On April 1, 2024 HCW Biologics Inc. (the "Company" or "HCW Biologics") (NASDAQ: HCWB), a clinical-stage biopharmaceutical company focused on discovering and developing novel immunotherapies to lengthen healthspan by disrupting the link between inflammation and age-related diseases, reported financial results and recent business highlights for its fourth quarter and fiscal year ended December 31, 2023 (Press release, HCW Biologics, APR 1, 2024, View Source [SID1234641667]).

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Dr. Hing C. Wong, Founder and CEO of HCW Biologics, stated, "These are exciting times at HCW Biologics. We achieved two major clinical milestones, with the completion of the Phase 1 clinical study to evaluate HCW9218 in solid tumors and the Phase 1b study to evaluate HCW9218 in pancreatic cancer. While it is still quite early in the clinical development process and we have only seen data when HCW9218 is administered as a monotherapy, we believe there are signs that HCW9218 provides clinical benefits to patients who have previously failed multiple lines of standard-of-care therapies. We believe that HCW9218 shows the potential to be a first in class immunotherapeutic cancer treatment."

Dr. Wong continued, "Now we are on the verge of initiating multiple Phase 2 clinical studies, including randomized trials, to evaluate HCW9218 as a treatment in combination with standard-of-care therapy in patients with cancer. We intend to focus on ovarian and pancreatic cancer, and we hope to opportunistically join studies with investigators who want to add an arm to their study using HCW9218 in combination with their therapy. This approach could give us an opportunity to assess HCW9218 in more cancer indications that we believe will provide valuable data to inform us of the most appropriate indications and regimens for future registration trials."

"Another piece of exciting news for 2024 is that we are planning on the initiation of investigative studies for age-related diseases using HCW9218. We are planning on using the Recommended Phase 2 Dose level of HCW9218 identified in our two now completed Phase 1/1b cancer trials. Dr. Wong added. "We believe age-associated dermatological conditions and diseases, such as senile lentigo and deep wrinkles, will be the first age-related indications we investigate beyond cancer.

Business Highlights

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The Phase 1 clinical trial to evaluate HCW9218 in solid tumors and the Phase 1b clinical trial to evaluate HCW9218 in pancreatic cancer were completed in February 2024. In the Phase 1 study, over 70% of patients with ovarian cancer (5/7) showed evidence of stable disease. In the Phase 1b study, 13% (2/15) of patients who participated in the study showed evidence of stable disease.
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The first Phase 2 clinical study to evaluate HCW9218 in patients with ovarian cancer will be sponsored by the University of Pittsburgh Medical Center. This fully randomized trial will have one arm of the study treating patients with HCW9218 with a neoadjuvant chemotherapy.
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The Company’s investment in its patent portfolio is beginning to result in new patent awards from the USPTO. Most importantly, among the patents the Company was awarded are the fundamental patents which protect the technology on which the Company’s lead molecules are based.
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On January 10, 2024, the Company terminated the credit agreement with Prime Capital Ventures, whereupon the Company was entitled to receive a refund of $5.3 million that was funded to establish an interest reserve account under the terms of the credit agreement. Due to the probability of default, the Company recognized a reserve for credit losses of $5.3 million as of December 31, 2023. However, the Company intends to pursue available remedies to recover these funds.
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On February 20, 2024, the Company completed a $2.5 million private placement of its common stock, at a price of $1.40 per share, which was a 25% premium over the market price on the closing date. Investors included certain officers and directors of the Company.
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As of March 31, 2024, the Company entered into legally binding agreements to issue $10.0 million of secured notes from investors, including certain of our officers and directors as well as other investors, $2.0 million of which was funded by the issuance date of the audited financial statements.

Fourth Quarter 2023 and Year End Financial Results

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Revenues: Revenues for the fourth quarters ended December 31, 2022 and 2023 were $1.3 million and $1.3 million, respectively. Revenues for the years ended December 31, 2022 and 2023 were $6.7 million and $2.8 million, respectively. Revenues were derived exclusively from the sale of licensed molecules to the Company’s licensee, Wugen. The licensed molecules are one of the inputs for manufacturing Wugen’s products. In 2023, revenues were negatively impacted by changes in Wugen’s clinical development program. In addition, Wugen suffered delays in ramping up its manufacturing process which also limited purchases of molecules licensed by the Company.
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Research and development (R&D) expenses: R&D expenses for the fourth quarters ended December 31, 2022 and 2023 were $2.9 million and $2.1 million, respectively. The $793,616 decrease, or 27%, resulted from a decline in manufacturing and materials expense. R&D expenses for the years ended December 31, 2022 and 2023 were $9.4 million and $7.7 million, respectively. The $1.7 million decrease, or 18%, resulted from a decline in expenses related to manufacturing and materials expense, preclinical expenses and performance-based bonuses. Manufacturing costs declined in 2023 because the Company had already made the necessary supplies of its lead molecules, HCW9218 and HCW9302, to fulfill the requirements for planned clinical development activities in 2024-2025. Preclinical costs in 2022 and 2023 are related to IND-enabling activities required to prepare an IND application to evaluate HCW9302 in a Phase 1b/2 clinical trial. A change in preclinical activities from 2022 to 2023 was the underlying reason for a decline in preclinical expenses. Setup costs were incurred for toxicology studies and other IND-enabling studies in 2022. Costs declined in 2023, as the Company was focused on additional research studies required for the Company’s IND submission.
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General and administrative (G&A) expenses: G&A expenses for the fourth quarters ended December 31, 2022 and 2023 were $3.0 million and $3.6 million, respectively. The $628,910 increase, or 20%, was attributable to an increase in legal expenses related to the Altor/NantCell matter. G&A expenses for the years ended December 31, 2022 and 2023 were $8.3 million and $13.3 million, respectively. The $5.0 million increase, or 60%, was attributable to an increase in legal expenses associated with the Company’s ongoing arbitration with Altor/NantCell. See further discussion of the Altor/NantCell arbitration in "Financial Guidance."
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Reserve for Credit Losses. In the period ended December 31, 2023, the Company recognized a reserve for credit losses related to a $5.3 million interest reserve deposit established in connection with a credit agreement the Company terminated. While the Company is entitled to recover these funds, facts available as of December 31, 2023 indicate it is not probable.
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Net loss: Net loss for the fourth quarters ended December 31, 2022 and 2023 were $5.4 million and $10.7 million, respectively. Net loss for the years ended December 31, 2022 and 2023 was $14.9 million and $25.0 million, respectively.

Financial Guidance

As of December 31, 2023, there was substantial doubt about our ability to continue as a going concern. Since that time, we had successful financings of $12.5 million, for which we received funds or have a legally binding commitment to so as of March 31, 2024. And, we continue with other fundraising efforts that we are targeting to complete in the next three to six months. Under the guidance of Topic 205-40 for going concern assessment, we evaluated whether we mitigated the substantial doubt over our ability to remain a going concern for the next 12 months from the filing date. If no additional financings occur after the filing date, we believe the relevant conditions that brought about substantial doubt can be alleviated if we implement a plan that includes certain adjustments to our strategic and operating plans, such as cutting back on the number of investigative studies and Phase 2 clinical trials we initiate; reducing salaries and other spending, and limiting the amount of cash used to reduce accounts payable, as well as other adjustments to alleviate substantial doubt.

On December 23, 2022, Claimants Altor and NantCell ("Altor/NantCell") filed a complaint against the Company in the U.S. District Court for the Southern District of Florida (the "Court"), alleging claims of misappropriation of trade secrets, tortious interference with contractual relations, inducement of breach of fiduciary duty, and specific performance/injunction for assignment of patents and patent applications, among other claims. That same day, Altor/NantCell also initiated an arbitration against the Company’s CEO and Founder, Dr. Wong, based on early identical allegations and alleging breach of contract, breach of fiduciary duty, and fraudulent concealment, among other claims. The Company moved to compel arbitration and the parties ultimately stipulated to the same. On April 27, 2023, in connection with the Altor/NantCell matter, the Court approved the parties’ stipulation and ordered the parties to arbitration. On May 1, 2023, Altor/NantCell filed a demand against the Company before JAMS. On May 3, 2023, Altor/NantCell dismissed the federal court action without prejudice and the Court ordered the case dismissed without prejudice and closed the case. Altor/NantCell’s proceeding against the Company is now proceeding in arbitration before JAMS, with an arbitration hearing scheduled for May 20, 2024. In addition, on March 26, 2024, Altor/NantCell gave notice that they are filing a complaint (the "Complaint") against the Company in the Chancery Court of the State of Delaware for the contribution of legal fees and expenses advanced to Dr. Wong in connection with the arbitration discussed above. Prior to the filing of the Complaint, Altor/NantCell had previously sought advancement from the Company and the Company agreed to advance 50% of Dr. Wong’s legal fees going forward from December 2023. On January 8, 2024, Altor/NantCell reserved their right to pursue contribution against the Company for 50% of the amount Altor/NantCell sent for advancement of expenses for Dr. Wong. In the Complaint, Altor/NantCell seek 50% of the fees they have already advanced to Dr. Wong, a declaration that the Company has an obligation to contribute 50% of the advancement of Dr. Wong’s expenses including 50% of Dr. Wong’s expenses incurred in connection with the arbitration through final resolution of the matter, and costs and fees in bringing this action. Although adverse decisions (or settlements) may occur in arbitration, it is not possible to reasonably estimate the possible loss or range of loss, if any, associated therewith at this time. As such, no accrual for these matters has been recorded within the Company’s financial statements. The Company incurred significant legal expenses in connection with this matter in the period ended December 31, 2023, and expects to continue to incur material costs and expenses in the first half of 2024.

On April 1, 2024 Xilio Therapeutics, Inc. (Nasdaq: XLO), a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology therapies for people living with cancer, reported pipeline progress and business updates and reported financial results for the fourth quarter and full year ended December 31, 2023 (Press release, Xilio Therapeutics, APR 1, 2024, View Source [SID1234641662]).

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"With our recently announced partnership with Gilead for XTX301, our tumor-activated IL-12, and additional financing from existing investors, we believe we are well-positioned to continue to advance our differentiated pipeline of tumor-activated I-O therapies and achieve potential near-term clinical milestones and value-drivers," said René Russo, Pharm.D., president and chief executive officer of Xilio. "Looking ahead, we are focused on rapidly advancing clinical development for XTX301 and XTX101, our tumor-activated, Fc-enhanced anti-CTLA-4, with anticipated clinical data for each of these programs later this year, as well as continuing to leverage our novel research platform to design and develop tumor-activated bispecific and immune cell engager molecules."

Pipeline and Business Updates

XTX101: tumor-activated anti-CTLA-4

XTX101 is an investigational tumor-activated, Fc-enhanced, high affinity binding anti-CTLA-4 designed to block CTLA-4 and deplete regulatory T cells when activated (unmasked) in the tumor microenvironment (TME). XTX101 is currently being evaluated in combination with atezolizumab in an ongoing Phase 1 clinical trial in patients with advanced solid tumors.

Xilio today reaffirmed plans to:

● Select a recommended Phase 2 dose for XTX101 in combination with atezolizumab in the second quarter of 2024.
● Subject to the results of the Phase 1 combination dose escalation portion of the trial, initiate the Phase 2 portion of the trial for XTX101 in combination with atezolizumab in patients with microsatellite stable colorectal cancer (MSS CRC) in the third quarter of 2024.
● Report initial Phase 2 data for XTX101 in combination with atezolizumab in approximately 20 patients with MSS CRC in the fourth quarter of 2024 and in approximately 20 additional patients (40 patients total) in the first quarter of 2025.

XTX301: tumor-activated, engineered IL-12

XTX301 is an investigational tumor-activated, engineered IL-12 molecule designed to potently stimulate anti-tumor immunity and reprogram the TME of poorly immunogenic "cold" tumors towards an inflamed, or "hot," state.

In March 2024, Xilio and Gilead Sciences, Inc. (Gilead) announced an exclusive license agreement for Xilio’s tumor-activated IL-12 program, including XTX301. Under the terms of the agreement:

● Xilio is eligible to receive $43.5 million in upfront payments, including a cash payment of $30.0 million and an initial equity investment by Gilead of approximately $13.5 million in Xilio common stock. The initial equity investment closed on March 28, 2024, and the $30.0 million upfront cash payment is payable by Gilead within a specified time period promptly following signing of the license agreement.
● Xilio will be eligible to receive up to $604.0 million in additional contingent payments, including proceeds from up to three additional equity investments by Gilead, a $75.0 million transition fee and specified development, regulatory and sales-based milestones. Xilio will also be eligible to receive tiered royalties ranging from high single digits to mid-teens on annual global net product sales.
● Prior to the potential transition fee, Xilio is eligible to receive up to a total of $29.0 million in additional equity investments and a development milestone payment.
● Xilio will be responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through dose expansion. Following the delivery by Xilio of a specified clinical data package for XTX301, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the agreement and payment by Gilead of the $75.0 million transition fee. If Gilead elects not to transition responsibilities for development and commercialization of the licensed products and pay the transition fee, then the license agreement will automatically terminate.

For more information, read the press release here.

XTX301 is currently being evaluated in Phase 1 dose escalation in patients with advanced solid tumors.

● In January 2024, Xilio reported encouraging preliminary safety data into the third dose level in the ongoing Phase 1 clinical trial. As of the data cutoff date of January 5, 2024, XTX301 had been administered at doses up to 45 ug/kg, which is nearly 100 times the maximum tolerated dose of recombinant human IL-12, and was generally well-tolerated with no dose-limiting toxicities observed.
● Xilio today reaffirmed plans to report Phase 1 safety, pharmacokinetic and pharmacodynamic data for XTX301 in patients with advanced solid tumors in the fourth quarter of 2024.

XTX202: tumor-activated, engineered IL-2

XTX202 is an investigational tumor-activated, beta-gamma biased IL-2 designed to potently stimulate CD8+ effector T cells and natural killer (NK) cells without concomitant stimulation of regulatory T cells when activated (unmasked) in the tumor microenvironment.

● In March 2024, Xilio announced additional data from its Phase 2 clinical trial evaluating XTX202 in patients with metastatic renal cell carcinoma or unresectable or metastatic melanoma. For more information, read the press release here.
● Together with previously reported data, Xilio believes these additional data further validate the company’s tumor-activated approach and support the broad potential for XTX202 as a combination therapy. Xilio plans to explore strategic opportunities to continue to develop XTX202 in combination with other agents.

Tumor-Activated Bispecific and Immune Cell Engager Programs

In March 2024, Xilio announced plans to focus its research-stage development efforts on tumor-activated bispecifics and immune cell engagers, including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers.

Preclinical data from the company’s first bispecific program, XTX501, a tumor-activated PD-1/IL-2 bispecific development candidate, will be featured at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2024 in San Diego, California from April 5-10, 2024.

● Presentation title: A tumor-activated PD1/IL2 bispecific molecule, designed to overcome IL-2 receptor-mediated clearance, improve tolerability and stimulate antigen-experienced CD8+ T cells in the tumor microenvironment of murine models
● Session date and time: Sunday, April 7, 2024, at 1:30 pm to 5:00 pm P.T.
● Abstract number: 719
● Poster board number: 5

Corporate Updates

● In March 2024, Xilio announced a private placement equity financing with certain existing accredited investors, including Bain Capital Life Sciences and Rock Springs Capital. Xilio anticipates receiving aggregate gross proceeds from the private placement of approximately $11.3 million, before deducting placement agent fees and expenses payable by the company. The private placement is expected to close on April 2, 2024, subject to the satisfaction of customary closing conditions. Xilio expects to use the proceeds from the private placement to fund working capital and other general corporate purposes.
● In March 2024, Xilio announced plans to implement a strategic portfolio prioritization designed to focus its resources on rapidly advancing clinical development for XTX301 and XTX101 and leveraging the company’s promising research platform to advance differentiated tumor-activated bispecific and immune cell engager molecules. As part of the strategic portfolio reprioritization, Xilio also announced plans to discontinue further investment in XTX202 as a monotherapy and implement an approximately 21% workforce reduction.

Year-End and Fourth Quarter 2023 Financial Results

● Cash Position: Cash and cash equivalents were $44.7 million as of December 31, 2023, compared to $120.4 million as of December 31, 2022.
● Research & Development (R&D) Expenses: R&D expenses were $11.7 million for the quarter ended December 31, 2023, compared to $15.0 million for the quarter ended December 31, 2022. R&D expenses were $52.1 million for the year ended December 31, 2023, compared to $59.2 million for the year ended December 31, 2022. The year-over-year decrease was primarily driven by decreases in manufacturing activities, XTX301 preclinical development activities, XTX101 clinical activities and personnel-related costs. These decreases were partially offset by increases in XTX301 and XTX202 clinical activities.
● General & Administrative (G&A) Expenses: G&A expenses were $6.4 million for the quarter ended December 31, 2023, compared to $8.2 million for the quarter ended December 31, 2022. G&A expenses were $27.0 million for the year ended December 31, 2023, compared to $29.9 million for the year ended December 31, 2022. The year-over-year decrease was primarily driven by decreases in professional and consulting fees, directors’ and officers’ liability insurance and stock-based compensation expenses.

● Net Loss: Net loss was $17.7 million for the quarter ended December 31, 2023, compared to $22.5 million for the quarter ended December 31, 2022. Net loss was $76.4 million for the year ended December 31, 2023, compared to $88.2 million for the year ended December 31, 2022.

Financial Guidance

Based on its current operating plans, Xilio anticipates that its cash and cash equivalents as of December 31, 2023, together with (i) the $30.0 million upfront payment under the license agreement with Gilead, (ii) the approximately $13.5 million in proceeds from the initial private placement with Gilead, which closed on March 28, 2024, and (iii) the approximately $11.3 million in proceeds from the private placement, which is expected to close on April 2, 2024 (subject to customary closing conditions), and after giving effect to (a) one-time costs and anticipated future cost savings associated with Xilio’s strategic portfolio reprioritization and workforce reduction announced in March 2024 and (b) the repayment in the first quarter of 2024 of the outstanding loan balance under Xilio’s loan and security agreement with Pacific Western Bank, will be sufficient to fund its operating expenses and capital expenditure requirements into the second quarter of 2025.

About XTX101 (anti-CTLA-4) and the Phase 1/2 Combination Clinical Trial

XTX101 is an investigational tumor-activated, Fc-enhanced, high affinity binding anti-CTLA-4 monoclonal antibody designed to block CTLA-4 and deplete regulatory T cells when activated (unmasked) in the tumor microenvironment (TME). In the third quarter of 2023, Xilio entered into a co-funded clinical trial collaboration with Roche to evaluate XTX101 in combination with atezolizumab (Tecentriq) in a multi-center, open-label Phase 1/2 clinical trial. Xilio is currently evaluating the safety and tolerability of the combination in patients with advanced solid tumors in the Phase 1 dose escalation portion of the clinical trial. Subject to the results of Phase 1 combination dose escalation, Xilio plans to evaluate the safety and efficacy of the combination in the Phase 2 portion of the clinical trial in patients with microsatellite stable colorectal cancer. Please refer to NCT04896697 on www.clinicaltrials.gov for additional details.

About XTX301 (IL-12) and the Phase 1 Clinical Trial

XTX301 is an investigational tumor-activated IL-12 designed to potently stimulate anti-tumor immunity and reprogram the tumor microenvironment (TME) of poorly immunogenic "cold" tumors towards an inflamed or "hot" state. In March 2024, Xilio entered into an exclusive license agreement with Gilead Sciences, Inc. for Xilio’s tumor-activated IL-12 program, including XTX301. Xilio is currently evaluating the safety and tolerability of XTX301 as a monotherapy in patients with advanced solid tumors in a first-in-human, multi-center, open-label Phase 1 clinical trial. Please refer to NCT05684965 on www.clinicaltrials.gov for additional details.

About XTX202 (IL-2) and the Phase 2 Clinical Trial

XTX202 is an investigational tumor-activated, beta-gamma biased IL-2 designed to potently stimulate CD8+ effector T cells and natural killer (NK) cells without concomitant stimulation of regulatory T cells when activated (unmasked) in the TME. The Phase 2 clinical trial is a multi-center, open-label trial designed to evaluate the safety and efficacy of XTX202 as a monotherapy in patients with unresectable or metastatic melanoma and metastatic renal cell carcinoma who have progressed on standard-of-care treatment. Please refer to NCT05052268 on www.clinicaltrials.gov for additional details.

On April 1, 2024 Vincerx Pharma, Inc. (Nasdaq: VINC), a biopharmaceutical company aspiring to address the unmet medical needs of patients with cancer through paradigm-shifting therapeutics, reported that it will host a virtual investor event reviewing preliminary clinical data from its Phase 1 dose-escalation study of VIP236 and provide an update on pipeline progress on Monday, April 8, 2024, at 2 PM PT (Press release, Vincerx Pharma, APR 1, 2024, View Source [SID1234641661]). This will follow the poster presentation of the VIP236 clinical data at the AACR (Free AACR Whitepaper) Annual Meeting 2024.

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The virtual investor event will include presentations by Ahmed Hamdy, MD, CEO of Vincerx Pharma, along with key opinion leaders, Uma Borate, MD, MBBS, Clinical Associate Professor in the Division of Hematology at The Ohio State University Comprehensive Cancer Center – Arthur G. James Cancer Hospital and Richard J. Solove Research Institute, and Vivek Subbiah, MD, Chief of Early-Phase Drug Development at Sarah Cannon Research Institute.

To register and view the live webcast, please visit: View Source An archived replay of the webcast will be available on the Vincerx Investor Page website following the conclusion of the live event.

On April 1, 2024 Carisma Therapeutics Inc. (Nasdaq: CARM) ("Carisma" or the "Company"), a clinical-stage biopharmaceutical company focused on discovering and developing innovative immunotherapies, reported financial results for the fourth quarter, and full year ended December 31, 2023, and provided a business update (Press release, Carisma Therapeutics, APR 1, 2024, View Source [SID1234641660]).

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"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

o The Company’s goal to identify a registrational profile for the product candidate in its anti-HER2 program in 2025 remains unchanged.

o 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.

o 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)

o 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.

o 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)

o 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.

o 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.

o 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)

o 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)

o 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.

o 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

o 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.

About CT-0525

CT-0525 is a first-in-class, ex vivo gene-modified autologous chimeric antigen receptor-monocyte (CAR-Monocyte) cellular therapy intended to treat solid tumors that overexpress human epidermal growth factor receptor 2 (HER2). It is being studied in a multi-center, open label, Phase 1 clinical trial for patients with advanced/metastatic HER2-overexpressing solid tumors that have progressed on available therapies. The CAR-Monocyte approach has the potential to address some of the challenges of treating solid tumors with cell therapies, including tumor infiltration, immunosuppression within the tumor microenvironment, and antigen heterogeneity. CT-0525 has the potential to enable significant dose escalation, enhance tumor infiltration, increase persistence, and reduce manufacturing time compared to CT-0508.

About CT-0508

CT-0508 is an ex vivo gene-modified autologous chimeric antigen receptor-macrophage (CAR-Macrophage) cellular therapy intended to treat solid tumors that overexpress HER2. It is being evaluated in a Phase 1 multi-center clinical trial that focuses on patients with recurrent or metastatic HER2-overexpressing solid tumors whose cancers do not have approved HER2-targeted therapies or who do not respond to treatment. The Phase 1 clinical trial marks the first time that engineered macrophages are being studied in humans.

On April 1, 2024 RS Oncology reported two abstracts with comprehensive preclinical and translational data in support of their lead clinical oncology compound RSO-021, have been accepted for poster presentations at the Annual Meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper), taking place April 5-10, 2024 in San Diego (Press release, RS Oncology, APR 1, 2024, View Source [SID1234641659]). RSO-021 is a first-in-class peroxiredoxin 3 (PRX3) covalent inhibitor that disables a critical antioxidant defense system in the mitochondria of tumor cells. Results from the completed Phase 1 clinical trial (clinical trials.gov #NCT05278975) will be an oral presentation on June 3rd, at the upcoming ASCO (Free ASCO Whitepaper) meeting in Chicago. Currently patients are being recruited to the Phase 2 dose expansion cohorts of the MITOPE clinical trial.

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"Covalent inactivation of PRX3 by RSO-021 represents a viable anticancer approach by targeting a universal tumor vulnerability of oxidative stress. The results we present at the AACR (Free AACR Whitepaper) Annual Meeting will highlight fundamental tumor cell features that are exploitable by this novel treatment." said Brian Cunniff, Chief Scientific Officer of RS Oncology.

Approximately 90% of mesotheliomas and 15-20% of solid tumors present with malignant pleural effusion (MPE) at late stage leaving the patients with poor prognoses and limited options. RSO-021 is a local therapy for patients with MPE arising from mesothelioma or advanced metastatic tumors. "The discoveries presented at AACR (Free AACR Whitepaper) highlight tumor cell features that are associated with sensitivity to RSO-021, providing a potential strategy to maximize patient response to RSO-021", added George Naumov, Chief Operations Officer of RS Oncology.

Details of the poster presentations:

Title: First-in-class peroxiredoxin 3 (PRX3) inhibitor RSO-021 triggers mesenchymal-to-epithelial transition in mesothelioma

Presenter: Brian Cunniff, CSO of RS Oncology

Session Category and Title: Experimental and Molecular Therapeutics – Other Cellular Mechanisms for Anticancer Drug Action

Session Date and Time: Tuesday Apr 9, 2024 9:00 AM – 12:30 PM

Location: Poster Section 29

Abstract Number: 4716

Title: SLC7A11 modulates sensitivity to the first-in-class mitochondrial peroxiredoxin 3 inhibitor thiostrepton (RSO-021) via a ferroptosis independent pathway

Presenter: Brian Cunniff, CSO of RS Oncology

Session Category and Title: Molecular/Cellular Biology and Genetics- Cellular Stress Responses 1

Session Date and Time: Sunday Apr 7, 2024 1:30 PM – 5:00 PM

Location: Poster Section 16

Published Abstract Number: 384

The full abstracts will be published on March 22, 2024, in an online-only proceedings supplement to the AACR (Free AACR Whitepaper) journal, Cancer Research.