Closing out a quiet week on Wall Street, a new SPAC prices its public debut and begins the search for a biotech partner
Biotech’s hot run of IPO pricings appears to be slowing down for the fall, with just a couple of companies making the jump to Wall Street this week.
The latest, a SPAC called Monterey Bio Acquisition, priced 10,000 shares at $10 apiece on Thursday, raking in a $100 million raise. The news comes roughly a month after the blank check company filed its S-1 papers.
Running the show is Sanjeev Satyal, who was most recently CEO of the biotech pH Pharma. The Seoul- and Silicon Valley-based company is working on a slate of candidates across oncology, inflammation, liver disease, genetic disease and ophthalmology, the most advanced of which is a Phase III-ready Rho kinase inhibitor for glaucoma. After the offering, Satyal will be left with a 1.2% stake in the company, according to the S-1/A.
Monterey Bio is largely controlled by the VC firm NorthStar Bio Ventures and its manager, Sandip Patel, who will own about 13% of shares after the offering. Chardan Monterey Investments, joint bookrunner on the offering, has a roughly 4% piece of the pie.
“Scientific discoveries and the management of biotechnology companies are getting increasingly complex. Finding, developing and launching new drugs are particularly challenging and expensive,” the S-1/A states. And that’s where Monterey thinks it can help.
The SPAC says it plans on leveraging the extensive network of its team — including some notable board members like current XOMA CEO James Neal, and Frances Heller, who once led business development at Bristol Myers Squibb — to merge with a biotech that has at least one in-house or in-licensed program.
SPAC activity has slowed significantly since the first three months of this year, which saw more money flow into blank check companies across all sectors than the entirety of 2020. But that isn’t to say there aren’t still companies out there looking for partners. EQRx made headlines back in August when it reverse merged with the CM Life Sciences III SPAC in a massive $1.8 billion deal. And earlier this week, Amicus Therapeutics spun out its gene therapy unit, now called Caritas Therapeutics, to reverse merge with Perceptive’s fourth blank-check outfit ARYA Sciences Acquisition Corp IV.
Monterey Bio, which will list under the ticker MTRYU, says it has a year to find a worthy partner.
Correction: James Neal is currently CEO of XOMA