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United States securities and exchange commission logo
September 28, 2023
Halley Gilbert
Chief Legal Officer
CARGO Therapeutics, Inc.
1900 Alameda De Las Pulgas, Suite 350
San Mateo, CA 94403
Re: CARGO Therapeutics,
Inc.
Draft Registration
Statement on Form S-1
Submitted September
1, 2023
CIK No. 0001966494
Dear Halley Gilbert:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Overview, page 1
1. Please disclose whether
Stanford s Phase 1 clinical trial was powered for statistical
significance, and
whether any SAEs were observed. Please also disclose whether
Stanford is a licensor,
or otherwise advise.
2. We note your disclosure
on page 2 that Stanford received Breakthrough Therapy
Designation from the
FDA. Please balance this disclosure with the statement on page 45
that a Breakthrough
Therapy Designation may not lead to a faster development or
regulatory review or
approval process, and does not increase the likelihood that a product
Halley Gilbert
FirstName LastNameHalley
CARGO Therapeutics, Inc. Gilbert
Comapany 28,
September NameCARGO
2023 Therapeutics, Inc.
September
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candidate will receive FDA approval. Please also clarify whether your
product candidate,
CRG-022, has been designated by the FDA as a breakthrough therapy for
the purposes of
your IND application.
3. With regard to your disclosure that CRG-022 is being studied by
Stanford in a Phase 1
clinical trial, please clarify, if known, whether Stanford plans to
pursue additional clinical
trials beyond its current Phase 1 clinical trial with a goal of
receiving regulatory approval
and how your and their trials will work in tandem, if at all.
4. We note your references to "breakthrough" and "encouraging" results
here, and
elsewhere. Please refrain from describing preliminary data from
clinical trials as
"breakthrough" or "encouraging" as this may create an inference that a
product candidate
is more likely to be found to be safe and effective and limit the
discussion to the objective
clinical data, such as the endpoints and whether they were met.
5. We note your disclosure on page 3 regarding demonstrating
comparability of the final
drug product to that produced by the process used in the Stanford
Phase 1 clinical trial.
Please balance this disclosure with the statements on page 45 and
elsewhere that you
cannot assure that the FDA will agree with your claim of comparability
and the
sufficiency of the data to support it, or agree with your ability to
reference the preclinical,
manufacturing or clinical data generated by the Stanford clinical
trial even if you obtain a
right of reference from Stanford.
6. Please revise your prospectus summary to explain briefly at first use
each of the scientific
or technical terms. By way of example only, we note the following
terms:
Autologous
Chimeric antigen receptor
High Complete Response
Cognate ligands
Immune escape
Payload capacity
Lentiviral vector
Our solution: next generation of CAR T-cell therapies, page 3
7. We note your disclosure on page 4 that your team will implement
manufacturing
processes that are highly reliable and readily transferrable to expand
capacity, reduce
turnaround time and minimize costs of goods. Please balance this
disclosure with the
statements on page 25 that you may experience delays in developing a
sustainable,
reproducible and scalable manufacturing and page 55 that you do not
own or operate your
own manufacturing facilities, and rely on third-parties, which can
result in increased costs
that could delay, prevent, or impair development or commercialization
efforts.
Our history, team and investors, page 6
8. We note your disclosure that your team has progressed products from
research to clinical
Halley Gilbert
FirstName LastNameHalley
CARGO Therapeutics, Inc. Gilbert
Comapany 28,
September NameCARGO
2023 Therapeutics, Inc.
September
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FirstName LastName
trials, and ultimately to regulatory approval and commercialization.
Please balance this
disclosure with the statement on page 25 that novel products, such as
yours, can be more
complex and consequently more expensive and take longer than for
other, better known or
extensively studied pharmaceutical or other product candidates.
9. Please limit the disclosure of specific investors to those identified
in the beneficial
ownership table on page 194. Additionally, indicate that prospective
investors should not
rely on the named investors investment decisions, that these
investors may have different
risk tolerances and that the shares purchased in the referenced
financings may have been
conducted at a significant discount to the IPO price, if true.
Risk Factors Summary, page 7
10. We note your disclosure that you have experienced rapid growth
since your inception,
and that you expect to continue to grow in the future. Please
specify the type of
growth you are referencing in this disclosure. In this regard,
we note your disclosure on
page 22 appears to reference employee and operational growth.
Summary financial data, page 12
11. You disclose on page F-23 that the preferred stock will automatically
be converted into
common stock upon the IPO provided that the offering price per share
is not less than
$5.00 (as adjusted for stock dividend, stock split, combination or
other similar
recapitalization) and the aggregate gross proceeds to the Company are
not less than $75.0
million, or at the date and time, or occurrence, of an event specified
in a vote or written
consent of the holders of the majority of the outstanding shares of
convertible preferred
stock. Tell us why it is appropriate to include the conversion in the
pro forma column on
page 14. If you believe the preferred stock will convert upon the IPO,
please revise the
disclosure to clarify the conditions in which the conversion will
occur and tell us why you
believe the conditions will be met.
Critical Accounting Policies and Significant Judgments and Estimates
Common Stock Valuations, page 120
12. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the awards underlying your equity
issuances and the reasons
for any differences between the recent valuations of your common stock
leading up to the
IPO and the estimated offering price. This information will help
facilitate our review of
your accounting for equity issuances including stock-based
compensation. Please discuss
with the staff how to submit your response.
Business
Our lead program, CRG-022, page 125
13. Please revise to clearly disclose the primary and secondary endpoints,
if any, of the
Stanford Phase 1 clinical trial and whether they were achieved. In
addition, please
Halley Gilbert
FirstName LastNameHalley
CARGO Therapeutics, Inc. Gilbert
Comapany 28,
September NameCARGO
2023 Therapeutics, Inc.
September
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disclose any observed serious adverse events.
Our tri-specific program, CRG-023, page 127
14. Please identify the referenced study published in June 2023.
Establishment of a commercial manufacturing process for CRG-022, page 138
15. We note your disclosure that the manufacturing process for CRG-022
builds upon the
process used to manufacture CRG-022 used by Stanford. If your
manufacturing process
uses technology developed by Stanford, please indicate in an
appropriate location whether
such technology is in-licensed under the Stanford Agreement.
Competition, page 145
16. With respect to your disclosures regarding competitors, please explain
the difference
between autologous and allogenic CAR T therapies.
Intellectual Property, page 147
17. Please specify the foreign jurisdictions in which you have pending
applications, licensed
patents or licensed pending patents.
License Agreements, page 149
18. Please revise your Stanford Agreement and National Cancer Institute
license agreement
disclosures relating to "double-digit percentage" of milestone
payments applicable to
product covered by licensed patent rights on non-patented products,
"low double-digit
percentage" of non-royalty revenue in the event you choose to exercise
your right to
sublicense, and "low single-digit to a low double-digit percentage" to
specify a percentage
rate or range that does not exceed ten percentage points.
Notes to the Financial Statements for the year ended December 31, 2022
11. License and research and development agreements
Oxford license and supply agreement, page F-27
19. Please disaggregate the $9.3 million milestone payments you may be
required to pay into
development, regulatory and commercial milestones.
General
20. Please ensure the writing is legible in the visual depictions
throughout your draft
registration statement. For example only, your visual under Pre
STASH technology on
page 145 contains illegible text.
21. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
Halley Gilbert
CARGO Therapeutics, Inc.
September 28, 2023
Page 5
not they retain copies of the communications.
You may contact Christine Torney at 202-551-3652 or Mary Mast at
202-551-3613 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jimmy McNamara at 202-551-7349 or Tim Buchmiller at 202-551-3635 with
any other
questions.
Sincerely,
FirstName LastNameHalley Gilbert
Division of
Corporation Finance
Comapany NameCARGO Therapeutics, Inc.
Office of Life
Sciences
September 28, 2023 Page 5
cc: Benjamin A. Potter, Esq.
FirstName LastName