Concentra Biosciences Acquires Cargo Therapeutics in $202 Million Deal

Concentra Biosciences, a biotech buyout firm backed by Tang Capital, has continued its acquisition spree with the purchase of Cargo Therapeutics, a struggling CAR T cell therapy company. The deal, valued at approximately $202 million upfront, marks another significant development in the ongoing consolidation within the biotechnology sector.

Cargo's Downfall and Concentra's Strategic Acquisition

Cargo Therapeutics, once a promising player in the CAR T cell therapy space, has agreed to be acquired by Concentra Biosciences following a series of setbacks. The company's decline began in January when it halted development of its lead candidate, firicabtagene autoleucel (firi-cel), for aggressive large B cell lymphoma (LBCL) due to an unfavorable benefit-risk profile.

Despite achieving a 77% response rate and 43% complete response in Phase II trials, firi-cel's durability was only 18% at three months, falling short of earlier Phase I results. This disappointing outcome led to significant workforce reductions, with Cargo cutting half its staff initially and later laying off the remaining 90% of employees.

Concentra's acquisition of Cargo comes as part of a larger trend of the firm targeting "zombie" biotechs – companies trading below the value of their cash reserves. The deal structure includes an upfront payment of $4.379 per Cargo share, with additional provisions allowing shareholders to benefit from any excess cash and potential asset sales.

Concentra's Expanding Portfolio and Industry Implications

The Cargo acquisition is the latest in a series of strategic moves by Concentra Biosciences. In recent months, the company has also acquired Kronos Bio, Elevation Oncology, and IGM Biosciences, establishing itself as a major player in the biotech acquisition landscape.

These acquisitions reflect a broader industry trend where investors are increasingly pushing for struggling companies to return cash to shareholders rather than pursue costly research pivots. Concentra's approach of acquiring companies at a premium to their stock price, retaining a portion of cash holdings, and returning the rest to investors has proven successful in this environment.

However, not all companies have welcomed Concentra's advances. In March, both Pliant and Acelyrin implemented poison pill stockholder rights programs to resist potential takeover attempts.

The ongoing consolidation in the biotech sector, exemplified by Concentra's activities, highlights the challenges faced by many companies in the current market. It also underscores the importance of clinical trial success and effective cash management in maintaining investor confidence and corporate independence.