Cartesian Therapeutics, Inc. is a clinical-stage biotechnology company leading the charge in the development of mRNA cell therapies for the treatment of autoimmune diseases. With a portfolio of promising product candidates and a robust pipeline, Cartesian is positioned to revolutionize the way these debilitating conditions are addressed.
Business Overview and History
Cartesian Therapeutics was founded in 2007 and is headquartered in Frederick, Maryland. The company’s origins can be traced back to its predecessor, Selecta Biosciences, Inc., which merged with the private Delaware corporation Cartesian Therapeutics in November 2023. This transformative merger solidified Cartesian’s position as a clinical-stage leader in the autoimmune disease treatment landscape.
The company’s journey began with a focus on developing immunotherapies for the treatment of autoimmune diseases, allergies, and transplantation rejection. In September 2019, Cartesian (then Selecta) expanded its pipeline into the autoimmune disease space by entering into a nonexclusive, worldwide license agreement with the U.S. Department of Health and Human Services, represented by the National Cancer Institute of the National Institutes of Health. This agreement allowed the company to license certain patents and patent applications for the development and manufacturing of anti-BCMA CAR-T cell products.
In June 2020, the company further strengthened its position in the field by entering into a license and development agreement with Swedish Orphan Biovitrum AB (Sobi) for the development and commercialization of the SEL-212 drug candidate, which was in development for the treatment of chronic refractory gout. This partnership brought in significant upfront payments and potential milestone payments, bolstering the company’s financial position.
Cartesian continued to expand its research and development capabilities through a series of collaboration and license agreements with Ginkgo Bioworks Holdings, Inc. in October 2021. These partnerships focused on designing next-generation IgA proteases and AAV capsids, further enhancing the company’s technological expertise.
At the heart of Cartesian’s approach is its proprietary mRNA cell therapy platform, which leverages the power of mRNA to enhance the function of cells and target the root causes of autoimmune disorders. Unlike traditional cell therapies that rely on DNA modifications, Cartesian’s mRNA-based therapies are designed to be administered repeatedly, without the need for pre-treatment chemotherapy. This innovative approach has the potential to deliver deep, durable clinical benefits to a broad patient population.
Cartesian’s lead product candidate, Descartes-08, is an autologous mRNA-engineered chimeric antigen receptor T-cell therapy (mRNA CAR-T) targeting B-cell maturation antigen (BCMA). In an open-label Phase 2 clinical trial in patients with myasthenia gravis, Descartes-08 demonstrated the ability to generate deep and durable clinical responses, with all seven participants maintaining clinically meaningful improvements in disease severity at nine months, and five of the seven participants maintaining these improvements at 12 months.
In addition to Descartes-08, Cartesian’s pipeline includes Descartes-15, a next-generation mRNA CAR-T therapy that has shown a significant increase in CAR expression and target-specific killing compared to Descartes-08 in preclinical studies. The company also has mRNA in situ modalities designed to deliver mRNA directly into a patient’s lymph node to generate CAR-T cells and other proteins that target autoimmunity.
Financials and Operational Highlights
As of September 30, 2024, Cartesian reported $220.9 million in cash, cash equivalents, and restricted cash, which the company expects will support its planned operations, including the completion of the planned Phase 3 trial of Descartes-08 for myasthenia gravis, into mid-2027.
For the nine months ended September 30, 2024, Cartesian reported collaboration and license revenue of $39.1 million, a significant increase from the $17.7 million reported in the prior-year period. This growth was primarily driven by an increase in revenue recognized under the company’s license agreement with Swedish Orphan Biovitrum AB (Sobi), including a $30 million milestone payment received in the third quarter of 2024.
Research and development expenses for the nine-month period were $33.8 million, down from $49.4 million in the same period of 2023. The decrease was largely due to reductions in clinical expenses, expenses related to a one-time cash charge for salaries and benefits as a result of a headcount reduction in April 2023, and decreased contract license and milestone payments.
General and administrative expenses, on the other hand, increased to $23.0 million for the nine months ended September 30, 2024, up from $18.4 million in the prior-year period. This rise was primarily attributed to expenses incurred for personnel and professional fees related to the Merger.
Cartesian reported a net loss of $67.2 million for the first nine months of 2024, compared to a net loss of $42.1 million in the same period of 2023. The increase in net loss was largely due to expenses associated with the change in the fair value of the contingent value right (CVR) liability and the Series A Preferred Stock forward contract liability, partially offset by the increased revenue recognized under the Sobi license agreement.
In the most recent quarter, Cartesian reported revenue of $387,000 and a net loss of $24.18 million. The net loss was primarily due to expenses associated with the change in the fair value of the contingent value right liability and decreased revenue recognized under the Sobi License. The company’s operating cash flow for the quarter was $13.69 million, with free cash flow of $7.49 million.
Liquidity
Cartesian’s liquidity position remains strong, with $220.9 million in cash, cash equivalents, and restricted cash as of September 30, 2024. This robust cash position is expected to fund the company’s operations, including the planned Phase 3 trial of Descartes-08 for myasthenia gravis, into mid-2027. The company’s financial strategy has been bolstered by strategic partnerships, milestone payments, and successful financing rounds, providing a solid foundation for its ongoing research and development efforts.
The company had no outstanding debt as of September 30, 2024, resulting in a debt-to-equity ratio of 0. Cartesian’s current ratio and quick ratio both stand at 3.03, indicating a strong ability to meet short-term obligations. The company also has a $0.3 million secured letter of credit related to its real estate leases.
Recent Developments and Outlook
In July 2024, Cartesian announced positive topline results from its Phase 2b trial of Descartes-08 in patients with myasthenia gravis. The trial met its primary endpoint with statistical significance, with 71% of patients treated with Descartes-08 observed to have a clinically meaningful improvement in Myasthenia Gravis Composite (MGC) score at Month 3, compared to 25% for the placebo group. The company expects to hold an End-of-Phase 2 meeting with the U.S. Food and Drug Administration (FDA) by the end of 2024 and plans to initiate a Phase 3 trial of Descartes-08 in myasthenia gravis in the first half of 2025.
In addition to the progress with Descartes-08 in myasthenia gravis, Cartesian has also dosed the first patient in a Phase 2 trial of Descartes-08 in patients with systemic lupus erythematosus (SLE) and the first patient in a first-in-human Phase 1 trial of its next-generation mRNA CAR-T therapy, Descartes-15. The company expects to file an Investigational New Drug (IND) application for a pediatric basket study by the end of 2024.
In July 2024, the company strengthened its balance sheet through a $130 million private placement equity financing, which is expected to support the development of Descartes-08 in myasthenia gravis through the planned Phase 3 trial.
Risks and Challenges
As a clinical-stage biotechnology company, Cartesian Therapeutics faces several risks and challenges that investors should consider. The company’s success is heavily dependent on the continued development and potential regulatory approval of its product candidates, particularly Descartes-08 and Descartes-15. Any delays or setbacks in the clinical trials or regulatory approval process could have a significant impact on the company’s financial performance and future prospects.
Additionally, Cartesian’s reliance on collaboration and license agreements for a significant portion of its revenue stream introduces a level of uncertainty, as the termination or renegotiation of these agreements could adversely affect the company’s financial results. The competitive landscape in the autoimmune disease treatment market is also highly dynamic, and Cartesian’s ability to maintain its technological edge and market position will be crucial.
Lastly, as a clinical-stage company, Cartesian Therapeutics will likely need to raise additional capital to fund its ongoing operations and future growth initiatives. The company’s ability to secure financing on favorable terms or at all could impact its long-term viability.
Conclusion
Cartesian Therapeutics is at the forefront of the mRNA cell therapy revolution, with a promising pipeline of product candidates targeting a range of autoimmune diseases. The company’s lead asset, Descartes-08, has demonstrated compelling clinical results in myasthenia gravis, and the advancement of Descartes-15 into the clinic underscores Cartesian’s commitment to innovation.
With a strengthened balance sheet and a clear path forward for its lead programs, Cartesian is well-positioned to continue its pioneering work in the autoimmune disease space. As the company navigates the challenges of clinical development and regulatory approval, investors will be closely watching its progress and the potential impact of its transformative mRNA cell therapies.
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