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CORRESP
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CORRESP

 October 30, 2023

650 Town Center Drive, 20th Floor

Costa Mesa, California 92626-1925

Tel: +1.714.540.1235 Fax: +1.714.755.8290

www.lw.com

FIRM / AFFILIATE OFFICES

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Washington, D.C.     

Milan

 VIA EDGAR AND ELECTRONIC SECURE
TRANSFER

 CARGO THERAPEUTICS, INC. HAS REQUESTED CONFIDENTIAL TREATMENT OF THE REDACTED PORTIONS OF THIS LETTER, WHICH WERE REPLACED WITH THE
FOLLOWING PLACEHOLDER “[***]” IN THE LETTER FILED VIA EDGAR, UNDER RULE 83 OF THE SEC’S RULES OF PRACTICE, AND THE COMPANY DELIVERED A COMPLETE UNREDACTED COPY OF THE LETTER TO ITS EXAMINER AT THE DIVISION OF CORPORATION FINANCE.

 U.S. Securities and Exchange Commission

FOIA Confidential Treatment

 Division of Corporation Finance

Requested Under 17 C.F.R. § 200.83

 100 F Street, N.E.

 Washington, D.C. 20549-6010

 Attention: Christine Torney, Mary Mast, Jimmy McNamara, Tim Buchmiller

Re:
 CARGO Therapeutics, Inc.

 
 Registration Statement on Form S-1

 
 Filed on October 20, 2023

 
 File No. 333-275113

Ladies and Gentlemen:

 On behalf of CARGO
Therapeutics, Inc. (the “Company”), we submit this letter (this “Letter”) to the staff (the “Staff”) of the Securities and Exchange Commission (the
“Commission”). The Company originally filed the above-referenced Registration Statement on Form S-1 on October 20, 2023 with the Commission (the “Registration
Statement”).

 On behalf of the Company, we are respectfully requesting confidential treatment for specified portions of this
Letter pursuant to Rule 83 promulgated by the Commission (17 C.F.R. §200.83). This Letter is accompanied by such request for confidential treatment because of the commercially sensitive nature of the information discussed in this Letter. A
redacted version of this Letter will be filed with the Commission on EDGAR, omitting the confidential information.

 October 30, 2023

 Page
 2

 The purpose of this Letter is to provide supplemental information to the Staff with respect
to the accounting treatment for stock-based compensation. In particular, the Company references Comment #12 of the Staff’s letter dated September 18, 2023 with respect to providing an explanation for the determination of the fair value of
the awards underlying the Company’s equity issuances and the reasons for any differences between the recent valuations of its common stock and the estimated offering price. The supplemental response set forth below is based upon information
provided to Latham & Watkins LLP by the Company.

 The Company’s discussion of its accounting for stock-based compensation is
primarily contained within the sections of the Registration Statement titled “Management’s discussion and analysis of financial condition and results of operations—Critical accounting estimates and significant judgments and estimates—Stock-based compensation” (the “MD&A”) and appears on pages 121-123 of the Registration Statement and Note 10 to the audited
financial statements of the Company in the Registration Statement and Note 9 to the unaudited condensed financial statements of the Company in the Registration Statement (the “Financial Statements”).

ESTIMATED IPO PRICE RANGE

 The Company
supplementally advises the Staff that, while not yet reflected in the Registration Statement, based on discussions with the Company’s board of directors (the “Board”) and reflecting the input from the underwriters for
its initial public offering (“IPO”), the Company currently anticipates an approximate price range of $[***] to $[***] per share for the Company’s common stock (the “Preliminary IPO Price Range”),
with a midpoint of the anticipated range of approximately $[***] per share (the “Preliminary Assumed IPO Price”). The Preliminary IPO Price Range and Preliminary Assumed IPO Price do not reflect any stock split that the
Company expects to effect prior to the Commission’s declaration of effectiveness of the Registration Statement. The post-split price range will be narrowed within the Preliminary IPO Price Range prior to distribution of the preliminary
prospectus in connection with the Company’s road show. For consistency with the Registration Statement, all data in this Letter is reflected on a pre-split basis, unless otherwise expressly noted.

The Company’s final post-split Preliminary IPO Price Range remains under discussion between the Company and J.P. Morgan Securities LLC,
Jefferies LLC and Cowen and Company, LLC, the representatives of the several underwriters (the “Representatives”), and a bona fide price range will be included in an amendment to the Registration Statement prior to any
distribution of the preliminary prospectus in connection with the Company’s road show.

 EQUITY AWARD GRANTS SINCE JANUARY 1, 2023

The following table summarizes the number of shares of common stock underlying stock options granted since January 1, 2023, as well as the
associated per share exercise price and the estimated fair value per share of the Company’s common stock used to determine stock-based compensation expense for financial reporting purposes. The Company does not expect to make any additional
grants prior to the completion of its IPO other than grants made concurrent with the IPO at an exercise price equal to the final IPO price (if any).

 CONFIDENTIAL TREATMENT
REQUESTED BY

 CARGO THERAPEUTICS, INC.

 October 30, 2023

 Page
 3

 Grant Date

Type of award

Number of Shares of
Common Stock Underlying
Options or Restricted
Stock Awards Granted

Fair Value Price
Per Share

Exercise Price
Per Share

 February 3, 2023

Restricted Stock Awards

25,434

$
[
***]

NA

 April 21, 2023

Options

26,934,673

$
[
***]

$
[
***]

 August 30, 2023(1)

Options

8,858,444

$
[
***]

$
[
***]

 August 31, 2023

Options

5,780,000

$
[
***]

$
[
***]

 September 29, 2023

Options

1,418,000

$
[
***]

$
[
***]

 October 11, 2023

Options

4,986,061

$
[
***]

$
[
***]

(1)
 The Board passed resolutions to grant 2,068,999 and 6,789,444 stock options on July 21, 2023 and
August 30, 2023, respectively, however the exercise price for those stock options was approved on August 30, 2023. In accordance with ASC 718, the criteria for the establishment of the grant date for these grants were met on
August 30, 2023, when the exercise price was established and all necessary approvals were obtained.

 HISTORICAL FAIR VALUE
DETERMINATION AND METHODOLOGY

 The Company has historically determined the fair value of its common stock using methodologies,
approaches and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice
Guide”). In addition, the Board also considered numerous objective and subjective factors, along with input from management and third-party valuation firms, to determine the fair value of the Company’s common stock as disclosed in
the Registration Statement.

 During the period discussed in this Letter, the Company has obtained independent third-party valuations of
its common stock on a regular basis as well as following events or conditions that the Company determined could cause the assumptions, qualifications or methodologies contained in prior independent third-party valuations to materially change. The
Company (a) for the valuation performed on January 1, 2022 and February 9, 2023, utilized the option-pricing model (“OPM”) back solve method for determining the fair value of its common stock and (b) for
the valuations performed on July 7, 2023 and August 1, 2023, utilized a hybrid method (the “Hybrid Method”) of the OPM and the probability-weighted expected return model (“PWERM”) for
determining the fair value of the Company’s common stock.

 The valuations utilizing the OPM framework required the input of highly
subjective assumptions, including (a) the expected volatility of the Company’s stock, (b) the expected term of the award, (c) the risk-free interest rate and (d) equity price. Due to the lack of a public market for the
trading of the Company’s common stock and a lack of company-specific historical and implied volatility data, the valuations utilizing the OPM framework based the estimate of expected volatility on the historical volatility of a group of peer
companies that are publicly traded. For these analyses, the third-party valuation firm selected companies with comparable characteristics to the Company including enterprise value, risk profiles and position within the industry, and with historical
share price information sufficient to meet the expected life of the stock-based awards. The valuations utilizing the OPM framework then computed the historical volatility data. The valuations utilizing the OPM framework estimated the expected life
of the Company’s employee stock options based on management’s expected time to a potential liquidity event. The risk-free interest rates for periods within the expected life of the option were based on the U.S. Treasury yield rate in
effect during the period the options were granted.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 CARGO THERAPEUTICS, INC.

 October 30, 2023

 Page
 4

 Under the PWERM, the per share value of the common stock is estimated based upon the
probability-weighted present value of expected future equity values for the common stock, under various possible future liquidity event scenarios and the resulting per share value of the common stock is discounted for a lack of marketability. Using
the PWERM, the enterprise value under various exit scenarios including an IPO and staying private that considered the Company’s estimate of the timing of each scenario, were weighted based on the Company’s estimate of the probability of
each event occurring. For IPO exit scenarios, the IPO valuations were determined using two methods. The first method considered IPO valuations observed for companies operating in industries and geographies similar to the Company. The second method
involved calculating multiples of the IPO pre-money valuation observed for each company relative to its respective latest post-money valuation achieved in a private financing (“IPO Step-Up Multiple”) to determine an appropriate IPO Step-Up Multiple for the Company. Equal weight was then given to each method. For each IPO scenario, value was
allocated to the outstanding shares assuming automatic conversion of all classes of the Company’s preferred stock to common stock.

The Hybrid Method combines the PWERM and OPM. For this method, a weighted enterprise value is determined under multiple scenarios
consistent with the PWERM, but the OPM is used to allocate the enterprise value among the equity instruments. The Company determined to incorporate the PWERM into its valuation methodology as values associated with various potential outcomes were
considered estimable, in light of the Company’s stage of development, operating results, its prospects for an IPO in the near term, general conditions in the capital markets, including with respect to IPOs, and the relative likelihood of
achieving a liquidity event such as an IPO in light of prevailing market conditions.

 After the equity value is determined and allocated
to the various equity securities, a discount for lack of marketability (“DLOM”) is applied to arrive at the fair value of the Company’s common stock. A DLOM is applied based on the theory that an owner of stock in a
private company has limited opportunities to sell this stock, and any such sale would involve significant transaction costs, thereby reducing overall fair market value. Thus, an adjustment to the preliminary value estimate must be made to account
for the lack of liquidity an owner of a private enterprise would experience.

 DISCUSSION OF FAIR VALUE DETERMINATIONS SINCE JANUARY 1, 2022

 The table below sets forth the fair market value determinations of the Company’s common stock as provided by independent
third-party valuation reports for periods since January 1, 2022.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 CARGO THERAPEUTICS, INC.

 October 30, 2023

 Page
 5

  Date of Estimated 

  Fair Value as 

 Determined by
the

  Valuation Report 

Fair Value
Per Share

 January 1, 2022

$
[***]

 February 9, 2023

$
[***]

 July 7, 2023

$
[***]

 August 1, 2023

$
[***]

 Corporate and Financing History

The Company was founded in December 2019 as a Delaware corporation under the name Syncopation Life Sciences, Inc. The Company changed its name
to CARGO Therapeutics, Inc. in September 2022.

 As depicted in the table above, the Company experienced an increase in its equity value
since January 1, 2023. The increases in the estimated values were primarily driven by the following key events:

•

 In February 2023, the Company executed its Series A Preferred Stock Purchase Agreement (“Series A-1 Financing”), and at the initial closings in February 2023, issued and sold to existing and new investors 68,832,003 shares of its Series A-1 redeemable
convertible preferred stock, par value $0.001 per share (the Series A-1 Preferred Stock”), for $1.00 per share for gross proceeds of approximately $68.8 million. The Series A-1 Financing included two additional tranches of Series A-1 Preferred Stock to be issued upon the achievement of certain milestones.

•

 Concurrent with the initial closings of the Series A-1 Financing, the
Company converted $32.9 million in principal and accrued interest of convertible notes and issued 43,824,255 shares of its Series A-2 redeemable convertible preferred stock at a conversion price of $0.75
per share.

•

 In June 2023, the Company closed the second tranche of the Series A-1
Financing and in July 2023, the Company issued 45,888,000 shares of its Series A-1 Preferred Stock for $1.00 per share for gross proceeds of approximately $45.9 million.

•

 In June 2023, the Company made the decision to pursue and began to commence preparation for an IPO, including the
selection of underwriters. An organizational meeting for the IPO was held on August 1, 2023, with drafting of the registration statement commencing thereafter.

•

 In August 2023, the Company appointed notable industry veterans to its board of directors, which included John
Orwin as Chairman, David Lubner as Independent Director and Strategic Finance and Audit Committee Chair and Dr. Krishnan Viswanadhan as Independent Director.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 CARGO THERAPEUTICS, INC.

 October 30, 2023

 Page
 6

•

 In September 2023, the Company appointed Michael Ports, PhD, as Chief Scientific Officer.

•

 The Company filed its first confidential draft registration statement on September 1, 2023, which was
followed by the filing of the amended confidential draft registration statement on October 4, 2023.

•

 The Company held
“testing-the-waters” meetings with investors from mid-September 2023 through October 2023.

•

 The Company publicly filed the Registration Statement on October 20, 2023.

•

 On October 27, 2023, the Company closed the third tranche of the Series
A-1 Financing and issued and sold 86,039,997 shares of its Series A-1 Preferred Stock for $1.00 per share for gross proceeds of approximately $86.0 million.

 January 1, 2022 Valuation and Fair Value Determination

The Company obtained an independent third-party valuation of the Company’s common stock as of January 1, 2022, and based on its
consideration of this valuation and the objective and subjective factors described on pages 121-122 of the Registration Statement, the Board determined that the fair value of the Company’s common stock
was $[***] per share as of January 1, 2022 (the “January 2022 Valuation”).

 The January 2022 Valuation
estimated t