Carisma Therapeutics Faces Setbacks as Merger Falls Through and Moderna Partnership Ends

Carisma Therapeutics, a cell therapy macrophage biotech, has encountered significant challenges in its efforts to stay afloat. The company's recent attempts at a strategic merger have failed, and its partnership with Moderna has come to an end, leaving the biotech's future uncertain.

Reverse Merger Plans Collapse

Carisma Therapeutics, which had previously laid off 95% of its workforce earlier this year, has been dealt another blow as its proposed reverse merger with OrthoCellix, a private regenerative cell therapy company and subsidiary of Ocugen, has fallen through. The merger, announced in late June, was seen as a potential lifeline for the struggling biotech.

According to a Securities and Exchange Commission (SEC) filing on September 18, OrthoCellix failed to secure the required $25 million in share commitments by the September 15 deadline, prompting Carisma to terminate the agreement. As a result, OrthoCellix now owes Carisma a $750,000 termination fee, due on or before September 18, along with reimbursement for reasonable out-of-pocket expenses related to the merger proposal and termination.

Moderna Partnership Ends

In a separate development, Carisma's partnership with Moderna has come to an end. The collaboration, which began in 2022 and was expanded in 2024 to include autoimmune disease targets, initially saw Moderna provide $45 million upfront and a $35 million investment to Carisma.

As part of the termination agreement, Moderna will pay Carisma $4 million to walk away from all other financial obligations. Effective September 16, Moderna is no longer required to pay any milestone or royalty fees for products resulting from the partnership.

Uncertain Future and Potential Delisting

With these setbacks, Carisma's future remains uncertain. The company has stated it will continue to explore options to sell or monetize its remaining assets and seek other possible strategic transactions. However, time is running out for the biotech.

Carisma faces the challenge of identifying and completing an alternative strategic transaction before October 7, when the Nasdaq hearings panel can no longer grant the company's listing due to continued noncompliance with listing standards. The collapse of the merger proposal was key to Carisma's plan to comply with the $1 share price minimum requirement, and Nasdaq could potentially delist the company before October 7.

If Carisma fails to secure an alternative transaction quickly, it expects to revert to its pre-merger plan of pursuing an orderly wind-down of its remaining operations. The company has warned that it is unlikely there will be a meaningful amount of cash available for distribution to stockholders in the event of a wind-down or liquidation.