China’s YishengBio is going to Nasdaq, making the transition via $230M SPAC maneuver
After attempting to make it on the HKEX last year, a Chinese biopharma is finally taking the once-flashy SPAC route to get on the Nasdaq.
YishengBio — which will be renamed YS Biopharma, per a Thursday statement — will be combining with Hong Kong-based Summit Healthcare Acquisition Corp, currently listed on Nasdaq under the ticker $SMIH after launching on the stock exchange last year. If everything goes to plan, the merger will be finished in Q1 next year.
The financing will be used to push the clinical development of two of YS’s main candidates to the commercialization stage in multiple, yet undisclosed, markets.
The transaction puts YS Biopharma at a pre-money equity valuation of $834 million. After the merger, YS said that it would earn close to $230 million in gross proceeds — $30 million from a private placement and $200 million that is currently sitting in Summit’s trust account. Per an SEC filing from Summit, private investors Snow Lake Capital and the Alliance Fund entered into agreements for $30 million as part of a private placement to be done as soon as Summit and YS merge.
As for what the final ticker will be, that has not been finalized yet. The current executive team, which currently is helmed by president and CEO Hui Shao and founder and chairman Yi Zhang, will continue to lead the new company, a statement noted.
YS, which originally built itself around its previously-conflicted, signature YSJA rabies vaccine, has expanded its pipeline to other vaccines and biologics. One of its main candidates is an adjuvanted rabies vaccine currently on its way to Phase III clinical trials. Additionally, YS is touting a recombinant Covid-19 vaccine in Phase II/III trials ongoing in the UAE, the Philippines and Pakistan.
Yisheng got itself into conflict with the Chinese health regulator, the NMPA, over the YSJA vaccine, costing the biopharma years of not being able to produce new batches. After its GMP license expired, it ended up waiting years before getting it back online. Per a note, at the time it was attempting to go public in Hong Kong:
We ceased the production of YSJA™ rabies vaccine in early 2014 when our five-year GMP certification expired. We received the GMP certificate of our newly constructed manufacturing facilities in Shenyang and launched the production of YSJA™ rabies vaccine in the new facilities in July 2019. We started the production of YSJA™ rabies vaccine in February 2020 and the sales and marketing since October 2020.
The market lull over the past couple of months has made many potential investors and companies shy of going public — but not everyone. A SPAC recently merged with small biotech Zura Bio, which currently is investigating a Phase II monoclonal antibody for alopecia areata, an autoimmune condition characterized by hair loss. That indication just got its first approved treatment a few months ago in Eli Lilly’s Olumiant.