After a brutal 2021 that included an FDA rejection reportedly stemming from trial misconduct, Sesen Bio is looking for an exit route, including a possible sale.
The about-face, announced Tuesday, is a disappointing, albeit predictable, update for Sesen after a dismal 2021 that included most notably an FDA rejection of its cancer drug. Now, the company—which had nearly $170 million in cash as of March 31—says it’s seeking “strategic alternatives” that include a potential sale, merger or strategic partnership.
Announcements like these are often paired with layoffs. However, the company has not mentioned any, and a spokesperson had not responded by the time of publication.
While it seeks out these alternatives, Sesen said it will continue clinical development “in accordance with its existing business strategy.” As such, CEO Thomas Cannell said that the company will pursue a meeting with the FDA in the “coming weeks” to hash out details regarding an additional phase 3 trial of its bladder cancer med Vicineum.
The drug—and the need for an additional trial—is the crux of what’s brought Sesen to this point. Everything appeared to be heading in the right direction until last August when the FDA rejected the company’s new drug application. At the time, Cannell said the team was “disappointed by this unexpected result.” But reporting by Stat shortly after unearthed error after error in the company’s phase 3 trial, including more than 2,000 violations of study protocol.
Wall Street did not react well to being duped. The company’s shares, which were not high to begin with, fell more than 50% to $1.00 apiece when the news broke. The company is now trading at roughly $0.50 per share.
Following the rejection, the company pulled its regulatory submission in Europe, leaving its sales team hired over the course of the summer in limbo.
In the months since, Sesen has had at least two meetings with the FDA. A third was scheduled for the end of March, according to the company’s fourth-quarter report, but details have not been disclosed by the company.
In October, the two held a meeting to discuss issues regarding the chemistry, manufacturing and controls that Sesen says it left with “a clear understanding of what additional information … is required for potential resubmission” of its application. Five weeks later, Sesen met with the regulator again to discuss the company’s clinical work and announced shortly after that it would launch another phase 3 trial.
All of these developments were punctuated by an internal review undertaken by the board that wrapped up at the end of February. The review looked at more than 600,000 documents and included interviews with 39 current and former employees and consultants. The board concluded that it “continues to fully support the company’s current management team,” and it didn’t feel any amendments were necessary prior to Securities and Exchange Commission or FDA disclosures.
But alas, no amount of reviews or meetings can fully change the company’s reality, which is that its sole asset remains stalled. In Tuesday’s release, Cannell emphasized that the company’s financial position gives it some wiggle room for potential alternatives.