Tang Capital's continued focus on buying out biotech companies, abundant with potential targets
Concentra Biosciences' Unique Approach Shapes Biotech M&A Landscape
In a move that's reshaping the biotech industry, Concentra Biosciences, a biotech shell company run by Tang Capital, has been acquiring struggling biotech companies and liquidating their assets to return cash to shareholders. This strategy, which has been particularly active in 2023, has been instrumental in influencing mergers and acquisitions (M&A) within the sector.
The approach, unique in the biotech world, involves acquiring distressed biotech firms with setbacks or market capitalizations below their cash holdings. By doing so, Concentra provides a rapid liquidity event for shareholders and extracts value from companies whose clinical data or development pipeline did not meet expectations.
Notable acquisitions by Concentra include Cargo Therapeutics, Elevation Oncology, Allakos, and most recently, iTeos Therapeutics. The acquisition of iTeos in mid-2025 is a prime example of this strategy, with Concentra making a cash offer and structuring the deal to deliver contingent value rights (CVRs) to shareholders.
The deal with iTeos was sealed on July 18, with iTeos issuing a press release announcing the transaction. Tang Capital had shown interest in iTeos days after the trial results for their drug belrestotug were announced, reaching out to discuss the results. The company had disclosed its ownership of nearly 10% of iTeos' shares at this time.
Tang Capital offered to buy 100% of iTeos' equity for $10.25 per share in cash on June 11. However, the offer was revised on June 26 to $10.36 per share, following due diligence conducted over the next few weeks. The deal term also extended the legacy products CVR term to 10 years after the merger to allow greater certainty that shareholders would receive a payout.
Shareholders would be eligible for two CVRs if all went well, with the first CVR giving shareholders all of the cash at closing that exceeded $490 million. The offer represented the projected difference between iTeos' net cash balance at closing after the discharge of liabilities and the aggregate cash payment that shareholders would receive, which was approximately 3% of $490 million.
Concentra's strategy has contributed to a broader trend in the biotech industry of "zombie" buyouts and liquidation-style deals, reflecting ongoing sector struggles. This has prompted other financial players like Xoma and KKR to engage in similar transactions and has encouraged venture investors to develop new financing approaches to support struggling biotech startups.
In summary, Concentra's distinctive model of swift acquisition, asset liquidation, and shareholder cash return of distressed biotech firms is a significant strategic innovation affecting biotech M&A dynamics, especially evident in deals throughout 2023 and 2024. This strategy addresses the sector's challenges by converting troubled biotech companies into immediate financial value for investors rather than prolonged operational turnaround efforts.
As of publication, Kevin Tang, the mysterious investor behind Concentra, did not return a request for comment.
In light of Concentra Biosciences' unique approach, the biotech industry's mergers and acquisitions (M&A) are being significantly influenced by investing strategies in business, as seen in numerous transactions throughout 2023 and 2024. This distinctive model, which involves acquiring struggling biotech companies, liquidating their assets, and returning cash to shareholders, is also being emulated by financial players like Xoma and KKR.
