The IPO Buzz: Cargo Therapeutics (CRGX) Launches $300 Million IPO

Phase 2 cancer clinical biotech CARGO Therapeutics (CRGX proposed) launched its $300 million IPO early today (Monday, Nov. 6, 2023) by disclosing terms: 18.75 million shares at $15.00 to $17.00. The IPO is expected to price Thursday night, Nov. 9, 2023, to trade Friday, Nov. 10, on the NASDAQ. If CARGO Therapeutics prices its IPO at the $16.00 mid-point, the company would have a valuation or a market cap of $618.77 million.

J.P. Morgan, Jefferies, Cowen and Truist Securities are the joint book-runners.

CARGO Therapeutics, based in San Mateo, California, is evaluating CRG-022, its lead CD22 CAR T-cell product candidate, in “a potentially pivotal Phase 2 clinical trial in patients with LBCL (large B-cell lymphoma) whose disease relapsed or was refractory to CD19 CAR T-cell therapy,” the prospectus says. Cargo Therapeutics licensed the underlying CAR (chimeric antigen receptor) exclusively from the National Cancer Institute. According to the prospectus: “A CAR is a protein that has been engineered to modify T cells so they can recognize and destroy cancer cells.” Cargo Therapeutics’ potential cell therapy uses a cancer patient’s own cells, the prospectus says.

Principal shareholders include Samsara BioCapital and Third Rock Ventures, according to Cargo Therapeutics’ S-1/A filing.

The SEC filing also shows that CARGO Therapeutics has no product revenues and a sizable net loss: $56.63 million for the 12 months that ended June 30, 2023. This financial profile – no product revenues and a substantial net loss – is typical for a biotech when it goes public.

CARGO Therapeutics’ IPO is the second biotech IPO to jump on the IPO Calendar with a Monday launch in the past two weeks.

Lexeo Therapeutics (LXEO), a clinical biotech developing cardiovascular and Alzheimer’s disease drugs, launched last Monday and priced its IPO last Thursday night, Nov. 2, at $11.00 – $2.00 below the bottom of its $13.00-to-$15.00 price range – on 9.09 million shares. Lexeo Therapeutics’ stock slid on Friday in its NASDAQ debut, closing at $10.05.

In contrast, other biotech IPOs priced earlier this year are doing well. RayzeBio, Inc. (RYZB), priced on Sept. 14, 2023, at $18.00, closed Friday, Nov. 3, 2023, at $22.35. Structure Therapeutics (GPCR), priced on Feb. 2, 2023, at $15.00, closed Friday, Nov. 3, 2023, at $69.88.

Stay tuned.

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Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.