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Topline Summary
Carisma Therapeutics (NASDAQ:CARM), formerly Sesen Bio, is a developmental biotech exploring the potential of cell therapies for cancer management. They hope that by exploiting immune cells called macrophages that they can continue to push the field of cell therapies forward. But cash concerns and limited clinical trial data make this something difficult to recommend at this time. For the risk-tolerant among you, though, the low valuation does signal room for a catalyst to move the needle. It’s just unclear what that catalyst might be in the near term.
Pipeline Overview
CT-0508
The main project being developed by CARM at this time is CT-0508, a cell product consisting of the patient’s macrophages (as opposed to T cells used in the currently approved cell therapy approaches) expressing a chimeric antigen receptor [CAR] against HER2, which is a massively important target in solid tumor oncology.
This therapy is currently in phase 1 clinical study in patients with advanced, HER2-overexpressing solid tumors. The latest update was presented back in September, which included 14 patients who received CT-0508 either as a multi-day infusion or as a single-day bolus infusion. No dose-limiting toxicities have been identified to date, with no high-grade toxicities classically associated with CAR-based therapies, like cytokine release syndrome or neurotoxicity.
Out of the 14 patients, 28.6% experienced disease stabilization. No objective responses were observed.
A third cohort of patients receiving additional pembrolizumab has yet to be reported on. The bolus group and combination group continue to enroll patients. There was no word on when to expect the next data update for CT-0508, but it would be reasonable to expect another readout at ASCO in June.
Other notable preclinical developments
CARM also has a noteworthy collaboration with Moderna, seeking to use mRNA delivered via lipid nanoparticles to make their CAR macrophages. A few weeks ago, CARM announced that they have nominated a lead candidate to undergo further IND-enabling testing before pursuing first-in-human studies. This project, CT-1119, targets mesothelin, and the first in vivo data were presented at this past year’s SITC meeting.
The company also announced back in November the clearance of an IND for CT-0525, another CAR-based therapy targeting HER2, but this time expressed in monocytes, which are the precursors to macrophages that can presumably be manufactured much more quickly. It will be the first such monocyte-based CAR therapy to be evaluated in solid tumors, and CARM expects to begin the trial in the first half of 2024.
Financial Overview
Per their latest quarterly filing, CARM held $97.6 million in total current assets, including $83.1 million in cash and equivalents and another $11 million in marketable securities. Their operational expenses for the quarter were $22.3 million after accounting for $3.8 million in collaboration revenue.
After interest income, the net loss for the quarter was $21.4 million. This gives CARM an operational runway of approximately 4-5 quarters.
Strengths and Risks
CARM’s biggest weakness at this time is easily their cash position relative to where they stand in the clinical development pipeline. So far, the only data we’ve seen cannot be called impressive by any stretch, since disease stabilization isn’t really a meaningful endpoint that moves the needle. I’ll be quick to point out that this was a phase 1 study, which is simply NOT designed to show efficacy, but you would like to see some kind of signal. The phase 1 trial so far suggests feasibility with the approach, but does not give an idea that it’s going to lead to better outcomes.
And I would not hitch my horse on adding pembrolizumab being the deciding factor as to whether CT-0508 is going to work out. They are now attempting to lean on biomarker data and preclinical evidence of synergy with anti-PD-1 therapy, but it would be much better to get a clear signal that CT-0508 is working on its own before we find out whether adding on pembrolizumab adds more or not.
That said, if it does work, there are interesting advantages with a macrophage or monocyte-based cell therapy. For starters, it does not require lymphodepleting chemotherapy before infusion, which should reduce the risk of serious toxicities associated with wiping out the immune system. Furthermore, the manufacturing time of these therapies is on the order of days, whereas approved CAR T-cell therapies can take weeks.
The Moderna collaboration is another potential strength for CARM, since it lends some big pharma gravitas and backing to their ongoing efforts. However, this is not an advanced collaboration worth potentially billions of dollars at this time, and it’s definitely not clear how much, if, and when CARM will get in terms of developmental milestones.
Bottom-Line Summary
In 2024, CARM themselves guide catalysts that are difficult to get too excited over, including updates on their CAR phase 1 trials, as well as starting other trials. Let me be clear; these are important developments. But for me, they signal a company in the nascent stages where things are perhaps at their riskiest. Furthermore, a negative catalyst they do not advertise is that 2024 is going to be a year where they’ll need to address cash. It appears most likely that they’ll need to do this through an equity raise, and if their market cap of $100 million (give or take) holds, then this will be done in a position of weakness, either creating a large chunk of dilution or failing to definitively address cash challenges.
Moreover, their operational expenses are only going to go up as they open more trials. Given these facts, and the early stage of the company, I’m putting this as a “hold” for me. I can’t recommend buying it unless you are interested in the very high-risk, high-reward scenario (and it would take a big surprise to realize that reward), but I also don’t see a massive downside risk at this time, either.
