Schedules March 2, 2023, Special Meeting of
Stockholders to Vote on Merger
Launches www.SesenBioandCarisma.com, Providing
Additional Information for Stockholders
Sesen Bio, Inc. (Nasdaq: SESN) today announced that it has filed
definitive proxy materials with the U.S. Securities and Exchange
Commission in connection with the Company’s pending merger with
Carisma Therapeutics Inc. (Carisma), a privately held, clinical
stage biopharmaceutical company focused on discovering and
developing innovative immunotherapies. Sesen Bio will commence
mailing the definitive proxy statement / prospectus to its
stockholders on or about January 24, 2023.
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 Sesen Bio Board recommends that stockholders vote “FOR” each
of the proposals listed on the WHITE proxy card enclosed with the
definitive proxy statement / prospectus.
In addition to the definitive proxy statement / prospectus,
Sesen Bio has also mailed a letter to the Company’s stockholders.
The full text of the letter being mailed to stockholders
follows:
Dear Fellow Stockholder,
Sesen Bio’s Board of Directors and management team are focused
on enhancing value for all Sesen Bio stockholders. The Sesen Bio
Board of Directors unanimously believes the pending merger with
Carisma Therapeutics is the most value maximizing option available
for Sesen Bio stockholders. Here’s why:
1. Substantial Upfront Cash: The pending merger
accelerates the return of direct and immediate cash value through
an expected special one-time cash dividend of approximately $70
million, or $0.34 per share1. This dividend is contingent upon
closing and represents the cash available in excess of the minimum
cash needed to fund the combined company operations.
2. Cutting-Edge Immunotherapy Platform with Upside
Opportunity: Stockholders immediately benefit from owning a
25.2% stake, or $0.40 per share2, in the $357
million3 combined company, with potential for
significant long-term upside. Carisma’s:
- Proprietary CAR-M platform is an entirely novel immunotherapy
approach that has the potential to change the way cancer and other
serious diseases are treated;
- First-of-its-kind technology is believed to be the only one
with demonstrated proof of mechanism and safety data in clinical
trials;
- Strong backing by established investors and strategic partners
includes Moderna, Novartis, AbbVie and Merck; and
- Upcoming catalysts and developmental milestones across its
clinical programs over the next 18 months provide significant
upside opportunity.
3. Additional Potential Cash Upside via a Contingent
Value Right: Stockholders will also benefit from any potential
proceeds from any sale of Sesen Bio’s legacy assets (including
Vicineum) and from the potential $30 million milestone
payment, or $0.14 per share4, under the Roche Asset Purchase
Agreement.
4. Comprehensive Evaluation of Strategic Alternatives to
Maximize Stockholder Value: This attractive transaction is the
result of a robust process conducted by the Sesen Bio Board of
Directors and management team (with the assistance of independent
financial and legal advisors), which included:
- A four-month comprehensive review of strategic
alternatives;
- Thorough evaluation of a merger, sale of assets, resumption of
R&D and dissolution and liquidation of assets and wind-down of
Sesen Bio;
- Outreach to over 100 companies which resulted in 42 bids;
and
- Extensive negotiations with Carisma to maximize value in an
agreed upon combination.
Beginning in April of 2022, the Sesen Bio Board of Directors and
management team conducted an extensive review of strategic
alternatives. Based on this review, the Sesen Bio Board of
Directors unanimously agreed that the pending merger with Carisma
maximized stockholder value over other strategic alternatives,
including a potential Nasdaq delisting in January 2023 followed by
a dissolution of the company and a liquidation of assets – a path
with an inferior distribution of cash, additional risk from needing
to satisfy contingent liabilities and a prolonged timeline leading
to additional cash burn. The Board remains fully committed to the
pending merger with Carisma, which it continues to believe
maximizes value for all stockholders.
The Sesen Bio Board of Directors would like to take this
opportunity to clarify a number of supposed issues surrounding this
transaction, so that stockholders can more accurately evaluate the
pending merger.
Did Sesen Bio negotiate to fully maximize the value to
stockholders in this transaction?
Yes. The pending merger with
Carisma is the result of a comprehensive strategic review process
with bids from 42 different companies, as well as extensive
negotiations with Carisma. Further, following the announcement of
the pending transaction in September 2022, Sesen Bio has engaged
extensively with its stockholders and Carisma to explore ways to
deliver significant value in connection with the pending
transaction. Based on feedback from Sesen Bio stockholders, in
December 2022, Sesen Bio and Carisma agreed to amend the merger
agreement to do just that:
- Increased expected special cash dividend to be paid to Sesen
Bio stockholders from the previously stated up to $25 million to an
expected approximate $70 million, representing the amount of
excess cash Sesen Bio will have available after meeting a required
net cash minimum of $75 million; and
- Expanded the CVR to include potential proceeds from any
sale of Sesen Bio’s legacy assets, including Vicineum.
The increased expected special cash dividend and expanded CVR,
coupled with an ownership position in a combined company poised for
significant long-term upside, is expected to deliver an implied
total value of $0.88 per share5 that could otherwise not be
achieved.
Could Sesen Bio dividend its remaining cash as suggested by
the Investor Group and then find another alternative (i.e.,
dissolve the Company)?
No. Sesen Bio and Carisma
and their respective advisors have engaged extensively with Bradley
Radoff and Michael Torok and their affiliates (collectively, the
“Investor Group”) in an attempt to reach an amicable resolution
regarding the pending merger. Despite Sesen Bio’s best efforts to
be flexible and transparent, the Investor Group has increased its
opportunistic position in Sesen Bio stock and remains focused on an
unfeasible distribution scenario with inaccurate assumptions that
would leave considerable stockholder value on the table.
Without the pending merger with Carisma, the most likely and
feasible path would be an exchange delisting (as previously
publicly communicated) followed by a dissolution of the Company and
a liquidation of assets.
The Investor Group has not considered or has chosen to ignore
these facts. In a more realistic orderly dissolution and
liquidation scenario – which would come with significant expense,
delay and uncertainty – only approximately 60%-90%6 of Sesen Bio’s
cash balance, or approximately $0.40-$0.60 per share7, would be
available for an initial distribution to stockholders, and that
could take up to six months or more after an additional stockholder
vote to approve the dissolution and liquidation. The remaining
amount would fund the wind-down of operations and the reserves for
current, potential future and unknown liabilities, which could take
up to three years to fully settle.
Is Carisma the best merger candidate for Sesen Bio?
Yes. The Sesen Bio Board of
Directors, in consultation with its financial and legal advisors,
carefully evaluated 42 bids over several months before determining
that a transaction with Carisma was the most value maximizing
opportunity.
- Carisma is revolutionizing the field of immunotherapy with
cutting-edge technology to develop first-of-their-kind engineered
macrophages.
- CAR-M technology has the potential to address a large patient
population with broad applicability across multiple types of solid
tumors, including non-oncology applications such as liver fibrosis
and autoimmune and neurodegenerative disease indications.
- Carisma’s strategic collaboration with Moderna will fully fund
R&D of innovative potential cancer therapies and provides
potentially significant downstream economics in the form of
development, regulatory and commercial milestones, in addition to
royalty payments.
Furthermore, the combined company will be led by Carisma’s
experienced Board and management team, which has strong investor
support including from AbbVie, Moderna, Wellington and TPG:
- CEO Steven Kelly was recently named Ernst & Young
Entrepreneur of the Year 2022 Greater Philadelphia, an award that
recognizes the most ambitious leaders who are building and
sustaining successful, dynamic businesses around the world.
- Co-founder and Chief Scientific Officer Dr. Michael Klichinsky
co-invented the technology at the University of Pennsylvania.
The Sesen Bio Board of Directors unanimously urges you to
vote FOR the pending merger TODAY to ensure you receive the maximum
value of your shares.
The Sesen Bio Board of Directors unanimously recommends
stockholders vote “FOR”:
- Proposal No. 1: Approval, for purposes of Nasdaq Listing Rule
5635(a) and (b), of the issuance of shares of Sesen Bio common
stock to Carisma stockholders pursuant to the terms of the Merger
Agreement and the change of control of Sesen Bio resulting from the
merger
- Proposal No. 2: Approval of an amendment to the Sesen Bio
Certificate of Incorporation to effect the reverse stock split and
reduce the number of authorized shares of Sesen Bio common
stock
- Proposal No. 3: Approval of an amendment and restatement of the
2014 Incentive Plan
- Proposal No. 4: Approval of an amendment to the 2014 ESPP
- Proposal No. 5: Approval of an adjournment of the Sesen Bio
special meeting, if necessary, to solicit additional proxies
The pending merger is expected to close in the first quarter of
2023, subject to approval by Sesen Bio’s stockholders and other
customary closing conditions.
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 that was
previously 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 consummating the pending merger with Carisma
Therapeutics, Inc. 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 is first being 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. 2 Based on pro forma fully diluted
post-close combined company shares outstanding. 3 Reflects pro
forma company value including stated valuation for Sesen Bio,
Carisma, and fully diluted value of the Moderna convertible note. 4
Based on basic outstanding shares including unvested RSUs. 5
Amounts reflect potential payments in the future and have not been
discounted. 6 Based on precedent liquidation processes and company
projections of potential liabilities and operating expenses. 7
Assumes stockholder approval of liquidation in 2Q 2023 and a cash
balance of approximately $140 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230119005673/en/
Investors: Erin Clark, Vice President, Corporate Strategy &
Investor Relations ir@sesenbio.com
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