- Atea Pharmaceuticals’ board of directors has unanimously rejected an unsolicited acquisition proposal from the investment firm behind privately held Concentra Biosciences, the company said Tuesday.
- Last week, Tang Capital Partners, Concentra’s owner, offered to pay Atea's stockholders $5.75 for each share they own, as well as 80% of the proceeds if Concentra licensed or sold any of the company's research programs.
- In a statement, Atea said the deal “fundamentally undervalues the company and is not in the best interests of Atea or its shareholders.” Shares, which had climbed nearly 40% when Tang Capital revealed its offer, fell about 10%, to $4.20 apiece, in Tuesday trading.
The proposal from Tang Capital was not the first time Concentra’s owners made a bid for a struggling biotechnology company.
In March, the investment firm made a successful takeover bid for cancer drug developer Jounce Therapeutics, proposing a similarly structured deal that would give shareholders a portion of the proceeds if Concentra sells its assets.
At the time, Jounce had already agreed to a reverse merger with U.K.-based biotech Redx Pharma. But Tang Capital’s bid was persuasive enough to convince Jounce to abandon the deal.
Atea, by comparison, hasn’t pursued a deal. The company is pushing forward with a Phase 3 trial of a COVID-19 drug, and is developing the medicine for hepatitis C as well.
That effort once caught the enthusiasm of investors, lifting Atea to a $300 million initial public offering in 2020 and shares to as high as about $80 apiece the following year. But the company has lost nearly all of its value since amid setbacks to the COVID-19 program and the progress made by larger rivals.
Atea’s depressed value created an opening for an activist investor like Tang Capital, which holds a 3.6% stake in the company. In revealing a buyout proposal week, Tang Capital’s CEO, Kevin Tang, wrote that the firm has "significant clinical development and business development experience” and “the expertise and resources to maximize the value” of Atea’s remaining assets.
Atea had just over $620 million in cash and cash equivalents as of March 31, according to a regulatory filing.
In a separate SEC filing last Thursday, Atea asked stockholders to vote to keep former U.S. Surgeon General Jerome Adams and a former Jounce Therapeutics director, Barbara Duncan, on the board until 2026.
Editor's note: This story has been updated to clarify that Barbara Duncan is currently on Atea's board.