Concentra Biosciences, a shell company from Tang Capital, wants to buy another biotech that has found itself in a bind.
Kevin Tang’s shop told Kezar Life Sciences’ board on Tuesday that it is willing to pay $1.10 per share to buy out the Bay Area biotech. The move comes just days after Kezar stopped its Phase 2b clinical trial in lupus nephritis after four patients died. The trial was then put on official hold by the FDA this week.
Kezar’s share price $KZR spiked 22% to 91 cents apiece in post-market trading after Concentra’s proposal became public. Kezar had closed Tuesday at 74 cents per share. The biotech debuted as a public company at $15 per share in June 2018.
Tang Capital owns 9.9% of Kezar’s outstanding shares. The investor has bought more than six million shares in Kezar since Sept. 30, according to an SEC filing.
Concentra’s non-binding proposal also comes with the potential for further payments. If the deal goes through and Concentra is able to out-license or sell Kezar’s experimental drugs and intellectual property, then shareholders could get 80% of those net proceeds.
In his letter to the board, Tang said Concentra “has funds immediately available to execute this transaction.”
“Concentra has the expertise and resources to maximize the value of the CVR for the benefit of Kezar shareholders,” Tang wrote. “This may include, if appropriate, completing PORTOLA, an ongoing Phase 2a study of zetomipzomib in patients with autoimmune hepatitis.”
Concentra has had a mixed bag of success. Atea Pharmaceuticals and LianBio rejected the shell company’s unsolicited bids last year. Theseus Pharmaceuticals and Jounce Therapeutics, meanwhile, both went with the takeover bids. DNA sequencing company Singular Genomics was also targeted by Concentra last month.
Tang wants to hear back from Kezar by the close of business on Oct. 18. Otherwise, the offer will expire, he wrote in the letter.
A Kezar spokesperson didn’t immediately respond to an Endpoints News inquiry.
The 2015 Amgen spinout has had a string of setbacks in the past 12 months. In August, Kezar stopped enrolling patients in a Phase 1 solid tumor trial. Last October, it laid off 41% of its staff, swapped CEOs and ended preclinical R&D to keep the lights on.
At the end of June, the company had $164 million in cash, equivalents and marketable securities.