BioPharma, Pharma

Cargo Therapeutics’ IPO Loads Up $281M for a Cancer Cell Therapy’s Pivotal Study

Cargo Therapeutics will use most of the IPO proceeds for clinical testing of a cell therapy engineered to overcome a common way cancers develop resistance. This program is based on research from the National Cancer Institute.

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Problems with cell therapy include limited durability of effect and life-threatening safety risks. Cargo Therapeutics aims to address many limitations of currently available cell therapies, but its lead program is focused on overcoming one: the resistance cancers can develop. A potentially pivotal study is underway and Cargo has raised $281.3 million in IPO cash to support the clinical research.

Late Thursday, Cargo priced its offering of 18.75 million shares at $15 apiece, which was the low end of the $15 to $17 price range it had planned. Those shares will trade on the Nasdaq under the stock symbol “CRGX.”

The first generation of cell therapies are made by engineering a patient’s T cells to go after a cancer protein called CD19. Cancers can develop resistance by losing this protein, rendering a CD19-targeting therapy ineffective. In the IPO filing, Cargo points to clinical tests of the Gilead Sciences CAR T-cell therapy Yescarta in patients with large B-cell lymphoma (LBCL). Results showed that about 60% of treated patients experienced relapse or disease progression after 24 months. Yescarta was approved in 2017 as a third-line LBCL treatment. Last year, the FDA approved the therapy for second-line use.

“As CD19 CAR T-cell therapies continue to expand into earlier lines of therapy and additional geographies, there is a large growing unmet need for the majority of patients who do not experience a durable response,” Cargo said in the IPO filing.

Lead Cargo program CRG-022 is an autologous cell therapy engineered to target a different cancer protein, CD22. In Phase 1 testing in patients with advanced cases of LBCL, Cargo reported 53% (20 of 38 patients) achieved a complete response to the therapy as of the most recent data cutoff date in May. In August, Cargo began a Phase 2 study testing its cell therapy in LBCL patients whose disease has relapsed or has not responded to a CD19-targeting cell therapy. Cargo expects interim results from this study in 2025, according to the IPO filing.

Cargo is based in San Mateo, California, but its origins are on the other side of the country. Company co-founder Crystal Mackall developed a CD22-targeting chimeric antigen receptor (CAR) during her tenure at the National Cancer Institute. In 2016, she took on positions at Stanford University. Cargo formed in 2019, based on Mackall’s CAR, which was licensed from the NCI. The company raised seed financing in 2021. Its $200 million Series A financing came together early this year, co-led by Third Rock Ventures, RTW Investments, and Perceptive Advisors.

Cargo’s aspirations to address multiple limitations of cell therapy is reflected by its name. After the company closed its Series A financing, CEO Gina Chapman told MedCity News that Cargo’s research includes developing cells engineered to carry therapeutic cargo that endow them with new properties. A second platform technology was licensed from Stanford. Called STASH, this technology enables the engineering of various types of immune cells.

“This platform allows us to incorporate multiple transgene therapeutic ‘cargo’ designed to enhance CAR T-cell persistence and trafficking to tumor lesions, as well as to help safeguard against tumor resistance and T cell exhaustion,” Cargo said in the IPO filing.

But Cargo’s near-term focus is its CD22-targeting cell therapy. At the end of June, Cargo reported a cash position of $42.4 million. Together with the IPO proceeds, the company said in the filing that it plans to spend $220 million for the Phase 2 test of this lead cancer cell therapy program.

Another $20 million is budgeted for the internal R&D of other therapeutic candidates. The most advanced preclinical Cargo program, CRG-023, engineers a T cell to hit three cancer proteins: CD19, CD20, and CD22. Cargo also said in the filing it may apply some of the IPO proceeds toward business development, such as acquisitions or licensing deals. With the completion of the IPO, the company expects it will have enough capital to last through 2025.

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