Business Overview

Cartesian Therapeutics, Inc. was originally incorporated in Delaware on December 10, 2007 under the name Selecta Biosciences, Inc. The company was founded as a clinical-stage biotechnology company focused on leveraging its proprietary technology and manufacturing platform to develop mRNA cell therapies for the treatment of autoimmune diseases.

In November 2023, Selecta Biosciences, Inc. merged with the private Delaware corporation previously known as Cartesian Therapeutics, Inc. As a result of the merger, the combined company changed its name to Cartesian Therapeutics, Inc. and its common stock began trading on the Nasdaq Global Market under the new trading symbol RNAC.

Prior to the merger, Selecta Biosciences, Inc. had financed its operations primarily through public offerings and private placements of its securities, funding received from research grants, collaboration and license arrangements, and a credit facility. The company did not have any products approved for sale and had not generated any product sales revenue. Except for the year ended December 31, 2022, Selecta Biosciences, Inc. had incurred significant operating losses since its inception.

After the merger, Cartesian Therapeutics, Inc. continued to finance its operations through a combination of equity offerings, debt financings, and collaboration and license agreements. In November 2023, the company entered into a securities purchase agreement for a private investment in public equity transaction, which provided for the issuance of 149,330 shares of Series A Non-Voting Convertible Preferred Stock for aggregate gross proceeds of $60.25 million.

Financial Performance

Cartesian Therapeutics' financial performance has been marked by consistent investment in research and development, as the company allocates significant resources to advancing its pipeline. For the fiscal year ended December 31, 2023, the company reported total revenue of $26.0 million, a significant increase from the $16.6 million reported in the previous year. This revenue growth was primarily driven by collaboration and licensing agreements, including the Sobi License and the Astellas Agreement.

However, Cartesian Therapeutics has yet to achieve profitability, reporting a net loss of $219.7 million for the fiscal year 2023. This is a common trend among clinical-stage biotechnology companies, as the significant costs associated with drug development and clinical trials often outpace revenue generation in the early stages of a company's lifecycle.

For the nine months ended September 30, 2024, Cartesian reported total revenue of $39.67 million, primarily driven by collaboration and license revenue. The company incurred a net loss of $67.17 million during this period as it continues to invest in the development of its product candidates.

In the most recent quarter (Q3 2024), Cartesian reported revenue of $387,000, a significant decrease compared to the prior fiscal year. This decrease was primarily due to reduced revenue recognized under the Sobi License and the Astellas Agreement. The company's net loss for Q3 2024 was $24.18 million, with the increase in net loss primarily attributed to expenses associated with the change in the fair value of the contingent value right liability.

Liquidity

The company's balance sheet remains strong, with $78.3 million in cash, cash equivalents, and restricted cash as of December 31, 2023. This cash position, combined with the $130.0 million raised in the July 2024 Private Placement, is expected to support the company's planned operations, including the completion of the Phase 3 trial for Descartes-08 in myasthenia gravis, into mid-2027.

As of September 30, 2024, Cartesian had $219.20 million in cash and cash equivalents. The company's debt-to-equity ratio stood at 19.48 as of December 31, 2023, while its current ratio and quick ratio were both 10.70 as of September 30, 2023, indicating a strong short-term liquidity position.

Operational Highlights

Cartesian Therapeutics' primary focus has been the development of Descartes-08, its lead mRNA cell therapy candidate for the treatment of myasthenia gravis. In July 2024, the company reported positive topline results from its Phase 2b trial, showcasing deep and durable clinical benefits in MG patients without the need for preconditioning chemotherapy. These results paved the way for Cartesian to initiate a Phase 3 AURORA trial, which is expected to commence in the first half of 2025.

In addition to its MG program, Cartesian is also advancing Descartes-08 in a Phase 2 trial for the treatment of systemic lupus erythematosus (SLE), with patient dosing underway. The company also recently dosed the first patient in a first-in-human Phase 1 trial of Descartes-15, its next-generation mRNA CAR-T cell therapy targeting B-cell maturation antigen (BCMA).

Cartesian has also been actively expanding its pipeline through strategic partnerships and collaborations. In 2023, the company entered into licensing agreements with Biogen and the National Cancer Institute, gaining access to valuable intellectual property and technologies to further strengthen its autoimmune disease research and development efforts.

Product Segments

Cartesian Therapeutics operates in two main product segments:

1. mRNA Cell Therapies: The company's lead product candidate, Descartes-08, is an mRNA cell therapy for the treatment of myasthenia gravis (MG). In an open-label Phase 2 clinical trial, Descartes-08 demonstrated deep and durable clinical benefits, with all seven participants maintaining improvements in MG severity scales considered clinically meaningful by expert consensus at nine months, and five of the seven participants maintaining improvements at 12 months. Cartesian's mRNA CAR-T modality is a personalized approach that collects a patient's T-cells and uses mRNA to introduce a chimeric antigen receptor (CAR) into the cell, redirecting the T-cells to target and destroy pathogenic self-reactive cells. The company's mRNA in situ modality is designed to deliver mRNA into a patient's lymph node to generate CAR-T cells and other proteins that target autoimmunity.

2. Collaboration and License Agreements: Cartesian has established several strategic partnerships to leverage its technology platform. These include:

• A License and Development Agreement with Audentes Therapeutics, Inc. (Astellas Gene Therapies) for the use of Cartesian's IdeXork technology in Pompe disease, with a $10 million upfront payment and potential for up to $340 million in future milestone payments and royalties. - A License and Development Agreement with Swedish Orphan Biovitrum AB (Sobi) for the development and commercialization of SEL-212 for chronic refractory gout, including a $75 million upfront payment and potential for up to $630 million in milestone payments, plus tiered royalties. - Research and license agreements with partners such as Biogen, the National Cancer Institute, and Ginkgo Bioworks to advance its technology and pipeline.

Risks and Challenges

As a clinical-stage biotechnology company, Cartesian Therapeutics faces several risks and challenges common to the industry. The successful development and commercialization of its product candidates are subject to the inherent uncertainties of the drug development process, including the risk of failure in clinical trials, regulatory hurdles, and the potential inability to obtain necessary approvals from the U.S. Food and Drug Administration (FDA).

Additionally, Cartesian's reliance on collaboration and licensing agreements for a significant portion of its revenue exposes the company to the risks associated with the performance and strategic decisions of its partners. The termination or modification of these agreements could have a material adverse impact on Cartesian's financial performance and future prospects.

The company also faces intense competition from other biotechnology and pharmaceutical companies pursuing similar therapeutic approaches, which could impact the commercial potential of Cartesian's product candidates, if approved.

Conclusion

Cartesian Therapeutics is at the forefront of the mRNA cell therapy revolution, leveraging its innovative platform to address the unmet needs of patients with autoimmune diseases. The company's lead candidate, Descartes-08, has demonstrated promising results in early-stage clinical trials, positioning it for a pivotal Phase 3 study in myasthenia gravis, a debilitating condition with limited treatment options.

With a strong financial position, a diversified pipeline, and a seasoned management team, Cartesian Therapeutics is well-equipped to navigate the challenges of the biotechnology industry and deliver transformative therapies to patients in need. As the company continues to execute on its strategic priorities, investors will closely monitor Cartesian's progress and the potential for long-term value creation.