Cargo Therapeutics Halts Operations, Seeks Reverse Merger Amid Pipeline Collapse

Cargo Therapeutics, a once-promising CAR-T therapy developer, has announced a dramatic restructuring that effectively ceases all development operations and sets the stage for a potential reverse merger. This move comes just months after the company's initial setbacks, highlighting the volatile nature of the biotech industry and the challenges faced by cell therapy companies.

Massive Workforce Reduction and Asset Divestment

In a stark reversal of fortune, Cargo Therapeutics has revealed plans to cut approximately 90% of its workforce and discontinue its remaining development programs. This decision follows the company's earlier move to halt development of its lead asset, firi-cel, and reduce its staff by half in January.

The latest cuts include the termination of the B-cell disease candidate CRG-023 and the suspension of the company's allogeneic platform development. These actions leave Cargo's pipeline entirely bare, marking a complete departure from its original mission in the CAR-T therapy space.

Leadership Changes and Strategic Pivot

As part of this sweeping restructuring, Cargo has appointed Anup Radhakrishnan, the company's chief operating officer and chief financial officer, as interim CEO. Radhakrishnan replaces outgoing CEO Gina Chapman, who is departing along with other undisclosed members of the executive team.

John Orwin, Cargo's board chairman, explained the rationale behind these decisions: "In connection with the company's review of strategic options, the board has concluded that it is in the best interests of shareholders to cease development operations. Our priority moving forward is to maximize value for shareholders while aiming to find a permanent home for our remaining assets for the benefit of patients, and to do both in an expeditious manner."

The company's new focus will be on pursuing a reverse merger or other business combination, leveraging its substantial cash reserves of $368.1 million as of the end of 2024.

The Fall of Firi-cel and Its Aftermath

The catalyst for Cargo's downfall was the failure of its lead asset, iricabtagene autoleucel (firi-cel), an autologous CD22 CAR-T cell therapy for large B-cell lymphoma. The company shelved the program in January after patients in its phase 2 trial experienced serious side effects, including an 18% incidence rate of grade 3 or higher immune effector cell-associated hemophagocytic lymphohistiocytosis-like syndrome (IEC-HS). Tragically, an undisclosed number of patients in the trial died from IEC-HS.

This setback not only led to the initial 50% workforce reduction but also cast doubt on the viability of Cargo's entire pipeline. The company had previously anticipated starting a phase 1 dose escalation study of CRG-023 and selecting a lead vector candidate for its allogeneic platform in the coming months, plans that have now been abandoned.

Cargo's rapid decline serves as a sobering reminder of the high-risk, high-reward nature of biotech investments, particularly in the advanced therapy space. The company, which raised approximately $291 million in its 2023 IPO and launched with $200 million in funding in March 2022, now faces the challenge of reinventing itself to salvage value for its shareholders.