Carisma Therapeutics Provides Business Update and Reports Fourth Quarter and Full Year 2023 Financial Results
- Carisma focuses on CT-0525 as a significant advancement in CAR-M treatment.
- Cash reserves of $77.6 million as of December 31, 2023, to fund operations until Q3 2025.
- Business restructuring includes pausing development of CT-1119 and prioritizing pipeline programs with high potential.
- Appointment of John Hohneker, M.D. to the Board of Directors.
- Expected reduction in workforce by approximately 37% in the second quarter of 2024.
- Research and development expenses increased due to pre-clinical development of CT-0525 and personnel costs.
- General and administrative expenses increased primarily due to merger-related costs.
- Net loss was $86.9 million for the year ended December 31, 2023.
- Expected sustainability of operations until Q3 2025 with current cash reserves and cost-saving measures.
- Reduction in workforce by approximately 37% may impact morale and productivity.
- Increase in research and development expenses may strain financial resources.
- General and administrative expenses increased significantly due to non-recurring costs related to the merger.
- Net loss significantly increased from the previous year, signaling financial challenges.
- Pause in development of CT-1119 may delay potential breakthroughs in treatment.
Insights
The strategic shift by Carisma Therapeutics Inc. to prioritize CT-0525 for HER2 positive solid tumors indicates a significant realignment of resources towards a candidate with potentially higher efficacy and market potential. The decision to cease further development of CT-0508 and pause CT-1119 suggests a focus on optimizing capital allocation to drive shareholder value. The reported cash reserves of $77.6 million, when combined with the operational restructuring, are expected to extend the company's runway into Q3 2025. This is a positive sign for investors as it reflects a buffer against dilutive financing rounds in the near term and underscores a disciplined approach to cash management.
However, it is important to note that R&D expenses have increased year-over-year, primarily due to the development of CT-0525. While this is indicative of the company's commitment to its lead candidate, it also reflects the high costs associated with biopharmaceutical development. The increase in G&A expenses, largely due to the merger with Sesen Bio, Inc. and the transition to a public company, may raise concerns about operational efficiency. Nonetheless, the anticipated decrease in these expenses for 2024 could alleviate some investor concerns over spending.
It is important for investors to closely monitor the initial data from the CT-0525 Phase 1 study expected by year-end 2024, as this will be a critical inflection point for the company's valuation. Positive results could catalyze investor interest and potential partnerships, while negative outcomes could significantly impact the stock price.
The oncology sector, particularly the development of treatments for solid tumors, remains highly competitive with significant unmet needs. Carisma's focus on CAR-M technology positions it within a niche but rapidly evolving segment of cancer immunotherapy. The prioritization of CT-0525, based on its potential for increased exposure compared to CT-0508, reflects an adaptive strategy to leverage preclinical advantages that could translate into clinical benefits.
The collaboration with Moderna to produce CAR-M in vivo could represent a disruptive innovation in the field, potentially reducing manufacturing complexities and costs associated with ex vivo therapies. This partnership, coupled with the targeted approach towards antigens in solid tumors, may offer a competitive edge. However, the success of this strategy hinges on forthcoming preclinical and clinical data.
While the workforce reduction is a common response to streamline operations and conserve cash, it may also signal internal challenges and the need for efficient execution of the remaining pipeline. The market will be observing how these changes affect the company's ability to meet its stated milestones, particularly the delivery of preclinical proof of concept data for its fibrosis program and the progression of its anti-HER2 program.
Carisma's financial strategy illustrates the delicate balance biotech firms must strike between advancing a promising pipeline and maintaining fiscal prudence. The company's cash position and extended operational runway are positive indicators of financial health in a sector where long-term investment is paramount and returns on investment are uncertain and typically delayed.
The cessation of development for certain candidates reflects a strategic allocation of resources, which is essential for maximizing the potential return on investment. This reallocation towards more promising candidates may lead to more efficient use of capital and better positioning in the market. However, the pause in development also serves as a reminder of the high attrition rates in drug development and the importance of a diverse pipeline to mitigate risks.
Investors should consider the broader economic implications of Carisma's strategy, including the potential impact on employment within the sector due to workforce reductions and the influence of such decisions on the local economy. Additionally, the company's ability to navigate the complex regulatory and reimbursement landscapes will be critical in determining the actual market impact of its pipeline candidates.
Company to prioritize CT-0525 as its anti-HER2 CAR-M product candidate and will cease further development of CT-0508
Other prioritized pipeline programs include the Company's in vivo CAR-M collaboration with Moderna, and research programs including fibrosis
Cash and cash equivalents of
"Clinical data generated with CT-0508 in Study 101 has shown that CAR-M is well-tolerated, feasible to manufacture and biologically active in HER2 positive solid tumors. Combining this data set with the multiple potential advantages we've seen preclinically around a monocyte-based approach gives us confidence that CT-0525 may be a significant advancement in CAR-M treatment," said Steven Kelly, President and Chief Executive Officer of Carisma. "We have therefore made the decision to focus our resources on the clinical development of the product we believe is best suited to deliver benefit to patients with significant unmet need."
Mr. Kelly continued, "We have also undertaken a careful review of our business and prioritized our other pipeline programs on those with the greatest overall potential and near-term milestones. This prioritization enables us to reduce expenses and streamline operations, including a restructuring of our workforce. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping patients."
Reprioritization Plan, Pipeline Updates, and Upcoming Milestones:
Ex Vivo Oncology
- Anti-human epidermal growth factor receptor 2 (Anti-HER2) Program
- The Company's goal to identify a registrational profile for the product candidate in its anti-HER2 program in 2025 remains unchanged.
- In Study 101, CT-0508, a chimeric antigen receptor macrophage (CAR-Macrophage), was well-tolerated, remodeled the tumor microenvironment (TME), and induced anti-tumor T cell immunity in patients with HER2 3+ tumors that achieved stable disease, despite suboptimal dose and a patient population with exhausted T cells.
- In late March 2024, Carisma made the decision to prioritize CT-0525, a chimeric antigen receptor monocyte (CAR-Monocyte), as the development candidate in its anti-HER2 program due to the potential for a CAR-Monocyte to have an approximately 2,000-fold increase in total exposure compared to a CAR-Macrophage. As a result, the Company believes that CT-0525 will be able to build on CT-0508's observed clinical anti-tumor activity.
- CT-0525 (Anti-HER2 CAR-Monocyte)
- In November 2023, Carisma announced the clearance of its Investigational New Drug application (IND) by the
U.S. Food and Drug Administration (FDA) for CT-0525. - The Company expects to treat the first patient in the CT-0525 Phase 1 clinical study in the second quarter of 2024 and to report initial data from the study by year-end 2024.
- In November 2023, Carisma announced the clearance of its Investigational New Drug application (IND) by the
- CT-0508 (Anti-HER2 CAR-Macrophage)
- In September 2023, the Company reported preliminary data from 14 patients in the open label Phase 1 clinical study of CT-0508 (Study 101) designed to evaluate the safety, tolerability and manufacturing feasibility of CT-0508 along with several customary secondary endpoints.
- The Company has also enrolled six patients in a Study 101 substudy evaluating the co-administration of CT-0508 and pembrolizumab, a programmed cell death protein 1 (PD-1) checkpoint inhibitor, evaluating the safety and tolerability of the co-administration, along with several customary secondary endpoints.
- While the Company will continue all study operations for subjects enrolled in Study 101, it plans to stop recruitment of new patients into the study and its substudies, and expects to report data from the substudy evaluating the co-administration of CT-0508 and pembrolizumab in the second quarter of 2024.
- CT-1119 (Anti-Mesothelin CAR-Monocyte)
- The Company has elected to pause further development of CT-1119 as part of its reprioritization plan, pending additional financing.
In Vivo Oncology
- Oncology (CAR-M + mRNA/LNP; Moderna Collaboration)
- In November 2023, Carisma presented pre-clinical data from its in vivo program demonstrating that chimeric antigen receptor macrophages and monocytes (CAR-M) can be directly produced in vivo, successfully redirecting endogenous myeloid cells against tumor-associated antigens using mRNA/LNP. The data demonstrated feasibility, tolerability, and efficacy of in vivo CAR-M against metastatic solid tumors.
- In December 2023, the Company announced the nomination of the first lead candidate in its collaboration with Moderna Tx, Inc., which will target an antigen present on a solid tumor with significant unmet medical need.
Fibrosis and Immunology
- Liver Fibrosis
- Pre-clinical proof of concept data from the fibrosis program is targeted for the second quarter of 2024.
Corporate Updates
- As a result of the pipeline reprioritization and corporate restructuring, Carisma plans to reduce its workforce by approximately
37% in the second quarter of 2024. - On April 1, 2024, Carisma announced the appointment of John Hohneker, M.D. to the Board of Directors of the Company, effective April 1, 2024. Dr. Hohneker brings over 30 years of extensive experience in drug development and leadership across the biotech and pharmaceutical sectors. The Company concurrently announced the resignation of Chidozie Ugwumba from Carisma's Board of Directors, also effective April 1, 2024.
Fourth Quarter and Full Year 2023 Financial Results
- Cash and Cash Equivalents: As of December 31, 2023, Carisma had cash and cash equivalents of
$77.6 million - R&D Expenses: Research and development (R&D) expenses were
$19.4 million $74.1 million $18.1 million $56.6 million $17.5 million $8 $4.4 million $2 $1 $0 $0.2 million - G&A Expenses: General and administrative (G&A) expenses were
$7.3 million $29.5 million $1.0 million $9.4 million $20.1 million $9.2 million $7.5 million $4.6 million $4.6 million $5.3 million $2.2 million $2.1 million $0.8 million $0.5 million - Net Loss: Net loss was
$86.9 million $61.2 million
Outlook
Carisma anticipates that its cash and cash equivalents of
About CT-0525
CT-0525 is a first-in-class, ex vivo gene-modified autologous chimeric antigen receptor-monocyte (CAR-Monocyte) cellular therapy intended to treat solid tumors that overexpress human epidermal growth factor receptor 2 (HER2). It is being studied in a multi-center, open label, Phase 1 clinical trial for patients with advanced/metastatic HER2-overexpressing solid tumors that have progressed on available therapies. The CAR-Monocyte approach has the potential to address some of the challenges of treating solid tumors with cell therapies, including tumor infiltration, immunosuppression within the tumor microenvironment, and antigen heterogeneity. CT-0525 has the potential to enable significant dose escalation, enhance tumor infiltration, increase persistence, and reduce manufacturing time compared to CT-0508.
About CT-0508
CT-0508 is an ex vivo gene-modified autologous chimeric antigen receptor-macrophage (CAR-Macrophage) cellular therapy intended to treat solid tumors that overexpress HER2. It is being evaluated in a Phase 1 multi-center clinical trial that focuses on patients with recurrent or metastatic HER2-overexpressing solid tumors whose cancers do not have approved HER2-targeted therapies or who do not respond to treatment. The Phase 1 clinical trial marks the first time that engineered macrophages are being studied in humans.
About Carisma
Carisma Therapeutics Inc. is a clinical stage biopharmaceutical company focused on utilizing our proprietary macrophage and monocyte cell engineering platform to develop transformative immunotherapies to treat cancer and other serious diseases. We have created a comprehensive, differentiated proprietary cell therapy platform focused on engineered macrophages and monocytes, cells that play a crucial role in both the innate and adaptive immune response. Carisma is headquartered in
Cautionary Note on Forward-Looking Statements
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to Carisma's business, strategy, future operations, cash runway, the advancement of Carisma's product candidates and product pipeline, and clinical development of Carisma's product candidates, including expectations regarding timing of initiation and results of clinical trials. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "goals," "intend," "may," "might," "outlook," "plan," "project," "potential," "predict," "target," "possible," "will," "would," "could," "should," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Any forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in, or implied by, such forward-looking statements. These risks and uncertainties include, but are not limited to, (i) Carisma's ability to obtain, maintain and protect its intellectual property rights related to its product candidates; (ii) Carisma's ability to advance the development of its product candidates under the timelines it anticipates in planned and future clinical trials and with its current financial and human resources; (iii) Carisma's ability to replicate in later clinical trials positive results found in preclinical studies and early-stage clinical trials of its product candidates; (iv) Carisma's ability to realize the anticipated benefits of its research and development programs, strategic partnerships, research and licensing programs and academic and other collaborations; (v) regulatory requirements or developments and Carisma's ability to obtain and maintain necessary approvals from the
For a discussion of these risks and uncertainties, and other important factors, any of which could cause Carisma's actual results to differ from those contained in the forward-looking statements, see the "Risk Factors" set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as well as discussions of potential risks, uncertainties, and other important factors in Carisma's other recent filings with the Securities and Exchange Commission. Any forward-looking statements that are made in this press release speak as of the date of this press release. Carisma undertakes no obligation to revise the forward-looking statements or to update them to reflect events or circumstances occurring after the date of this press release, whether as a result of new information, future developments or otherwise, except as required by the federal securities laws.
Investors:
Shveta Dighe
Head of Investor Relations
investors@carismatx.com
Media:
Julia Stern
(763) 350-5223
jstern@realchemistry.com
CARISMA THERAPEUTICS INC. | |||||
Consolidated Balance Sheets | |||||
(in thousands, except share and per share data) | |||||
December 31, | |||||
Assets | 2023 | 2022 | |||
Current assets: | |||||
Cash and cash equivalents | $ | 77,605 | $ | 24,194 | |
Marketable securities | - | 27,802 | |||
Prepaid expenses and other assets | 2,866 | 2,596 | |||
Total current assets | 80,471 | 54,592 | |||
Property and equipment, net | 6,764 | 8,628 | |||
Right of use assets – operating leases | 2,173 | 4,822 | |||
Deferred financing costs | 146 | 4,111 | |||
Total assets | $ | 89,554 | $ | 72,153 | |
Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit) | |||||
Current liabilities: | |||||
Accounts payable | $ | 3,933 | $ | 1,728 | |
Accrued expenses | 7,662 | 10,361 | |||
Deferred revenue | 1,413 | 2,459 | |||
Operating lease liabilities | 1,391 | 3,437 | |||
Finance lease liabilities | 544 | 1,162 | |||
Other current liabilities | 965 | 523 | |||
Total current liabilities | 15,908 | 19,670 | |||
Deferred revenue | 45,000 | 45,000 | |||
Convertible promissory note | - | 33,717 | |||
Derivative liability | - | 5,739 | |||
Operating lease liabilities | 860 | 976 | |||
Finance lease liabilities | 328 | 872 | |||
Other long-term liabilities | 926 | 1,041 | |||
Total liabilities | 63,022 | 107,015 | |||
Convertible preferred stock | - | 107,808 | |||
Stockholders' equity (deficit): | |||||
Preferred stock | - | - | |||
Common stock | 40 | 2 | |||
Additional paid-in capital | 271,594 | 1,197 | |||
Accumulated other comprehensive loss | - | (41) | |||
Accumulated deficit | (245,102) | (158,223) | |||
Total Carisma Therapeutics Inc. stockholders' equity (deficit) | 26,532 | (157,065) | |||
Noncontrolling interests | - | 14,395 | |||
Total stockholders' equity (deficit) | 26,532 | (142,670) | |||
Total liabilities, convertible preferred stock and | $ | 89,554 | $ | 72,153 | |
CARISMA THERAPEUTICS INC. | |||||||||
Consolidated Statements of Operations and Comprehensive Loss | |||||||||
(in thousands, except share and per share data) | |||||||||
Three Months Ended | Year Ended | ||||||||
2023 | 2022 | 2023 | 2022 | ||||||
Collaboration revenues | $ | 4,289 | $ | 3,731 | $ | 14,919 | $ | 9,834 | |
Operating expenses: | |||||||||
Research and development | 19,415 | 18,082 | 74,125 | 56,618 | |||||
General and administrative | 7,324 | 971 | 29,525 | 9,378 | |||||
Total operating expenses | 26,739 | 19,053 | 103,650 | 65,996 | |||||
Operating loss | (22,450) | (15,322) | (88,731) | (56,162) | |||||
Change in fair value of derivative liability | — | (550) | (84) | (1,919) | |||||
Interest income (expense), net | 1,295 | (867) | 1,936 | (3,145) | |||||
Pre-tax loss | (21,155) | (16,739) | (86,879) | (61,226) | |||||
Income tax provision | 197 | — | — | — | |||||
Net loss | $ | (20,958) | $ | (16,739) | $ | (86,879) | $ | (61,226) | |
Share information: | |||||||||
Net loss per share of common stock, basic and diluted | $ | (0.52) | $ | (7.61) | $ | (2.59) | $ | (28.77) | |
Weighted-average shares of common stock | 40,391,608 | 2,198,748 | 33,524,197 | 2,128,069 | |||||
Comprehensive loss | |||||||||
Net loss | $ | (20,958) | $ | (16,739) | $ | (86,879) | $ | (61,226) | |
Unrealized gain (loss) on marketable securities | 26 | 119 | 440 | (41) | |||||
Less: reclassification to net loss of previous | (399) | — | (399) | — | |||||
Comprehensive loss | $ | (21,331) | $ | (16,620) | $ | (86,838) | $ | (61,267) | |
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SOURCE Carisma Therapeutics Inc.
FAQ
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