Company Calls Out Misrepresentations from
Investor Group
Sesen Bio, Inc. (Nasdaq: SESN) today issued the following
statement reiterating the Company’s confidence in, and commitment
to, the pending merger with Carisma Therapeutics Inc. (Carisma) in
response to the release issued yesterday by Bradley Radoff and
Michael Torok and their affiliates (collectively, the “Investor
Group”):
Our attempts to engage with the Investor
Group have been driven by our belief that an amicable resolution
and successful transaction are in the best interest of our
stockholders. Despite the fact that Mr. Radoff built his current
position after the merger was announced, and the continued efforts
by the Investor Group to disrupt the process to the detriment of
our long-term stockholders, we still sought to negotiate with them
with the hopes of achieving the best outcome for our stockholders.
In contrast, we believe the Investor Group continues to be
opportunistic and single-minded, disseminating misleading
information about discussions with Sesen Bio and its advisors, and
appears willing to sacrifice direct and immediate cash value and
the potential upside of ownership in the combined company to secure
a short-term payout.
It’s important for all Sesen Bio
stockholders to know the facts:
False Claims from Investor
Group
Facts
The Investor Group claims to represent
stockholders’ interests.
We believe the Investor Group are
opportunists who are advancing their own agenda. Mr. Radoff
built his current position after the transaction with Carisma was
announced. Since that time, the Investor Group has continued to
spread misinformation, including by advocating for an unfeasible
distribution scenario with inaccurate assumptions that would
leave considerable stockholder value on the table and introduce
significant uncertainty and risk for Sesen Bio and its
stockholders.
We believe the Investor Group’s stake in
Sesen Bio is simply an arbitrage opportunity for them – motivated
by financial speculation. The Investor Group has failed to
articulate a plan for the Company beyond rejecting the merger and
“reconstituting” the Board. Further, we have repeatedly offered the
Investor Group the opportunity to meet with Carisma’s management
team to learn more about Carisma’s pipeline and growth prospects,
which they have consistently declined.
The Investor Group claims that there is an
alternate path beyond liquidation.
They are wrong. Without the pending
merger with Carisma, the most likely and feasible path for Sesen
Bio would be a court-managed dissolution of the potentially
de-listed Company and a liquidation of assets.
The Investor Group is ignoring the
reality of a court-managed dissolution and liquidation and the
significant time, expense and uncertainty it would mean for both
Sesen Bio and its stockholders. As we have repeatedly noted,
only approximately 60%-90%1 of Sesen Bio’s cash balance, or
approximately $0.40-$0.60 per share2, would be available for an
initial distribution which may not be available for six months or
more after an additional stockholder vote. The full process could
take up to three years in the Delaware court system to fully settle
Sesen Bio’s potential future and unknown liabilities.
The Investor Group claims that the
increased special cash dividend is insufficient.
In response to feedback from Sesen Bio
stockholders, Sesen Bio and Carisma amended the merger agreement
to increase the expected special cash dividend by more than
180%. Stockholders now stand to receive approximately $70
million at closing, or approximately $0.34 per share3, an
increase from the previously stated special cash dividend of up to
$25 million. We increased the cash dividend three times as part of
our negotiations, offering $40 million, then $65 million until we
landed on the $70 million.
The Investor Group claims to be surprised
and offended at our offer to discuss an advisory role and
reimbursement of their legal fees.
Both offers were
made in response to their requests as part of our efforts to
negotiate in good faith:
- In written and verbal correspondence, the Investor Group
expressed interest in an advisory role so that their
perspectives could be heard. In an effort to come to a resolution
where they could share their perspectives directly with management,
Sesen Bio offered to discuss an advisor role for the two principals
of the Investor Group as additional CEO advisors.
- The Investor Group repeatedly asked for reimbursement of
fees, including in an email request sent on December 23. To be
responsive to these requests, Sesen Bio offered to discuss
reimbursement of Mr. Radoff’s and Mr. Torok’s legal fees and
expenses as part of a settlement agreement, as is customary and
standard in such agreements.
The Investor Group has no fiduciary
responsibility to other stockholders, and appears to be acting to
advance its own interests to the detriment of the Company and its
owners. While the Investor Group continues to distort the facts,
the Sesen Bio Board will continue to act in the best interests of
all Sesen Bio stockholders. The Board remains fully committed to
the pending merger with Carisma, which maximizes value for all
stockholders.
Sesen Bio’s definitive proxy statement / prospectus and other
materials regarding the pending merger can be found at
www.SesenBioandCarisma.com.
Sesen Bio stockholders who need assistance voting or have
questions regarding the Sesen Bio special meeting may contact Sesen
Bio’s proxy solicitor, MacKenzie Partners, toll-free at
1-800-322-2885 or email at proxy@mackenziepartners.com.
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.
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.
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,
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, the receipt of any payments under the contingent value
rights, and the amount and timing of distributions to be made to
Sesen Bio stockholders, if any, in connection with any potential
dissolution or liquidation scenario 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, as amended; (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 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 press release 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 (as amended, the registration statement) that includes a
proxy statement of Sesen Bio and also constitutes a prospectus of
Sesen Bio with respect to shares of Sesen Bio common stock to be
issued in the proposed transaction (proxy statement/prospectus).
The definitive proxy statement/prospectus was first mailed to Sesen
Bio stockholders on or about January 24, 2023. 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 definitive proxy statement/prospectus 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 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 definitive 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 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.
_____________________________ 1 Based on precedent liquidation
processes and company projections of potential liabilities and
operating expenses. 2 Assumes stockholder approval of liquidation
in 2Q 2023 and a cash balance of approximately $140 million. 3
Based on basic outstanding shares including unvested RSUs.
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version on businesswire.com: https://www.businesswire.com/news/home/20230126005598/en/
Investors: Erin Clark, Vice President, Corporate Strategy
& Investor Relations ir@sesenbio.com
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