Concentra Biosciences Continues Biotech Acquisition Spree with Elevation Oncology Deal

Concentra Biosciences, owned by Tang Capital Partners, has made another strategic move in its ongoing series of acquisitions, agreeing to purchase Elevation Oncology for $0.36 per share. This latest deal comes on the heels of Concentra's recent buyouts of Kronos Bio and Allakos, solidifying its position as an aggressive player in the biotech M&A landscape.

Elevation's Tumultuous Journey to Acquisition

Elevation Oncology, a company focused on antibody-drug conjugates (ADCs), has faced significant challenges in recent months. The biotech came under pressure from activist investor BML Capital Management earlier this year, following the discontinuation of its lead clinical asset, EO-3021, a Claudin 18.2 ADC targeting advanced gastric and gastroesophageal junction cancers.

The phase 1 trial results for EO-3021 were disappointing, with an objective response rate of only 22.2% among 36 evaluable patients. This setback led Elevation to terminate the program in March and reduce its workforce by 70%, prompting calls from BML Capital for the company to wind down operations and return cash to shareholders.

Terms of the Concentra-Elevation Deal

Under the terms of the agreement, which has received approval from Elevation's board of directors, Concentra will pay $0.36 for each share of Elevation Oncology. This represents a modest premium over the company's closing price of $0.32 on the Friday before the announcement.

In addition to the per-share payment, Elevation's current stockholders will receive a contingent value right (CVR) for each share. This CVR entitles holders to a portion of the proceeds from any future sale of Elevation's HER3-targeted ADC, EO-1022, as well as any excess cash in the company's coffers above a baseline of $26.4 million.

Concentra's Acquisition Strategy and Industry Implications

Concentra's string of acquisitions, including Elevation, Kronos Bio, and Allakos, highlights a growing trend of consolidation in the biotech sector, particularly among companies facing financial or clinical setbacks. However, not all of Concentra's recent M&A attempts have been successful.

In March, two unnamed companies enacted "poison pill" defenses to ward off Concentra's advances. One of these companies, Acelyrin, opted to merge with another biotech rather than sell to Concentra, illustrating the complex dynamics at play in the current biotech M&A environment.

As the industry continues to navigate challenging market conditions and heightened investor scrutiny, Concentra's aggressive acquisition strategy may signal a shift towards increased consolidation and restructuring within the biotech sector.