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United States securities and exchange commission logo
November 10, 2022
Thomas R. Cannell, D.V.M.
Chief Executive Officer
Sesen Bio, Inc.
245 First Street, Suite 1800
Cambridge, MA 02142
Re: Sesen Bio, Inc.
Registration
Statement on Form S-4
Filed October 14,
2022
File No. 333-267891
Dear Thomas R. Cannell:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Q: What will Sesen Bio stockholders receive in the merger?, page 2
1. Please disclose here
and throughout the prospectus the criteria that the Sesen Bio board of
directors will consider
when deciding whether to approve the special cash dividend and
how the directors will
determine the amount of the dividend.
Prospectus Summary
The Companies, page 12
2. Please expand the
discussion of Sesen Bio's decision to voluntarily pause further
development of Vicineum
to also disclose that Sesen Bio no longer plans to pursue
regulatory approval of
Vicineum for NMIBC in the E.U. and has started to wind down
certain of its
manufacturing operations and business development partnerships.
Thomas R. Cannell, D.V.M.
FirstName
Sesen Bio, LastNameThomas R. Cannell, D.V.M.
Inc.
Comapany 10,
November NameSesen
2022 Bio, Inc.
November
Page 2 10, 2022 Page 2
FirstName LastName
Reasons for the Merger , page 13
3. Please clarify here and on page 128 whether the post-merger combined
company plans to
pursue Sesen Bio's paused Vicineum candidate. We note risk factor
disclosure on page 62
that Sesen Bio s only prospective revenue streams currently depend
in part upon the
ability of Qilu to develop, manufacture, market and/or sell Vicineum,
but it is not clear if
the combined company intends to pursue development of Vicineum itself.
If the
combined company does not intend to pursue these plans, please specify
what, if anything,
it intends to do with the Vicineum asset.
Treatment of Carisma Options and Carisma Plan, page 16
4. Given your disclosure here that Sesen Bio will assume the CARISMA
Therapeutics Inc.
2017 Stock Incentive Plan, please file the plan as an exhibit.
Risks Related to the Merger
The exchange ratio will not change or otherwise be adjusted based on the market
price of Sesen
Bio common stock, page 26
5. Please revise this risk factor to disclose the market price of Sesen
Bio's common stock on
the date of the Merger Agreement.
The Merger
Background of the Merger, page 122
6. Please revise this section to include discussion of how the special
cash dividend was
formulated as part of the merger negotiations.
Carisma Reasons for the Merger, page 130
7. We note that one of the factors that the Carisma Board considered in
support of the
merger was the projected financial position of the combined company,
including its ability
to support the combined company s current and planned clinical
trials and operations.
Assuming Sesen Bio meets the minimum requirement of having net cash as
of the
merger s closing of $125 million, and to the extent that the
combined company plans to
use a material portion of the $125 million to fund the development of
any specific pipeline
candidates, please disclose the amounts it expects to allocate to each
candidate and specify
how far in the clinical development for each of these product
candidates it expects to
reach.
Opinion of Sesen Bio's Financial Advisor
Summary of Financial Analyses
Valuation Analysis-Discounted Cash Flow, page 135
8. We note that SVB Securities performed a discounted cash flow analysis
to calculate the
estimated present value of certain cash flows that Carisma was
forecasted to generate from
Thomas R. Cannell, D.V.M.
FirstName
Sesen Bio, LastNameThomas R. Cannell, D.V.M.
Inc.
Comapany 10,
November NameSesen
2022 Bio, Inc.
November
Page 3 10, 2022 Page 3
FirstName LastName
January 1, 2023 through December 31, 2041. Please explain why SVB
believed that an
analysis of the cash flows over 18 years was reasonable. Please also
explain what factors
led Sesen Bio management to direct SVB to assume an annual decline
ranging from 10%
to 30% of Carisma's cash flows in perpetuity and what factors led SVB
to use a discount
rate ranging from 11% to 13%.
Additional Factors Observed by SVB Securities Carisma Valuation Analysis
Selected
Public Companies, page 135
9. Please disclose whether any companies that met the selection criteria
were excluded from
the valuation analysis. If so, please identify these companies and
explain the reason for
excluding them.
Certain Unaudited Financial Projections, page 137
10. Please supplementally provide us with a copy of the forecasted
financial information
prepared by Carisma that was provided to Sesen Bio.
11. The summary of the Financial Projections on page 139 defines the Total
Adjusted
Revenue as "[e]qual to total risk-adjusted revenue." Clearly identify
the risk adjustments
in arriving at risk-adjusted revenue. Please also revise to explain
how Sesen Bio
determined that the time period of the projections was reasonable.
12. We note disclosure on page 139 that the Financial Projections included
two underlying
assumptions, "among other things." Please revise to include all
material assumptions
underlying the Financial Projections. Please explain how you arrived
at the probability of
regulatory approval for CT-0508 and disclose the date that you assume
that CT-0508 will
be granted regulatory approval. Additionally, discuss whether the
Financial Projections
factored in the possibility of FDA approval of new competitive
products and ensure that
all information that SVB Securities considered in reaching its
fairness determination,
including any of these assumptions, is disclosed in this filing.
Material U.S. Federal Income Tax Consequences of the Merger, page 150
13. We note your disclosure on page 151 that no opinion of counsel has
been obtained or will
be obtained regarding the treatment of the merger as a tax-free
reorganization. However,
you still state in the registration statement that the merger is
intended to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code. As
such, your
disclosure makes representations as to probable material tax
consequences. Please revise
to disclose that this is the opinion of named counsel and file an
opinion of counsel as an
exhibit to your registration statement. For guidance, refer to Section
III of Staff Legal
Bulletin No. 19.
Thomas R. Cannell, D.V.M.
FirstName
Sesen Bio, LastNameThomas R. Cannell, D.V.M.
Inc.
Comapany 10,
November NameSesen
2022 Bio, Inc.
November
Page 4 10, 2022 Page 4
FirstName LastName
Agreements Related to the Merger
Subscription Agreement, page 186
14. Please file the Subscription Agreement that Carisma entered into on
September 20,
2022 as an exhibit to the registration statement or, alternatively,
provide your analysis
supporting your belief that such filing is not required. See Item
601(b)(10) of Regulation
S-K.
Intellectual Property, page 221
15. With respect to the patents licensed from Micromet and XOMA, please
identify the type
of patent protection (e.g., composition of matter, use, or process)
for any material patents,
the expected expiration date and the jurisdiction.
Sesen Bio Business
Sesen Bio's OUS Business Development Partnering, page 222
16. Please disclose whether, to Sesen Bio's knowledge, its decision to
pause further
development of Vicineum will impact Qilu's development and
commercialization of
Vicineum in China.
Carisma Business, page 235
17. This section includes disclosure that states or implies that Carisma's
product candidates
are safe and/or effective. Please revise these statements, as safety
and efficacy
determinations are in the exclusive purview of the FDA or other
regulators. For
example, the following statements improperly state or imply that
Carisma's product
candidates are safe or effective:
Carisma can redirect [CARs ] potent innate immune functions
against cancer
preliminary clinical results have...provided clinical validation
of the CAR-M
mechanism of action
CT-0508 has exhibited a favorable safety profile
"promising" preliminary clinical results from Carisma s Phase 1
clinical trial of CT-
0508
While you may present objective data from Carisma's trials, please
refrain from drawing
conclusions from the results. Moreover, statements about these trials
should be properly
balanced with disclosure that: (1) Carisma's cell therapy has yet to
be broadly applied to
solid tumors; (2) Carisma's CAR-M platform is a novel therapeutic
approach, and; (3)
Carisma has only preliminary results from its Phase 1 clinical trial
of CT-0508. We note
risk factor disclosure to this effect on page 62.
Overview, page 235
18. We note the statement that Carisma believes it will "rapidly generate
new product
candidates suitable for clinical development[.]" We note similar
statements on pages 238,
239, and 309 about Carisma's plans to "rapidly advance" CT-0508
through clinical
Thomas R. Cannell, D.V.M.
FirstName
Sesen Bio, LastNameThomas R. Cannell, D.V.M.
Inc.
Comapany 10,
November NameSesen
2022 Bio, Inc.
November
Page 5 10, 2022 Page 5
FirstName LastName
development and "rapidly pursue" its development. Please revise these
statements and
any other similar statements to remove any implication that Carisma
will be successful in
advancing its product candidates in a rapid or accelerated manner, as
such statements are
speculative.
Carisma's Pipeline Programs, page 236
19. We note that CT-0525 is not reflected in the pipeline table on
Carisma's website. Please
explain why this program is sufficiently material to Carisma's
business to warrant
inclusion in the pipeline table in the prospectus.
Novel Modalities, page 266
20. We note your disclosure that you have a sponsored research agreement
with Dr. Bruce
Blazar, MD. Please file this agreement as an exhibit or tell us why
you don't believe it's
necessary. Refer to Item 601(b)(10) of Regulation S-K.
Moderna Collaboration Agreement, page 276
21. We note your disclosure that the royalty period for each product
developed under the
agreement will expire on a country-by-country basis upon the later of
(1) the expiration of
the last-to-expire valid patent claim of specified patents, (2) the
expiration of regulatory-
based exclusivity for such product in such country or (3) a specified
period after the first
commercial sale with respect to such product in such country. Please
specify the number
of years from first commercial sale that royalties are payable.
University of Pennsylvania License Agreement, page 277
22. Please revise to disclose the royalty term or how it is determined. If
the royalty term and
the term of the agreement are the same, please make that clear.
Management Following the Merger, page 324
23. Please file the employment agreements for Messrs. Kelly, Morris and
Klichinsky as
exhibits. See Item 601(b)(10) of Regulation S-K.
Unaudited Pro Forma Condensed Combined Financial Information
1. Description of Transactions, page 358
24. Please disclose how the contingent value rights (CVR) will be
accounted for as part of the
recapitalization transaction and on a go forward basis. Tell us the
accounting guidance on
which you relied.
Principal Stockholders of Carisma , page 375
25. Please identify in footnotes to the table all natural persons who have
voting and/or
investment power over the shares held by:
Thomas R. Cannell, D.V.M.
Sesen Bio, Inc.
November 10, 2022
Page 6
AbbVie Biotechnology Ltd;
HealthCap VII L.P.;
MRL Ventures Fund, LLC;
The Trustees of the University of Pennsylvania;
TPG Biotechnology Partners V, L.P.;
Wellington Life Sciences V GmbH & Co. KG.
Please make corresponding revisions to the footnotes to the Principal
Stockholders of the
Combined Company table on page 378 as appropriate.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Vanessa Robertson at 202-551-3649 or Sasha Parikh at
202-551-3627 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Dillon Hagius at 202-551-7967 or Ada D. Sarmento at 202-551-3798 with
any other
questions.
Sincerely,
FirstName LastNameThomas R. Cannell, D.V.M.
Division of
Corporation Finance
Comapany NameSesen Bio, Inc.
Office of Life
Sciences
November 10, 2022 Page 6
cc: Steven J. Abrams, Esq.
FirstName LastName