Carisma Therapeutics (CARM) Reports Q4, Provides Business Update

Carisma Therapeutics Inc. (NASDAQ: CARM) ("Carisma" or the "Company"), a clinical-stage biopharmaceutical company focused on discovering and developing innovative immunotherapies, today reported financial results for the fourth quarter, and full year ended December 31, 2023, and provided a business update.

"Clinical data generated with CT-0508 in Study 101 has shown that CAR-M is well-tolerated, feasible to manufacture and biologically active in HER2 positive solid tumors. Combining this data set with the multiple potential advantages we've seen preclinically around a monocyte-based approach gives us confidence that CT-0525 may be a significant advancement in CAR-M treatment," said Steven Kelly, President and Chief Executive Officer of Carisma. "We have therefore made the decision to focus our resources on the clinical development of the product we believe is best suited to deliver benefit to patients with significant unmet need."

Mr. Kelly continued, "We have also undertaken a careful review of our business and prioritized our other pipeline programs on those with the greatest overall potential and near-term milestones. This prioritization enables us to reduce expenses and streamline operations, including a restructuring of our workforce. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping patients."

Reprioritization Plan, Pipeline Updates, and Upcoming Milestones:

Ex Vivo Oncology

• Anti-human epidermal growth factor receptor 2 (Anti-HER2) Program
  • The Company's goal to identify a registrational profile for the product candidate in its anti-HER2 program in 2025 remains unchanged.
  • In Study 101, CT-0508, a chimeric antigen receptor macrophage (CAR-Macrophage), was well-tolerated, remodeled the tumor microenvironment (TME), and induced anti-tumor T cell immunity in patients with HER2 3+ tumors that achieved stable disease, despite suboptimal dose and a patient population with exhausted T cells.
  • In late March 2024, Carisma made the decision to prioritize CT-0525, a chimeric antigen receptor monocyte (CAR-Monocyte), as the development candidate in its anti-HER2 program due to the potential for a CAR-Monocyte to have an approximately 2,000-fold increase in total exposure compared to a CAR-Macrophage. As a result, the Company believes that CT-0525 will be able to build on CT-0508's observed clinical anti-tumor activity.
    
• CT-0525 (Anti-HER2 CAR-Monocyte)
  • In November 2023, Carisma announced the clearance of its Investigational New Drug application (IND) by the U.S. Food and Drug Administration (FDA) for CT-0525.
  • The Company expects to treat the first patient in the CT-0525 Phase 1 clinical study in the second quarter of 2024 and to report initial data from the study by year-end 2024.

• CT-0508 (Anti-HER2 CAR-Macrophage)
  • In September 2023, the Company reported preliminary data from 14 patients in the open label Phase 1 clinical study of CT-0508 (Study 101) designed to evaluate the safety, tolerability and manufacturing feasibility of CT-0508 along with several customary secondary endpoints.
  • The Company has also enrolled six patients in a Study 101 substudy evaluating the co-administration of CT-0508 and pembrolizumab, a programmed cell death protein 1 (PD-1) checkpoint inhibitor, evaluating the safety and tolerability of the co-administration, along with several customary secondary endpoints.
  • While the Company will continue all study operations for subjects enrolled in Study 101, it plans to stop recruitment of new patients into the study and its substudies, and expects to report data from the substudy evaluating the co-administration of CT-0508 and pembrolizumab in the second quarter of 2024.
    
• CT-1119 (Anti-Mesothelin CAR-Monocyte)
  • The Company has elected to pause further development of CT-1119 as part of its reprioritization plan, pending additional financing.

In Vivo Oncology

• Oncology (CAR-M + mRNA/LNP; Moderna Collaboration)
  • In November 2023, Carisma presented pre-clinical data from its in vivo program demonstrating that chimeric antigen receptor macrophages and monocytes (CAR-M) can be directly produced in vivo, successfully redirecting endogenous myeloid cells against tumor-associated antigens using mRNA/LNP. The data demonstrated feasibility, tolerability, and efficacy of in vivo CAR-M against metastatic solid tumors.
  • In December 2023, the Company announced the nomination of the first lead candidate in its collaboration with Moderna Tx, Inc., which will target an antigen present on a solid tumor with significant unmet medical need.

Fibrosis and Immunology

• Liver Fibrosis
  • Pre-clinical proof of concept data from the fibrosis program is targeted for the second quarter of 2024.

Corporate Updates

• As a result of the pipeline reprioritization and corporate restructuring, Carisma plans to reduce its workforce by approximately 37% in the second quarter of 2024.
  
• On April 1, 2024, Carisma announced the appointment of John Hohneker, M.D. to the Board of Directors of the Company, effective April 1, 2024. Dr. Hohneker brings over 30 years of extensive experience in drug development and leadership across the biotech and pharmaceutical sectors. The Company concurrently announced the resignation of Chidozie Ugwumba from Carisma's Board of Directors, also effective April 1, 2024.

Fourth Quarter and Full Year 2023 Financial Results

• Cash and Cash Equivalents: As of December 31, 2023, Carisma had cash and cash equivalents of $77.6 million.
  
• R&D Expenses: Research and development (R&D) expenses were $19.4 million and $74.1 million for the fourth quarter and full year ended December 31, 2023, respectively, compared to $18.1 million and $56.6 million for the fourth quarter and full year ended December 31, 2022, respectively. The increase of $17.5 million year-over-year was primarily due to a $8.4 million increase in direct costs associated with pre-clinical development of CT-0525, a $4.4 million increase in personnel costs due to growth in research and development employee headcount, a $2.7 million increase in the Company's facilities and other expenses resulting from increased laboratory space and laboratory supplies from expanded clinical and pre-clinical work, a $1.3 million increase due to costs associated with growth and expansion of pre-clinical activities towards submission of an IND for CT-0525, and a $0.9 million increase in direct costs associated with the pre-clinical development related to CT-1119, partially offset by a $0.2 million decrease in direct costs associated with CT-0508. The Company expects its research and development expenses to decrease in 2024 as it implements the revised operating plan, including a reduction in workforce, prioritization of CT-0525 and a pause in development of CT-1119. The Company expects that its expenses will increase again in future years as it continues to advance its clinical trials and potentially progress additional product candidates.
  
• G&A Expenses: General and administrative (G&A) expenses were $7.3 million and $29.5 million for the fourth quarter and full year ended December 31, 2023, respectively, compared to $1.0 million and $9.4 million for the fourth quarter and full year ended December 31, 2022, respectively. The increase of $20.1 million year-over-year was primarily attributable to a $9.2 million increase in personnel costs and a $7.5 million increase in professional fees. The increase in personnel costs was primarily due to non-recurring severance and other costs associated with the merger with Sesen Bio, Inc. on March 7, 2023 ("Merger") of $4.6 million, and higher personnel costs as a result of an increase in headcount to support operating as a public company of $4.6 million. The increase in professional fees primarily consisted of $5.3 million in costs associated with activities to support the transitioning to and operating as a public company and protecting the Company's IP portfolio, along with $2.2 million in legal fees and communication fees associated with the Merger. Insurance and taxes increased $2.1 million as a result of costs associated with operating as a public company, such as director and officer insurance. Facilities and supplies increased $0.8 million due to office expenditures resulting from an increased footprint, and other expenses increased $0.5 million. The Company expects that its general and administrative expenses will decrease in 2024 as its 2023 expenses included a significant amount of non-recurring costs related to the Merger and as it implements its revised operating plan, including reducing its workforce and decreasing expenses related to non-essential activities.
  
• Net Loss: Net loss was $86.9 million and $61.2 million for the years ended December 31, 2023, and 2022, respectively.

Outlook

Carisma anticipates that its cash and cash equivalents of $77.6 million as of December 31, 2023, combined with the expected cost savings from implementing the revised operating plan, are sufficient to sustain its planned operations into the third quarter of 2025.

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