Tango finds a quick step to Wall Street via $353M SPAC deal

Tango Therapeutics is aiming for the public markets, one year after raising its latest private round. But instead of going the traditional IPO route, the synthetic lethality biotech is joining a swelling wave of life sciences companies that are hitting Wall Street by merging with a special purpose acquisition company, or SPAC, raising $353 million in the process.

The SPAC, Boxer Capital’s BCTG Acquisition Corp., will snap up Tango in a deal slated to close in the third quarter. Under the all-stock deal, the combined company will receive $167 million from the SPAC, as well as $186 million through a private round from a laundry list of investors led by Boxer Capital. The combined company will trade on the Nasdaq under the ticker “TNGX.”

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BCTG raised the $167 million in its IPO in September 2020 and went on the hunt for one or more biotechs to subsume in the targeted oncology space.

“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,” said Aaron Davis, co-founder and CEO of Boxer Capital and CEO and chairman of BCTG, in a statement.

Barbara Weber (Tango Therapeutics)

The proceeds will carry three of Tango’s programs into the clinic by 2023 and set up multiple preclinical programs to follow suit at a steady clip, according to the statement. That includes IND filings for lead program TNG908 in the fourth quarter of this year, a USP1 inhibitor in 2022 and an undisclosed target in 2023.

Tango’s pipeline is based on synthetic lethality, the interaction between two genes that causes cell death when both are inactivated. In cancer cells, one of these genes is inactivated by mutation; the other will be inactivated by a drug. The first FDA-approved example of this type of synthetic lethality in cancer are PARP inhibitors for BRCA-mutant ovarian cancer, which include AstraZeneca and Merck's Lynparza and Zejula from GlaxoSmithKline unit Tesaro.

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This approach is a way to target lost tumor suppressor genes, which have long evaded drug developers.

“Tumor suppressor genes are lost. You can’t turn on something that is gone, as opposed to an oncogene, where you can turn someone off that is on,” said Tango CEO Barbara Weber, M.D., in a previous interview.

The company’s lead program, TNG908, targets protein arginine methyltransferase 5 (PRMT5), an enzyme that plays a key role in cell survival. The drug is designed to zero in on cancer cells in which the MTAP gene is deleted. Because MTAP is the synthetic lethal partner to PRMT5, the drug will only cause cell death in cancer cells, while sparing normal cells that express PRMT5.

Besides its own pipeline, Tango is working on programs with Gilead and will "absolutely" strike more deals, Weber said in a previous interview.

The duo originally teamed up in 2018, with Gilead handing over $50 million and promising $1.7 billion in pre-clinical fees and development, regulatory and commercial milestones to work on up to five immuno-oncology targets with Tango. In August 2020, the partners expanded that deal to 15 targets, with Gilead adding another $125 million, making a $20 million investment in Tango and promising up to $410 million for each of those targets. Gilead will have seven years to figure out which of those programs to take forward. If it pulls the trigger on all 15, the deal would top out at $6.15 billion.