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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Leases
The Company has operating leases for its laboratory and office space in Philadelphia, Pennsylvania. The Company’s operating leases have term end dates ranging from 2024 to 2029. The Company also has obligations under an arrangement for the use of certain laboratory equipment that are classified as finance leases that commenced in 2022 and have end dates ranging from 2024 to 2025.
The Company’s operating and finance lease right-of-use (ROU) assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU assets and lease liability. The Company accounts for non-lease components, such as maintenance, separately from lease components.
During the years ended December 31, 2023 and 2022, the Company entered into purchase and sale agreements under which the Company sold lab equipment for $1.2 million and $1.6 million, respectively. Concurrent with the sale of equipment, the Company entered into various lease agreements, with term end dates ranging from 2025 to 2026, whereby the Company will lease back the equipment. The Company accounts for such transactions as failed sale-leasebacks, due to having continuing involvement with the equipment. The Company carries this laboratory equipment as property and equipment, net on the accompanying consolidated balance sheets and the sale proceeds as a finance liability. The ongoing lease payments are recorded as reductions to the finance liability and interest expense. No gain or loss was recorded on the failed sale-leasebacks. As of December 31, 2023, the Company had a $1.9 million financing liability recorded in other current liabilities and other long-term liabilities on the consolidated balance sheets.
The elements of the lease costs were as follows (in thousands):
Year Ended December 31,
20232022
Operating lease cost$5,774 $4,764 
Finance lease cost:
Amortization of lease assets1,187 560 
Interest on lease liabilities139 98 
Total finance lease cost1,326 658 
Variable lease cost1,733 920 
Total lease cost$8,833 $6,342 
Lease term and discount rate information related to leases was as follows:
December 31,
20232022
Weighted-average remaining lease term (in years)
Operating leases2.62.2
Finance leases1.52.2
Weighted-average discount rate
Operating leases9.8 %9.4 %
Finance leases9.0 %9.0 %
Supplemental cash flow information was as follows (in thousands):
Year Ended
December 31,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used in operating leases$5,764 $4,750 
Operating cash used in finance leases$139 $98 
Financing cash used in finance leases$1,301 $865 
Future maturities of lease liabilities were as follows as of December 31, 2023 (in thousands):
Operating
Leases		Finance
Leases
Fiscal year ending:
2024$1,510 $600 
2025219 339 
2026226 — 
2027233 — 
2028240 — 
Thereafter184 — 
Total future minimum payments2,612 939 
Less imputed interest(361)(67)
Present value of lease liabilities$2,251 $872 
Licensing and Sponsored Research Agreements
Under a license agreement with The Trustees of the University of Pennsylvania (Penn), entered into in November 2017 (Penn License Agreement), the Company is required to make annual payments of $25,000. Penn is eligible to receive up to $10.9 million per product in development upon the achievement of certain clinical, regulatory and commercial milestone events. There are additional milestone payments required to be paid of up to $30.0 million per product in commercial milestones and up to an additional $1.7 million in development and regulatory milestone payments for the first CAR-M product directed to mesothelin. Additionally, the Company is obligated to pay Penn single-digit royalties based on its net sales.
In March 2023, the Company entered into a manufacturing and supply agreement with Novartis Pharmaceuticals Corporation (Novartis) for the manufacturing of the Company’s CT-0508 product candidate (Novartis Agreement). The Novartis Agreement is for five years and shall renew automatically for additional one-year periods unless and until
terminated by either party. In addition to paying to manufacture the product, the Company will also pay $1.0 million per calendar year, payable in quarterly payments, for reserved capacity starting on the date on which the Novartis site is declared ready to produce CT-0508 as determined by the Company. In the event of termination without cause by the Company, a termination fee equal to $4.0 million will be payable by Carisma to Novartis which, pursuant to the terms of the agreement, can be credited in full against amounts due for a substitute product.
Contingencies
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.
On February 3, 2023, a purported stockholder filed a complaint in the United States District Court for the District of Delaware against Sesen Bio and its board of directors, captioned Plumley v. Sesen Bio, Inc., et al., Case No. 1:23-cv-00131 (D. Del.) (the Plumley Complaint). The Plumley Complaint asserts claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for allegedly false and misleading statements in the proxy statement/prospectus filed as part of the Registration Statement in connection with the Merger and under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements and seeks, among other relief, an order enjoining the Merger and an award for plaintiffs’ fees and costs. On February 7, 2023, another purported stockholder filed a complaint in the United States District Court for the Southern District of New York against Sesen Bio and its board of directors, captioned Franchi v. Sesen Bio, Inc., et al., 1:23-cv-01041 (S.D.N.Y.) (the Franchi Complaint). The Franchi Complaint contains substantially similar allegations and claims and seeks substantially similar relief as the Plumley Complaint. Additionally, on February 9, 2023, another purported stockholder filed a complaint in the United States District Court for the Southern District of New York against Sesen Bio and its board of directors, captioned Menzer v. Sesen Bio, Inc., et al., 23-cv-01119 (S.D.N.Y.) (the Menzer Complaint). The Menzer Complaint contains substantially similar allegations and claims and seeks substantially similar relief as the Plumley Complaint and the Franchi Complaint. In April 2023, the Company executed a confidential fee agreement to resolve the stockholders’ claim for attorney’s fees and expenses in connection with the Plumley Complaint, Franchi Complaint, and Menzer Complaint. The Company settled and paid the confidential fee agreement resulting in $0.2 million of claim expenses incurred during the year ended December 31, 2023.