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Sesen Bio Reports Second Quarter 2018 Financial Results and Pipeline Updates

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FDA Grants Fast Track Designation for Vicinium in NMIBC

Company Focused on Defining Registration Pathway for Vicinium and
Preparing for BLA Submission in 2019

Sesen Bio, Inc. (NASDAQ:SESN), a late-stage clinical company developing
next-generation antibody-drug conjugate (ADC) therapies for the
treatment of cancer, today reported pipeline updates and operating
results for the second quarter ended June 30, 2018.

"The first half of 2018 was full of successful milestones for Sesen Bio,
and I am excited to have joined the company at such an important time in
its evolution," said Dr. Thomas Cannell, president and chief executive
officer of Sesen Bio, who was recently appointed on August 7, 2018. "The
three-month data from the Phase 3 VISTA Trial demonstrate a strong
complete response rate and favorable safety with Vicinium for high-grade
non-muscle invasive bladder cancer, and we look forward to assessing
twelve-month efficacy data in less than a year's time. Now, with Fast
Track designation for Vicinium, we are focused on advancing our
engagement with the FDA, kicking off critical manufacturing readiness
activities, initiating pre-commercial efforts and preparing for our very
first BLA submission for Vicinium for this highly deserving patient
population. I am very confident in what the future holds for Sesen Bio
and look forward to delivering on the important milestones we have
ahead."

Business Update

  • In June 2018, Sesen Bio completed an underwritten public offering of
    its common stock raising gross proceeds of approximately $46 million.
    The company believes this financing extends the company's cash runway
    into 2020 based on its current operating plan.

Vicinium Program Updates

  • In August 2018, the U.S. Food and Drug Administration (FDA) granted
    Fast Track designation to Vicinium™ for the treatment of
    BCG-unresponsive, high-grade non-muscle invasive bladder cancer
    (NMIBC). Fast Track designation is intended to expedite the
    development and review process of therapeutics that address unmet
    medical needs, including opportunities for more frequent interactions
    with the FDA.
  • In June 2018, the National Cancer Institute (NCI) initiated patient
    dosing in the Phase 1 trial of Vicinium in combination with
    AstraZeneca's PD-L1 checkpoint inhibitor, Imfinzi™ (durvalumab). The
    NCI is evaluating the combination under a Cooperative Research and
    Development Agreement, which was executed in June 2017.
  • In May 2018, Sesen Bio presented positive, three-month data from its
    ongoing Phase 3 VISTA Trial of Vicinium for the treatment of patients
    with high-grade NMIBC who have been previously treated with bacillus
    Calmette-Guérin (BCG), during a plenary session at the American
    Urological Association Annual Meeting.
    • In the cohort of patients with carcinoma in situ (CIS) with or
      without papillary disease whose cancer recurred within six months
      of their last course of BCG treatment, treatment with Vicinium
      demonstrated a complete response rate of 39 percent. In evaluable
      patients in the cohort of patients with CIS with or without
      papillary disease whose cancer recurred after six months, but
      before 11 months, after their last course of BCG treatment,
      treatment with Vicinium demonstrated a complete response rate of
      80 percent. This translates into a 42 percent complete response
      rate for the combined cohorts of CIS patients who were
      BCG-unresponsive within 12 months of their last BCG treatment.
    • In patients with papillary disease without CIS whose cancer
      recurred within six months of their last course of BCG treatment,
      treatment with Vicinium demonstrated a 68 percent recurrence-free
      rate at three months.
    • To date, Vicinium has been well-tolerated by patients in the VISTA
      Trial. Sesen Bio anticipates reporting twelve-month data from its
      Phase 3 VISTA Trial in mid-2019.

Second Quarter 2018 Financial Results

  • Cash Position: Cash and cash equivalents were $62.9 million as
    of June 30, 2018, compared to $15.8 for the same period in 2017.
  • R&D Expenses: Research and development expenses were $2.8
    million for the quarter ended June 30, 2018, compared to $2.9 million
    for the same period in 2017. This decrease was due primarily to a
    reduction in Vicinium-related development expenses.
  • G&A Expenses: General and administrative expenses were $2.4
    million for the quarter ended June 30, 2018, compared to $2.2 million
    for the same period in 2017. This increase was due primarily to an
    increase in professional fees.
  • Net Loss: Net loss was $9.0 million, or $0.16 per share, for
    the quarter ended June 30, 2018, compared to net loss of $7.3 million,
    or $0.30 per share, for the same period in 2017.
  • Financial Guidance: Following the company's public offering in
    June 2018, Sesen Bio believes it will have capital sufficient to fund
    its current operating plans into 2020.

About the VISTA Clinical Trial
The VISTA Trial is an
open-label, multicenter, single-arm Phase 3 clinical trial evaluating
the efficacy and tolerability of Vicinium™ in patients with high-grade
non-muscle invasive bladder cancer (NMIBC) that is carcinoma in situ
(CIS), which is cancer found on the inner lining of the bladder that has
not spread into muscle or other tissue) and/or papillary, which is
cancer that has grown from the bladder lining out into the bladder but
has not spread into muscle or other tissue, who have been previously
treated with bacillus Calmette-Guérin (BCG). The primary endpoint of the
trial is the complete response rate in patients with CIS with or without
papillary disease. Patients in the trial receive locally administered
Vicinium twice a week for six weeks, followed by once-weekly treatment
for another six weeks, then treatment every other week for up to two
years. Twelve-month data are anticipated in mid-2019. To learn more
about the Phase 3 VISTA Trial, please visit www.clinicaltrials.gov and
search the identifier NCT02449239.

About Vicinium™
Vicinium™, also known as VB4-845, is Sesen
Bio's lead product candidate and is a next-generation antibody-drug
conjugate (ADC), developed using the company's proprietary Targeted
Protein Therapeutics platform, for the treatment of high-grade
non-muscle invasive bladder cancer (NMIBC). Vicinium 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 (ETA).
Vicinium is constructed with a stable, genetically engineered peptide
linker to ensure the payload remains attached until it is internalized
by the cancer cell, which is believed to decrease the risk of toxicity
to healthy tissues, thereby improving its safety. In prior clinical
trials conducted by Sesen Bio, EpCAM has been shown to be overexpressed
in NMIBC cells with minimal to no EpCAM expression observed on normal
bladder cells. Sesen Bio is currently conducting the Phase 3 VISTA
Trial, designed to support the registration of Vicinium for the
treatment of high-grade NMIBC in patients who have previously received
two courses of bacillus Calmette-Guérin (BCG) and whose disease is now
BCG-unresponsive. Twelve-month data from the trial are anticipated in
mid-2019. Additionally, Sesen Bio believes that Vicinium's cancer
cell-killing properties promote an anti-tumor immune response that may
potentially combine well with immuno-oncology drugs, such as checkpoint
inhibitors. The activity of Vicinium in BCG-unresponsive NMIBC is also
being explored at the US National Cancer Institute in combination with
AstraZeneca's immune checkpoint inhibitor durvalumab.

About Sesen Bio
Sesen Bio, Inc. is a late-stage clinical
company advancing next-generation antibody-drug conjugate therapies for
the treatment of cancer based on the company's Targeted Protein
Therapeutics platform. The company's lead program, Vicinium™, also known
as VB4-845, is currently in a Phase 3 registration trial, the VISTA
Trial, for the treatment of high-grade non-muscle invasive bladder
cancer. Twelve-month data from the trial are anticipated in mid-2019.
Vicinium incorporates a tumor-targeting antibody fragment and a protein
cytotoxic payload into a single protein molecule designed to selectively
and effectively kill cancer cells while sparing healthy cells. 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
the Company, the Company's strategy, future operations, and other
statements containing the words "anticipate," "believe," "estimate,"
"expect," "intend," "may," "plan," "predict," "project," "target,"
"potential," "will," "would," "could," "should," "continue," and similar
expressions, constitute forward-looking statements within the meaning of
The Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including: the
uncertainties inherent in the initiation and conduct of clinical trials,
the possibility that the three-month data of the Phase 3 VISTA Trial are
not indicative of final clinical results and final clinical trial
results may not be positive with regard to the safety or efficacy of
Vicinium, our ability to successfully develop our product candidates and
complete our planned clinical programs, our ability to obtain marketing
approvals for our product candidates, expectations regarding our ongoing
clinical trials, availability and timing of data from clinical trials,
whether interim results from a clinical trial will be predictive of the
final results of the trial or results of early clinical studies will be
indicative of the results of future studies, the adequacy of any
clinical models, expectations regarding regulatory approvals,
expectations regarding the adequacy of our existing capital resources to
fund our operations into 2020 and other factors discussed in the "Risk
Factors" section of the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other reports filed with the Securities and
Exchange Commission. In addition, the forward-looking statements
included in this press release represent the Company's views as of the
date hereof. The Company anticipates that subsequent events and
developments will cause the Company's views to change. However, while
the Company may elect to update these forward-looking statements at some
point in the future, the Company specifically disclaims any obligation
to do so. These forward-looking statements should not be relied upon as
representing the Company's views as of any date subsequent to the date
hereof.

 

SESEN BIO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS

(unaudited)
(in thousands)

         
June 30, December 31,
2018

 

2017

 
Assets
Current assets:

Cash and cash equivalents

 

$ 62,961 $ 14,680

Prepaid expenses and other current assets

 

  806     301  

Total current assets

 

63,767 14,981
Property and equipment, net 421 522
Restricted cash 20 10
Intangible assets 46,400 46,400
Goodwill 13,064 13,064
Other assets   41     120  
Total assets $ 123,713   $ 75,097  
 
Liabilities and stockholders' equity
Current liabilities:

Accounts payable

 

$ 1,310 $ 907

Accrued expenses

 

  3,223     3,813  

Total current liabilities

 

4,533 4,720
Other liabilities 288 215
Deferred tax liability 12,528 12,528
Contingent consideration 42,300 39,600
 
Stockholders' equity:

Common stock

77 35

Additional paid-in capital

 

229,239 170,330

Accumulated deficit

 

  (165,252 )   (152,331 )
Total stockholders' equity   64,064     18,034  
Total liabilities and stockholders' equity $ 123,713   $ 75,097  
 
 
SESEN BIO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)
(in
thousands, except per share data)
             
 

Three Months Ended
June 30,

Six Months Ended
June 30,

2018

2017

2018

2017

 
Total revenue $ - $ - $ - $ 425
Operating expenses:
Research and development 2,779 2,909 6,034 5,783
General and administrative 2,351 2,241 4,303 4,454
Loss from change in fair value of contingent consideration   3,900     2,200     2,700     3,700  
Total operating expenses   9,030     7,350     13,037     13,937  
Loss from operations (9,030 ) (7,350 ) (13,037 ) (13,512 )
Other income, net   72     34     116     135  
Net loss and comprehensive loss $ (8,958 ) $ (7,316 ) $ (12,921 ) $ (13,377 )
Net loss per share —basic and diluted $ (0.16 ) $ (0.30 ) $ (0.28 ) $ (0.54 )
Weighted-average number of common shares used in net
loss per share —basic and diluted   56,421     24,685     46,105     24,648  

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