Shares of Cargo Therapeutics Inc. bounced back Monday after slumping in its market debut Friday following a disappointing initial public offering.
The San Mateo company went public Thursday evening, pricing its shares (Nasdaq: CRGX) at $15 a piece — the low end of its forecast range. The next day, in their first day of trading, the cancer treatment developer's shares jumped a bit before ending the day down 3% to $14.53 a piece.
They recovered a small portion of that in Monday's regular session, closing trading up 16 cents, or 1%, to $14.69 each. But they took off in after-hours exchanges. In recent trading in the extended session, Cargo's shares were up 89 cents a piece, or 6%, to $15.42 each.
It was unclear what was driving the price spike.
Cargo raised $281.3 million in its IPO, a far cry from the as much as $367 million it had hoped to garner in the deal. At the $15 price, the offering gave the company an initial market capitalization of $580.1 million.
The company could still see more money from the deal. The offering's underwriters — JPMorgan, Jefferies, TD Cowen and Truist Securities — have 30 days to purchase up to 2.8 million Cargo shares at the $15 IPO price.
Cargo is developing a kind of immunotherapy designed to treat large B cell lymphoma, a non-Hodgkins variant of the disease. The company, which was spun out of Stanford University, is in Phase 2 trials for one use of its treatment. It has a licensing agreement with Stanford for its technology.
Pre-IPO, Cargo's biggest investors were Samsara BioCapital, which held a 17.3% stake; a fund managed by Perceptive Venture Advisors, which held 12.9%; and Third Rock Ventures, 11.1%.Following the IPO, Samsara held an 8.9% stake; Perceptive a 6.7% one; and Third Rock, 5.7%
Headed by CEO Gina Chapman, a veteran of South San Francisco's Genentech Inc., Cargo plans to use the proceeds from its IPO to fund clinical development and further research and to provide working capital. The company, which isn't yet generating any revenue, posted a $30.6 million loss in the first half of this year after losing $41 million in all of last year.
Cargo's operations and capital expenditures burned through $31 million in the first six months of 2023 after consuming $31.8 million for all of 2022.
Through the end of June, the company had an accumulated deficit of $77.6 million since its founding nearly four years ago.
Cargo is one of the few Bay Area companies — biotechnology or otherwise — that have gone public this year.
