In what appears to be a considerable setback for the once-valued $1.2 billion biotech company, CARGO Therapeutics is slashing nearly its entire workforce and halting its drug development efforts. As reported by CARGO's corporate update, the company has decided to suspend the development of CRG-023 and its allogeneic platform. The move comes after the failed Phase 2 study of their leading candidate, firicabtagene autoleucel (firi-cel). It has led to the abrupt appointment of Anup Radhakrishnan as interim CEO to oversee a potential reverse merger or business combination.
With a shrinking workforce set to decrease by about 90%, the San Carlos-based biotech firm once boasted around 170 employees as of last September. Now, the number is likely to plummet to 10 or less, as indicated in a coverage by SFGate. The layoffs, a direct consequence of the drug development discontinuation, represent the second such slashing of jobs this year alone, with an earlier action in January also contributing to a dwindling talent pool within the company.
John Orwin, Chairman of the Board at CARGO, expressed the company's stance, "In connection with the Company’s review of strategic options, the Board has concluded that it is in the best interests of shareholders to cease development operations," as per CARGO's press statement. He also intended to prioritize shareholder value and pursue a permanent solution for the company's remaining assets for patient benefit. Amid this organizational pivoting, CARGO is also engaged with TD Cowen as its strategic financial advisor.
The trajectory for Cargo Therapeutics has sharply declined; the company’s market valuation has plummeted from its peak to now less than $200 million. From a high-achieving IPO in 2023, the latest financial turmoil paints a stark contrast, especially after a failed trial spurted safety concerns and subsequent operational halting. According to SFGate, CARGO acknowledged an accumulated deficit of $312 million and bluntly stated its bleak outlook, having "incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability."
