Sesen Bio Reports Fourth Quarter and Full-Year 2018 Financial Results and Additional Preliminary Data from Phase 3 VISTA Trial

Sesen Bio (Nasdaq: SESN), a late-stage clinical company
developing targeted fusion protein therapeutics for the treatment of
patients with cancer, today reported operating results for the fourth
quarter and full year ended December 31, 2018. The Company also reported
new, preliminary analyses from the Company’s Phase 3 VISTA trial further
demonstrating the activity of Vicinium treatment in patients with
high-risk non-muscle invasive bladder cancer (NMIBC).

“2018 was a year of tremendous progress towards our goal of bringing
Vicinium to patients with BCG-unresponsive NMIBC, setting us up for a
transformational 2019,” said Dr. Thomas Cannell, president and chief
executive officer of Sesen Bio. “We are well underway with our Phase 3
VISTA trial designed to support the full approval of Vicinium for
patients with NMIBC. The totality of the efficacy and safety data
generated to date in our Phase 3 VISTA trial, and the compelling
benefit-risk profile, give us confidence in the approvability of
Vicinium for this indication. Due to the limited treatment options, once
patients become BCG-unresponsive, their choice is to either undergo a
life-altering, complicated surgery of complete bladder removal or live
with a highly-progressive cancer. We believe Vicinium can have a
substantial impact on how patients with NMIBC are treated, translating
into a significant commercial opportunity, as we endeavor to achieve our
mission of saving and renewing the lives of patients with cancer.”

VISTA Trial Progress

• Positive Preliminary VISTA Trial Data Reported in BCG-unresponsive
  NMIBC: In January, Sesen Bio announced positive preliminary
  data from its ongoing Phase 3 VISTA trial, a single-arm,
  multi-center clinical trial designed to support the approval of
  Vicinium for the treatment of patients with high-risk,
  BCG-unresponsive NMIBC. The trial completed enrollment in the second
  quarter of 2018, with a total of 133 patients across three cohorts
  based on histology and time to disease recurrence after adequate BCG
  treatment. Cohort 1 enrolled 86 patients with Carcinoma in situ
  with or without papillary disease that was determined to be refractory
  or recurred within six months of their last course of adequate BCG.
  Cohort 2 enrolled seven patients with Carcinoma in situ with or
  without papillary disease that was determined to be refractory or
  recurred after six months, but less than 12 months, after their last
  course of adequate BCG. Cohort 3 enrolled 40 patients with high-risk
  papillary disease without Carcinoma in situ that was determined
  to be refractory or recurred within six months of their last course of
  adequate BCG. As of a December 3, 2018 data cutoff data, preliminary
  efficacy data for each of the trial cohorts were as follows:

• Additional Preliminary VISTA Analyses Further Support Vicinium
  Treatment Potential for NMIBC: Since the first preliminary data
  were reported in January, Sesen Bio conducted additional analyses,
  including duration of response in patients with Carcinoma in situ
  with or without papillary disease, time to cystectomy across all
  patient types with Carcinoma in situ or papillary disease, and
  time to disease recurrence and recurrence-free rate in patients with
  papillary disease without Carcinoma in situ as of an assessment
  date of December 3, 2018. These additional preliminary data, in
  addition to the data reported in January, support a growing body of
  evidence demonstrating the anti-tumor activity of Vicinium.
  • Duration of Response: In addition to the complete response
    rate in Cohort 1, duration of response in Cohort 1 is a primary
    endpoint measure. The median duration of complete response
    for patients in Cohort 1 (n=86) is 227 days (95% CI, 127-516),
    using the Kaplan-Meier method. Additional ad hoc analysis of
    pooled data for all patients with Carcinoma in situ
    (Cohorts 1 and 2, n=93) shows that among patients who achieved a
    complete response at 3 months, 69% had a complete response of 6
    months or longer after starting therapy.
  • Time to Cystectomy: The U.S. Food and Drug Administration
    (FDA) guidance states that the goal of therapy in patients with
    BCG-unresponsive NMIBC is to avoid cystectomy. Therefore, time to
    cystectomy is a key secondary endpoint in the VISTA trial. Across
    all 133 patients treated with Vicinium, patients are projected to
    be cystectomy-free for approximately 519 days (95% CI, 361-523),
    or 18 months.
  • Time to Disease Recurrence: High-grade Ta or T1 NMIBC is
    associated with higher rates of progression and recurrence.
    Therefore, time to disease recurrence is a key secondary endpoint
    for patients with high-grade papillary-only (Ta and T1) NMIBC. The
    median time to disease recurrence for patients in Cohort 3 (n=40)
    is 270 days (95% CI, 169-452).
  • Recurrence-free Rate: Sesen Bio conducted an ad hoc
    analysis on disease recurrence, a standard criterion to evaluate
    treatment response for patients with high-grade papillary-only (Ta
    and T1) NMIBC. The analysis showed that for patients in Cohort 3
    (n=40), Vicinium treatment demonstrated favorable efficacy with
    56% (95% CI, 40%-72%) of patients remaining recurrence-free at 6
    months, and 36% (95% CI, 21%-54%) of patients remaining
    recurrence-free at 12 months.
• Vicinium Demonstrated to be Well-tolerated in the VISTA Trial:
  As of the December 3, 2018 data cut off, in patients across all
  cohorts (n=133), 78% adverse events were Grade 1 or 2. The most
  commonly reported treatment-related adverse events were dysuria (13%),
  hematuria (12%) and urinary tract infection (11%) – all of which are
  consistent with the profile of bladder cancer patients and the use of
  catheterization for treatment delivery. These adverse events were
  determined to be manageable and reversible, and only five patients
  discontinued treatment due to an adverse event. Serious adverse
  events, regardless of treatment attribution, were reported in 14% of
  patients. There were four treatment-related SAEs reported in three
  patients including acute renal injury (Grade 3), pyrexia (Grade 2),
  cholestatic hepatitis (Grade 4) and renal failure (Grade 5). No
  patient developed metastatic disease during the Phase 2 clinical trial
  for Vicinium or the Phase 3 VISTA trial (through the December 3, 2018
  data cut off).
• Updated VISTA Trial Data on Track to be Reported in Mid-2019:
  The Phase 3 VISTA trial remains ongoing and the company anticipates
  reporting updated primary and secondary endpoint data from the VISTA
  trial in mid-2019. In August 2018, Vicinium was granted Fast Track
  Designation by the FDA for the treatment of patients with high-risk
  NMIBC who have previously received two courses of BCG and whose
  disease is now BCG-unresponsive. In connection with this designation,
  the Company is planning to further engage with the FDA in the first
  half of 2019 to discuss its intended registration strategy for
  Vicinium for the treatment of high-risk NMIBC.

Additional Vicinium Progress

• Manufacturing Readiness Underway with FUJIFILM: In
  October 2018, the Company entered into an agreement for the
  manufacturing process and technology transfer of Vicinium
  production with FUJIFILM Diosynth Biotechnologies U.S.A., Inc.
  (FUJIFILM). Preparations are underway for full-scale GMP manufacturing
  at FUJIFILM in the second quarter of 2019 to assess FUJIFILM’S ability
  to produce the bulk drug substance form of Vicinium for commercial
  purposes if Sesen Bio receives regulatory approval to market Vicinium
  for the treatment of high-risk NMIBC.
• Continued Support of Vicinium Combination Trial in NMIBC: Sesen
  Bio has continued support of the National Cancer Institute’s ongoing
  clinical assessment of Vicinium in combination with AstraZeneca’s
  immune checkpoint inhibitor, durvalumab, for the treatment of patients
  with high-risk, BCG-unresponsive NMIBC. Sesen Bio believes the Phase 1
  trial is based on strong scientific rationale, as well as both
  clinical and preclinical data, on combining Vicinium with a checkpoint
  inhibitor. The Company expects biomarker data from this Phase 1 trial
  to be reported in the second half of 2019.

Fourth Quarter and Full-Year 2018 Financial Results

• Cash Position: Cash and cash equivalents were $50.4 million as
  of December 31, 2018, compared to $14.7 million as of December 31,
  2017.
• Revenue: No revenue was recorded for the three months ended
  December 31, 2018, nor for the same period in 2017. For the twelve
  months ended December 31, 2018, Sesen Bio did not record any revenue,
  compared to $0.4 million in revenue for the same period in 2017. This
  decrease was due to revenue recognized in 2017 from the License
  Agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc
  related to EBI-031 and all other IL-6 antagonist antibody technology,
  which was a part of the Company’s prior technology platform before the
  Company acquired Viventia Bio, Inc. in 2016.
• R&D Expenses: Research and development (R&D) expenses for
  the fourth quarter of 2018 were $4.7 million, compared to $3.1 million
  in R&D expenses for the same period in 2017. For the twelve months
  ended December 31, 2018, research and development expenses were $14.1
  million compared to $12.5 million for the same period in 2017. The
  fourth quarter and annual increases were both driven by expenses
  related to the ongoing manufacturing process and technology transfer
  with FUJIFILM which initiated in mid-2018.
• G&A Expenses: General and administrative expenses for the
  fourth quarter of 2018 were $3.5 million compared to $2.0 million for
  the same period in 2017. The increase was due primarily to higher
  staffing, and consulting costs as well as higher legal and
  intellectual property related costs in 2018. For the twelve months
  ended December 31, 2018, general and administrative expenses were
  $11.6 million and $8.1 million for the same period in 2017. The
  increase was due primarily to an increase in professional fees,
  one-time personnel-related expenses and increased market research
  consulting costs.
• Net Loss: Net loss was $6.8 million, or $0.09 per share, for
  the fourth quarter of 2018 and $33.7 million, or $0.55 per share, for
  the twelve months ended December 31, 2018, compared to $6.5 million,
  or $0.22 per share, for the fourth quarter of 2017 and $29.0 million,
  or $1.11 per share, for the full year ended December 31, 2017.
• Financial Guidance: Based on its current operating plans, Sesen
  Bio believes it will have capital sufficient to fund its current
  operating plan into 2020.

Conference Call Information
To participate in the conference
call, please dial (844) 831-3025 (domestic) or (315) 625-6887
(international) and refer to conference ID 2179668. The webcast can be
accessed in the Investor Relations section of the company's website at www.sesenbio.com.
The replay of the webcast will be available in the investor section of
the company’s website at www.sesenbio.com
for 60 days following the call.

About the VISTA Clinical Trial
The VISTA trial is an
open-label, multicenter, single-arm Phase 3 clinical trial evaluating
the efficacy and tolerability of Vicinium as a monotherapy in patients
with high-risk, bacillus Calmette-Guérin, or BCG, unresponsive
non-muscle invasive bladder cancer (NMIBC). The primary endpoints of the
trial are the complete response rate and duration of complete response
in patients with Carcinoma in situ with or without papillary disease.
Patients in the trial receive locally administered Vicinium twice a week
for six weeks, followed by once-weekly treatment for another six weeks,
then treatment every other week for up to two years. Updated
twelve-month data for the VISTA trial are anticipated in mid-2019. To
learn more about the Phase 3 VISTA trial, please visit www.clinicaltrials.gov and
search the identifier NCT02449239.

About Vicinium^®
Vicinium, a
locally-administered fusion protein, is Sesen Bio’s lead product
candidate being developed for the treatment of high-risk non-muscle
invasive bladder cancer (NMIBC). Vicinium is comprised of a recombinant
fusion protein that targets epithelial cell adhesion molecule (EpCAM)
antigens on the surface of tumor cells to deliver a potent protein
payload, Pseudomonas Exotoxin A (ETA). Vicinium is constructed with a
stable, genetically engineered peptide tether to ensure the payload
remains attached until it is internalized by the cancer cell, which is
believed to decrease the risk of toxicity to healthy tissues, thereby
improving its safety. In prior clinical trials conducted by Sesen Bio,
EpCAM has been shown to be overexpressed in NMIBC cells with minimal to
no EpCAM expression observed on normal bladder cells. Sesen Bio is
currently conducting the Phase 3 VISTA trial, designed to support the
registration of Vicinium for the treatment of high-risk NMIBC in
patients who have previously received two courses of bacillus
Calmette-Guérin (BCG) and whose disease is now BCG-unresponsive. Updated
twelve-month data from the trial are anticipated in mid-2019.
Additionally, Sesen Bio believes that Vicinium’s cancer cell-killing
properties promote an anti-tumor immune response that may potentially
combine well with immuno-oncology drugs, such as checkpoint inhibitors.
The activity of Vicinium in BCG-unresponsive NMIBC is also being
explored at the US National Cancer Institute in combination with
AstraZeneca’s immune checkpoint inhibitor durvalumab.

About Sesen Bio
Sesen Bio, Inc. is a late-stage clinical
company advancing targeted fusion protein therapeutics for the treatment
of patients with cancer. The company’s lead program, Vicinium^®,
also known as VB4-845, is currently in a Phase 3 registration trial, the
VISTA trial, for the treatment of high-risk, BCG un-responsive
non-muscle invasive bladder cancer. Updated twelve-month data from the
trial are anticipated in mid-2019. Vicinium incorporates a
tumor-targeting antibody fragment and a protein cytotoxic payload into a
single protein molecule designed to selectively and effectively kill
cancer cells, while minimizing toxicity to non-cancerous bladder cells.
For more information, please visit the company’s website at www.sesenbio.com.

Cautionary Note on Forward-Looking Statements
Any statements
in this press release about future expectations, plans and prospects for
the Company, the Company’s strategy, future operations, and other
statements containing the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,”
“potential,” “will,” “would,” “could,” “should,” “continue,” and similar
expressions, constitute forward-looking statements within the meaning of
The Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including: the
uncertainties inherent in the initiation and conduct of clinical trials,
the possibility that the preliminary data of the Phase 3 VISTA trial are
not indicative of final clinical results and final clinical trial
results may not be positive with regard to the safety or efficacy of
Vicinium, our ability to successfully develop our product candidates and
complete our planned clinical programs, our ability to obtain marketing
approvals for our product candidates, expectations regarding our ongoing
clinical trials, availability and timing of data from clinical trials,
whether interim results from a clinical trial will be predictive of the
final results of the trial or results of early clinical studies will be
indicative of the results of future studies, the adequacy of any
clinical models, expectations regarding the manufacturing process and
technology transfer with FUJIFILM Diosynth Biotechnologies U.S.A., Inc.,
expectations regarding regulatory approvals, expectations regarding the
adequacy of our existing capital resources to fund our operating plan
into 2020 and other factors discussed in the “Risk Factors” section of
the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and other reports filed with the Securities and Exchange Commission. In
addition, the forward-looking statements included in this press release
represent the Company’s views as of the date hereof. The Company
anticipates that subsequent events and developments will cause the
Company’s views to change. However, while the Company may elect to
update these forward-looking statements at some point in the future, the
Company specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as representing the
Company’s views as of any date subsequent to the date hereof.

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