Pliant Therapeutics Enacts Poison Pill Defense Amid Concentra Biosciences' Growing Stake

In a strategic move to protect shareholder interests, Pliant Therapeutics has implemented a limited-duration stockholder rights program, commonly known as a "poison pill defense." This action comes on the heels of Kevin Tang's Concentra Biosciences acquiring a significant 9.6% stake in the California-based biotech company.

Defensive Measures in the Face of Potential Takeover

The poison pill defense, launched on Thursday, allows current shareholders to purchase additional Pliant common stock at a 50% discount. Moreover, if an "unapproved" company acquires at least 10% of Pliant's stock and subsequently merges with or acquires the biotech, existing stockholders would be entitled to buy shares of the resulting company at a 50% discount.

This defensive strategy is set to expire on March 11, 2026, at the latest, as stated in Thursday's news release. While Pliant did not explicitly name any specific "unapproved" company, the timing of this move is noteworthy, coming just days after Tang Capital's stake in the company reached 9.6%, just shy of the 10% threshold outlined in the stockholder rights program.

Industry Context and Similar Moves

Pliant's decision mirrors that of Acelyrin, another biotech firm that recently enacted a similar stockholder rights plan. Acelyrin's move was explicitly aimed at protecting its shareholders from the "continued and rapid accumulation" of the company's shares by Tang Capital Partners, which had reached an 8.8% stake as of Monday.

Kevin Tang, the owner of Tang Capital, is known for his aggressive investment strategies, often targeting struggling biotech companies. A recent example of this approach was Concentra Biosciences' unsolicited proposal to acquire LianBio in December 2023, which was ultimately rejected and led to LianBio's shutdown last month.

Pliant's Recent Challenges

The implementation of this poison pill defense comes at a challenging time for Pliant Therapeutics. The company recently faced setbacks in its clinical programs:

1. Last month, Pliant was forced to suspend its Phase IIb/III BEACON-IPF study, which was testing the integrin blocker bexotegrast for idiopathic pulmonary fibrosis.

2. Following a data review that revealed an imbalance in adverse events among patients treated with bexotegrast, Pliant announced earlier this month that it would discontinue the BEACON-IPF trial altogether.

3. Adding to these difficulties, Novartis recently decided to terminate its collaboration with Pliant on PLN-1474, a candidate for metabolic dysfunction-associated steatohepatitis. Despite losing this partnership, which began in 2019, Pliant continues to explore options for PLN-1474, including potential new collaborations.

As the pharmaceutical landscape continues to evolve, Pliant's defensive maneuver highlights the complex interplay between biotech innovation, corporate strategy, and investor dynamics in the industry.