Drug discovery specialists at Ligand take their antibody biz public via SPAC, aiming to build $850M company
When Ligand Pharmaceuticals unveiled plans to spin off its antibody discovery unit, OmniAb, last November, the board of directors had yet to approve a specific format for the split. The leading option, Ligand said at the time, was an IPO and distribution of shares to existing shareholders.
Four months later, they have a decision. And they’re going for the SPAC route.
OmniAb will still be going public, Ligand announced, but it’s doing so by merging with Avista Public Acquisition Corp. II (APAC), a blank check company set up by private equity firm Avista Capital Partners. The combined company will have an initial pre-money equity valuation of $850 million, according to the biotech.
The new beginning comes almost seven years after Ligand picked up the OmniAb platform as part of a $178 million acquisition of OMT.
The decision to split, Ligand said earlier, stemmed from the conclusion that it had really been running two distinct companies under one roof: one focused on drug discovery, early-stage drug development, product reformulation and partnering (Ligand); the other specializing in antibody screening and development (OmniAb).
Antibodies generated from the OmniAb platform — which spans a number of transgenic animals from rat to chicken to mouse — could rack up 10 approvals by 2028, per Ligand projections. The first ones came in 2021, when GloriaBio’s zimberelimab and EQRx/CStone’s sugemalimab were approved in China for different types of cancer. Both anti-PD-1 antibodies originated on the transgenic rat platform, OmniRat.
Following APAC’s $200 million IPO last August, the deal is expected to deliver at least $130 million and at most $266 million in cash, depending on whether APAC shareholders decide to cash out.
Avista has also promised to invest an additional $115 million ($15 million as a PIPE, and the rest to backstop potential redemptions), while Ligand will contribute $15 million.
Ligand added that it intends to distribute 100% of its ownership of OmniAb to shareholders in a tax-free distribution some time in the second half of 2022.