Another fledgling biopharma company is planning to go public.
And several prominent life sciences hedge funds that previously invested in the company are hoping this IPO fares better than the majority of recent offerings.
CARGO Therapeutics, a company purporting to advance a next generation of CAR T-cell therapies for cancer, last week filed plans with regulators to list its shares. CARGO did not disclose the number of shares it is planning to sell or the price it is seeking.
According to a regulatory filing, Perceptive Xontogeny Venture Fund II is one of six investors — and the only one connected to a hedge fund — that owns at least 5 percent of CARGO’s shares before the public offering, according to the filing. It is an affiliate of Perceptive Advisors headed by Joseph Edelman.
Perceptive Xontogeny previously bought 20 million shares of Series A-1 preferred stock for $20 million, according to the filing.
Cassandra Gianna Luca, a principal of Perceptive Xontogeny Venture Fund II, who was previously elected to CARGO’s board as the fund’s designee, resigned from the board this month.
Several other life sciences hedge funds also previously invested in CARGO, but their stakes are less than 5 percent, so they are not singled out in the S-1 regulatory filing.
For example, in March Perceptive Xontogeny Venture Fund, life sciences firm RTW Investments, and Third Rock Ventures co-led Cargo’s $200 million Series A financing.
The fundraise also included several new investors, including life sciences hedge fund firm Cormorant Asset Management.
The proceeds of the IPO are expected to be used, in part, to finance planned phase 2 trials for CARGO’s T-cell therapy — CRG-022, research and development capabilities for new product candidates, working capital, and other general corporate purposes, according to the regulatory filing.
While IPO activity in general has picked up this year, the shares of the newly public companies have been struggling.
Three-quarters of the 24 IPOs priced since September 6 and tracked by Renaissance Capital are currently in the red.
Eight of the 24 are down more than 50 percent from their IPO price.
Few of the newly listed companies had hedge fund owners before going public.
That said, shares of Neumora Therapeutics, a clinical-stage biotech company, which are down 42 percent from their IPO price. Surveyor Capital, a Citadel company, participated in the company’s Series A funding round.