Tango Enters Lucrative SPAC Merger to Drive Precision Medicine Pipeline
Precision-medicine biotech Tango Therapeutics has entered into a definitive merger agreement with special purpose acquisition company (SPAC) BCTG Acquisition Corp. The merger sees leading health care investors pledging up to $186 million through a common stock private investment in public equity (PIPE). Common stock in the new combined company, Tango Therapeutics, Inc., will soon be listed on Nasdaq under ticker “TNGX.”
Investors involved in the common stock PIPE include SPAC sponsor Boxer Capital in conjunction with Avoro Capital Advisors, Bain Capital Life Sciences, Blackrock, EcoR1 Capital, Farallon Capital, Fidelity Management & Research Company LLC and several others organizations. Overall, total proceeds related to the merger are expected to reach approximately $353 million.
The definitive merger agreement is expected to complete in the third quarter of this year. Barbara Weber, M.D., President and Chief Executive Officer (CEO) of Tango, will take the helm of the combined company.
“This morning’s announcement is a key milestone for Tango as it ensures we have access to the capital needed to advance our preclinical programs and initiate clinical studies of our three lead programs, as we continue our mission of bringing transformational therapies to patients,” said Dr. Weber in a statement.
Aaron Davis, Boxer Capital’s Co-founder and CEO and BCTG Acquisition’s Chairman and CEO, said, “We were particularly interested in partnering BCTG with a company with a novel approach to treating cancer, a deep pipeline and an exceptional management team, and Tango perfectly embodies the platform and company we had in mind with its focus on synthetic lethality.”
The funding garnered from this transaction will go toward providing Tango the capital needed to develop its therapeutic pipeline, which includes the filing of an Investigational New Drug (IND) application for the company’s lead program TNG908. This candidate is an MTA-cooperative PRMT5 inhibitor that will be applied to multiple types of cancers in clinical studies. “Tango’s lead program, targeting PRMT5, leverages a unique mechanism of action with the potential to address a significant patient population across multiple cancer types, and we are excited about this transaction and supporting Tango on their path into the clinic and beyond,” said Davis.
Funding will also go toward IND filing for the company’s USP1 inhibitor designed for the treatment of BRCA1-mutant breast, ovarian and prostate cancer. An IND for an undisclosed target for the treatment of STK11-mutant lung cancer will also be supported by the financing.
In August 2020, Tango closed $50 million in equity financing, which was also used to fund clinical studies of its lead program. The same day, the company announced an expanded collaboration with Gilead Sciences, building on a previous agreement made in 2018. In the expanded agreement, Gilead said it would provide an upfront payment to Tango of $125 million as well as a $20 million equity investment in the precision-medicine biotech company. Under terms of the agreement, Gilead was given the right to option up to 15 Tango programs over seven years, ringing in at approximately $410 million per program in opt-in, extension as well as milestone payments.
“Since we signed the original agreement two years ago, we have been very pleased with the productivity of the collaboration and with the quality of scientific discovery that has come from this partnership,” said Gilead Sciences’ Executive Vice President of Research, William A. Lee, Ph.D., at the time of the expanded agreement announcement. “We are looking forward to working with Tango to run additional cancer context dependent screens to identify a broader set of targets based on our immuno-oncology strategy.”