Sesen Bio (Nasdaq: SESN), a late-stage clinical company developing targeted fusion protein therapeutics for the treatment of patients with cancer, today reported operating results for the first quarter ended March 31, 2022. During the quarter, the Company continued to engage with the US Food and Drug Administration (FDA) to identify an anticipated regulatory path toward potential resubmission of a Biologics License Application (BLA) for Vicineum for the treatment of non-muscle invasive bladder cancer (NMIBC). The Company has also initiated a process to review strategic alternatives with the goal of maximizing shareholder value.
US Regulatory Update
On March 28, 2022, Sesen Bio participated in a Type C Meeting with the FDA. During the meeting, the FDA agreed to a majority of the Companys proposed protocol and statistical analysis plan design elements for an additional Phase 3 clinical trial that it plans to conduct for potential resubmission of a BLA for Vicineum for the treatment of NMIBC. The Company plans to meet with the FDA in mid-2022 to align on the remaining outstanding items related to the additional Phase 3 clinical trial, and intends to request that meeting in the coming weeks.
In addition to working with the FDA to align on a study design, the Company has been addressing comments related to Chemistry, Manufacturing and Controls (CMC) that were included in the Complete Response Letter (CRL) for the BLA for Vicineum for the treatment of bacillus Calmette-Gurin (BCG)-unresponsive NMIBC. The Company has completed technical work on several of the key CMC comments and is continuing to make progress on the remaining items. The Companys responses to the CMC comments will ultimately be reviewed by the FDA upon a potential BLA resubmission.
Other Business Updates
On January 6, 2022, Sesen Bio disclosed that it achieved a $20 million milestone payment pursuant to the Companys 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, as well as royalty payment obligations on future sales, remaining under the Roche License Agreement. As part of the Roche License Agreement, Roche also maintains the right to fully acquire the IL-6 technology.
On May 3, 2022, Sesen Bio announced that it had initiated a process to review strategic alternatives with the goal of maximizing shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of the Company, a merger, acquisition or other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of some of the Companys proprietary technologies. The Company is actively working with an investment bank in this process. Pending any decision to undertake any strategic alternative, the Company is continuing its development activities in accordance with its existing business strategy.
On June 22, 2022, Sesen Bio will hold its Annual Meeting of Stockholders, one of the primary purposes of which will be to approve a proposal for a reverse stock split, which includes a proportionate reduction in authorized shares of common stock. The proposed reverse stock split, if approved, should allow the Company to remain listed on the Nasdaq Global Market, which should increase the range and attractiveness of strategic alternatives that the Company is able to consider to maximize shareholder value.
First Quarter 2022 Financial Results
Cash Position: Cash, cash equivalents and restricted cash were $169.8 million as of March 31, 2022, compared to $110.0 million as of March 31, 2021.
R&D Expenses: Research and development expenses for the first quarter of 2022 were $4.8 million compared to $6.1 million for the same period in 2021. The decrease of $1.3 million was primarily due to lower costs associated with technology transfer and manufacturing ($1.4 million), regulatory and clinical consulting fees ($0.6 million) and license milestone fees ($0.6 million), which were partially offset by increases in employee-related compensation, primarily driven by increased headcount and the retention program implemented in the fourth quarter of 2021 ($1.2 million), and other R&D expenses ($0.1 million).
G&A Expenses: General and administrative expenses for the first quarter of 2022 were $9.0 million compared to $5.3 million for the same period in 2021. The increase of $3.7 million was due primarily to increases in legal expenses related, in part, to the independent internal review completed in February 2022 ($3.0 million), employee-related compensation, primarily driven by increased headcount and the retention program implemented in the fourth quarter of 2021 ($1.1 million), insurance expense ($0.1 million) and other general expenses ($0.2 million). This was partially offset by a decrease in consultant fees incurred in preparation for commercial launch as a result of the subsequent CRL received in August 2021 ($0.7 million).
Net Loss: Net loss was $0.8 million, or $0.00 per basic and per diluted share, for the first quarter of 2022, compared to net loss of $55.5 million, or $0.35 per basic and diluted share, for the same period in 2021. The decrease of $54.7 million in net loss was primarily attributable to the non-cash decrease in fair value of contingent consideration ($61.1 million), partially offset by decreased license and related revenue recognized ($4.3 million).