Amend Merger Agreement to Increase Expected
Special Cash Dividend to $75 Million and Extend Contingent Value
Right for Vicineum to March 31, 2027
Bradley L. Radoff and Michael Torok to Vote
Shares in Support of Transaction
Michael Torok to Join Carisma Board of
Directors as Only Sesen Bio Representative
Special Meeting of Stockholders to Approve
Merger to be Held on March 2, 2023
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 that the companies have reached a
voting and support agreement (the “Support Agreement”) with Bradley
L. Radoff and Michael Torok (together with their respective
affiliates, the “Investor Group”). The Investor Group, which
beneficially owns approximately 8.7% of Sesen Bio’s outstanding
common stock, has committed to vote its shares in support of the
pending merger.
In connection with the Support Agreement, Sesen Bio and Carisma
have further amended the previously amended merger agreement
announced on December 29, 2022, which has been unanimously approved
by the Boards of Directors of both companies:
- Increased the one-time special cash dividend expected to be
paid to Sesen Bio stockholders to $75 million, $0.36 per share1.
This represents an increase from the expected special cash dividend
of approximately $70 million, approximately $0.34 per share, under
the first amendment to the merger agreement, and an increase from
the up to $25 million special cash dividend under the terms of the
original merger agreement;
- Extended the period of time for payments under the Contingent
Value Right (“CVR”) related to any potential proceeds from the sale
of Vicineum and Sesen Bio’s other legacy assets to March 31, 2027,
from December 31, 2023, under the previous terms. Under the CVR,
Sesen Bio stockholders remain entitled to any proceeds from the
potential milestone payment under the Roche Asset Purchase
Agreement; and
- Michael Torok will join the Carisma Board of Directors upon
closing of the merger as the only Sesen Bio representative.
Dr. Jay Duker, Chair of the Sesen Bio Board of Directors, said,
“We appreciate Mr. Radoff’s and Mr. Torok’s constructive
engagement. Our discussions with our stockholders over the last
several weeks have enabled valuable changes to the merger agreement
that benefit all stockholders, including the significantly
increased expected special cash dividend of $75 million and an
enhanced CVR. We are confident that the merger with Carisma
maximizes value for all Sesen Bio stockholders, and we are pleased
Mr. Radoff and Mr. Torok will support the pending transaction. We
look forward to expeditiously closing the merger by the end of the
quarter.”
Steven Kelly, President and Chief Executive Officer of Carisma,
added, “We are excited to reach this agreement with Sesen Bio and
Messrs. Radoff and Torok. The merger provides significant funding
for Carisma's R&D pipeline to advance our revolutionary
proprietary cell therapy platform. We are confident the combined
company will be well positioned to create significant value for
stockholders.”
Mr. Torok, on behalf of the Investor Group, said, “We are
pleased that our extensive engagement with Sesen Bio and its
representatives has helped unlock additional value for Sesen Bio’s
stockholders. We believe the amended merger terms represent the
most value maximizing path for stockholders. We are excited about
the long-term value potential of the Carisma platform, and I look
forward to joining the Carisma Board.”
Carisma’s previously announced approximately $30 million
financing remains committed and is expected to close concurrently
with the pending merger.
The issuance of the special cash dividend and CVR remain
contingent on the closing of the pending transaction, which is
expected to occur in the first quarter of 2023, subject to approval
by Sesen Bio stockholders and other customary closing
conditions.
Following completion of the incremental financing from Carisma’s
key investors and subsequent completion of the merger, Sesen Bio
stockholders are expected to own 24.2% of the pro forma company
consistent with the exchange ratio formula set forth in the
original merger agreement, dated September 20, 2022.
The Sesen Bio Board unanimously recommends that stockholders
vote “FOR” each of the proposals listed on the WHITE proxy card
enclosed with the previously mailed definitive proxy statement /
prospectus. As previously disclosed, the special meeting of
stockholders will be held exclusively via live webcast on March 2,
2023, at 10:00 a.m. Eastern Time. Sesen Bio stockholders of record
as of January 17, 2023, will be entitled to vote at the
meeting.
The complete Support Agreement, which includes other customary
provisions, will be filed as an exhibit to a Form 8-K to be filed
by the Company with the U.S. Securities and Exchange
Commission.
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. Olshan Frome Wolosky LLP is serving as legal counsel to
the Investor Group.
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, 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 basic outstanding shares including unvested RSUs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230214005338/en/
Investors: Erin Clark, Vice President, Corporate Strategy &
Investor Relations ir@sesenbio.com
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