It takes two to Tango: The biotech using CRISPR to discover new cancer gene targets rides a $353M SPAC deal to Nasdaq
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The latest biotech-SPAC deal has arrived, and it’s dancing its way to Nasdaq to the tune of several hundred million dollars.
Tango Therapeutics and its CRISPR-focused search for new cancer genes is reverse merging with Boxer Capital’s blank-check company, the biotech announced Wednesday morning. With a spotlight on three lead programs, Tango expects total proceeds to equal about $353 million in the deal, which includes the roughly $167 million held in the SPAC and an additional $186 million in PIPE financing.
CEO Barbara Weber told Endpoints News that Tango had been planning for a traditional IPO at some point this year, having recently finished non-deal roadshows with about 30 to 40 investors. But they shifted gears when Boxer, who had previously led the company’s Series B in April 2020, approached Tango execs with the SPAC idea.
“When we looked at the investors that were in the SPAC, they were the same list of people that we had just spent two months talking to,” Weber told Endpoints. “We actually didn’t look at any other SPACs; this was a specific decision around the Boxer-sponsored SPAC.”
Blank check companies have taken Wall Street by storm, and the biopharma sector has not been left out of the fun. Per an Endpoints News tally, Tango is the fifth life sciences company to ride a SPAC to Nasdaq this year, following in the footsteps of 23andMe, Sema4, SomaLogic and Better Therapeutics.
That’s brought in a hefty heaping of cash for these fabled five, with the group netting a combined $2.67 billion — or more than half the total raised by the 30 biotechs that went public through the usual IPO in 2021.
And there’s plenty more money waiting in the wings. Since the start of this year alone, another 31 SPACs have launched and have yet to find a partner. This group has a combined $7.8 billion waiting in their shell accounts and includes SPACs from prominent investors such as Foresite, Perceptive, Eduardo Bravo and Vinod Khosla, the latter of whom launched three.
The blank-check companies can take up to two years to find a partner, and some analysts have signaled an oncoming glut given the sheer amount of SPACs going public over the last several months. According to figures from SPACInsider, there have been 308 SPACs in 2021 already, surpassing the amount from the last two years, when 2020 saw 248 and 2019 had 57.
For Tango, though, that means they can continue pushing their CRISPR-based approach to finding new targeted cancer drugs. The biotech takes advantage of CRISPR as a research tool, using it to discover gene pair targets that create unique vulnerabilities in cancer cells. It’s similar to the underlying theory behind PARP inhibitors — drugs that go after a protein in patients with a mutation on one of the proteins used to repair DNA.
When using CRISPR to knock out genes, Tango researchers look for those that when knocked out lead to cell death in a concept known as synthetic lethality. These genes then serve as potential targets. Though this process had been theorized for years, it wasn’t until CRISPR came along in the last decade that it became possible to do with precision, Weber said.
The biotech has three programs it intends to advance with Wednesday’s funds, looking to file INDs in each of the next three years. First up is TNG908, an MTA-cooperative PRMT5 inhibitor, expected in the fourth quarter of 2021. Weber said the money will help generate proof-of-concept data for the candidate in different tumor types.
There’s also a USP1 inhibitor expected in 2022 and an undisclosed target expected in 2023, both of which are expected to hit the clinic thanks to the runway from these funds. The former is looking at the treatment of BRCA1-mutant breast, ovarian and prostate cancer, while the latter is going after STK11-mutant lung cancer.
With the transition to becoming a public company now underway, Weber said the next steps are to keep plugging away at their research. She’s promising much more discovery work coming up behind the three lead programs.
“We are discovering three to four [new] targets a year, so we hope to in the future continue to be advancing an IND for a new molecule, a new target, every 12 to 18 months for the foreseeable future,” Weber said.