SEC opens inquiry into Wall Street's SPAC mania — report; A China-based gene therapy player now has $80M more in the bank
The SPAC mania has intensified not just in biotech but throughout the market. And it’s caught so much fire that now the SEC has reportedly opened an inquiry into the matter.
US regulators have reached out to Wall Street banks for information on how they’re managing the risks involved in the blank check mergers, four sources told Reuters. The requests have not risen to the level of a formal demand just yet, but have asked that the banks voluntarily provide the information.
The possibility of a formal investigation remains on the table, Reuters reported. In their requests, the SEC is looking for a variety of info ranging from SPAC deal fees, volumes and how the banks are policing the deals internally, to compliance and reporting.
SPACs have triggered what’s become a gold rush on Wall Street, with $170 billion poured into the holding companies so far this year. That’s already eclipsed the figure from all of 2020, Reuters reported, which hit $157 billion.
Earlier this month, the SEC warned investors of jumping aboard SPACs based on celebrity endorsements. Former professional athletes Shaquille O’Neal and Alex Rodriguez, who have only expanded their influence in retirement, each joined SPAC syndicates in February.
And earlier this week, the much-maligned office space startup WeWork announced its intentions to go public through a SPAC. It’s seeking a $9 billion valuation despite having reported losses of $3.5 billion in 2019 and $3.2 billion in 2020. The move comes a few years after WeWork’s failed IPO.
For biotech in 2021, the SPAC train has only brought in more money with a myriad of investors trying to capitalize. There was the high-profile Richard Branson SPAC that merged with 23andMe in February, and Foresite and Perceptive, among others, have launched new blank check companies in recent months. — Max Gelman
A China-based gene therapy player now has $80M more in the bank
There’s no shortage of players in pursuit of an off-the-shelf gene therapy. Now, a Nanjing, China-based biotech has $80 million more to work with.
Bioheng Biotech took the wraps off a Series B round on Wednesday, co-led by GL Ventures, Decheng Capital and Octagon Capital. BlueRun Ventures China and Shenzhen Capital Group Company also chipped in.
The proceeds will go straight into R&D and process development, according to the company which was founded in 2017.
“Bioheng focuses on the development of allogeneic immuno-cell therapy. At present, we have made progress in several indications with promising clinical data,” founder and CEO He Xiaohong said in a statement, without naming the indications. “We are looking forward to providing more affordable ‘off-the-shelf’ immuno- cell therapies to patients soon. ” — Nicole DeFeudis
Sleep apnea player ApniMed takes home $25 million in financing to chase PhIII study
Cambridge, MA-based Apnimed has closed a $25 million Series B round as it gears up for two Phase II readouts of its oral candidate for sleep apnea, the biotech said Thursday.
The round was led by existing investor Morningside Ventures and joined by Seligman Investments and Tao Capital Partners.
Apnimed’s lead compound, AD109, is a combination of a selective norepinephrine reuptake inhibitor and an antimuscarinic, a novel chemical, the biotech said.
The company is currently running two Phase II studies in obstructive sleep apnea that are expected to read out in Q2 2021. ApniMed plans to use the proceeds to set up a Phase III pivotal study for the drug and begin building its commercial infrastructure, according to a statement. — Kyle Blankenship