CARGO halts Phase 2 study of cancer treatment

SAN CARLOS, Calif. - CARGO Therapeutics , Inc. (NASDAQ:CRGX), a clinical-stage biotech company currently valued at $628 million, announced today the discontinuation of its Phase 2 clinical study, FIRCE-1, for the treatment of large B-cell lymphoma (LBCL). According to InvestingPro analysis, the company’s stock appears undervalued despite falling nearly 40% over the past year. The decision follows an ad hoc analysis of the study, which indicated that the benefit-risk profile of firicabtagene autoleucel (firi-cel) was not competitive in the intended patient population.

The study, which involved patients whose disease relapsed or was refractory to CD19 CAR T-cell therapy, showed an overall response rate of 77% and a complete response rate of 43%. However, the durability of complete response at three months was only 18%. Moreover, safety concerns arose as 18% of patients developed severe immune effector cell-associated hemophagocytic lymphohistiocytosis-like syndrome (IEC-HS).

In response to these findings, CARGO is also reducing its workforce by approximately 50% to extend its cash runway and focus on advancing its other product candidate, CRG-023, into Phase 1 clinical trials and its novel allogeneic platform. InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 18.95, though analysts note the company is quickly burning through cash. Get access to 8 more key financial insights with InvestingPro.

Gina Chapman, President and CEO of CARGO Therapeutics, expressed disappointment with the study’s outcomes, emphasizing the importance of durability in complete response for LBCL patients. She acknowledged the patients, caregivers, families, and investigators involved in the study and thanked the CARGO employees impacted by the decision.

Despite the setback, the company plans to present an analysis of the FIRCE-1 study at a future medical conference. CARGO reported preliminary cash, cash equivalents, and marketable securities of $368.1 million as of December 31, 2024, which is expected to fund operations into mid-2028. The company’s strong balance sheet shows minimal debt of just $28.58 million, though InvestingPro analysis indicates net income is expected to decline this year. Discover comprehensive financial health metrics and analyst forecasts with an InvestingPro subscription.

CARGO Therapeutics specializes in developing cell therapies for cancer patients, aiming to address the limitations of approved cell therapies. The company’s pipeline includes CRG-023, a tri-specific CAR T-cell therapy, and a novel allogeneic platform intended to improve the durability and availability of CAR T-cell therapy.

This news article is based on a press release statement from CARGO Therapeutics.

In other recent news, Cargo Therapeutics has made significant strides in its clinical trials and strategic operations. Clear Street recently initiated coverage on the company, assigning it a Buy rating with a $28 target. This aligns with the broader analyst consensus and suggests a substantial upside from the current price. The firm’s optimism is primarily due to the company’s leading drug candidate, Firi-cel, which is expected to outperform existing treatments for B-cell malignancies.

Clear Street estimates Firi-cel’s peak sales to reach around $2.1 billion, underscoring its blockbuster potential. This forecast is supported by the company’s strong balance sheet and a healthy current ratio. Cargo Therapeutics is also progressing with its CRG-023 therapy and has secured approximately $110 million from a private investment for further development.

In addition, Cargo Therapeutics has entered a sublease agreement with Vaxcyte, Inc. and announced the appointment of Dr. Kapil Dhingra to its Board of Directors. Analyst firms TD Cowen and Piper Sandler have maintained their positive ratings on the company’s stock, with Piper Sandler reaffirming its Overweight rating based on research supporting the safety profile of CAR-T therapies. These recent developments point to a promising trajectory for the company.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.