After ditching electric vehicle parts maker, a SPAC chooses a Brown spinout that had tested the IPO waters
While the market remains difficult to navigate, the latest SPAC merger shows that biotechs and blank checks are still willing to brace the choppy waters — and for both parties involved in the latest deal, it’s not their first attempt at a successful voyage onto Wall Street.
Ocean Biomedical wanted to go the IPO route but that didn’t pan out.
Aesther Healthcare Acquisition, the biotech’s SPAC partner that was disclosed Wednesday, originally wanted to merge with a gear maker for electric vehicles but that May plan went bust in July.
The biotech is a spinout from Brown University and was founded by its dean of medicine, Jack Elias, and the chair of pathology and laboratory medicine at Brown, Jake Kurtis. Physician and entrepreneur Chirinjeev Kathuria was also a founding member. Elizabeth Ng, a former director of strategy development at Merck, serves as the company’s CEO.
Ocean’s candidates come from institutional ties as Brown has licensed their NSCLC, glioblastoma multiforme and pulmonary fibrosis candidates, while Rhode Island Hospital licensed their malaria vaccine program to the company. Their inflammation candidate sought to treat Covid-19 by reducing cytokines and comes from Stanford University, according to a snapshot in Endpoints News’ IPO tracker last year.
The transaction will see the value of the combined company sit at around $345 million.
The company initially tried to brave the waters on its own with an IPO last year — trying to raise $50 million by offering 6.3 million shares with hopes to hit a ceiling of around $100 million. Those plans were dampened in February, according to Renaissance Capital, reporting the company cut its IPO ambitions to around $22 million.
“We think that combination will result in positive valuations and long-term growth, as we continually focus on identifying and accelerating promising discoveries,” said Aesther CEO Suren Ajjarapu in a statement.
Ajjarapu, chief executive of online drug marketplace TRxADE Health, got the SPAC on Nasdaq in September 2021. The company was looking to make purchases related to targets in the pharmaceutical, medtech and healthcare IT space.
While the market has not been kind to SPAC mergers as of late, such as Amicus and Perspective calling off their deal, some have managed to go forward. Earlier this summer, Tim Lu’s Senti Bio wrapped up its merger with Omid Farokhzad’s blank check company, pulling together $140.3 million in gross proceeds, but this was far from the $296 million expected when the merger was first announced.