New chapter in Theseus’ adventure as troubled biotech approached by two potential suitors

It’s been a wild November for Theseus Pharmaceuticals. Just a couple of weeks ago, the biotech laid off almost three-quarters of its staff. Days later, the company received offers from two sets of potential buyers.

One of the offers came from the VC firms Foresite and Orbimed. On Nov. 22, the two firms “indicated their intent to explore and evaluate a potential acquisition of all of the outstanding shares” of Theseus that they don’t already own, the biotech revealed in a Nov. 27 release. Foresite is already in possession of around 12.6% of Theseus’ shares while OrbiMed owns 40.1%, according to an SEC filing.

Should Theseus accept that offer, it would take the company—which has been listed on the Nasdaq since October 2021—private again.

The other proposal came from an increasing common name in potential biotech M&A stories: Concentra Biosciences. Theseus was more specific about the nature of this offer, explaining that Tang Capital Partners would use its Concentra subsidiary to pay $3.80 per share for Theseus' common stock, along with a contingent value right for Theseus’ shareholders to receive 80% of the net proceeds from licensing or selling off any of the biotech’s programs.

The $3.80 offer price does not reflect any substantial markup on the $3.62 price that Theseus’ shares closed at on Nov. 24, the day Concentra reached out. Tang Capital Partners already owns 7% of the biotech, and the same proportion of shares is also owned by both Tang Capital Management and their CEO Kevin Tang, according to an SEC filing.

The offer is just the latest example of Concentra hoping to snap up a troubled biotech this year, after a reach out to Rain Oncology last month. Tang has already scored success when Concentra used a last-minute offer to snatch Jounce Therapeutics out of the hands of Redx Pharma in March, although an attempt to buy Atea Pharmaceuticals a few weeks later was rejected.

Meanwhile, the Theseus offer marks the second attempt this month by OrbiMed and Foresite to team up to buy a biotech. The two firms recently pitched to take Kinnate Biopharma private, only nine months after Kinnate bought back the shares that were sold to the two VC partners from a China-focused cancer venture they had set up together.

Theseus has made no secret of the fact that it is open to a buyout. The Massachusetts biotech has been struggling since July when development was halted on a gastrointestinal stromal tumor treatment due to dose-limiting toxicities observed in a trial. The company's shares tumbled 65%. Earlier this month, the company disclosed that it was laying off 72% of its workforce and “exploring strategic alternatives” that could include a sale of the business.

Theseus gave no indication of which, if any, of the offers it is more inclined to accept, simply explaining that the board will “carefully review and evaluate” both proposals.