Concentra Biosciences Continues Biotech Buying Spree with Elevation Oncology Acquisition

Concentra Biosciences, owned by Tang Capital Partners, has added another struggling biotech to its portfolio with the acquisition of Elevation Oncology. The deal, announced today, marks Concentra's latest move in a series of buyouts targeting distressed pharmaceutical companies.

Elevation Oncology Accepts Concentra's Offer Amid Investor Pressure

Elevation Oncology, which has been grappling with activist investor demands to wind down operations, has agreed to a buyout offer from Concentra Biosciences. The deal values Elevation at 36 cents per share, a modest premium over the company's closing price of 32 cents on Friday.

The acquisition comes after a tumultuous period for Elevation, which faced pressure from investor BML Capital Management earlier this year. BML had urged the company to liquidate and return cash to shareholders following the failure of Elevation's lead clinical asset.

Terms of the Acquisition

Under the terms of the agreement, which has been approved by Elevation's board, current stockholders will receive:

• 36 cents per share in cash
• A contingent value right (CVR) for each share, entitling holders to:
  • A portion of proceeds from the potential sale of EO-1022, a HER3-targeted antibody-drug conjugate (ADC)
  • Any remaining cash in Elevation's accounts above a $26.4 million baseline

Elevation's Recent Struggles and Strategic Shift

Elevation's decision to sell comes on the heels of significant setbacks:

• In March, the company discontinued development of EO-3021, its sole clinical-stage asset
• The Claudin 18.2 ADC showed disappointing results in a phase 1 trial for gastric and gastroesophageal junction cancers
• Following the trial failure, Elevation cut 70% of its workforce

These events prompted a strategic review, with the company considering various options including a potential reverse merger. However, activist investor BML had warned it would likely oppose such a move.

Concentra's Acquisition Strategy and Industry Trends

The Elevation deal continues Concentra's pattern of acquiring troubled biotechs, following earlier purchases of Kronos Bio and Allakos. However, not all of Concentra's recent approaches have been successful:

• Two unnamed companies enacted "poison pill" defenses in March to fend off Concentra's advances
• Acelyrin, another potential target, opted to merge with a different biotech rather than sell to Concentra

These developments highlight the challenging environment for small and mid-sized biotechs, with many facing difficult choices between consolidation, strategic pivots, or winding down operations in the face of market pressures and clinical setbacks.