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Sesen Bio to Merge with Carisma Therapeutics in All-Stock Transaction
Thursday 22 September 2022

US-based late-stage clinical company Sesen Bio, Inc. (NASDAQ: SESN) has agreed to merge with US-based clinical stage biopharmaceutical company Carisma Therapeutics Inc. in an all-stock transaction, the company said.

The combined company will focus on the advancement of Carisma's proprietary cell therapy platform that utilises 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 USD 30m financing, including HealthCap, AbbVie, Wellington Partners, SymBiosis, Penn Medicine, TPG Biotech, MRL Ventures Fund, the therapeutics-focussed corporate venture arm of Merck and 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 USD 180m 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.

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.

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 and Sterling LLP is serving as the placement agents' legal counsel.

Sesen Bio, Inc., a late-stage clinical company, focuses on designing, engineering, developing, and commercializing targeted fusion protein therapeutics (TFPTs) for the treatment patients with cancer.
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Date Published: 22/09/2022

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