Cargo Therapeutics, a once-high-flying Bay Area biotech company that specializes in oncology research, is laying off almost its entire staff as it shuts down drug development efforts.
The San Carlos company announced that it would slash 90% of its workforce in a Tuesday filing with the Securities and Exalter Commission. It’s the second major job cut that Cargo has announced this year; in January, the company declared it would lay off about half its staff. Cargo had about 170 full-time workers back in September, per a filing, but that number will now likely drop down to 10 or fewer.
Cargo’s January layoffs came after the company shut down a Phase 2 clinical trial, in which almost a fifth of the trial’s lymphoma patients were displaying signs of a dangerous side effect. Cargo is now suspconcludeing development of the remaining drug candidates in its pipeline.
John Orwin, the chair of Cargo’s board, wrote in a Tuesday news release that the board decided it is “in the best interests of shareholders to cease development operations.”
He added that the board is grateful to the departing employees, and he wrote that the layoffs are a direct result of Cargo’s shutting down its drug development.
“Our priority shifting forward is to maximize value for shareholders while aiming to find a permanent home for our remaining assets for the benefit of patients, and to do both in an expeditious manner,” Orwin wrote.
The news release declared Cargo might seek out a “reverse merger,” where a private company would take control of publicly traded Cargo and become public itself, or some other business shift.
Cargo’s situation — only a smattering of employees left after two large layoff rounds — represents a major fall from grace for the research and development company. When Cargo went public in 2023, its stock price climbed, topping its value out at around $1.2 billion in March 2024. Its stock fluctuated for much of the year, before plummeting on the news of January’s trial shutdown and layoffs. Now, Cargo is worth less than $200 million.
The company put things bluntly in the “Risks” section of a March 12 financial report — which revealed an accumulated deficit of $312 million. Cargo wrote that it has “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.”
Cargo’s spokesperson did not immediately respond to SFGATE’s request for comment.
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