Bil­lions of dol­lars worth of SPACs are rid­ing on the biotech IPO boom

Bil­lion­aire hedge fund man­ag­er Bill Ack­man’s push to raise $4 bil­lion for his blank check com­pa­ny, Per­sh­ing Square Ton­tine Hold­ings, is cast­ing a spot­light on the SPACs. And amid a his­toric SPAC boom, biotechs are set­ting sev­er­al records on what some ob­servers say is shap­ing up to be a third ma­jor track — be­sides IPO and M&A — to go pub­lic.

Jay Heller

“SPACs were ap­prox­i­mate­ly 3% of the IPO mar­ket back in 2014, now they are al­most 35% of all new list­ings,” Jay Heller, the Nas­daq’s head of cap­i­tal mar­kets, told End­points News.

Even though bio­phar­ma ap­pears large­ly un­scathed by the volatil­i­ty in the broad­er pub­lic mar­ket, see­ing in­stead a his­toric run of de­buts, SPACs have still emerged as an al­ter­na­tive ve­hi­cle that can off­set some risks.

Es­tab­lished more than three decades ago, SPACs, or spe­cial pur­pose ac­qui­si­tion com­pa­nies, are es­sen­tial­ly clean­er re­verse merg­er shells for pri­vate com­pa­nies look­ing to make a quick flip to the pub­lic mar­ket. The way it works: An in­vest­ment firm would cre­ate a cor­po­ra­tion and file for an IPO based on noth­ing but its rep­u­ta­tion for pick­ing out win­ner op­por­tu­ni­ties — and the team has two years to do so af­ter rais­ing the cap­i­tal, sole­ly re­served for buy­ing out an ex­ist­ing com­pa­ny.

While it’s had a check­ered past tied with fraud­u­lent out­fits, blue chip spon­sors from RTW In­vest­ments to Per­cep­tive Ad­vi­sors are in­creas­ing­ly set­ting up their own SPACs.

For both in­vestors and com­pa­nies (as well as their orig­i­nal back­ers), it saves time and trou­ble ne­go­ti­at­ing terms or set­ting a price — al­though ex­ist­ing share­hold­ers do have the right to vote down a merg­er last minute.

Jonas Gross­man

“We pre­dict­ed at least six biotech fo­cused SPACs this year and we are al­most there,” said Jonas Gross­man, the pres­i­dent of Chardan.

Chardan raised $70 mil­lion to cre­ate its own SPAC, Chardan Health­care Ac­qui­si­tion, back in 2018. It then ze­roed in on Bio­mX, an Is­raeli mi­cro­bio­me-fo­cused biotech, as a merg­er tar­get, bring­ing the first and on­ly biotech SPAC com­bi­na­tion of 2019.

Since then, RTW’s Health Sci­ences has com­bined with Im­muno­vant, Per­cep­tive’s Arya Sci­ences has merged with Im­mat­ics, EcoR1’s Panacea has priced its $125 mil­lion IPO, and LifeSci Ac­qui­si­tion Corp has raised $60 mil­lion. Chardan it­self has pooled $85 mil­lion for a sec­ond SPAC.

Last week, Ther­a­peu­tics Ac­qui­si­tions — a SPAC spon­sored by RA Cap­i­tal — marked an­oth­er first by an IPO by sell­ing $118 mil­lion worth of com­mon shares rather than units. Prac­ti­cal­ly, it means that the of­fer­ing didn’t in­clude any trad­able war­rants, which used to be a fix­ture in such pub­lic list­ings.

The com­pa­ny had ini­tial­ly struc­tured the IPO based on units, Heller of Nas­daq not­ed, con­sist­ing of one share of Class A com­mon stock and one-third of one re­deemable war­rant.

“They were prob­a­bly able to re­struc­ture the deal be­cause of strong in­vestor de­mand,” he wrote. “The af­ter­mar­ket trad­ing of this se­cu­ri­ty will be a test to see if this will be adopt­ed by fu­ture SPACs.”

Jan Hatzius (Photographer: Christopher Goodney/Bloomberg via Getty Images)

When will it end? Gold­man econ­o­mist gives late-stage vac­cines a good shot at tar­get­ing 'large shares' of the US by mid-2021 — but the down­side is daunt­ing

It took decades for hepatitis B research to deliver a slate of late-stage candidates capable of reining the disease in.

With Covid-19, the same timeline has devoured all of 5 months. And the outcome will influence the lives of billions of people and a multitrillion-dollar world economy.

Count the economists at Goldman Sachs as optimistic that at least one of these leading vaccines will stay on this furiously accelerated pace and get over the regulatory goal line before the end of this year, with a shot at several more near-term OKs. That in turn should lead to the production of billions of doses of vaccines that can create herd immunity in the US by the middle of next year, with Europe following a few months later.

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UP­DAT­ED: No­vavax her­alds the lat­est pos­i­tive snap­shot of ear­ly-stage Covid-19 vac­cine -- so why did its stock briefly crater?

High-flying Novavax $NVAX became the latest of the Covid-19 vaccine players to stake out a positive set of biomarker data from its early-stage look at its vaccine in humans.

Their adjuvanted Covid-19 vaccine was “well-tolerated and elicited robust antibody responses numerically superior to that seen in human convalescent sera,” the company noted. According to the biotech:

All subjects developed anti-spike IgG antibodies after a single dose of vaccine, many of them also developing wild-type virus neutralizing antibody responses, and after Dose 2, 100% of participants developed wild-type virus neutralizing antibody responses. Both anti-spike IgG and viral neutralization responses compared favorably to responses from patients with clinically significant COVID‑19 disease. Importantly, the IgG antibody response was highly correlated with neutralization titers, demonstrating that a significant proportion of antibodies were functional.

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J&J gets a fresh OK for es­ke­t­a­mine, but is it re­al­ly the game-chang­er for de­pres­sion Trump keeps tweet­ing about?

Backed by an enthusiastic set of tweets from President Trump and a landmark OK for depression, J&J scooped up a new approval from the FDA for Spravato today. But this latest advance will likely bring fresh scrutiny to a drug that’s spurred some serious questions about the data, as well as the price.

First, the approval.

Regulators stamped their OK on the use of Spravato — developed as esketamine, a nasal spray version of the party drug Special K or ketamine — for patients suffering from major depressive disorder with acute suicidal ideation or behavior.

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Igor Splawski (CureVac)

Cure­Vac nabs a top No­var­tis sci­en­tist for CSO slot as mR­NA vac­cines seize the spot­light

One of the key players in the race to develop a new mRNA vaccine to fight Covid-19 has reshuffled the top spots in the executive suite. And they’re bringing in a Novartis vet out of Harvard to spearhead their work on mRNA.

CureVac, which just filed for an IPO that’s still taking shape, has formally handed Franz-Werner Haas the CEO title, after giving it to him on an interim basis. And the still rather stealthy German biotech largely owned by billionaire Dietmar Hopp has recruited Igor Splawski as its chief scientific officer.

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President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

OWS' Mon­cef Slaoui lam­basts ‘in­sult­ing’ me­dia cov­er­age: 'How are you help­ing in this pan­dem­ic?'

Ten weeks into his job as the chief advisor of Operation Warp Speed, Moncef Slaoui has found a new hurdle to the challenge of bringing a Covid-19 vaccine unprecedented speed: the media.

In an official podcast by the Department of Health and Human Services, Slaoui — a veteran of GlaxoSmithKline who came out of his retirement to take on the role, relinquishing several board directorships and selling shares in the process — counted himself naive in assuming that the press was aiming to inform.

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Bruce Hironaka, IgGenix CEO

IgGenix emerges from stealth with $10 mil­lion Se­ries A hop­ing to re-en­gi­neer al­ler­gic cas­cade

A little over six months after the FDA approved the first treatment for peanut allergies, a new biotech has emerged hoping to break through in a field that’s seen virtually no innovation.

IgGenix came out of stealth mode Tuesday morning, announcing a $10 million Series A round to get the company started. The California-based biotech aims to focus not just on peanuts, but all types of food allergies and related serious conditions by developing a platform that can interfere with the allergic cascade. Financing was led by Khosla Ventures and joined by Parker Ventures.

Tony Coles, Cerevel Therapeutics CEO

Adding $445M, Tony Coles and his big Pfiz­er neu­ro spin­out hitch a ride to Wall Street on Per­cep­tive’s SPAC

Two years ago, after Pfizer abruptly shut down its entire neuroscience division, Bain Capital bet $350 million that those assets were still worth something and packaged them into a new biotech: Cerevel Therapeutics. A year later, they got seasoned executive Tony Coles, who had recently jumped back into the C-suite of another neuroscience startup, to run the company.

Now Coles is steering Cerevel public, in what he says is the largest ever transaction of its kind. Cerevel has agreed to merge with Perceptive Advisors’ specialty acquisition company ARYA II. Between the roughly $125 million Perceptive raised through ARYA and an additional investment of $320 million Bain Capital, Perceptive and — yes, really — Pfizer, among others, Cerevel will now move forward with an added $445 million in its coffers.

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Rich Heyman (ARCH)

Rich Hey­man joins PMV Phar­ma, a p53 biotech, as it adds $70 mil­lion in Se­ries D

Less than a year after pulling in an impressive $62 million Series C round, PMV Pharma is back at it again.

The Cranbury, NJ-based biotech announced Monday an additional $70 million in Series D financing as it seeks to develop cancer therapies targeting p53 mutations. Additionally, PMV also introduced longtime biotech entrepreneur Rich Heyman as chairman of the board of directors.

“This financing provides PMV Pharma with the resources to expand our pipeline and to potentially advance multiple p53 therapies into the clinic,” said PMV president and CEO David Mack in a statement.

Days af­ter seal­ing Sanofi pact, Kymera beats a path to the Nas­daq with $100M IPO pitch

Back in March, when Kymera Therapeutics closed $102 million in Series C funding led by Biotechnology Value Fund and Redmile Group, CEO Nello Mainolfi noted the protein degradation player was “at the cusp of transitioning” into a fully integrated R&D company. Five months and a major Sanofi pact later, he’s back asking for another little push to get there.

Kymera has penciled in $100 million in its first IPO pitch — although given the public market’s seemingly insatiable appetite for biotechs these days the final figure is anyone’s guess.