In the hunt for reverse merger targets, Caribou could be prized game BioPharma Dive · Getty Images Jacob Bell Thu, October 8, 2026 at 11:23 AM EDT 4 min read CRBU -19.37% ^IXIC -0.62% Trade CRBU on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
This story was originally published on BioPharma Dive. To receive daily news and insights, subscribe to our free daily BioPharma Dive newsletter.
On Wall Street, a major search is underway to find struggling public companies that can serve as the raw materials for a niche but booming business. A promising candidate may have just emerged.
This business revolves around "reverse mergers," a type of deal where a private company combines with a public counterpart, often as a quick way to access the broad and deep-pocketed array of investors found on marketplaces like the Nasdaq. While previously disparaged, reverse mergers have recently become so popular that some deal experts question whether there are enough quality "shell" companies to meet the demand.
Shell hunters could have another option following a Tuesday announcement from Caribou Biosciences, the once high-flying biotechnology startup co-founded by CRISPR gene editing pioneer Jennifer Doudna. In a statement, Caribou CEO Rachel Haurwitz said the current financing environment has made it "increasingly challenging" to secure the money needed to advance the company's two main research programs, which focus on a hard-to-make form of medicine known as "off-the-shelf" cell therapy.
As such, Caribou has made the "difficult decision" not to further develop its programs and to "evaluate strategic alternatives" — common corporate lingo for opening itself up to various deals. Caribou's board of directors has already cleared management to start evaluating a potential merger, acquisition, business combination or other transactions. The company has also tapped Wedbush Securities to serve as its exclusive financial advisor in this process.
To Daina Graybosch, an analyst at Leerink Partners who covers Caribou, the natural end for the company now is either a reverse merger or an acquisition by Tang Capital, a San Diego-based investment firm that made a name for itself by buying up cash-rich biotechs and returning much of their value to shareholders. Caribou ended the second quarter with $114 million worth of cash, cash equivalents and marketable securities.
"I think Rachel and the team really do believe in their assets, but it's a real struggle," Graybosch said. "And when you finally do raise [capital], it just gets more and more dilutive. To pull the trigger now and give money back is what everybody likes to see" and "creates so much positive trust" with investors.
Caribou checks some of the boxes that, according to deal experts, make for a good reverse merger candidate. It trades on the Nasdaq, for example, which is more attractive to private drug developers than lower-tier, over-the-counter markets.
Caribou may also have a subzero enterprise value, which, in broad strokes, means that after accounting for its cash pile, the market is attributing nothing — or, really, less than nothing — to the company's core operating business. That can actually be a plus to private developers, as it signals they might not have to pay a big premium to snag the public vehicle.
Using its June 30 financials and closing share price Wednesday, Caribou would have a negative enterprise value of roughly $20 million. (Notably, that's at the low end of a range from Leerink, which estimates the figure could be as much as $30 million depending on how much cash Caribou spent in the third quarter.)
"I would definitely say a reverse merger is on the table here," said Emmett Sweeney, a vice president on the healthcare investment banking team at Raymond James.
Perhaps what makes Caribou such an obvious reverse merger prospect is its publicly stating that it's exploring strategic alternatives. When companies do that, they become "low-hanging fruit" for reverse merger deals, according to David Kellman, a managing director and head of life sciences and biopharma investment banking at Citizens.
They're "basically running auction processes" with private companies, Kellman said in an interview earlier this month. "Those are the most obvious candidates, regardless of other criteria."
Caribou's statement, including the mention of Wedbush being its strategic advisor, is a sign that company leaders are "serious" and "mean business," Sweeney said. Clearly, "they want to move quickly. That's another aspect of Caribou that makes it an attractive merger partner."
Sweeney and others anticipate that Caribou, if not already, will soon be inundated with inbounds from private companies interested in merging. With roughly two dozen biotech reverse mergers announced this year, "the question for many companies is no longer whether the structure works, but whether they can find the right shell and execute the transaction on attractive terms," Raymond James analysts wrote in a note to clients Wednesday.
One lingering question is whether Caribou's now-discontinued drugs will find a new home.
Graybosch doesn't have high hopes — in part because of rival programs advancing at other cell therapy developers like Fate Therapeutics and AvenCell Therapeutics, both of which are backed by major life sciences investors and large pharmaceutical firms.
"Very rarely do these assets show up [again]," she said. "If I'm an investor thinking, 'Do I wrap a new company around this asset, or do I go invest in AvenCell or Fate,' I probably choose AvenCell or Fate at this point."
A booming business on Wall Street would love more biotechs to quietly die
