Sesen Bio Reports Third Quarter 2022 Financial Results and Business Update
Sesen Bio announced a proposed merger with Carisma Therapeutics, focusing on advancing engineered macrophages for cancer treatment. The transaction is anticipated to close in 2-3 months, pending shareholder approval. Sesen Bio stockholders will own approximately 41.7% of the new entity. Sesen reported a third-quarter revenue of $40 million due to the Roche Asset Purchase Agreement, with a net income of $20.5 million. However, net income has decreased significantly from $71.7 million in Q3 2021, mainly due to higher restructuring charges and unfavorable non-cash expenses.
- Merger with Carisma expected to enhance development focus on innovative therapies.
- Third-quarter revenue of $40 million reflects successful execution of Roche Asset Purchase Agreement.
- Approximately $180 million in cash and equivalents post-merger to support future development.
- Net income decreased from $71.7 million in Q3 2021 to $20.5 million in Q3 2022, indicating financial strain.
- Increased restructuring charges totaling $10.9 million for Q3 2022, up from $5.5 million in Q3 2021.
Combined company will focus on the advancement of Carisma’s development of engineered macrophages for the treatment of cancer and other serious disorders
Transaction is expected to close in the next two to three months, subject to
Business Updates
-
On
September 21, 2022 ,Sesen Bio announced that it had entered into a definitive merger agreement with Carisma Therapeutics (Carisma ). The combined company will focus on the development of Carisma’s chimeric antigen receptor macrophage (CAR-M) therapies, which are believed to be the only therapies of their kind with demonstrated proof of mechanism and safety data in clinical trials.
Immediately following the merger, pre-merger
Immediately prior to the closing of the merger,
The combined company is expected to have approximately
The combined company will be led entirely by Carisma’s current management team, which has extensive cell therapy experience and a strong track record in oncology and drug development. This includes
-
On
July 18, 2022 ,Sesen Bio announced it was voluntarily pausing further clinical development of Vicineum in the US and that it intends to seek a partner to continue Vicineum’s development.Sesen Bio remains focused on closing the proposed transaction withCarisma while it continues to evaluate potential opportunities for Vicineum. -
On
November 1, 2022 ,Carisma announced the acceptance of multiple abstracts to be presented at the upcomingSociety for Immunotherapy of Cancer (SITC) 37th Anniversary Annual Meeting inBoston, Massachusetts , which is being heldNovember 8 to November 12, 2022 . Accepted abstracts include two abstracts of its clinical trial data, including one for oral presentation, four abstracts of pre-clinical study data, and one abstract overviewing the design of a Phase 1 clinical trial for CT-0508.
Third Quarter 2022 Financial Results
-
Cash Position: Cash, cash equivalents and marketable securities were
as of$184.9 million September 30, 2022 , compared to cash and cash equivalents of as of$162.6 million December 31, 2021 . -
Total Revenue: Total revenue for the three months ended
September 30, 2022 was , which was due to the execution of the Roche Asset Purchase Agreement.$40.0 million -
R&D Expenses: Research and development expenses were
for the three months ended$2.9 million September 30, 2022 , compared to for the three months ended$5.0 million September 30, 2021 . The decrease of was primarily due to a decrease in costs associated with manufacturing ($2.0 million ) and a decrease in other R&D related costs ($1.9 million ), driven by the strategic decision to voluntarily pause further development of Vicineum in the US in the third quarter of 2022.$0.1 million -
G&A Expenses: General and administrative expenses were
for the three months ended$8.1 million September 30, 2022 , compared to for the three months ended$8.7 million September 30, 2021 . The decrease of was primarily due to a decrease in marketing and commercialization expenses, which were incurred in preparation for potential commercial launch of Vicineum but were discontinued as a result of the Complete Response Letter (CRL) from the$0.6 million US Food and Drug Administration (FDA) received inAugust 2021 ( ) and a decrease in professional fees for accounting services ($2.3 million ). This was partially offset by an increase in legal expense ($0.4 million ), driven by legal fees associated with our assessment of strategic alternatives incurred in the third quarter of 2022 ($1.3 million ), partially offset by a decrease in legal fees associated with the internal review ($2.2 million ) and other legal expenses ($0.4 million ). Additionally, financial advisor fees increased due to the Company’s assessment of strategic alternatives in the third quarter of 2022 ($0.5 million ).$0.8 million -
Restructuring Charges: Restructuring charges were
for the three months ended$10.9 million September 30, 2022 , compared to for the three months ended$5.5 million September 30, 2021 . Restructuring charges for the third quarter of 2022 consisted of severance and other employee-related costs ( ) and termination of certain contracts and other associated costs ($6.9 million ) associated with the restructuring plan approved on$4.0 million July 15, 2022 , following the decision to voluntarily pause further development of Vicineum in the US. Restructuring charges for the third quarter of 2021 consisted of severance and other employee-related costs ( ) and termination of certain contracts ($2.8 million ) associated with the restructuring plan approved on$2.7 million August 30, 2021 , following the receipt of the CRL. -
Non-Cash Related Expenses:
-
The Company did not record any intangibles impairment charge for the three months ended
September 30, 2022 , and the Company recorded an intangibles impairment charge of in the three months ended$31.7 million September 30, 2021 . In light of the CRL, the Company performed an interim impairment test forIn-Process Research and Development (IPR&D) assets, which resulted in the decrease in fair value of Vicineum’s US rights. -
The non-cash change in fair value of contingent consideration was a gain of
for the three months ended$1.8 million September 30, 2022 , compared to a gain of for the three months ended$114.0 million September 30, 2021 . The gain from the fair value of contingent consideration of for the three months ended$1.8 million September 30, 2022 , was due to the Company’s conclusion that it no longer expects to make earnout payments toQilu Pharmaceutical Co., Ltd. for commercialization of Vicineum in theGreater China region. Accordingly, the Company reduced the remaining of contingent consideration liabilities to zero as of$1.8 million September 30, 2022 . The gain from the fair value of contingent consideration of for the three months ended$114.0 million September 30, 2021 , was primarily due to management’s assessment of a lower probability of regulatory success of Vicineum, and a refinement of associated timelines, following the CRL.
-
The Company did not record any intangibles impairment charge for the three months ended
-
Income Tax Benefit: The Company did not record a benefit or loss for the three months ended
September 30, 2022 . In the third quarter of 2021, the Company determined that the fair value of the Company’s intangible asset of Vicineum US rights was zero, which resulted in an impairment charge of . In connection with this impairment charge, in the third quarter of 2021, the Company reduced the associated deferred tax liability, which resulted in an income tax benefit of$31.7 million .$8.6 million -
Net Income: Net income was
, or$20.5 million per basic and$0.10 per diluted share, for the third quarter of 2022, compared to$0.10 , or$71.7 million per basic and$0.36 per diluted share, for the third quarter of 2021. The decrease was primarily attributable to unfavorable changes in non-cash related expenses of$0.36 (including tax benefit) and increased restructuring charges of$89.1 million . This was partially offset by revenue of$5.4 million related to the execution of the Roche Asset Purchase Agreement.$40.0 million
1: Award presented by
About
Cautionary Note on Forward-Looking Statements
Any statements in this press release about future expectations, plans and prospects for
Important Additional Information
In connection with the proposed transaction, on
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
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited; In thousands, except share and per share data) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ |
71,107 |
|
$ |
162,636 |
|
|
Short term marketable securities |
|
106,427 |
|
|
- |
|
|
Accounts receivable |
|
- |
|
|
21,011 |
|
|
Other receivables |
|
14,297 |
|
|
3,482 |
|
|
Prepaid expenses and other current assets |
|
527 |
|
|
18,476 |
|
|
Total current assets |
|
192,358 |
|
|
205,605 |
|
|
Non-current assets: | |||||||
Restricted cash |
|
30 |
|
|
20 |
|
|
Marketable securities |
|
7,336 |
|
|
- |
|
|
Property and equipment, net |
|
- |
|
|
43 |
|
|
Intangible assets |
|
- |
|
|
14,700 |
|
|
|
- |
|
|
13,064 |
|
||
Long term prepaid expenses |
|
- |
|
|
7,192 |
|
|
Other assets |
|
- |
|
|
123 |
|
|
Total non-current assets |
|
7,366 |
|
|
35,142 |
|
|
Total Assets | $ |
199,724 |
|
$ |
240,747 |
|
|
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ |
514 |
|
$ |
2,853 |
|
|
Accrued expenses |
|
33,800 |
|
|
8,255 |
|
|
Other current liabilities |
|
381 |
|
|
460 |
|
|
Total current liabilities |
|
34,695 |
|
|
11,568 |
|
|
Non-current liabilities: | |||||||
Contingent consideration |
|
- |
|
|
52,000 |
|
|
Deferred tax liability |
|
- |
|
|
3,969 |
|
|
Deferred revenue |
|
- |
|
|
1,500 |
|
|
Total non-current liabilities |
|
- |
|
|
57,469 |
|
|
Total Liabilities |
|
34,695 |
|
|
69,037 |
|
|
Stockholders’ Equity: | |||||||
Preferred stock, |
|
- |
|
|
- |
|
|
Common stock, |
|
202 |
|
|
199 |
|
|
Additional paid-in capital |
|
493,629 |
|
|
487,768 |
|
|
Other comprehensive loss |
|
(235 |
) |
|
- |
|
|
Accumulated deficit |
|
(328,567 |
) |
|
(316,257 |
) |
|
Total Stockholders’ Equity |
|
165,029 |
|
|
171,710 |
|
|
Total Liabilities and Stockholders’ Equity | $ |
199,724 |
|
$ |
240,747 |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (OPERATIONS) | ||||||||||||||
(Unaudited; In thousands, except per share data) | ||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
2022 |
2021 |
|
2022 |
2021 |
||||||||||
Revenue: | ||||||||||||||
License and related revenue | $ |
40,000 |
|
$ |
- |
|
$ |
40,000 |
|
$ |
6,544 |
|
||
Total revenue | $ |
40,000 |
|
$ |
- |
|
$ |
40,000 |
|
$ |
6,544 |
|
||
Operating expenses: | ||||||||||||||
Research and development | $ |
2,931 |
|
$ |
4,967 |
|
$ |
37,636 |
|
$ |
18,273 |
|
||
General and administrative |
|
8,141 |
|
|
8,699 |
|
|
32,705 |
|
|
20,797 |
|
||
Restructuring charge |
|
10,947 |
|
|
5,522 |
|
|
10,947 |
|
|
5,522 |
|
||
Intangibles impairment charge |
|
- |
|
|
31,700 |
|
|
27,764 |
|
|
31,700 |
|
||
Change in fair value of contingent consideration |
|
(1,800 |
) |
|
(114,000 |
) |
|
(52,000 |
) |
|
(52,240 |
) |
||
Total operating expenses | $ |
20,219 |
|
$ |
(63,112 |
) |
$ |
57,052 |
|
$ |
24,052 |
|
||
Income (Loss) from Operations | $ |
19,781 |
|
$ |
63,112 |
|
$ |
(17,052 |
) |
$ |
(17,508 |
) |
||
Other income (expense), net |
|
676 |
|
|
1 |
|
|
867 |
|
|
(45 |
) |
||
Income (Loss) Before Taxes | $ |
20,457 |
|
$ |
63,113 |
|
$ |
(16,185 |
) |
$ |
(17,553 |
) |
||
Benefit from income taxes |
|
- |
|
|
8,561 |
|
|
3,875 |
|
|
8,273 |
|
||
Net Income (Loss) After Taxes | $ |
20,457 |
|
$ |
71,674 |
|
$ |
(12,310 |
) |
$ |
(9,280 |
) |
||
Net income (loss) attributable to common stockholders - basic | $ |
20,442 |
|
$ |
71,622 |
|
$ |
(12,310 |
) |
$ |
(9,280 |
) |
||
Net income (loss) attributable to common stockholders - diluted | $ |
20,442 |
|
$ |
71,623 |
|
$ |
(12,310 |
) |
$ |
(9,280 |
) |
||
Net income (loss) per common share - basic | $ |
0.10 |
|
$ |
0.36 |
|
$ |
(0.06 |
) |
$ |
(0.05 |
) |
||
Weighted-average common shares outstanding - basic |
|
200,464 |
|
|
196,778 |
|
|
199,801 |
|
|
176,547 |
|
||
Net income (loss) per common share - diluted | $ |
0.10 |
|
$ |
0.36 |
|
$ |
(0.06 |
) |
$ |
(0.05 |
) |
||
Weighted-average common shares outstanding - diluted |
|
200,947 |
|
|
201,017 |
|
|
199,801 |
|
|
176,547 |
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
(Unaudited; In thousands, except per share data) | ||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
2022 |
2021 |
|
2022 |
2021 |
||||||||||
Net income (loss) | $ |
20,457 |
|
$ |
71,674 |
$ |
(12,310 |
) |
$ |
(9,280 |
) |
|||
Unrealized (gain) loss on marketable securities |
|
(46 |
) |
|
- |
|
235 |
|
|
- |
|
|||
Total comprehensive income (loss) | $ |
20,503 |
|
$ |
71,674 |
$ |
(12,545 |
) |
$ |
(9,280 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107005373/en/
Investors:
ir@sesenbio.com
Source:
FAQ
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