Cargo Therapeutics Halts Cell Therapy Research, Announces Major Restructuring

Cargo Therapeutics, a once-promising cell therapy developer, has announced a dramatic restructuring that includes laying off 90% of its workforce and discontinuing all research and development activities. The move comes just two months after disappointing results from its lead drug candidate, firi-cel, sent the company reeling.

Leadership Exodus and Strategic Review

In a significant shake-up, CEO Gina Chapman and Chief Medical Officer Ginna LaPort will be departing the company. Anup Radhakrishnan, previously Cargo's chief commercial and financial officer, will step into the role of CEO as the company explores options for its future.

The biotech firm is now considering a reverse merger, business combination, or other strategic alternatives to maximize shareholder value. John Orwin, chair of Cargo's board, stated, "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."

Financial Position and Historical Context

Despite the setbacks, Cargo Therapeutics maintains a relatively strong financial position, with $368 million in cash, cash equivalents, and short-term securities as of the end of 2024. However, since its inception in late 2019, the company has accumulated a deficit of approximately $313 million.

Cargo's journey has been marked by both promise and disappointment. The company emerged from stealth in March 2023 with an impressive $200 million Series A funding round, backed by notable investors such as Third Rock Ventures, Samsara BioCapital, and RTW Investments. This was followed by a successful $281 million initial public offering in November 2023, ranking among the largest biotech IPOs that year.

The Rise and Fall of Firi-cel

Cargo's lead candidate, firi-cel, initially showed promise in a Phase 1 trial for large B-cell lymphoma, encouraging further studies. However, safety concerns emerged during Phase 2 testing, revealing severe immune reactions and diminishing remission rates. These findings ultimately led to the termination of the firi-cel program.

In response to the firi-cel setback, Cargo had initially planned to refocus its efforts on other CAR-T therapies in its pipeline, including CRG-023, designed to target three proteins: CD19, CD20, and CD22. Despite receiving regulatory approval to begin human trials of CRG-023, the company has now decided to shelve this program as well, marking a complete withdrawal from its cell therapy research initiatives.