SAN CARLOS, Calif. - CARGO Therapeutics, Inc. (NASDAQ: CRGX), a clinical-stage biotechnology company focused on developing cell therapies for cancer, announced today a successful private investment in public equity (PIPE) financing that will generate approximately $110 million in gross proceeds.
The company stated that the funds would support the preparation of a Biologics License Application (BLA) for its Phase 2 study, FIRCE-1, of firicabtagene autoleucel (firi-cel) and further development of its CRG-023 program.
The PIPE included the sale of approximately 6.47 million shares of common stock at a price of $17 per share. The financing drew participation from a mix of new and existing investors such as EcoR1 Capital, Woodline Partners LP, and T. Rowe Price Associates, among others. The transaction is expected to close on May 30, 2024, pending customary closing conditions.
President and CEO Gina Chapman commented on the strong investor support, attributing it to confidence in the company's mission and its progress on the pivotal Phase 2 study of firi-cel for patients with large B-cell lymphoma (LBCL) who have relapsed or are refractory to CD19 CAR T-cell therapy.
CARGO Therapeutics is also advancing its CRG-023 program, which involves a novel tri-specific CAR T designed to overcome multiple resistance mechanisms. The company's strategic focus includes addressing limitations of current cell therapies such as durability, safety, and supply reliability.
The information in this article is based on a press release.
InvestingPro Insights
In light of the recent PIPE financing announcement by CARGO Therapeutics, Inc. (NASDAQ: CRGX), a deeper financial analysis using InvestingPro reveals some key insights into the company's financial health and market performance. Notably, CRGX holds a market capitalization of approximately $821.38 million, indicating a significant presence in the biotechnology sector. However, the company's P/E ratio stands at -2.78, reflecting investor concerns over profitability, especially as analysts do not anticipate the company to be profitable this year. This aligns with the company's negative operating income of the last twelve months as of Q1 2024, which amounted to -$122.27 million.
From a liquidity standpoint, CRGX holds more cash than debt on its balance sheet, which is a positive sign for its financial stability and its ability to fund ongoing projects like the FIRCE-1 Phase 2 study and the CRG-023 program. Additionally, the company's liquid assets exceed its short-term obligations, further underscoring its capacity to meet immediate financial needs.
Investors tracking the company's stock performance will note that CRGX has experienced a large price uptick of 35.63% over the last six months, despite a year-to-date price total return of -9.89%. This volatility suggests that while the company has had recent growth, it also faces challenges that could impact its stock value.
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