On December 22, 2022, Athersys, Inc. (the "Company") received a written notice (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") that the Company is not in compliance with the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Requirement"), because the closing bid price of the Company’s common stock (the "Common Stock") was below $1.00 per share for 30 consecutive business days. The Notice does not impact the listing of the Common Stock on the Nasdaq Capital Market at this time (Filing, 8-K, Athersys, DEC 29, 2022, View Source [SID1234625672]).

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The Notice provided that, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from the date of the Notice, or until June 20, 2023, to regain compliance with the Bid Price Requirement. During this period, the Common Stock will continue to trade on the Nasdaq Capital Market. If at any time before June 20, 2023 the bid price of the Common Stock closes at or above $1.00 per share for a minimum of ten consecutive trading days, Nasdaq will provide written notification that the Company has achieved compliance with the Bid Price Requirement and the matter will be closed.

The Company is considering all available options to regain compliance with the Bid Price Requirement. However, there can be no assurance that the Company will be able to regain compliance with the rule or will otherwise be in compliance with other Nasdaq listing criteria. In the event the Company does not regain compliance by June 20, 2023, the Company may be eligible for an additional 180 calendar day compliance period to demonstrate compliance with the Bid Price Requirement. To qualify for the additional 180-day period, the Company will be required to meet the continued listing requirements for market value of publicly held shares and all other initial listing standards (with the exception of the Bid Price Requirement). In addition, the Company will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If the Company does not qualify for the second compliance period or fails to regain compliance during the second 180-day period, then Nasdaq will notify the Company that its Common Stock is subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq Hearings Panel.

On December 29, 2022 Sesen Bio, Inc. (Nasdaq: SESN) and Carisma Therapeutics Inc. (Carisma), a privately-held, clinical stage biopharmaceutical company focused on discovering and developing innovative immunotherapies, reported an amendment to their previously announced merger agreement dated September 20, 2022 (Press release, Sesen Bio, DEC 29, 2022, View Source [SID1234625669]).

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Under the terms of the amended merger agreement, which has been unanimously approved by the Boards of Directors of both companies, the one-time special cash dividend expected to be paid to Sesen Bio stockholders will be increased to approximately $70 million, or approximately $0.34 per share, representing the amount of excess cash available after Sesen Bio meets a required net cash minimum of $75 million and represents an increase from the previously stated up to $25 million special cash dividend, or up to $0.12 per share. Carisma’s previously announced approximately $30 million financing remains committed and is expected to close concurrently with the merger.

As part of the amended merger agreement, the contingent value right ("CVR") payable to Sesen Bio stockholders has been amended to also include proceeds from any sale of Vicineum and Sesen Bio’s other preclinical assets, in addition to any proceeds from the milestone payment under the Roche Asset Purchase Agreement.

The issuance of the special cash dividend and CVR remain contingent on the closing of the pending transaction. Following completion of the incremental financing from Carisma’s key investors and subsequent completion of the merger, Sesen Bio stockholders are expected to own 25.2% of the pro forma company consistent with the exchange ratio formula set forth in the original merger agreement.

Dr. Thomas Cannell, President and Chief Executive Officer of Sesen Bio, said, "Since first announcing the merger, both companies have engaged extensively with Sesen Bio stockholders and continued to explore ways to deliver greater value in connection with the closing. The $45 million increase to the expected special cash dividend delivers even more direct and immediate cash value. Furthermore, Sesen Bio stockholders will be positioned to realize the long-term benefits of the pending merger, including a meaningful ownership position in the combined company, and benefit from additional potential upside through the CVR. With support from its financial and legal advisors, the Board embarked on a thorough evaluation of its strategic alternatives, including liquidation, and conducted outreach to more than 100 companies, 42 of which submitted bids. Based on this comprehensive review process, we are confident that the pending merger maximizes stockholder value and is in the best interest of our stockholders. In the weeks ahead, we look forward to further engaging with our stockholders regarding the significant benefits of our pending merger with Carisma."

Steven Kelly, President and Chief Executive Officer of Carisma, added, "The revised terms of our pending merger with Sesen Bio reinforce our confidence in and commitment to completing this compelling transaction. Carisma’s stockholders continue to be enthusiastic about the potential merger and have reaffirmed their commitment to provide incremental financing to support the combined company. Following completion of our merger with Sesen Bio, the combined company will be positioned for continued success as we advance our mission to revolutionize cancer treatments."

The merger and related financing are expected to close in the first quarter of 2023, subject to approval by Sesen Bio stockholders and other customary closing conditions.

Update on Engagement with Investor Group

On November 18, 2022, Bradley Radoff and Michael Torok and their affiliates (collectively, the "Investor Group") disclosed beneficial ownership of 5.7% of Sesen Bio’s outstanding common stock, indicated to Sesen Bio that it would not support the pending merger with Carisma on the terms set forth in the merger agreement and subsequently demanded the payment of a special cash dividend to Sesen Bio stockholders in the amount of $0.50 per share or approximately $100 million. On December 1, 2022, the Investor Group disclosed ownership of 7.4% of Sesen Bio’s outstanding common stock. Both Sesen Bio, Carisma, and the companies’ respective advisors have engaged with the Investor Group in an attempt to foster a constructive dialogue and reach an amicable resolution regarding the pending merger.

During such discussions, Sesen Bio and Carisma offered to significantly increase the amount of the special cash dividend by $45 million to approximately $70 million. This would increase the immediate value paid to Sesen Bio stockholders while providing the go-forward combined company with the necessary net cash of $75 million to fund its operations, based on an expected Sesen Bio net cash as of immediately prior to close and before issuance of the cash dividend of approximately $145 million.

The Sesen Bio Board of Directors continues to believe the merger provides Sesen Bio stockholders with both immediate value and future upside, which is far superior to the risk, uncertainty and prolonged timeline associated with Sesen Bio re-initiating a process to evaluate (or re-evaluate) potential strategic alternatives, including a liquidation. Based on the comprehensive review process conducted with the Sesen Bio Board of Directors, the payment of a special cash dividend without a concurrent transaction would be unlikely.

However, despite the offer to increase the expected special cash dividend to approximately $70 million from up to $25 million and the immediate value represented by the dividend, CVR and continued ownership in the combined company – and despite the parties and their advisors providing the above information – the Investor Group nonetheless continues to demand an approximate $100 million special cash dividend.

SVB Securities is acting as exclusive financial advisor to Sesen Bio for the transaction and Hogan Lovells US LLP is serving as its legal counsel. Evercore is serving as lead financial advisor to Carisma for the transaction and BofA Securities, Inc. is also serving as financial advisor to Carisma for the transaction. Wilmer Cutler Pickering Hale and Dorr LLP is serving as legal counsel to Carisma. BofA Securities, Inc. and Evercore are serving as co-placement agents for Carisma’s concurrent financing and Shearman & Sterling LLP is serving as the placement agents’ legal counsel.

On December 29, 2022 Biocytogen Pharmaceuticals (Beijing) Co., Ltd. ("Biocytogen", HKEX: 02315) reported official launch of its fully human heavy chain antibody platform, RenNano (Press release, Biocytogen, DEC 29, 2022, View Source [SID1234625668]). RenNano is the third member of the RenMice family, joining RenMab and RenLite. Together, Biocytogen’s three RenMice platforms allow for the streamlined discovery and development of fully human monoclonal antibodies, bispecific/multispecific antibodies and single-domain antibodies (sdAbs, or nanobodies).

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While humans and mice generate antibodies that require heavy and light chain pairing to be functional, camels and sharks generate heavy-chain-only antibodies (HCAb), meaning their variable domains (VHH or sdAb) can function without pairing with the light chain. Owing to their nanometer-level size and small molecular weight, sdAbs have superior permeability, thus can cross the blood-brain barrier and infiltrate solid tumor tissues. In addition, the longer CDR3 region enables sdAbs to detect the otherwise hidden epitopes of GPCRs and other challenging targets. Since sdAbs have a simple structure, they are ideal building blocks for assembling bispecific/multispecific antibodies and CAR cell therapies.

While nanobodies have its unique advantages, animals that naturally produce HCAbs, such as camels, are difficult to be widely used for the preparation of monoclonal antibodies because they are large, having a long breeding cycle and few offspring. Meanwhile, humanization is required to develop camelid antibody sequences into drugs, which further increases the complexity and time of drug development.

Therefore, Biocytogen developed RenNano mouse that was engineered to produce HCAbs by modifying the constant region of the fully human RenMab model. Compared with other existing HCAb platforms, the in situ replacement of the mouse genes with the complete human heavy chain variable genes makes the RenNano mouse one of the most comprehensive fully human antibody platforms in the world. SdAb sequences generated from RenNano mice have the highest possible diversity, and do not require antibody humanization, which saves time and cost, and reduces risk of failure during later stages of drug development. Additionally, compared with camelids or other natural HCAb-producing species, mice are easier to breed and immunize. Our in-house studies show that immunization of RenNano mice can generate HCAbs with diverse CDR3 sequences that recognize a variety of epitopes. These HCAbs can recognize antigens with nM-level affinity independent of light chains. Moreover, antibodies derived from RenNano mice are capable of exerting biological functions both in vitro and in vivo. They are highly hydrophilic and have favorable developability characteristics.

The successful development of the RenNano platform expands Biocytogen’s capabilities of antibody discovery and broadens the applications of our antibody library. We welcome global partners to realize the full potential of our RenMice platforms and derived antibodies and bring benefit to the patients.

About RenMice

RenMice, i.e., RenMab, RenLite and RenNano mice, which have proprietary intellectual property rights, were developed by Biocytogen over the course of 5 years using size-unlimited, precise chromosome engineering technology (SUPCE). RenMice is one of the top 3 fully human antibody mice made by in situ replacement technology globally. All RenMice members contain full human heavy chain VDJ loci replaced in situ. Regarding antibody κ light chains, RenMab mouse contains full human VJ loci replaced in situ and RenLite mouse contains a single human VJ locus replaced in situ. RenNano mouse has modified heavy chain constant regions to generate functional HCAbs.

RenMice can generate robust immune response and produce fully human antibodies with great diversity, specificity, affinity and druggability. Using RenMice, Biocytogen has built 6 fully human antibody discovery platforms, covering various types of targets and modalities such as monoclonal antibody (RenMab), bispecific antibody and bispecific ADC (RenLite), nanobody (RenNano), TCR-mimic antibody for intracellular targets (HLA/RenMice, i.e., MHC humanized RenMice), and antibody platform against GPCR and other challenging targets (RenMice knockouts).

RenMice has been recognized by top biopharmaceutical companies around the world, including Merck KGaA, Xencor, BeiGene, Innovent, etc.

On December 29, 2022 Qilu Pharmaceutical reported the latest progress being made with several clinical studies involving its innovative bifunctional antibody, QL1706, at several international and Chinese academic conferences, including the American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2022 Annual Meeting, the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2022 Annual Meeting, the Chinese Society of Clinical Oncology (CSCO) 2022 Annual Meeting, and the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2022 Asia Congress (Press release, Qilu Pharmaceutical, DEC 29, 2022, View Source [SID1234625667]).

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Antibodies targeting programmed death receptor 1 and its ligand (PD-1/PD-L1) or cytotoxic T-lymphocyte-associated protein 4 (CTLA-4) have been widely used in clinical practices to treat a variety of advanced tumors. However, some combinations of dual immune checkpoint inhibitors (ICIs) limit the maximum clinical benefits for patients due to greater toxicity. QL1706 is an innovative combination of anti-PD-1 monoclonal antibody and anti-CTLA-4 monoclonal antibody, developed on the MabPair technology platform. QL1706 has significant advantages in terms of proportional allocation between CTLA-4 IgG1 and PD-1 IgG4 antibodies and flexibility in the selection of the Fc backbone. QL1706 introduces mutations onto the heavy chain of CTLA-4 antibodies, so CTLA-4 IgG1 has a shorter elimination half-life than PD-1 IgG4 (4-5 days and 6-9 days, respectively), resulting in shorter patient exposure to CTLA-4 antibodies. QL1706 bifunctional antibody combines the activity of both PD-1 and CTLA-4 antibodies, while helping to attenuate the toxicity caused by CTLA-4 antibodies.

At AACR (Free AACR Whitepaper)’s annual meetings in 2021 and 2022, Qilu Pharmaceutical reported the results of the Phase Ia/Ib studies of QL1706 for advanced solid tumors in a poster presentation (abstract numbers: CT119, CT520). In the phase Ia study, a dose of 0.3-10.0 mg/kg (intravenous, every 3 weeks for a cycle) was used in a 3+3 dose escalation study; and 5.0 mg/kg and 7.5 mg/kg were used as extension doses. In the QL1706 10 mg/kg dose group, two cases of dose-limiting toxicity (DLT) occurred, including one case of grade-3 thrombocytopenia with grade-1 gingival bleeding and one case of grade-4 immunomodulatory nephritis, based on which the final recommended dose (RP2D) in phase 2 was determined to be 5 mg/kg. As of September 30, 2021, among a total of 518 patients enrolled in phase Ia and Ib, the incidence of treatment-related adverse events (TRAEs) was 72.2%, and the incidence of grade-3 TRAEs or above was 13.5%. The most common TRAEs with an incidence greater than 10% were rashes (17.6%), pruritus (12.5%), and hypothyroidism (11.6%).

At the ASCO (Free ASCO Whitepaper) 2022 Meeting, Qilu Pharmaceutical announced the results of the study of QL1706 for the treatment of patients with advanced nasopharyngeal cancer (abstract no. 6034) and cervical cancer (abstract no. 5535) in a poster presentation. As of the data cut-off date, 110 patients with nasopharyngeal cancer were enrolled in Phase Ia/Ib studies, of whom 71.8% had received second-line therapy or above, and 43.6% immunotherapy. Objective response was achieved in 24.5% of the patients, with a confirmed ORR of 39.1% (9/23) and 38.5% (15/39) among patients who had received first- and second-line therapies or above without immunotherapy, respectively. After a median follow-up of 7.7 months, the median progression-free survival (PFS) was 2.0 months (95% CI 1.4-2.9), the 6-month PFS rate was 47.4% while median overall survival (OS) data was not yet available.

In the phase Ib study, 53 patients with cervical cancer were enrolled, 83% of whom had squamous carcinoma and 17% adenocarcinoma; and 62% and 38% had received first- and second-line (or above) treatment, respectively. As of the data cut-off date, 34.0% of the patients were still receiving QL1706 treatment, and 60.3% had witnessed reduction in target lesions. One (2%) patient achieved complete response (CR) and 14 (26%) partial response (PR), with a confirmed ORR of 28% and a disease control rate of 55%. The median follow-up was 5.6 months, with a median PFS of 4.2 months and a 6-month PFS rate of 37%. Median OS was not achieved.

At the CSCO 2022 meeting, Qilu Pharmaceutical announced in a poster presentation the results of the phase II clinical study of QL1706 in combination with chemotherapy with or without bevacizumab in first-line treatment of recurrent or metastatic cervical cancer (paper number: 12865). Among the 57 patients with recurrent or metastatic cervical cancer enrolled, 30 were treated with QL1706 in combination with chemotherapy and QL1706 in combination with chemotherapy plus bevacizumab, with an overall ORR of 77.2% and DCR of 98.2%. Among them, the ORR and DCR of the group treated with QL1706 in combination with chemotherapy were 74.1% and 100.0%, respectively; and QL1706 in combination with chemotherapy plus bevacizumab 80.0% and 96.7%, respectively. As of the data cut-off date, median PFS and median OS were not achieved. Based on the results of this study, a phase III clinical study (NCT05446883) designed to evaluate the efficacy and safety of QL1706 in combination with paclitaxel-cisplatin/carboplatin with or without bevacizumab in the first-line treatment of recurrent or metastatic cervical cancer has now been conducted.

At the recent ESMO (Free ESMO Whitepaper) Asia Congresss, Qilu Pharmaceutical announced in a poster presentation the results of the Phase II clinical study of QL1706 in combination with chemotherapy with or without bevacizumab for the treatment of patients with advanced EGFR wild-type and EGFR mutant non-small cell lung cancer (abstract numbers: 622 and 637).

As various studies on QL1706 progress, its clinical layout have been covered for several major disease areas including lung cancer, gastrointestinal tumors, gynecological tumors, head and neck tumors and urological tumors. In addition to first-line treatment for cervical cancer, QL1706 will also be researched in more phase III clinical studies on first-line treatment and adjuvant therapy for non-small cell lung cancer and liver cancer, which is expected to create a new landscape of immunotherapy, providing more treatment options for patients and more possibilities for unmet clinical needs.

As previously reported, on September 20, 2022, Sesen Bio, Inc., a Delaware corporation ("Sesen Bio"), Seahawk Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Sesen Bio ("Merger Sub"), and CARISMA Therapeutics Inc., a Delaware corporation ("Carisma"), entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), pursuant to which, among other things, and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Merger Sub will merge with and into Carisma, with Carisma continuing as a wholly-owned subsidiary of Sesen Bio and the surviving corporation of the merger (the "Merger") (Filing, 8-K, Sesen Bio, DEC 29, 2022, View Source [SID1234625666]). The Merger Agreement is filed as Exhibit 2.1 to Sesen Bio’s Current Report on Form 8-K filed on September 21, 2022 (the "September Form 8-K"). The material terms of the Merger Agreement were described in Item 1.01 of the September Form 8-K and are incorporated by reference herein.

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On December 29, 2022, Sesen Bio, Merger Sub and Carisma entered into the First Amendment to the Merger Agreement (the "Amendment"). The Amendment amends the Merger Agreement to, among other things, (i) reduce the minimum net cash of Sesen Bio required at the closing of the Merger from $100 million to $75 million, and (ii) increase the one-time special cash dividend to be paid to Sesen Bio stockholders from up to $25 million to the amount of cash available after Sesen Bio meets the $75 million net cash minimum.

In addition, as part of the Amendment, the parties agreed to revise the form of contingent rights agreement (the "CVR Agreement") to include the proceeds from any sale of Sesen Bio’s non-cash assets (net of customary deductions) to the contingent value right ("CVR") to be distributed by way of dividend to holders of Sesen Bio common stock on the record date. The contingent payments under the CVR Agreement, if they become due, will be payable to a rights agent for subsequent distribution to the holders of the CVRs. In the event that no such proceeds are received, holders of the CVRs will not receive any payment pursuant to the CVR Agreement. There can be no assurance that any cash payment will be made or that any holders of CVRs will receive any amounts with respect thereto.

As previously disclosed, the right to the contingent payments contemplated by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement. The CVRs will not be evidenced by a certificate or any other instrument and will not be registered with the Securities and Exchange Commission. The CVRs will not have any voting or dividend rights and will not represent any equity or ownership interest in Sesen Bio or any of its affiliates. No interest will accrue on any amounts payable in respect of the CVRs.

The foregoing descriptions of the Amendment and the CVR Agreement do not purport to describe all of the terms of such agreements and are qualified by reference to the Amendment, which is attached as Exhibit 2.1 hereto and incorporated herein by reference, and the form CVR Agreement attached thereto.