Five months after its acquisition of Atea Pharmaceuticals fell through, Concentra Biosciences has set its sights on another struggling biotech: Rain Oncology.
Rain has had a rough time of it recently, with the company laying off 65% of its workforce at the end of May in the wake of the failure of its lead asset milademetan in a phase 3 trial for liposarcoma. Rain also said it would halt other trials of the MDM2 inhibitor and explore options that could “enhance” its pipeline through a precision oncology acquisition.
At the same time Rain was reevaluating its pipeline, Concentra had run into its own problems. The company, which is owned by Tang Capital, saw its proposal to buy Atea Pharmaceuticals rebuffed, with the board of the COVID-19-focused biotech deriding the offer as “fundamentally” undervaluing the company.
Now, Tang Capital—described on LinkedIn as a life-sciences-focused investment company— has a new target in the form of Rain. It already owns a 14.6% stake in Rain and has offered to buy all outstanding shares of the biotech for $1.25 a pop, slightly above the 99 cents that Rain’s shares were trading for at Friday’s close.
Rain’s shares had previously been riding far higher than that, ranging between $7 and $10 apiece for the first four months of the year, until the milademetan trial fail brought the value crashing down.
Tang’s offer, which it made on Friday, also includes a contingent value right (CVR) for Rain’s shareholders to receive 80% of the net proceeds from any licensing or sale of Rain’s oncology programs.
“The management of Concentra has the expertise and resources to both maximize the value of the CVR for the benefit of legacy Rain Oncology stockholders and responsibly wind down clinical study activities for the benefit of patients,” Concentra’s CEO Kevin Tang said in a letter to Rain’s board.
Concentra has the necessary funds to hand to make good on the deal, Tang added, with the expectation that an agreement can be finalized this month and the sale done and dusted by the end of the year.
The deal is subject to Rain having at least $55 million in cash and equivalents in the bank at closing, according to the letter.
Tang will be hoping that its offer receives a warmer welcome than that shown by Atea in May. In fact, the investment company had enjoyed better luck only weeks earlier, when it used a last-minute offer to snatch Jounce Therapeutics out of the hands of Redx Pharma in March.