 2021, the Company wrote-down the
associated deferred tax liability by $8.6 million as a
benefit.
- Net Income (Loss): Net income was $71.7 million, or
$0.36 per basic and $0.36 per diluted share, for the third quarter
of 2021, compared to net loss of $22.6 million, or $0.19 per basic
and diluted share, for the same period in 2020. The change was
primarily attributable to favorable changes in non-cash related
expenses ($110.4 million, including tax benefit), offset by
restructuring charges ($5.5 million) and lower license revenue
recognized ($11.2 million).
1 Vysyneum is the proprietary brand name that was conditionally
approved by the EMA for oportuzumab monatox in the European
Union.
About Vicineum™
Vicineum, a locally administered fusion protein, is Sesen Bio’s
lead product candidate being developed for the treatment of
BCG-unresponsive non-muscle invasive bladder cancer (NMIBC).
Vicineum is comprised of a recombinant fusion protein that targets
epithelial cell adhesion molecule (EpCAM) antigens on the surface
of tumor cells to deliver a potent protein payload, Pseudomonas
Exotoxin A. Vicineum is constructed with a stable, genetically
engineered peptide tether to ensure the payload remains attached to
the antibody binding fragment until it is internalized by the
cancer cell. This fusion protein design is believed to decrease the
risk of toxicity to healthy tissues, thereby improving its safety.
In prior clinical trials conducted by Sesen Bio, EpCAM has been
shown to be overexpressed in NMIBC cells with minimal to no EpCAM
expression observed on normal bladder cells. Sesen Bio is currently
in the follow-up stage of a Phase 3 registration trial in the US
for the treatment of BCG-unresponsive NMIBC. In February 2021, the
FDA accepted the Company’s BLA file for Vicineum for the treatment
of BCG-unresponsive NMIBC and granted the application Priority
Review with a target PDUFA date of August 18, 2021. On August 13,
2021, the Company received a Complete Response Letter (CRL) from
the FDA regarding its BLA for Vicineum. Additionally, Sesen Bio
believes that cancer cell-killing properties of Vicineum promote an
anti-tumor immune response that may potentially combine well with
immuno-oncology drugs, such as checkpoint inhibitors. For this
reason, the activity of Vicineum in BCG-unresponsive NMIBC is also
being explored at the US National Cancer Institute in combination
with AstraZeneca’s immune checkpoint inhibitor durvalumab.
About Sesen Bio
Sesen Bio, Inc. is a late-stage clinical company advancing
targeted fusion protein therapeutics for the treatment of patients
with cancer. The Company’s lead program, Vicineum™, also known as
oportuzumab monatox, is currently in the follow-up stage of a Phase
3 registration trial for the treatment of BCG-unresponsive NMIBC.
In February 2021, the FDA accepted the Company’s BLA file for
Vicineum for the treatment of BCG-unresponsive NMIBC and granted
the application Priority Review with a target PDUFA date of August
18, 2021. On August 13, 2021, the Company received a CRL from the
FDA regarding its BLA for Vicineum. Sesen Bio retains worldwide
rights to Vicineum with the exception of Greater China, the Middle
East and North Africa (MENA) and Turkey, for which the Company has
partnered with Qilu Pharmaceutical, Hikma Pharmaceuticals and
Eczacibasi Pharmaceuticals Marketing (EIP), respectively, for
commercialization. Vicineum is a locally administered targeted
fusion protein composed of an anti-EpCAM antibody fragment tethered
to a truncated form of Pseudomonas Exotoxin A, which is being
developed for the treatment of BCG-unresponsive NMIBC. For more
information, please visit the Company’s website at
www.sesenbio.com.
COVID-19 Pandemic Potential Impact
Sesen Bio continues to monitor the rapidly evolving environment
regarding the potential impact of the COVID-19 pandemic on the
Company. The Company has not yet experienced any disruptions to our
operations as a result of COVID-19, however, we are not able to
quantify or predict with certainty the overall scope of potential
impacts to our business, including, but not limited to, our ability
to raise capital and, if approved, commercialize Vicineum. Sesen
Bio remains committed to the health and safety of patients,
caregivers and employees.
Cautionary Note on Forward-Looking Statements
Any statements in this press release about future expectations,
plans and prospects for the Company, the Company’s strategy, future
operations, and other statements containing the words “anticipate,”
“believe,” “expect,” “intend,” “may,” “plan,” “predict,” “target,”
“potential,” “will,” “continue,” and similar expressions,
constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. For example,
statements regarding the Company’s ability to work towards
potential resolution of the issues raised in the CRL for Vicineum,
the Company’s ability to improve the lives of patients by bringing
new treatment options to market, the outcome and timing of the
Company’s Clinical Type A Meeting with the FDA to discuss Vicineum,
the Company's intentions to use additional information from the CMC
Type A Meeting and Clinical Type A Meeting to better synchronize
the regulatory reviews of Vicineum in the US and in the European
Union, the Company’s ability to utilize Vicineum manufactured
during process validation for any potential clinical trials needed
to address issues raised in the CRL, and that any such potential
clinical trials can proceed while addressing CMC issues, the
Company’s belief that it has a clear understanding of the path
forward regarding CMC for resubmission of the BLA for Vicineum, the
Company’s expectations that it will need to conduct an additional
clinical trial for Vicineum with 90-100 patients, the Company’s
plans to provide further guidance after the Clinical Type A
Meeting, the Company’s expectation that the restructuring plan will
better position the Company to execute on next steps as they are
determined, the Company's expectations to decrease annual cash
costs as a result of the restructuring plan, the Company’s
expectations regarding the ability of outside counsel and other
experts to work expeditiously to conduct their review, determine
the nature and scope of any issues identified, and advise on next
steps, the impact of COVID-19 on the Company, including its ability
to raise capital, and, if approved, its ability to commercialize
Vicineum for the treatment of BCG-unresponsive NMIBC. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important
factors, including: the risk that the FDA may not schedule the
Clinical Type A Meeting with the Company within the currently
expected timing, or at all, the risk that the Company may not be
able to determine a path forward for the development of Vicineum
for the treatment of BCG-unresponsive NMIBC, the risk that the
Company may not resume its plans to pursue regulatory approval for
Vicineum in the US or in the European Union, the risk that clinical
trials of Vicineum for the treatment of BCG-unresponsive NMIBC,
including any clinical trial needed to address issues raised in the
CRL, may fail to demonstrate safety and efficacy to the
satisfaction of the FDA or the EMA, or otherwise produce favorable
results, the risk that the FDA may not approve the BLA for Vicineum
for the treatment of BCG-unresponsive NMIBC if the Company
resubmits the BLA at a future time, the risk that the European
Commission may not approve the Company’s MAA for Vicineum for the
treatment of BCG-unresponsive NMIBC if the Company resubmits the
MAA at a future time, the risk that Vicineum for the treatment of
BCG-unresponsive NMIBC may cause undesirable side effects, serious
adverse events or have other properties that could delay or halt
clinical trials, delay or prevent its regulatory approval by the
FDA or the European Commission, limit the commercial profile of its
labeling, if approved, or result in significant negative
consequences following any marketing approval, the risk that the
restructuring plan may not achieve its intended purposes, including
positioning the Company to execute on next steps as they are
determined, the risk that the Company’s internal review may
identify misconduct or other improper activities by the Company’s
employees or third-parties involved in the Company’s clinical or
regulatory activities related to Vicineum, and other factors
discussed in the “Risk Factors” section of the Company’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other
reports filed with the Securities and Exchange Commission. In
addition, the forward-looking statements included in this press
release represent the Company’s views as of the date hereof. The
Company anticipates that subsequent events and developments will
cause the Company’s views to change. However, while the Company may
elect to update these forward-looking statements at some point in
the future, the Company specifically disclaims any obligation to do
so. These forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the
date hereof.
SESEN BIO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited) September 30, 2021 December 31,
2020 Assets Current assets: Cash and cash equivalents
$ 175,236
$ 52,389
Accounts receivable
1,107
-
Prepaid expenses and other current assets
24,137
7,478
Restricted cash
-
3,000
Total current assets
200,480
62,867
Non-current assets: Restricted cash
20
20
Property and equipment, net
53
123
Intangible assets
14,700
46,400
Goodwill
13,064
13,064
Long term prepaid expenses
7,192
-
Other assets
162
349
Total non-current assets
35,191
$ 59,956
Total Assets
$ 235,671
$ 122,823
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities: Accounts payable
$ 3,909
$ 3,102
Accrued expenses
8,186
3,973
Deferred revenue
-
1,500
Contingent consideration
-
8,985
Other current liabilities
499
489
Total current liabilities
12,594
18,049
Non-current liabilities: Contingent consideration, net of
current portion
56,600
99,855
Deferred tax liability
3,969
12,528
Deferred revenue, net of current portion
1,500
1,500
Other non-current liabilities
-
118
Total non-current liabilities
62,069
114,001
Total liabilities
74,663
132,050
Stockholders’ Equity ( Deficit): Preferred stock, $0.001 par
value per share; 5,000,000 shares authorized at September 30, 2021
and December 31, 2020; no shares issued and outstanding at
September 30, 2021 and December 31, 2020
-
-
Common stock, $0.001 par value per share; 400,000,000 and
200,000,000 shares authorized at September 30, 2021 and December
31, 2020, respectively; 199,463,645 and 140,449,647 shares issued
and outstanding at September 30, 2021 and December 31, 2020,
respectively
199
140
Additional paid-in capital
486,010
306,554
Accumulated deficit
(325,201)
(315,921)
Total Stockholders’ Equity (Deficit)
161,008
(9,227)
Total Liabilities and Stockholders’ Equity
$ 235,671
$ 122,823
SESEN BIO, INC. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (OPERATIONS) AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data) (Unaudited)
Three Months ended September
30,
Nine Months ended September
30,
2021
2020
2021
2020
License and related revenue
$
-
$
11,236
$
6,544
$
11,236
Operating expenses: Research and development
4,967
10,196
18,273
23,625
General and administrative
8,699
4,115
20,797
10,882
Restructuring charge
5,522
-
5,522
-
Intangibles impairment charge
31,700
-
31,700
-
Change in fair value of contingent consideration
(114,000)
18,400
(52,240)
(16,820)
Total operating expenses
(63,112)
32,711
24,052
17,687
Income (Loss) from Operations
63,112
(21,475)
(17,508)
(6,451)
Other income (expense), net
1
(1)
(45)
195
Income (Loss) Before Taxes
63,113
(21,476)
(17,553)
(6,256)
Benefit (provision) for income taxes
8,561
(1,132)
8,273
(1,132)
Net Income (Loss) and Comprehensive Income (Loss) After Taxes
$
71,674
$
(22,608)
$
(9,280)
$
(7,388)
Net income (loss) attributable to common stockholders -
basic
$
71,622
$
(22,608)
$
(9,280)
$
(7,535)
Net income (loss) attributable to common stockholders - diluted
$
71,623
$
(22,608)
$
(9,280)
$
(7,535)
Net income (loss) per common share - basic
$
0.36
$
(0.19)
$
(0.05)
$
(0.07)
Weighted-average common shares outstanding - basic
196,778
117,886
176,547
113,437
Net income (loss) per common share - diluted
$
0.36
$
(0.19)
$
(0.05)
$
(0.07)
Weighted-average common shares outstanding - diluted
201,017
117,886
176,547
113,437
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108005378/en/
Investors: Erin Clark, Vice President, Corporate Strategy &
Investor Relations ir@sesenbio.com
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