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Monday Moves: 3 Philly biotech companies are starting 2023 with fresh funding

Plus, a potential rift in a merger deal for Carisma Therapeutics.

Life sciences. (Photo by Pexels user Martin Lopez used under a Creative Commons license)

Money Moves is a column where we chart the funding raises of tech companies across the region. Have a tip? Email us at philly@technical.ly.


ArriVent Biopharma raises $110 million

Newtown Square-based biopharmaceutical company ArriVent Biopharma has raised $110 million in a private stock sale, and is expected to raise more.

In partnership with Shanghai-based Allist Pharma, outside of China, ArriVent has the rights to the development, manufacturing and commercialization of furmonertinib, a drug that targets locally advanced or metastatic non-small-cell lung cancer.

A rep for ArriVent did not immediately reply to Technical.ly’s request for comment. Philly Biz Journal reported that the round will be used to advance its current pipeline and support additional company asset growth, including a new drug candidate that targets solid tumors. The outlet reported that ArriVent expects the Series B funding round will reach $145 million when closed.

The company raised $150 million Series A in 2021 when it launched, led by Hillhouse Capital Group, with participation from Lilly Asia Ventures, OrbiMed, Octagon Capital Advisors, Boyu/Zoo Capital and Lyra Capital.

ArriVent is led by cofounder Bing Yao, previously the chairman and CEO of Viela Bio. The Gaithersburg, Maryland-based company was acquired by Irish biopharmaceutical giant Horizon Therapeutics for $3.05 billion in early 2021.

Aro Bio’s Series B

About two years after Washington Square-based biotech company Aro Biotherapeutics raised its Series A round of financing at $88 million, the company is working to close a Series B, per Mike Beyer, a company spokesperson. The round will continue into the first quarter of 2023, and is led by Cowen Healthcare Investments, as a follow-on investment. Johnson & Johnson, BioMotiv, LLC, and Ionis Pharmaceuticals, Inc. participated in the company’s Series A.

The proceeds from the financing will be used to advance Aro’s Centyrin-SiRNA drug candidate, ABX1100. The candidate works toward the treatment of Pompe Disease, which affects the heart and skeletal muscles. In September, the drug was granted Rare Pediatric Drug designation by the FDA to treat the disease, which can come on at any stage of life.

The drug is slated to head into human clinical trials later this year, Beyer said. The raise will also fund further development of the company’s pre-clinical stage pipeline in genetic muscle disease and immunology.

Seneca Therapeutics’ bridge round

Philly-area Seneca Therapeutics, a 2018-founded clinical-stage biopharmaceutical company working on immunotherapies for solid cancers, raised a bridge round at the end of 2022. The $7.7 million round was raised mainly to support the company’s ongoing research, CFO Mark Kerschner told Technical.ly.

The research led the company to receive FDA clearance in Q4 to begin a Phase I/II clinical study using Seneca Valley Virus (“SVV-001″) in combination with a checkpoint inhibitor, Kerschner said via email. The study is in patients who are “TEM8 positive and SVV-001 permissive with neuroendocrine tumors or neuroendocrine carcinomas.” The study is slated to begin enrollment early this year.

Carisma Therapeutics’ merger at a pause

In September, University City-based biotech firm Carisma Therapeutics announced it would be merging with with Boston’s Sesen Bio. The companies were aiming to form one clinical-stage biotech company that would advance engineer macrophages for the treatment of cancer and other serious disorders. Carisma was also slated to bring a $30 million investment to the deal.

But the deal is drawing opposition from one of Sesen’s largest investor groups, led by Bradley L. Radoff and Michael Torok, who hold 8.4% of Sesen Bio stock. In a letter to the company’s board this week, the investors call on Sesen Bio’s board to stop the merger, calling it an “an inexperienced, misaligned Board that appears blindly committed to an ill-conceived transaction.”

They call into question Carisma’s valuation, and ask board members to justify Sesen’s investment in Carisma. They also ask for the total transaction-related professionals’ fees and bonuses to date, and ask for clarity on how much capital is being invested at Carisma’s $350 million current valuation. The investors note that comparable companies’ valuations have declined between 30% and 60% since the announcement of the deal.

“In our view, Sesen Bio has placed an absurdly high value on Carisma despite the fact that valuations across the early-stage biotech sector have been resetting,” the statement continued. “We fear this egregious misstep reflects Sesen Bio’s board of directors having minimal stockholdings, insufficient capital allocation and transaction expertise, and weak public company governance experience.”

On Wednesday, the Sesen Bio board released a statement in a response, confirming its “confidence in, and commitment to” the merger.

Following a recent amendment of the merger agreement, the pending deal “provides immediate cash value for Sesen Bio stockholders and additional upside through ownership in the combined company,” the statement said, “which the Company believes is far superior to the risk, uncertainty and prolonged timeline associated with other potential strategic alternatives, including a dissolution and liquidation of Sesen Bio.”

Companies: Carisma Therapeutics Inc.
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