'Not for the faint of heart': After sealing Sesen reverse merger, Carisma aims for clinical victories

For a moment there, it seemed as though a reverse merger between Carisma Therapeutics and Sesen Bio was on thin ice. Activist investors at the latter were holding up the marriage, largely to maximize the amount of cash that would be dispersed to Sesen shareholders. But after months of negotiating, the final assuaging came from Carisma’s head honcho.

“What I eventually did is get a forum with them—the primary people—and tell them the story of Carisma,” said CEO Steven Kelly. “That was something that was lacking.” 

The forum, according to Kelly, was an opportunity for the investors to hear from the man in charge, and who’d be commanding the joint operation, on exactly what Carisma offered. It also allowed Kelly to explain that the company needed a minimum financial floor to see this potential through and that current demands fell beneath that floor. 

“Shortly after that, we reached a position that worked for Sesen shareholders and worked for us,” he said. The parties agreed on a one-time $75 million cash dividend among those shareholders and concurrent with the deal closing, Carisma raised a $30 million financing. Carisma now sits on the Nasdaq with $140 million in cash on hand, enough to last two years. 

“I would say the reverse merger process isn't for the faint of heart,” Kelly joked.

With the deal locked in, the expanded Carisma can refocus its attention on the clinical success of its macrophage and monocyte cell therapies. The company’s lead asset, CT-0508, is a CAR-macrophage, different from more common CAR-T cells in the way that it rallies the immune system. Carisma touts macrophages as being “professional antigen-presenting cells” that can spur the body’s innate immune system. 

CT-0508 is currently in a phase 1 trial as both a monotherapy and in combination with Merck & Co.’s Keytruda. Recruitment is ongoing with hopes of enrolling just under 50 patients. Kelly says the company hopes to share data by the end of the year. 

Waiting in the wings is the company’s CAR-monocyte, the precursor cell to macrophages. Kelly says the benefits of constructing monocytes are that the company can make more of them—up to 10 billion cells—and they can be manufactured in one day.

He predicted the vein-to-vein time would be less than two weeks, compared with a median of 27 days for Gilead’s blockbuster CAR-T therapy Yescarta. Carisma plans to ask regulators in the third quarter to greenlight a single agent phase 1 study using the fewest patients possible to demonstrate a safety profile similar to the macrophage asset. After that, the company will again incorporate a Keytruda combination. 

The biotech hopes to have the Keytruda combo data in the first half of 2024, said Kelly, with the readout informing a registrational program for the CAR-monocyte asset. 

Simultaneously, Carisma is working on developing CAR-monocyte programs for Moderna as part of a 2022 collaboration. In exchange for $45 million upfront and a $35 million convertible note, Moderna can select up to 12 targets for Carisma to work on. Kelly says that the biotech giant has so far selected four targets and expects they’ll name more. 

“Moderna’s happy, we're very happy, and hopefully it will become the first...in-vivo remodeling in monocytes and macrophages,” he said. 

2023 is also set to be the year Carisma explores its technology outside of oncology, which to date has been the primary focus. Kelly said the company has a tool to assess the use of its cell therapies in liver fibrosis and neurology, which may ultimately be used to develop new internal programs or supply new targets to Moderna.

In fact, diseases outside of oncology may be where an allogeneic approach of the company’s technology works best, Kelly added. Until then, the company is prioritizing autologous work. 

"I want to show clinical benefit in the autologous setting," the CEO said of his goals this year. "And I think that just cascades into additional tumor targets as well as has applicability for the in vivo approach."