carm-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________

FORM 10-Q

____________________________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________to _________________

Commission File Number: 001-36296

Carisma Therapeutics Inc.

(Exact Name of Registrant as Specified in its Charter)

____________________________________________________________


Delaware			26-2025616
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

3675 Market Street, Suite 401 Philadelphia, PA			19104
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (267) 491-6422

(Former Name or Former Address, if Changed Since Last Report)

____________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of exchange
on which registered

Common Stock, $0.001 par value per share

CARM

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 6, 2024, the registrant had 41,544,975 shares of common stock, $0.001 par value per share, outstanding.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q may include, but are not limited to, statements about:

•our ability to obtain additional financing;

•the timing and conduct of our pre-clinical studies and clinical trial of CT-0525 for solid tumors that overexpress human epidermal growth factor receptor 2, or HER2;

•the timing and conduct of our pre-clinical studies for fibrosis;

•our plans to conduct discovery and pre-clinical testing of the development of in vivo chimeric antigen receptor macrophage and monocyte, or CAR-M, therapeutics for up to twelve oncology targets, as well as multiple other targets and indications in connection with our collaboration with ModernaTX, Inc., or Moderna;

•our ability to replicate in later clinical trials positive results found in pre-clinical studies and early-stage clinical trials of our product candidates;

•our ability to successfully enroll patients in our Phase 1 clinical trial of CT-0525 and complete clinical trials;

•our plans to conduct discovery and pre-clinical testing of other product candidates;

•our ability to realize the anticipated benefits of our research and development programs, strategic partnerships, research and licensing programs and academic and other collaborations;

•the timing of applying for and receiving, and our ability to maintain, marketing approvals from applicable regulatory authorities for our product candidates;

•our ability to obtain and maintain intellectual property protection and regulatory exclusivity for CT-0525 and any other product candidates we are developing or may develop in the future;

•acceptance of CT-0525 and any other product candidates we are developing or may develop, if and when approved, by patients, the medical community and third-party payors;

•our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;

•the potential advantages of our product candidates;

•our estimates regarding the potential market opportunity for our product candidates;

•our commercialization and manufacturing capabilities and strategy;

•the potential impact of public health epidemics or pandemics and of global economic developments on our business, operations, strategy and goals;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•our competitive position;

•the impact of government laws and regulations;

•political and economic developments; and

•such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 including Part I, Item 1A, “Risk Factors” and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 including Part II, Item 1A, "Risk Factors."

In some cases, forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “goals,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those expressed or implied by the forward-looking statements. No forward-looking statement is a promise or a guarantee of future performance.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date

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of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “Carisma,” “we,” “us,” and “our” refer to Carisma Therapeutics Inc. (formerly Sesen Bio, Inc.) and its consolidated subsidiaries.

References to “Legacy Carisma” refer to CTx Operations, Inc. (formerly CARISMA Therapeutics Inc.) and references to “Sesen Bio” refer to Sesen Bio, Inc. prior to completion of the business combination on March 7, 2023 in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of September 20, 2022, as amended, by and among the Company, Legacy Carisma and Seahawk Merger Sub, Inc., a wholly owned subsidiary of the Company, or Merger Sub, pursuant to which Merger Sub merged with and into Legacy Carisma, with Legacy Carisma continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger, or the Merger.

Pursuant to the Merger Agreement, we changed our name from “Sesen Bio, Inc.” to “Carisma Therapeutics Inc.” Following the completion of the Merger, the business conducted by us became primarily the business conducted by Legacy Carisma, which is a biopharmaceutical company dedicated to developing a differentiated and proprietary cell therapy platform focused on engineered macrophages, cells that play a crucial role in both the innate and adaptive immune response.

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CARISMA THERAPEUTICS INC.

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		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Interim Financial Statements (Unaudited).	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations and Comprehensive Loss	2
	Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Consolidated Statements of Cash Flows	4
	Notes to the Interim Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	30
Item 4.	Controls and Procedures.	30

PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings.	31
Item 1A.	Risk Factors.	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	88
Item 5.	Other Information.	84
Item 6.	Exhibits.	89

SIGNATURES		90

iii

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CARISMA THERAPEUTICS INC.

Unaudited Consolidated Balance Sheets

(in thousands, except share and par value)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	40,362	$	77,605

Prepaid expenses and other assets	10,359		2,866
Total current assets	50,721		80,471
Property and equipment, net	6,531		6,764
Right of use assets – operating leases	1,945		2,173
Deferred financing costs	142		146
Total assets	$	59,339	$	89,554

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,033	$	3,933
Accrued expenses	9,241		7,662
Deferred revenue	659		1,413
Operating lease liabilities	1,179		1,391
Finance lease liabilities	1,283		544
Other current liabilities	1,222		965
Total current liabilities	15,617		15,908
Deferred revenue	41,250		45,000
Operating lease liabilities	795		860
Finance lease liabilities	502		328
Other long-term liabilities	815		926
Total liabilities	58,979		63,022
Commitments and contingencies (Note 6)

Stockholders’ equity:
Preferred stock $0.001 par value, 5,000,000 shares authorized, none issued or outstanding	—		—
Common stock $0.001 par value, 350,000,000 shares authorized, 41,544,975 and 40,609,915 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	41		40
Additional paid-in capital	275,561		271,594

Accumulated deficit	(275,242)		(245,102)


Total stockholders’ equity	360		26,532
Total liabilities and stockholders’ equity	$	59,339	$	89,554

See accompanying notes to unaudited interim consolidated financial statements.

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CARISMA THERAPEUTICS INC.

Unaudited Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Collaboration revenues	$	9,197	$	3,560	$	12,594	$	6,803
Operating expenses:
Research and development	15,307		18,518		32,769		35,159
General and administrative	5,560		6,007		11,005		15,581
Total operating expenses	20,867		24,525		43,774		50,740
Operating loss	(11,670)		(20,965)		(31,180)		(43,937)
Change in fair value of derivative liability	—		—		—		(84)
Interest income (expense), net	508		1,177		1,040		(300)
Pre-tax loss	(11,162)		(19,788)		(30,140)		(44,321)
Income tax expense	—		(88)		—		(197)
Net loss	$	(11,162)	$	(19,876)	$	(30,140)	$	(44,518)

Share information:
Net loss per share of common stock, basic and diluted	$	(0.27)	$	(0.49)	$	(0.73)	$	(1.67)
Weighted-average shares of common stock outstanding, basic and diluted	41,543,553		40,258,107		41,241,009		26,596,712
Comprehensive loss
Net loss	$	(11,162)	$	(19,876)	$	(30,140)	$	(44,518)
Unrealized gain on marketable securities	—		129		—		306
Comprehensive loss	$	(11,162)	$	(19,747)	$	(30,140)	$	(44,212)

See accompanying notes to unaudited interim consolidated financial statements.

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CARISMA THERAPEUTICS INC.

Unaudited Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share data)

Convertible preferred stock

Stockholders’ Equity (Deficit)

Common stock

Additional
paid-in
capital

Accumulated
other
comprehensive
(loss) income

Accumulated
deficit

Noncontrolling
interests

Total

Amount

Balance at December 31, 2023

SEC Form 10-Q filed by Carisma Therapeutics Inc.