CAMBRIDGE, Mass.– Sesen Bio, Inc. (Nasdaq: SESN) today issued the following statement reiterating the Company’s confidence in, and commitment to, the pending merger with Carisma Therapeutics Inc. (Carisma) as the best path forward for stockholders.
The Sesen Bio Board of Directors remains confident that the pending merger with Carisma represents the most value maximizing path forward.
The Board, in consultation with its financial and legal advisors, undertook a four-month comprehensive review of strategic alternatives, including evaluating a merger, sale of assets, resumption of R&D and liquidation of assets and dissolution. After reaching out to over 100 companies and evaluating 42 bids, the Board unanimously determined the pending merger with Carisma was the most value maximizing option for all stockholders, delivering an implied total of $0.88 per share1, that could otherwise not be achieved.
The Company believes the proposed alternative from Bradley Radoff and Michael Torok and their affiliates (collectively, the “Investor Group”) hinges on an unfeasible distribution scenario with inaccurate assumptions that would leave considerable stockholder value on the table. Aside from the significant uncertainty and risk this proposed scenario would introduce, it does not consider contingent liabilities to the Company which may be sizable. As a more realistic alternative, in an orderly liquidation or dissolution scenario – which would come with significant expense, delay and uncertainty – only approximately 60%-90%2, or approximately $0.40-$0.60 per share, of the cash balance is estimated to be available for an initial distribution to stockholders, which could take up to six months or more after an additional stockholder vote. The remaining amount would fund the wind-down of operations and the reserves for current, potential future and unknown liabilities, which could take up to three years to fully settle.
The pending merger with Carisma delivers significant and immediate value to stockholders.
Following extensive engagement with stockholders, Sesen Bio recently amended the merger agreement to deliver even greater value in connection with closing:
- Expected special cash dividend of approximately $70 million to be paid at closing, or approximately $0.34 per share, an increase from the previously stated special cash dividend of up to $25 million;
- 25.2% ownership interest in the $357 million combined company, or $0.40 per share. Carisma is a well-funded company developing groundbreaking therapies for a wide range of cancers with potential for significant long-term upside; and
- $30 million contingent value right (“CVR”)3, or $0.14 per share, related to the Roche Asset Purchase Agreement, which has been amended to also include upside for potential proceeds from any sale of Sesen Bio’s legacy assets (Vicineum and/or its preclinical assets).
The pending merger with Carisma provides immediate cash value for Sesen Bio stockholders and additional upside through ownership in the combined company, which the Company believes is far superior to the risk, uncertainty and prolonged timeline associated with other potential strategic alternatives, including a dissolution and liquidation of Sesen Bio.
