SCHEDULE: Cargo Therapeutics to be Acquired by Concentra Biosciences in Cash and CVR Deal

Cargo Therapeutics, Inc. has entered into a definitive merger agreement to be acquired by Concentra Biosciences, LLC for $4.379 per share in cash plus one contingent value right.

Summary

• Cargo Therapeutics, Inc. has signed an Agreement and Plan of Merger with Concentra Biosciences, LLC and its subsidiary, Concentra Merger Sub VII, Inc., for an acquisition via a cash tender offer.
• The offer price is $4.379 in cash per share of Cargo Therapeutics' Common Stock, plus one Contingent Value Right (CVR).
• The closing of the tender offer is contingent on at least 50% plus one share of outstanding Common Stock being validly tendered and the Issuer's Closing Net Cash being no less than $217.5 million.
• Tang Capital Management, LLC, Kevin Tang, Tang Capital Partners, LP (TCP), and Tang Capital Partners International, LP (TCPI) collectively beneficially own 3,059,630 shares of Cargo Therapeutics' Common Stock, representing 6.6% of the outstanding shares as of May 2, 2025.
• The acquisition funds for the Common Stock were approximately $22.0 million of working capital set aside by TCP and TCPI for general investing purposes.
• A Limited Guaranty has been provided by Tang Capital Partners, LP in favor of Cargo Therapeutics, capping certain obligations at $213.1 million under the Merger Agreement and CVR Proceeds plus CVR Expense Cap under the CVR Agreement.
• Each CVR entitles holders to contingent cash payments: 100% of the amount by which Closing Net Cash exceeds $217.5 million (adjusted for certain claims) and 80% of Net Proceeds from any Disposition of CVR Products within two years of the Merger Closing Date.
• CVR Products include CRG-022 (firi-cel), CRG-023 (CD19/CD20/CD22 tri-specific CAR T), and Cargo Therapeutics' allogeneic platform.
• Concentra is committed to using commercially reasonable efforts, including spending up to $250,000 (CVR Expense Cap), to facilitate Dispositions of CVR Products and maintain related intellectual property and CMC activities during the Disposition Period.

Sentiment

Score: 7

Explanation: The sentiment is positive due to a definitive acquisition offer providing a cash component and potential upside via CVRs, offering a clear exit for shareholders. However, the contingent nature of the CVRs introduces uncertainty, preventing a higher score.

Positives

• Provides a defined cash value of $4.379 per share to Cargo Therapeutics shareholders.
• Offers potential additional upside through Contingent Value Rights (CVRs) tied to future net cash and disposition proceeds of key product candidates.
• The acquisition by Concentra Biosciences, backed by Tang Capital, suggests strategic alignment and potential for the CVR products.

Negatives

• The value of the CVRs is highly contingent and uncertain, depending on future events such as the final Closing Net Cash and successful Dispositions of CVR Products.
• No payment will be received from CVRs related to Dispositions if no such Dispositions occur within two years of the Merger Closing Date.
• The CVR Expense Cap of $250,000 for commercially reasonable efforts might be insufficient for extensive development or marketing of the CVR Products.

Risks

• The tender offer may not close if the minimum tender condition (over 50% of outstanding shares) or the Closing Net Cash condition (no less than $217.5 million) is not met.
• The contingent nature of CVR payments means shareholders may not realize additional value beyond the cash component.
• The success of CVR Product Dispositions is uncertain and depends on market conditions, product development, and Concentra's efforts.
• The CVR Agreement specifies that Concentra will use 'commercially reasonable efforts,' which may not guarantee optimal outcomes for CVR holders.

Future Outlook

The future outlook for Cargo Therapeutics involves its acquisition by Concentra Biosciences through a tender offer, followed by a merger. Shareholders will receive a fixed cash payment and a contingent value right, the latter's value depending on the company's final net cash position and the future disposition of its key product candidates (CRG-022, CRG-023, and the allogeneic platform) within a two-year period post-merger.

Management Comments

• Concentra Biosciences and Concentra Merger Sub VII, Inc. have entered into an Agreement and Plan of Merger with Cargo Therapeutics, Inc. to acquire all outstanding shares.
• Tang Capital Partners, LP has delivered a Limited Guaranty to Cargo Therapeutics as a condition and inducement for the Merger Agreement.
• Concentra and the Issuer (post-merger) are expected to use commercially reasonable efforts to facilitate Dispositions of CVR Products and maintain related intellectual property and CMC activities.

Industry Context

This announcement reflects ongoing consolidation and strategic M&A activity within the biotechnology and pharmaceutical sectors, particularly in the specialized area of CAR T-cell therapies. Acquisitions like this allow larger entities or investment firms to integrate promising clinical assets and platforms, potentially accelerating development or monetizing intellectual property through future dispositions.

Comparison to Industry Standards

• The document details a specific acquisition and does not provide sufficient comparative financial or operational data to assess the results against global industry benchmarks or specific comparable companies/projects.
• The inclusion of a Contingent Value Right (CVR) is a common mechanism in biotech M&A, allowing sellers to participate in future upside of pipeline assets while providing buyers with a lower upfront cost and risk mitigation.

Related Party Transactions

• Tang Capital Management, LLC, Kevin Tang, Tang Capital Partners, LP (TCP), and Tang Capital Partners International, LP (TCPI) are reporting persons with significant beneficial ownership in Cargo Therapeutics.
• Concentra Biosciences, LLC, the acquirer, is controlled by Kevin Tang, who is also a reporting person and manager/CEO of the Tang Capital entities.
• Tang Capital Partners, LP has provided a Limited Guaranty to Cargo Therapeutics in connection with the Merger Agreement and CVR Agreement, indicating a direct financial commitment from a related party to facilitate the transaction.

Stakeholder Impact

• Shareholders: Will receive $4.379 per share in cash and one CVR, providing a liquidity event and potential future contingent payments.
• Employees: Potential changes in employment or organizational structure post-merger, though not explicitly detailed.
• Creditors: The Limited Guaranty by Tang Capital Partners, LP provides a financial backstop for certain obligations of Concentra and Merger Sub, potentially impacting creditors' risk assessment.
• Customers/Partners: Future development and commercialization of Cargo Therapeutics' product candidates will be under Concentra's direction, potentially affecting existing or future collaborations.

Next Steps

• Completion of the cash tender offer, subject to conditions including minimum tendered shares and Closing Net Cash.
• Merger of Concentra Merger Sub VII, Inc. into Cargo Therapeutics, Inc. following the tender offer.
• Execution of the Contingent Value Rights Agreement.
• Concentra's efforts to pursue Dispositions of CVR Products (CRG-022, CRG-023, allogeneic platform) within two years of the Merger Closing Date.

Key Dates

Recommendation

Keywords

Cargo Therapeutics, Concentra Biosciences, Merger Agreement, Tender Offer, Contingent Value Right, CVR, Acquisition, Biotech, CAR T-cell, SEC Filing, Schedule 13D, CRG-022, CRG-023, Allogeneic Platform