Transaction to create a well-funded,
clinical-stage biotechnology company advancing engineered
macrophages for the treatment of cancer and other serious
disorders
Combined company expected to have approximately
$180 million of cash, cash equivalents and marketable securities at
close, including $30 million from a concurrent financing by
Carisma, which is expected to fund the combined company through
2024
Cash runway of combined company expected to
enable multiple clinical readouts across Carisma programs
Sesen Bio, Inc. (Nasdaq: SESN) and Carisma
Therapeutics Inc. (Carisma), a privately held, clinical stage
biopharmaceutical company focused on discovering and developing
innovative immunotherapies, announced today that they have entered
into a definitive merger agreement to combine the companies in an
all-stock transaction. The combined company will focus on the
advancement of Carisma’s proprietary cell therapy platform that
utilizes engineered macrophages and monocytes to potentially
transform the treatment of cancer and other serious disorders.
Carisma is pioneering the development of chimeric antigen receptor
macrophage (CAR-M) therapies and is believed to be the only company
developing CAR-M therapies with demonstrated proof of mechanism and
safety data in clinical trials. The combined company is expected to
operate under the name Carisma Therapeutics Inc. and trade on
Nasdaq under the ticker symbol “CARM”.
Carisma has also secured commitments from a syndicate of
investors for a $30 million financing, including HealthCap, AbbVie,
Wellington Partners, SymBiosis, Penn Medicine, TPG Biotech, MRL
Ventures Fund, the therapeutics-focused corporate venture arm of
Merck & Co., Agent Capital, Solasta, Livzon, Pictet Alternative
Advisors and 4Bio, which is expected to close concurrently with the
completion of the merger. With the cash expected from both
companies at closing and the proceeds of the concurrent financing,
the combined company is expected to have approximately $180 million
in cash, cash equivalents and marketable securities. These cash
resources are expected to be used to advance Carisma’s pipeline
through multiple ongoing and planned key data readouts across
several clinical trials and to fund operating expenses and capital
expenditure requirements through 2024. The merger and related
financing are expected to close in the next three to four
months.
Carisma’s cell and gene therapies are based on a proprietary
platform technology that reprograms a patient’s macrophages and
targets them against cancer cells, with the potential for broad
anti-tumor immunity. This novel technology is designed to engage
with the body’s immune system to treat solid tumors, which remains
a persistent clinical challenge that is yet to be comprehensively
achieved through CAR-T and other immunotherapy approaches.
Carisma’s CAR-M platform provides the ability to fine-tune the
specific targets of the immune cells, potentially enabling multiple
therapeutic applications in and beyond oncology. The first clinical
application of this technology is CT-0508, a CAR-M cell therapy
currently being evaluated by Carisma in a Phase 1 multi-center
clinical trial with a lead target indication of advanced HER2+
solid tumors. Carisma believes this Phase 1 clinical trial marks
the first time that engineered macrophages are being studied in
humans. Carisma is leveraging its proprietary CAR-M platform to
expand its oncology pipeline both independently and through a
strategic partnership with Moderna. Additionally, Carisma is
exploring the potential to develop its proprietary macrophage
engineering platform for non-oncology applications such as liver
fibrosis, as well as autoimmune and neurodegenerative disease
indications.
“The proposed merger represents an exciting opportunity for
shareholders of each company, and we believe it gets us one step
closer to our goal of revolutionizing the field of immunotherapy,”
said Steven Kelly, President and Chief Executive Officer of
Carisma. “This transaction will provide us with financial strength
to not only continue to develop our lead candidate CT-0508, but
also allow us to accelerate the growth of our platform and pipeline
within and outside of oncology and develop additional strong
strategic partnerships beyond those we already have with Moderna
and Novartis. Carisma is focused on delivering cutting-edge
technology for patients in a way that has never been done before,
and we look forward to advancing this important mission.”
“This transaction represents the result of a thoughtful and
careful review of strategic alternatives over the past four months,
during which Carisma’s clinical programs, management team, and
corporate strategy stood out amongst the 42 bids reviewed,” said
Dr. Thomas Cannell, President and Chief Executive Officer of Sesen
Bio. “Carisma is an exciting clinical-stage company with
groundbreaking science and an impressive management team, which we
believe makes them the optimal partner to provide value for our
shareholders. Our mission at Sesen Bio has always been to save and
improve the lives of patients with cancer, and we believe Carisma
has the science and the unwavering patient focus required to make
that mission a reality.”
Carisma has several anticipated upcoming catalysts and
developmental milestones across its clinical programs over the next
18 months, including:
- Additional Phase 1 data readout of safety, manufacturing
feasibility, and mechanism of action of CT-0508 with single-day
dosing
- Completion of the technology transfer to Novartis for the
planned clinical manufacturing of CT-0508
- Phase 1 data readout for the CT-0508 intraperitoneal trial for
patients with HER2+ peritoneal cancer
- Phase 1 data readout of CT-0508 in combination with
pembrolizumab for patients with HER2+ solid tumors
- Investigational New Drug (IND) Application for a new HER2 CAR
engineered monocyte cell product
In addition to its exclusively licensed proprietary technologies
that were developed by leading scientists at the University of
Pennsylvania (Penn), including Saar Gill, MD, PhD, an associate
professor of Medicine at Penn’s Perelman School of Medicine and a
Carisma co-founder and fellow co-founder and Carisma’s Chief
Scientific Officer, Dr. Michael Klichinsky, PharmD, PhD, Carisma
has well-established strategic partners to support the advancement
of its pipeline. Carisma recently entered into a strategic
partnership with Moderna for the discovery, development and
commercialization of in vivo CAR-M therapies for up to 12 targets
for the treatment of cancer. As part of the collaboration, Carisma
received a $45 million up-front cash payment and an investment by
Moderna in the form of a $35 million convertible note, which will
convert into shares of common stock of the combined company in
connection with the merger. Under the collaboration, Carisma will
receive full research funding and is eligible to receive
development, regulatory, and commercial milestone payments, plus
royalties on net sales of any products that are commercialized.
Carisma has also partnered with Novartis, which has extensive
experience in cell therapy manufacturing, to operate as Carisma’s
contract manufacturing organization for clinical supply of its lead
clinical program, CT-0508.
About the Proposed Merger
Pre-merger Sesen Bio stockholders are expected to own
approximately 41.7% and pre-merger Carisma stockholders are
expected to own approximately 58.3% of the combined company, in
each case before giving effect to the concurrent financing
described above and the conversion of the outstanding Moderna
convertible note. Under the terms of the merger agreement,
stockholders of Carisma will receive newly issued shares of Sesen
Bio common stock pursuant to an exchange ratio formula set forth in
the merger agreement. The percentage of the combined company that
Sesen Bio stockholders will own upon the closing of the merger is
further subject to adjustment based on the amount of Sesen Bio’s
net cash at the time of closing.
Immediately prior to the closing of the proposed merger, Sesen
Bio stockholders of record will be issued a contingent value right
(CVR) for each outstanding share of Sesen Bio common stock held by
such Sesen Bio stockholder as of such date, representing the right
to receive certain cash payments from proceeds received by Sesen
Bio related to the Roche Asset Purchase Agreement, if any, subject
to customary deductions, including for expenses and taxes.
Following the consummation of the merger, the combined company
will be headquartered in Philadelphia, Pennsylvania, and will be
led by Steven Kelly, President and Chief Executive Officer of
Carisma. Mr. Kelly was recently named Ernst & Young
Entrepreneur of the Year 2022 Greater Philadelphia, an award that
recognizes the most ambitious leaders who are building and
sustaining successful, dynamic businesses around the world. The
board of directors of the combined company is expected to be
composed of seven members, consisting of one member designated by
Sesen Bio and six members designated by Carisma.
The merger agreement has been unanimously approved by the boards
of directors of both companies. The merger and related financing
are expected to close in the next three to four months, subject to
approval by Sesen Bio’s shareholders and other customary closing
conditions.
Additional information about the transaction will be provided in
a Current Report on Form 8-K that will be filed by Sesen Bio with
the Securities and Exchange Commission (SEC) and will be available
at www.sec.gov.
SVB Securities is acting as exclusive financial advisor to Sesen
Bio for the transaction and Hogan Lovells US LLP is serving as its
legal counsel. Evercore Group LLC is serving as lead financial
advisor to Carisma for the transaction and BofA Securities, Inc. is
also serving as financial advisor to Carisma for the transaction.
Wilmer Cutler Pickering Hale and Dorr LLP is serving as legal
counsel to Carisma. BofA Securities, Inc. and Evercore Group L.L.C.
are serving as co-placement agents for Carisma’s concurrent
financing and Shearman & Sterling LLP is serving as the
placement agents’ legal counsel.
About Sesen Bio
Sesen Bio, Inc. is a late-stage clinical company focused on
targeted fusion protein therapeutics for the treatment of patients
with cancer. Sesen Bio’s most advanced product candidate,
Vicineum™, also known as VB4-845, is a locally-administered
targeted fusion protein composed of an anti-epithelial cell
adhesion molecule antibody fragment tethered to a truncated form of
Pseudomonas exotoxin A for the treatment of non-muscle invasive
bladder cancer. On July 15, 2022, Sesen Bio made the strategic
decision to voluntarily pause further development of Vicineum in
the US. The decision was based on a thorough reassessment of
Vicineum, which included the incremental development timeline and
associated costs for an additional Phase 3 clinical trial,
following Sesen Bio’s discussions with the United States Food and
Drug Administration. Sesen Bio has turned its primary focus to
assessing potential strategic alternatives with the goal of
maximizing shareholder value. Additionally, Sesen Bio intends to
seek a partner for the further development of Vicineum. For more
information, please visit the Company’s website at
www.sesenbio.com.
About Carisma Therapeutics
Carisma Therapeutics Inc. is a biopharmaceutical company
dedicated to developing a differentiated and proprietary cell
therapy platform focused on engineered macrophages, cells that play
a crucial role in both the innate and adaptive immune response. The
first applications of the platform, developed in collaboration with
the University of Pennsylvania*, are autologous chimeric antigen
receptor (CAR)-macrophages for the treatment of solid tumors.
Carisma Therapeutics is headquartered in Philadelphia, PA. For more
information, please visit www.carismatx.com
*Carisma has licensed certain Penn-owned intellectual property
from the University of Pennsylvania, and Penn's Perelman School of
Medicine receives sponsored research and clinical trial funding
from Carisma. Penn and certain of its faculty members, including
Dr. Gill, are current equity holders in Carisma and have received
and may be entitled to receive future financial consideration from
Carisma from the development and commercialization of products
based on licensed Penn intellectual property.
Cautionary Note on Forward-Looking Statements
Any statements in this press release about future expectations,
plans and prospects for Sesen Bio, Carisma or the combined company,
Sesen Bio’s, Carisma’s or the combined company’s strategy or future
operations, and other statements containing the words “anticipate,”
“believe,” “contemplate,” “expect,” “intend,” “may,” “plan,”
“predict,” “target,” “potential,” “possible,” “will,” “would,”
“could,” “should,” “continue,” and similar expressions, constitute
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. For example, statements
concerning the proposed transaction, the concurrent financing, the
contingent value rights and other matters, including without
limitation: statements relating to the satisfaction of the
conditions to and consummation of the proposed transaction, the
expected timing of the consummation of the proposed transaction and
the expected ownership percentages of the combined company, Sesen
Bio’s and Carisma’s respective businesses, the strategy of the
combined company, future operations, advancement of the combined
company’s product candidates and product pipeline, clinical
development of the combined company’s product candidates, including
expectations regarding timing of initiation and results of clinical
trials of the combined company, the ability of Sesen Bio to remain
listed on the Nasdaq Stock Market, the completion of the concurrent
financing, and the receipt of any payments under the contingent
value rights are forward-looking statements. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including
without limitation: (i) the risk that the conditions to the closing
of the proposed transaction are not satisfied, including the
failure to obtain stockholder approval of matters related to the
proposed transaction in a timely manner or at all; (ii)
uncertainties as to the timing of the consummation of the proposed
transaction and the ability of each of Sesen Bio and Carisma to
consummate the proposed transaction, including completing the
concurrent financing; (iii) risks related to Sesen Bio’s ability to
correctly estimate its expected net cash at closing and Sesen Bio’s
and Carisma’s ability to correctly estimate and manage their
respective operating expenses and expenses associated with the
proposed transaction; (iv) risks related to Sesen Bio’s continued
listing on the Nasdaq Stock Market until closing of the proposed
transaction; (v) the risk that as a result of adjustments to the
exchange ratio, Sesen Bio stockholders or Carisma stockholders
could own less of the combined company than is currently
anticipated; (vi) the risk that the conditions to payment under the
contingent value rights will not be met and that the contingent
value rights may otherwise never deliver any value to Sesen Bio
stockholders; (vii) risks associated with the possible failure to
realize certain anticipated benefits of the proposed transaction,
including with respect to future financial and operating results;
(viii) uncertainties regarding the impact any delay in the closing
would have on the anticipated cash resources of the combined
company upon closing and other events and unanticipated spending
and costs that could reduce the combined company’s cash resources;
(ix) the occurrence of any event, change or other circumstance or
condition that could give rise to the termination of the merger
agreement; (x) the effect of the announcement, pendency or
completion of the merger on Sesen Bio’s or Carisma’s business
relationships, operating results and business generally; (xi) costs
related to the merger; (xii) the outcome of any legal proceedings
that may be instituted against Sesen Bio, Carisma or any of their
respective directors or officers related to the merger agreement or
the transactions contemplated thereby; (xiii) the ability of Sesen
Bio or Carisma to protect their respective intellectual property
rights; (xiv) competitive responses to the proposed transaction and
changes in expected or existing competition; (xv) the success and
timing of regulatory submissions and pre-clinical and clinical
trials; (xvi) regulatory requirements or developments; (xvii)
changes to clinical trial designs and regulatory pathways; (xviii)
changes in capital resource requirements; (xix) risks related to
the inability of the combined company to obtain sufficient
additional capital to continue to advance its product candidates
and its preclinical programs; (xx) legislative, regulatory,
political and economic developments; and (xxi) other factors
discussed in the “Risk Factors” section of Sesen Bio’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other
reports filed with the SEC. In addition, the forward-looking
statements included in this communication represent Sesen Bio’s and
Carisma’s views as of the date hereof. Sesen Bio and Carisma
anticipate that subsequent events and developments will cause the
respective company’s views to change. However, while Sesen Bio may
elect to update these forward-looking statements at some point in
the future, Sesen Bio specifically disclaims any obligation to do
so, except as required under applicable law. These forward-looking
statements should not be relied upon as representing Sesen Bio’s
views as of any date subsequent to the date hereof.
Important Additional Information
In connection with the proposed transaction, Sesen Bio will file
materials with the SEC, including a registration statement on Form
S-4 (Form S-4), which will include a document that serves as a
proxy statement/prospectus of Sesen Bio and an information
statement of Carisma, and other documents regarding the proposed
transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE
MATERIALS, INCLUDING THE FORM S-4 AND THE PROXY
STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
THE PARTIES TO THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain the Form S-4, the proxy
statement/prospectus and other materials filed by Sesen Bio with
the SEC free of charge from the SEC’s website at www.sec.gov or
from Sesen Bio at the SEC Filings section of www.sesenbio.com.
No Offer or Solicitation
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended. Subject to certain exceptions to be
approved by the relevant regulators or certain facts to be
ascertained, a public offer will not be made directly or
indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone or internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
Participants in the Solicitation
Sesen Bio and Carisma and their respective directors, executive
officers and other members of management may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about Sesen Bio’s directors and
executive officers is available in Sesen Bio’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2021, its
definitive proxy statement dated April 28, 2022 for its 2022 Annual
Meeting of Stockholders and its Current Report on Form 8-K filed
with the SEC on August 31, 2022. Other information regarding the
participants in the proxy solicitation and a description of their
interests in the transaction, by security holdings or otherwise,
will be included in the proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the proposed
transaction when they become available. Investors should read the
proxy statement/prospectus carefully when it becomes available
before making any voting or investment decisions. You may obtain
free copies of these documents from Sesen Bio or the SEC’s website
as indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220921005487/en/
Investors: Erin Clark, Vice President, Corporate Strategy &
Investor Relations ir@sesenbio.com
Carisma Media Contact: Julia Stern (763) 350-5223
jstern@realchemistry.com
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