After multiple rounds of layoffs that cut Kronos down to just 10 people, the small molecule biotech has accepted a buyout offer from Kevin Tang’s Concentra Biosciences.
After a series of failed buyout attempts, biotech clean up firm Concentra Biosciences has finally found a willing target in autoimmune disease biotech Kronos Bio, which will be acquired for about $34.8 million.
Run by Tang Capital, Concentra is known for buying out struggling biotechs and closing them down. The company has been trying to find a new target for the past few weeks, unsuccessfully bidding on Acelyrin and Pliant.
Now, Kronos has agreed to come under Concentra’s wing and be shepherded through the disposition of its assets, according to a Friday press release. The deal offers Kronos shareholders 57 cents in cash per share of common stock, plus a contingent value right (CVR) granting more cash on the anniversary of the deal closing.
Kronos emerged in 2018 to discover small molecules for “historically intractable” cancer targets. The focus has shifted over the years toward developing drugs that address deregulated transcription for cancer and autoimmune disorders. The company has struggled along the way, laying off employees over the past few years until just 10 were left as of November 2024. CEO Norbert Bischofberger also stepped aside, with CFO Deborah Knobelman stepping up to oversee a strategic review.
After that review, Kronos’ board determined that the Concentra deal was the best path forward for shareholders, according to Friday’s release.
That leaves a handful of assets in need of new homes, most of them preclinical. The CVR included in the deal provides for payments to shareholders if the assets are purchased by another company. Kronos’ most advanced drug candidate was istisociclib, which was discontinued in November 2024. The drug was in Phase II development for treatment-resistant ovarian cancer.
Preclinical drugs on the list include KB-9558 for multiple myeloma and HPV-driven cancers, KB-7898 for Sjögren’s disease and three undisclosed programs in discovery.
The complex deal provides payments via the CVR in a handful of different situations before and after the deal closes. CVR holders will have the right to receive 50% of the net proceeds if KB-9558 and KB-7898 are sold within two years of the deal closing; all of the proceeds if KB-0742, lanraplenib and entospletinib are sold before the deal closes; all of the cost savings realized prior to closing; 80% of the cost savings from the merger realized from closing to the second anniversary; and half of the costs between the second anniversary of the closing and the third anniversary.
The deal is expected to close in the middle of the year.
As of December 31, 2024, Kronos had $112.4 million on hand, according to a fourth quarter earnings report from March 18.
