Sesen Bio Reports First Quarter 2022 Financial Results and Business Update
Strong balance sheet of
US Regulatory Update
March 28, 2022, Sesen Bioparticipated in a Type C Meeting with the FDA. During the meeting, the FDA agreed to a majority of the Company’s proposed protocol and statistical analysis plan design elements for an additional Phase 3 clinical trial that it plans to conduct for potential resubmission of a BLA for Vicineum for the treatment of NMIBC. The Company plans to meet with the FDA in mid-2022 to align on the remaining outstanding items related to the additional Phase 3 clinical trial, and intends to request that meeting in the coming weeks.
In addition to working with the FDA to align on a study design, the Company has been addressing comments related to Chemistry, Manufacturing and Controls (CMC) that were included in the Complete Response Letter (CRL) for the BLA for Vicineum for the treatment of bacillus Calmette-Guérin (BCG)-unresponsive NMIBC. The Company has completed technical work on several of the key CMC comments and is continuing to make progress on the remaining items. The Company’s responses to the CMC comments will ultimately be reviewed by the FDA upon a potential BLA resubmission.
Other Business Updates
January 6, 2022, Sesen Biodisclosed that it achieved a $20 millionmilestone payment pursuant to the Company’s exclusive license agreement (Roche License Agreement) with Roche for legacy Interleukin-6 (IL-6) antagonist antibody technology owned by Sesen Bio. Following this milestone payment, Sesen Biohas cumulatively received $50 millionin upfront and milestone payments, with an additional $220 millionin potential future milestone payments, as well as royalty payment obligations on future sales, remaining under the Roche License Agreement. As part of the Roche License Agreement, Roche also maintains the right to fully acquire the IL-6 technology.
May 3, 2022, Sesen Bioannounced that it had initiated a process to review strategic alternatives with the goal of maximizing shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of the Company, a merger, acquisition or other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of some of the Company’s proprietary technologies. The Company is actively working with an investment bank in this process. Pending any decision to undertake any strategic alternative, the Company is continuing its development activities in accordance with its existing business strategy.
June 22, 2022, Sesen Biowill hold its Annual Meeting of Stockholders, one of the primary purposes of which will be to approve a proposal for a reverse stock split, which includes a proportionate reduction in authorized shares of common stock. The proposed reverse stock split, if approved, should allow the Company to remain listed on the Nasdaq Global Market, which should increase the range and attractiveness of strategic alternatives that the Company is able to consider to maximize shareholder value.
First Quarter 2022 Financial Results
- Cash Position: Cash, cash equivalents and restricted cash were
$169.8 millionas of March 31, 2022, compared to $110.0 millionas of March 31, 2021.
- R&D Expenses: Research and development expenses for the first quarter of 2022 were
$4.8 millioncompared to $6.1 millionfor the same period in 2021. The decrease of $1.3 millionwas primarily due to lower costs associated with technology transfer and manufacturing ( $1.4 million), regulatory and clinical consulting fees ( $0.6 million) and license milestone fees ( $0.6 million), which were partially offset by increases in employee-related compensation, primarily driven by increased headcount and the retention program implemented in the fourth quarter of 2021 ( $1.2 million), and other R&D expenses ( $0.1 million).
- G&A Expenses: General and administrative expenses for the first quarter of 2022 were
$9.0 millioncompared to $5.3 millionfor the same period in 2021. The increase of $3.7 millionwas due primarily to increases in legal expenses related, in part, to the independent internal review completed in February 2022( $3.0 million), employee-related compensation, primarily driven by increased headcount and the retention program implemented in the fourth quarter of 2021 ( $1.1 million), insurance expense ( $0.1 million) and other general expenses ( $0.2 million). This was partially offset by a decrease in consultant fees incurred in preparation for commercial launch as a result of the subsequent CRL received in August 2021( $0.7 million).
- Net Loss: Net loss was
$0.8 million, or $0.00per basic and per diluted share, for the first quarter of 2022, compared to net loss of $55.5 million, or $0.35per basic and diluted share, for the same period in 2021. The decrease of $54.7 millionin net loss was primarily attributable to the non-cash decrease in fair value of contingent consideration ( $61.1 million), partially offset by decreased license and related revenue recognized ( $4.3 million).
Vicineum, a locally administered fusion protein, is Sesen Bio’s lead product candidate being developed for the treatment of non-muscle invasive bladder cancer (NMIBC). Vicineum is comprised of a recombinant fusion protein that targets epithelial cell adhesion molecule (EpCAM) antigens on the surface of tumor cells to deliver a potent protein payload, Pseudomonas Exotoxin A. Vicineum is constructed with a stable, genetically engineered peptide tether to ensure the payload remains attached to the antibody binding fragment until it is internalized by the cancer cell. This fusion protein design is believed to decrease the risk of toxicity to healthy tissues, thereby improving its safety. In prior clinical trials conducted by
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Cautionary Note on Forward-Looking Statements
Any statements in this press release about future expectations, plans and prospects for the Company, the Company’s strategy, future operations, and other statements containing the words “anticipate,” “believe,” “expect,” “intend,” “may,” “plan,” “predict,” “target,” “potential,” “will,” “would,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. For example, statements regarding the anticipated regulatory path forward for Vicineum for the treatment of NMIBC, the Company’s plans to conduct an additional Phase 3 clinical trial for potential resubmission of a BLA for Vicineum for the treatment of NMIBC, the Company’s plans to meet with the FDA in mid-2022 to align on the remaining outstanding items related to the additional Phase 3 clinical trial, the Company’s intentions to request such meeting in the coming weeks, any future payments to the Company pursuant to the Roche License Agreement including any future milestone payments and royalty payments, the Company’s plans to review strategic alternatives with the goal of maximizing shareholder value, the Company’s plans to explore and evaluate potential strategic alternatives, which may include the sale of the Company, a merger, acquisition or other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of some of the Company’s proprietary technologies, the Company’s plans to continue its development activities in accordance with its existing business strategy pending any decision to undertake any strategic alternative, the Company’s plans to hold its Annual Meeting of Stockholders on
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