Elevation Oncology, which spent the spring fending off activist investor demands to wind down, has become the latest beleaguered biotech to take up the option of a buyout from Concentra Biosciences.
The offer, which has been approved by Elevation’s board, will see Concentra pay 36 cents for each share of the oncology biotech—slightly above the 32 cents that the company’s stock closed trading at on Friday. Elevation’s current stockholders will also receive a contingent value right for each share that will entitle them to a slice of the proceeds from the sale of the biotech’s HER3-targeted ADC called EO-1022 as well as any leftover cash in the company’s coffers above a baseline of $26.4 million.
The sale would mark the end of a tough period for the antibody-drug-conjugate-focused biotech, which came under fire from investor BML Capital Management earlier this year. BML “applauded” the company’s decision in March to drop its sole clinical-stage asset EO-3021, but pointed to “the current state of the public equity market … along with the abysmal performance of several recent reverse mergers” to urge Elevation to wind down its operations and hand the remaining cash to shareholders.
Elevation had spent most of this year considering its strategic options, but BML warned in the same April letter that if one of the options being considered was a reverse merger with another company—a common escape route for struggling biotechs—BML would likely vote against it.
The biotech had been investigating EO-3021, a Claudin 18.2 ADC as a potential treatment for advanced, unresectable or metastatic gastric and gastroesophageal junction cancers. But data from a phase 1 trial of 36 evaluable patients with these cancers showed an objective response rate of just 22.2%, leading the company to ditch the asset in March along with 70% of its staff.
Elevation is set to be the latest in a string of acquisitions by Tang Capital Partners-owned Concentra this year, following the buyouts of Kronos Bio and Allakos.
Not all of Concentra's recent M&A moves have borne fruit, though. In response to the acquirer's advances, two other companies enacted "poison pill" defenses in March to keep Concentra at bay. One of them, Acelyrin, opted to merge with another biotech rather than sell itself.