Weeks after closing a deal to buy Jounce Therapeutics, Concentra Biosciences is rebounding to pick up another struggling biotech, this time COVID-19-focused Atea Pharmaceuticals.
Concentra and its CEO Kevin Tang of Tang Capital have put in an offer of $5.75 per share to acquire 100% of Atea, according to a Monday SEC filing. The offer is a 55% premium on the $3.70 share price of Friday, May 19. Based on the number of outstanding shares, the offer is worth about $480 million. The deal also means that between them Atea stockholders will get a contingent value right (CVR) to receive 80% of the net proceeds from any license or disposition of the biotech's programs.
“We believe that our proposal represents a compelling offer for Atea stockholders,” Tang wrote in a letter that accompanied the formal offer. He explained that Concentra has significant capital resources through an arrangement with Tang Capital Partners, which is the biotech’s controlling shareholder.
“The management of Concentra, which has significant clinical development and business development experience, has both the expertise and resources to maximize the value of the CVR for the benefit of Atea stockholders,” the letter explained.
Shareholders seemed to agree, as Atea's stock climbed 34% Monday morning to $4.97, compared to a Friday close of $3.70.
Tang is hoping to quickly move through the due diligence process and close the deal by late July.
The deal echoes Tang and Concentra’s swift action to take over Jounce Therapeutics earlier this year. Just as Jounce prepared to close a reverse merger deal with Redx Pharma, Concentra swooped in with an offer that Jounce’s shareholders couldn’t refuse. Concentra walked away with Jounce and left Redx jilted. The deal closed earlier in May and Jounce has now been taken private again.
Atea did not return a request for comment on the offer as of publication. The biotech is studying bemnifosbuvir in high-risk outpatients with COVID-19 in a phase 3 study called Sunrise. The therapy was recently granted a fast-track designation by the FDA.
Roche walked away from a partnership with Atea after the therapy failed a phase 2 study and prompted a revamp of the phase 3 program. The therapy failed one of the phase 3 trials in mild to moderate COVID-19 outpatients called Morningsky, according to data released in April. Bemnifosbuvir did not improve the time for alleviating COVID-19 symptoms, but Atea at the time pointed to a reduction in hospitalizations—especially in older patients.
Atea also cut a dengue virus antiviral in February. The biotech reported cash on hand of $620.5 million as of March 31, according to a first-quarter earnings report.