On February 28, 2022 Sesen Bio (Nasdaq: SESN), a late-stage clinical company developing targeted fusion protein therapeutics for the treatment of patients with cancer, reported operating results for the fourth quarter and full year ended December 31, 2021 (Press release, Sesen Bio, FEB 28, 2022, View Source [SID1234609160]). During the fourth quarter, the Company worked with the US Food and Drug Administration (FDA) to identify an anticipated regulatory path toward potential resubmission of a Biologics License Application (BLA) for the Company’s lead program, Vicineum for the treatment of non-muscle invasive carcinoma in situ (CIS) of the bladder in patients previously treated with adequate or less than adequate bacillus Calmette-Guérin (BCG).1
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"Our interactions with the FDA during the fourth quarter provided us further clarity on the steps required to resubmit a BLA for Vicineum and to bring a therapy to market that we believe has the potential to save and improve the lives of patients," said Dr. Thomas Cannell, president and chief executive officer of Sesen Bio. "We have bolstered our team’s expertise in order to carry out that mission, and we look forward to executing our strategic priorities leading into, and coming out of, our upcoming Type C Meeting in March."
US Regulatory Update
On October 29, 2021, Sesen Bio participated in a productive Chemistry, Manufacturing and Controls (CMC) Type A Meeting with the FDA. Following the meeting, the Company believes it has a clear understanding of what additional information regarding CMC is required for potential resubmission of a BLA. Other key takeaways from the meeting include the FDA confirming that:
Vicineum manufactured using the proposed commercial process is comparable to Vicineum used in prior clinical trials.
Sesen Bio can utilize Vicineum manufactured during process validation for any future clinical trials needed to address issues raised in the Complete Response Letter (CRL) regarding the BLA for Vicineum for the treatment of BCG-unresponsive non-muscle invasive bladder cancer (NMIBC), and that any of these future trials can proceed while addressing CMC issues raised in the CRL.
On December 8, 2021, Sesen Bio participated in a productive Clinical Type A Meeting with the FDA. Following the meeting, the Company announced that it plans to conduct an additional Phase 3 clinical trial for potential resubmission of a BLA. Other key takeaways from the meeting include:
The trial design may include a randomized clinical trial assessing the safety and efficacy of Vicineum compared to investigators’ choice of intravesical chemotherapy.
The trial may include both patients who have received adequate BCG and patients who have received less than adequate BCG.
The anticipated randomized trial design is aligned with guidance the Company has received from the European Medicines Agency, which may help to coordinate the regulatory paths forward for Vicineum in the US and the European Union. The Company was also encouraged by the FDA to submit the final results from the Phase 3 VISTA trial for Vicineum for the treatment of BCG-unresponsive NMIBC with a BLA resubmission.
On January 7, 2022, the FDA granted Sesen Bio’s request for a Type C Meeting to discuss the study protocol for an additional Phase 3 clinical trial that the Company plans to conduct for potential resubmission of a BLA for Vicineum for the treatment of non-muscle invasive carcinoma in situ (CIS) of the bladder in patients previously treated with adequate or less than adequate BCG. The Type C Meeting has been scheduled for March 28, 2022.
Other Business Updates
On January 6, 2022, Sesen Bio disclosed that it achieved a $20 million milestone payment pursuant to the Company’s exclusive license agreement (Roche License Agreement) with Roche for legacy Interleukin-6 (IL-6) antagonist antibody technology owned by Sesen Bio. Following this milestone payment, Sesen Bio has cumulatively received $50 million in upfront and milestone payments, with an additional $220 million in potential future milestone payments remaining under the Roche License Agreement.
On February 25, 2022, the Board of Directors (Board) of Sesen Bio disclosed the completion of an independent internal review conducted by outside counsel with the assistance of subject matter experts (Review). The Review took place over the course of five months, involved full cooperation from the Company’s management team, a review of more than 600,000 documents, and 39 interviews of current and former employees and consultants. As a result of the Review, the Board continues to fully support the Company’s current management team and believes no changes or amendments relating to the Company’s prior disclosures to the Securities and Exchange Commission (SEC) or FDA relating to Vicineum, the Phase 3 VISTA trial for Vicineum for the treatment of BCG-unresponsive NMIBC, or the Company’s BLA for Vicineum are warranted. The Company intends to work cooperatively with the FDA in preparing for an additional Phase 3 clinical trial for Vicineum.
Fourth Quarter and Full-Year 2021 Financial Results
Cash Position: Cash, cash equivalents and restricted cash were $162.6 million as of December 31, 2021, compared to $55.4 million as of December 31, 2020. The increase of $107.2 million was due primarily to net proceeds from at-the-market (ATM) offerings.
R&D Expenses: Research and development expenses for the fourth quarter of 2021 were $7.0 million compared to $5.6 million for the same period in 2020. For the year ended December 31, 2021, research and development expenses were $25.3 million compared to $29.2 million for the same period in 2020. The full year decrease of $3.9 million was due primarily to lower costs associated with technology transfer and manufacturing ($7.4 million). This was partially offset by increases in employee-related compensation driven by increased headcount and the retention program implemented after receipt of the CRL in August 2021 ($2.1 million), regulatory and clinical consulting fees ($1.0 million) and certain other R&D expenses, none of which were individually material ($0.5 million).
G&A Expenses: General and administrative expenses for the fourth quarter of 2021 were $8.6 million compared to $3.4 million for the same period in 2020. For the year ended December 31, 2021, general and administrative expenses were $29.4 million compared to $14.3 million for the same period in 2020. The full year increase of $15.1 million was due primarily to increases in employee-related compensation ($5.0 million), legal costs ($4.8 million), and marketing and commercial expenses driven by preparation for the commercial launch prior to receipt of the CRL ($4.1 million). Additionally, accounting services ($0.4 million), insurance expenses ($0.4 million), information technology expenses ($0.3 million) and other G&A expenses, none of which were individually material ($0.1 million), contributed to the increase.
Restructuring Charge: Restructuring expenses were $5.5 million for the year ended December 31, 2021 compared to no restructuring expenses for the year ended December 31, 2020. The increase was due to one-time costs associated with the Restructuring Plan implemented in response to the CRL for severance and other employee-related costs ($2.8 million) and the termination of certain contracts ($2.7 million).
Non-Cash Related Expenses:
Intangibles impairment charge for the year ended December 31, 2021 was $31.7 million. In light of the CRL, the Company performed an interim impairment test for In-Process Research and Development (IPR&D) assets, which resulted in the decrease in fair value of Vicineum’s US rights.
The change in fair value of contingent consideration was a decrease of $56.8 million for the year ended December 31, 2021 compared to a decrease of $11.2 million for the same period in 2020. This was primarily due to management’s assessment of a lower probability of regulatory success and a refinement of timelines given the CRL.
Income Tax Benefit (Provision): Benefit from income tax was $8.3 million for the year ended December 31, 2021 compared to $1.4 million tax expense for the same period in 2020. In connection with the intangibles impairment charge in the third quarter of 2021, the Company wrote-down the associated deferred tax liability by $8.6 million as a benefit.
Net Income (Loss): Net income was $8.9 million, or $0.04 per basic and per diluted share, for the fourth quarter of 2021, compared to net loss of $15.0 million, or $0.11 per basic and diluted share, for the same period in 2020. For the year ended December 31, 2021, net loss was $0.3 million, or $0.00 per share, compared to net loss of $22.5 million, or $0.19 per share, for the same period in 2020. The full year decrease of $22.2 million in net loss was due primarily to the $20 million milestone achieved by Roche initiating a Phase II clinical study pursuant to the Roche License Agreement.
1As per the 2018 FDA guidance on NMIBC, adequate BCG is defined as at least one of the following: (i) at least five of six doses of an initial induction course plus at least two of three doses of maintenance therapy or (ii) at least five of six doses of an initial induction course plus at least two of six doses of a second induction course.
About Vicineum
Vicineum, a locally administered fusion protein, is Sesen Bio’s lead product candidate being developed for the treatment of non-muscle invasive carcinoma in situ (CIS) of the bladder in patients previously treated with adequate or less than adequate BCG. Vicineum 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. Vicineum is constructed with a stable, genetically engineered peptide tether to ensure the payload remains attached to the antibody binding fragment until it is internalized by the cancer cell. This fusion protein design 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 non-muscle invasive bladder cancer (NMIBC) cells with minimal to no EpCAM expression observed on normal bladder cells. Sesen Bio is currently in the follow-up stage of a Phase 3 clinical trial in the US for the treatment of BCG-unresponsive NMIBC. In February 2021, the FDA accepted the Company’s Biologics License Application (BLA) file for Vicineum for the treatment of BCG-unresponsive NMIBC, granted Priority Review for the BLA and set a Prescription Drug User Fee Act (PDUFA) date of August 18, 2021. On August 13, 2021, the Company received a Complete Response Letter (CRL) from the FDA regarding its BLA for Vicineum. After meeting with the FDA, the Company plans to conduct an additional Phase 3 clinical trial for Vicineum for the treatment of non-muscle invasive CIS of the bladder in patients previously treated with adequate or less than adequate BCG in connection with the potential resubmission of a BLA. Additionally, Sesen Bio believes that cancer cell-killing properties of Vicineum promote an anti-tumor immune response that may potentially combine well with immuno-oncology drugs, such as checkpoint inhibitors. For this reason, the activity of Vicineum in BCG-unresponsive NMIBC is also being explored at the US National Cancer Institute in combination with AstraZeneca’s immune checkpoint inhibitor durvalumab.