Sesen Bio Stockholders Expected to Receive
Approximately $70 Million Special Cash Dividend, an Increase from
up to $25 Million Previously Announced
Contingent Value Right to Include Proceeds of
Vicineum and Other Preclinical Assets, in Addition to Previously
Announced Proceeds of Roche Agreement
Companies Provide Update on Engagement with
Investor Group
Sesen Bio, Inc. (Nasdaq: SESN) and Carisma Therapeutics Inc.
(Carisma), a privately-held, clinical stage biopharmaceutical
company focused on discovering and developing innovative
immunotherapies, today announced an amendment to their previously
announced merger agreement dated September 20, 2022.
Under the terms of the amended merger agreement, which has been
unanimously approved by the Boards of Directors of both companies,
the one-time special cash dividend expected to be paid to Sesen Bio
stockholders will be increased to approximately $70 million, or
approximately $0.34 per share, representing the amount of excess
cash available after Sesen Bio meets a required net cash minimum of
$75 million and represents an increase from the previously stated
up to $25 million special cash dividend, or up to $0.12 per share.
Carisma’s previously announced approximately $30 million financing
remains committed and is expected to close concurrently with the
merger.
As part of the amended merger agreement, the contingent value
right (“CVR”) payable to Sesen Bio stockholders has been amended to
also include proceeds from any sale of Vicineum and Sesen Bio’s
other preclinical assets, in addition to any proceeds from the
milestone payment under the Roche Asset Purchase Agreement.
The issuance of the special cash dividend and CVR remain
contingent on the closing of the pending transaction. Following
completion of the incremental financing from Carisma’s key
investors and subsequent completion of the merger, Sesen Bio
stockholders are expected to own 25.2% of the pro forma company
consistent with the exchange ratio formula set forth in the
original merger agreement.
Dr. Thomas Cannell, President and Chief Executive Officer of
Sesen Bio, said, "Since first announcing the merger, both companies
have engaged extensively with Sesen Bio stockholders and continued
to explore ways to deliver greater value in connection with the
closing. The $45 million increase to the expected special cash
dividend delivers even more direct and immediate cash value.
Furthermore, Sesen Bio stockholders will be positioned to realize
the long-term benefits of the pending merger, including a
meaningful ownership position in the combined company, and benefit
from additional potential upside through the CVR. With support from
its financial and legal advisors, the Board embarked on a thorough
evaluation of its strategic alternatives, including liquidation,
and conducted outreach to more than 100 companies, 42 of which
submitted bids. Based on this comprehensive review process, we are
confident that the pending merger maximizes stockholder value and
is in the best interest of our stockholders. In the weeks ahead, we
look forward to further engaging with our stockholders regarding
the significant benefits of our pending merger with Carisma.”
Steven Kelly, President and Chief Executive Officer of Carisma,
added, "The revised terms of our pending merger with Sesen Bio
reinforce our confidence in and commitment to completing this
compelling transaction. Carisma’s stockholders continue to be
enthusiastic about the potential merger and have reaffirmed their
commitment to provide incremental financing to support the combined
company. Following completion of our merger with Sesen Bio, the
combined company will be positioned for continued success as we
advance our mission to revolutionize cancer treatments.”
The merger and related financing are expected to close in the
first quarter of 2023, subject to approval by Sesen Bio
stockholders and other customary closing conditions.
Update on Engagement with Investor Group
On November 18, 2022, Bradley Radoff and Michael Torok and their
affiliates (collectively, the “Investor Group”) disclosed
beneficial ownership of 5.7% of Sesen Bio’s outstanding common
stock, indicated to Sesen Bio that it would not support the pending
merger with Carisma on the terms set forth in the merger agreement
and subsequently demanded the payment of a special cash dividend to
Sesen Bio stockholders in the amount of $0.50 per share or
approximately $100 million. On December 1, 2022, the Investor Group
disclosed ownership of 7.4% of Sesen Bio’s outstanding common
stock. Both Sesen Bio, Carisma, and the companies’ respective
advisors have engaged with the Investor Group in an attempt to
foster a constructive dialogue and reach an amicable resolution
regarding the pending merger.
During such discussions, Sesen Bio and Carisma offered to
significantly increase the amount of the special cash dividend by
$45 million to approximately $70 million. This would increase the
immediate value paid to Sesen Bio stockholders while providing the
go-forward combined company with the necessary net cash of $75
million to fund its operations, based on an expected Sesen Bio net
cash as of immediately prior to close and before issuance of the
cash dividend of approximately $145 million.
The Sesen Bio Board of Directors continues to believe the merger
provides Sesen Bio stockholders with both immediate value and
future upside, which is far superior to the risk, uncertainty and
prolonged timeline associated with Sesen Bio re-initiating a
process to evaluate (or re-evaluate) potential strategic
alternatives, including a liquidation. Based on the comprehensive
review process conducted with the Sesen Bio Board of Directors, the
payment of a special cash dividend without a concurrent transaction
would be unlikely.
However, despite the offer to increase the expected special cash
dividend to approximately $70 million from up to $25 million and
the immediate value represented by the dividend, CVR and continued
ownership in the combined company – and despite the parties and
their advisors providing the above information – the Investor Group
nonetheless continues to demand an approximate $100 million special
cash dividend.
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 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 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 stockholder value. Additionally, Sesen Bio is seeking 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 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, Inc. (Sesen Bio), CARISMA
Therapeutics Inc. (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 effect of uncertainties related to the actions of activist
stockholders, which could make it more difficult to obtain the
approval of Sesen Bio stockholders with respect to the transaction
related proposals and result in Sesen Bio incurring significant
fees and other expenses, including for third-party advisors; (x)
the occurrence of any event, change or other circumstance or
condition that could give rise to the termination of the merger
agreement; (xi) 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; (xii)
costs related to the merger; (xiii) 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; (xiv) the
ability of Sesen Bio or Carisma to protect their respective
intellectual property rights; (xv) competitive responses to the
proposed transaction and changes in expected or existing
competition; (xvi) the success and timing of regulatory submissions
and pre-clinical and clinical trials; (xvii) regulatory
requirements or developments; (xviii) changes to clinical trial
designs and regulatory pathways; (xix) changes in capital resource
requirements; (xx) 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; (xxi)
legislative, regulatory, political and economic developments; and
(xxii) 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 Securities Exchange
Commission (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 between Carisma and
Sesen Bio, Sesen Bio filed with the SEC a registration statement on
Form S-4 on October 14, 2022, Amendment No. 1 to the Form S-4 on
November 21, 2022 and Amendment No. 2 to the Form S-4 on December
14, 2022 (as amended, the Form S-4). The Form S-4 includes a
preliminary proxy statement of Sesen Bio and constitutes a
prospectus of Sesen Bio with respect to shares of Sesen Bio common
stock to be issued in the proposed transaction (preliminary proxy
statement/prospectus). The preliminary proxy statement/prospectus
is not final and may be further amended. The definitive proxy
statement/prospectus (if and when available) will be delivered to
Sesen Bio’s stockholders. Sesen Bio may also file other relevant
documents regarding the proposed transaction with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS,
INCLUDING THE REGISTRATION STATEMENT, THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS, AND ALL OTHER RELEVANT DOCUMENTS THAT ARE OR
WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
TRANSACTION, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THESE
MATERIALS, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE
PROPOSED TRANSACTION. Investors and security holders are able to
obtain the preliminary proxy statement/prospectus, the definitive
proxy statement/prospectus (if and when available) and other
documents that are filed or will be 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 Therapeutics 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 proposed transaction, by security holdings
or otherwise, is included in the preliminary proxy
statement/prospectus and other relevant materials that are or will
be filed with the SEC regarding the proposed transaction. Investors
should read the definitive proxy statement/prospectus carefully (if
and when 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/20221229005292/en/
Investors: Erin Clark, Vice President, Corporate Strategy &
Investor Relations ir@sesenbio.com Carisma Media: Julia Stern (763)
350-5223 jstern@realchemistry.com
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