The biotech is exploring opportunities for a reverse merger or other business combinations. CFO and now interim CEO Anup Radhakrishnan will take charge of these negotiations.
Cargo Therapeutics is laying off 90% of its staff as it evaluates its strategic options, according to a company release on Tuesday afternoon. The biotech is also stopping all development operations.
The move, according to Cargo, is to “preserve cash and maximize shareholder value.” CFO Anup Radhakrishnan will serve as the biotech’s interim CEO and will help navigate the company through a reverse merger or other business combination. Cargo is also suspending all development operations, including work on its trispecific CAR T candidate CRG-023 and its allogeneic platform.
Following the announcement, Cargo’s stock fell 7.5% at close of trading Tuesday but rallied to go up almost 19% in pre-market trading Wednesday.
William Blair, in a note to investors Tuesday evening, said it would suspend coverage of Cargo “until we gain more clarity on ongoing operations.”
In another note published last week, William Blair seemed to still have high hopes for Cargo, at least in the long run. “We continue to believe CRG-023 and the company’s Allo Vector platform have the potential to be long-term value creators,” analysts wrote, however noting that “given their stage of development, we think they are unlikely to generate meaningful clinical data in the next 12 months.”
William Blair at the time estimated that Cargo would lose $101.6 million through 2025. As of the end of 2024, the biotech had $368.1 million in cash, cash equivalents and marketable securities, according to the layoff announcement.
Analysts also predicted that Cargo’s stock would stay “flat” through the year, at least until it provided a more detailed development plan—or until it engaged in “business development opportunities.”
Founded in 2019 and backed by Third Rock Ventures, Cargo in March 2023 brought in $200 million in an oversubscribed Series A funding round, which helped it develop its pipeline of next-generation CAR T therapies for cancer.
Cargo invested much of its time and resources into firicabtagene autoleucel (firi-cel) an autologous CAR T candidate that targets the CD22 protein. The biotech was running a Phase II trial for the asset, also called firi-cel, in large B cell lymphoma, but in January made the decision to discontinue its development.
The biotech at the time was forced to conduct an ad-hoc analysis of the mid-stage study due to “recent safety events” and came to the conclusion that findings “do not support a competitive benefit-risk profile for firi-cel for the intended patient population.”
Concurrent with the discontinuation of the firi-cel study, Cargo announced a 50% workforce reduction that would extend its cash runway into mid-2028.
