CARGO Therapeutics Aims for One of Nasdaq's Largest Biotech IPOs of the Year with CD22 CAR-T Therapy

Biotech startup CARGO Therapeutics hopes toOne of the largest listed companies on Nasdaq。

If Cargo Therapeutics, Inc., the blood cancer cell therapy manufacturer, can garner sufficient investor interest in its IPO at the proposed midpoint price of $16, its Wall Street debut will be nearly on par with Apogee Therapeutics' $300 million deal in July, but below RayzeBio's $311 million issuance in September and Acelyrin's $540 million offering in May.

CARGO Therapeutics disclosed its plans on Monday morning,Plans to sell 18.75 million shares at a price of $15 to $17 per share. According to its latest SEC filing, calculated at the midpoint,This would be approximately $300 million, or net proceeds of about $274 million. If the underwriters purchase an additional 2.8 million shares, the net proceeds will increase to approximately $316 million.Last month, the startup had announced its IPO plan.

The IPO Market Environment This Year

About 15 biotech companies went public this year, and CARGO will become one of the few cell and gene therapy manufacturers. Lexeo Therapeutics, a cardiac and Alzheimer's gene therapy startup, went public last Friday with a smaller IPO than originally planned, and its stock price fell nearly 9% on the first day of trading.

Most biotech companies listed on Nasdaq this year are trading below their IPO price, with a few exceptions, including autoimmune drug maker Apogee and radiopharmaceuticals company RayzeBio.

Cargo Therapeutics, Inc. Set to Become the Sixth Biotech IPO in China This Fall, and could mark the end of a bleak year for the IPO market amid macro-environmental factors and industry-specific variables (such as a complete withdrawal of investors from the biotech sector and heightened scrutiny of preclinical platform models). Before the Labor Day holiday, industry insiders estimated that 5 to 10 biotech companies would go public by the end of the year. They anticipated that the IPO pipeline would expand to about 20 after the JP Morgan Healthcare Conference in early January.

"On Monday morning, an anonymous industry banker mentioned, 'There is still a lot of nervousness about market performance.' The banker indicated that many variables remain unstable, making it difficult to predict what will happen in the rest of the year. Companies considering a potential IPO in December are likely now engaged in 'very deep conversations.'"

Investors like Beth Seidenberg have previously stated that reliable biotech companies can go public regardless of market conditions. Last week, Henry Gosebruch, CEO of Neumora, echoed the same sentiment. The neuroscience startup’s stock price has dropped approximately 28% since its debut in September, trading at $17 per share.

Gosebruch said in a live interview last Thursday: "A good company can go public in any market. It's less about the environment and more about what's the best choice for us."

He pointed out that, considering Neumora has multiple Phase III trials in depression and other early-stage studies, as well as early research on other brain diseases ongoing, the timing for going public is appropriate.

However, the broader context for biotech IPOs is bleak: Troy Ignelzi, former CFO of Karuna Therapeutics and current CFO of neuroscience startup Rapport Therapeutics, was blunt last week, saying, "I don't know if anyone can go public right now."

CARGO's IPO means it will have funding to operate until 2025., which is the year when the expected interim data of its blood cancer project is released.

About CARGO Therapeutics‍

According to Gina Chapman, President and CEO, CARGO Therapeutics originated from research at the National Cancer Institute and Stanford University. After raising $11 million in seed funding and $32 million in bridge financing, it completed a $200 million Series A financing in March this year. The main shareholders of CARGO Therapeutics include Samsara, Red Tree Ventures, Perceptive Xontogeny, Third Rock Ventures, Nextech, Janus Henderson, and RTW Investments.

Gina Chapman，CARGO TherapeuticsPresident and Chief Executive Officer

This nearly four-year-old biotechnology company is developing a CD22 CAR-T cell therapy, which is extracted from the patient's own cells and is similar to existing CAR-T therapies on the market. The candidate drug, named CRG-022, is currently in Phase II clinical trials, targeting patients with large B-cell lymphoma who have failed prior CD19 CAR-T therapy. The company stated that it hopes this study, which began dosing in September, will serve as a cornerstone for regulatory approval. According to its S-1 filing, CARGO also plans to investigate whether CRG-022 can help patients who have not previously received CAR-T therapy and explore its potential in other blood cancers, such as pediatric leukemia.

According to a filing with the U.S. Securities and Exchange Commission, as of the end of June, CARGO had an accumulated deficit of $77.6 million and cash and cash equivalents of $42.4 million.

Source: https://endpts.com/