Carisma Therapeutics Inc. (CARM) is a clinical-stage biopharmaceutical company at the forefront of harnessing the power of macrophages and monocytes to develop groundbreaking therapies for cancer, fibrosis, and autoimmune diseases. With a strong focus on patient-centric innovation, Carisma's proprietary cell therapy platform aims to revolutionize the treatment landscape by unleashing the innate and adaptive immune capabilities of these potent myeloid cells.
Business Overview and History Carisma Therapeutics Inc. was initially formed as Carma Therapeutics LLC, a Pennsylvania limited liability company, in April 2016. The company converted to a Delaware corporation in May 2017, adopting the name CARISMA Therapeutics Inc. In March 2023, a significant merger took place when CARISMA Therapeutics Inc. merged with a wholly-owned subsidiary of Sesen Bio, resulting in the formation of CTx Operations, Inc. Subsequently, Sesen Bio changed its name to Carisma Therapeutics Inc.
Since its inception, Carisma has been dedicated to developing its proprietary cell therapy platform for creating transformative immunotherapies. The company's early operations focused on essential startup activities, including organizing and staffing, business planning, capital raising, establishing and maintaining its intellectual property portfolio, building its product candidate pipeline, conducting drug discovery activities, undertaking pre-clinical studies, manufacturing process development studies, and initiating early-stage clinical trials.
A significant milestone in Carisma's history occurred in 2020 when the company initiated its first Phase 1 clinical trial. This trial evaluated CT-0508, Carisma's lead product candidate at the time and the first CAR-Macrophage to be tested in a human clinical trial. While the trial demonstrated that CT-0508 was well-tolerated, feasible to manufacture, and showed promising anti-tumor effects, Carisma later made the strategic decision to cease further development of this candidate and instead prioritize the development of CT-0525.
Throughout its history, Carisma has relied on various funding sources to finance its operations. These have primarily included proceeds from sales of preferred stock, revenue from its collaboration with Moderna, research tax credits, and convertible debt financing. The company has invested substantial resources in the discovery, research, and early clinical development of its product candidates, although it has not yet commercialized any products or generated revenue from product sales.
Carisma's pioneering work in macrophage engineering has garnered significant attention and support. In January 2022, the company entered into a strategic collaboration with Moderna, Inc. (MRNA) to develop in vivo CAR-M (chimeric antigen receptor macrophage and monocyte) therapies for up to twelve research targets in oncology. This collaboration has already yielded promising results, with Carisma and Moderna announcing the nomination of their first development candidate targeting Glypican-3 (GPC3) for the treatment of hepatocellular carcinoma (HCC) in June 2024.
In addition to the Moderna collaboration, Carisma is advancing its own pipeline of ex vivo CAR-M therapies, led by its lead product candidate, CT-0525, which is designed to treat solid tumors that overexpress the human epidermal growth factor receptor 2 (HER2) protein. The company dosed the first patient in the Phase 1 clinical trial for CT-0525 in May 2024 and received Fast Track designation from the FDA in June 2024. Carisma expects to report initial data from this trial in the first quarter of 2025.
Carisma's macrophage engineering platform is not limited to oncology, as the company is also pursuing the development of engineered macrophages for the treatment of fibrosis. In the second quarter of 2024, Carisma achieved pre-clinical proof of concept in its liver fibrosis program, demonstrating the anti-fibrotic potential of its engineered macrophages in multiple animal models. The company expects to nominate a development candidate for its fibrosis program in the first quarter of 2025.
Product Segments Carisma's product portfolio is divided into two main segments: the ex vivo oncology program and the in vivo program.
The ex vivo oncology program centers around Carisma's lead product candidate, CT-0525, which is intended to treat solid tumors that overexpress human epidermal growth factor receptor 2 (HER2). CT-0525 utilizes a novel approach to CAR-M therapy that engineers patients' monocytes directly, without ex vivo differentiation into macrophages. Carisma believes this CAR-Monocyte approach will result in a therapy with favorable attributes compared to engineering after ex vivo differentiation CAR-Macrophage, with the potential to improve anti-tumor effects.
The in vivo program is being developed through Carisma's collaboration with ModernaTX, Inc. (Moderna). In this collaboration, Carisma is utilizing Moderna's mRNA-lipid nanoparticle (LNP) technology, together with Carisma's CAR-M platform, to create novel in vivo off-the-shelf gene therapy products. In December 2023, Carisma announced the nomination of the first development candidate under this collaboration, which targets Glypican-3 (GPC3) and is designed to treat solid tumors, including hepatocellular carcinoma. In September 2024, the companies expanded the collaboration to include the development of two in vivo CAR-M therapies for autoimmune diseases.
In addition to its oncology programs, Carisma is pursuing early research and development of multiple assets for the potential treatment of fibrosis and other immunologic and inflammatory diseases using its macrophage and monocyte engineering platform.
Financials As of September 30, 2024, Carisma reported cash and cash equivalents of $26.9 million, which the company expects will fund its operations into the third quarter of 2025. For the nine months ended September 30, 2024, the company reported total revenue of $16.0 million, which included $5.8 million in revenue recognized from the Moderna collaboration, including a $2.0 million milestone payment. Carisma's net loss for the same period was $42.8 million, with a net loss per share of $1.04.
For the most recent fiscal year (2023), Carisma reported annual revenue of $14.9 million, an annual net loss of $86.9 million, annual operating cash flow of -$81.2 million, and annual free cash flow of -$82.3 million.
In the most recent quarter (Q3 2024), Carisma reported quarterly revenue of $3.4 million and a quarterly net loss of $12.7 million. The company experienced a year-over-year revenue decline of 11.5% in this quarter, primarily related to the completion of certain research and development activities under the Moderna License Agreement.
Liquidity Carisma's financial ratios paint a mixed picture. The company's current ratio of 3.23 and quick ratio of 3.23 indicate strong liquidity, while its debt-to-equity ratio of -0.30 suggests a conservative capital structure. However, the company's return on assets of -1.52 and return on equity of -9.57 reflect the challenges of its early-stage development stage. Additionally, Carisma's free cash flow margin of -3.38% highlights the significant investments required to advance its pipeline.
Risks and Challenges As a clinical-stage biopharmaceutical company, Carisma faces a number of risks and challenges that are common in the industry. These include the inherent uncertainty of clinical trial outcomes, the potential for regulatory delays or denials, the ability to successfully scale-up manufacturing processes, and the competition from other companies developing similar therapies.
Notably, in late March 2024, Carisma's board of directors approved a strategic restructuring plan, which included the cessation of development for its lead product candidate, CT-0525, and a 34% reduction in the company's workforce. This decision was made to prioritize the company's in vivo macrophage engineering platform and focus its resources on advancing therapies for fibrosis, oncology, and autoimmune diseases.
The company's heavy reliance on its collaboration with Moderna also presents a risk, as the success of Carisma's in vivo CAR-M programs is dependent on Moderna's continued commitment and performance. Additionally, Carisma's limited operating history and history of net losses raise concerns about its long-term viability if it is unable to achieve sustained profitability.
Outlook and Conclusion Despite the challenges it faces, Carisma remains a promising player in the rapidly evolving field of macrophage-based therapeutics. The company's strategic pivot towards its in vivo CAR-M platform and fibrosis program, coupled with the progress in its collaboration with Moderna, suggest that Carisma is well-positioned to capitalize on the significant potential of its innovative technology.
As Carisma continues to advance its pipeline and navigate the complex regulatory landscape, investors will closely monitor the company's ability to deliver on its clinical milestones, secure additional funding, and demonstrate the real-world impact of its macrophage engineering platform. The company's ability to effectively manage its resources and execute on its revised strategy will be crucial in determining its long-term success and the potential of its transformative therapies.
With 41.75 million shares of common stock outstanding as of September 30, 2024, Carisma's market performance will be closely tied to its ability to progress its pipeline and achieve key developmental milestones. The company's focus on the US market and its potential to expand into new therapeutic areas beyond oncology could provide additional growth opportunities in the future.
As Carisma navigates the challenges of being a clinical-stage biopharmaceutical company, its innovative approach to macrophage engineering and strategic collaborations position it as a company to watch in the evolving landscape of cell therapies and immunotherapies.