Carisma Therapeutics Winds Down Operations, Considers Strategic Alternatives

Carisma Therapeutics, a cell therapy and oncology-focused company, has announced a significant reduction in its workforce and operations as it explores strategic alternatives to maximize value. The company, which has been steadily scaling back its pipeline and headcount over the past year, is now taking drastic measures to preserve its remaining assets and cash reserves.

Massive Layoffs and Operational Restructuring

Carisma has revealed plans to lay off 42 employees, reducing its workforce from 48 to just six individuals. This decision, announced in the company's annual SEC filing, follows previous layoffs in December 2024 when one-third of the workforce was cut. The remaining staff members are deemed necessary to "pursue strategic alternatives and execute an orderly wind down of our operations," according to the filing.

The latest round of layoffs will cost the company approximately $3.8 million, primarily in employee termination benefits, to be paid out by the end of the year. Carisma's CEO, Steven Kelly, acknowledged the difficulty of these changes but emphasized that "pursuing strategic alternatives coupled with a reduction in operating costs has the potential to maximize the value of our science and other assets given the challenging funding environment."

Asset Evaluation and Potential Sale

As part of its wind-down strategy, Carisma is actively seeking to maximize the value of its remaining assets. The company is exploring various options, including:

1. Selling or licensing specific assets
2. Pursuing collaborations with other companies
3. Considering a merger or sale of the entire company

Key assets that Carisma is looking to divest include:

• CT-2401: An mRNA/LNP therapy for liver fibrosis
• CT-1119: A CAR-M (chimeric antigen receptor-monocyte) treatment for mesothelin-positive solid tumors
• The company's engineering and CAR-M platforms

Kelly expressed confidence in the potential of these programs, stating, "We believe deeply in the potential of our liver fibrosis and oncology programs, which have shown compelling preclinical results, and are well-positioned for future development."

Financial Outlook and Future Prospects

Carisma entered 2025 with approximately $17.9 million in cash reserves. The company anticipates that its latest cost-cutting measures will extend this runway into the second half of the year. However, the future remains uncertain, with the company noting in its SEC filing that it "may elect to commence bankruptcy or liquidation and dissolution proceedings."

The biotech has already completed its R&D obligations as part of a CAR-M therapeutics-focused collaboration with Moderna, which resulted in the nomination of 12 oncology targets for further research. However, Carisma has stated that it "currently [has] no intention of resuming research and development activities."

As Carisma Therapeutics navigates this challenging period, the pharmaceutical industry watches closely to see how the company's valuable assets and innovative platforms might be leveraged in the future, either through strategic partnerships or acquisition by larger entities in the space.