Damaged Biotech, Important Money Place


CARGO Therapeutics (CRGX) (~$150MM market cap) is a clinical-stage biotechnology firm that’s growing CAR T-cell therapies for most cancers sufferers.  Final night time, the corporate issued a press launch stating they’re discontinuing the FIRCE-1 Part 2 Examine of their lead asset, firicabtagene autoleucel, as a consequence of a non-competitive profit danger profile for sufferers.  The inventory is down roughly 75% on the information.

Moreover, CARGO introduced they’re going to consider strategic choices and are commencing a 50% discount in power.  The announcement will not be a full waving the white flag, they do have a Part 1 prepared asset in CRG-023 that simply obtained an IND utility approval from the FDA earlier this month.  CARGO presently plans to go forward with mid-year launch of a Part 1 research, however my guess is these plans may change by then relying on what occurs with the strategic assessment.  CARGO was a late 2023 IPO and thus has a pleasant chunk of money remaining on their stability sheet that might be enticing to a reverse merger associate and supplies some margin of security at these costs if the method drags out.

Above is my typical again of the envelope math on a possible liquidation worth for CRGX.  The shareholder base right here appears fairly vanilla, there are not any cornerstone biotech buyers proudly owning greater than 10%, the board is staggered and administration owns little or no inventory.  It would want an activist or different push to get issues shifting right here, however I just like the low cost to a big money stability and added it to my damaged biotech basket.

Disclosure: I personal shares of CRGX

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