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.”

What Will it Take to Re­al­ize the Promise and Po­ten­tial of Im­mune Cell Ther­a­pies?

What does it take to get to the finish line with a new cancer therapy – fast? With approvals in place and hundreds of immune cell therapy candidates in the pipeline, the global industry is poised to create a fundamental shift in cancer treatments towards precision medicine. At the same time, unique challenges associated with cell and process complexity present manufacturing bottlenecks that delay speed to market and heighten cost of goods sold (COGS) — these hurdles must be overcome to make precision treatments an option for every cancer patient. This series of articles highlights some of the key manufacturing challenges associated with the production of cell-based cancer therapies as well as the solutions needed to transcend them. Automation, process knowledge, scalability, and assured supply of high-quality starting material and reagents are all critical to realizing the full potential of CAR-based therapies and sustaining the momentum achieved in recent years. The articles will highlight leading-edge technologies that incorporate these features to integrate across workflows, accelerate timelines and reduce COGS – along with how these approaches are enabling the biopharmaceutical industry to cross the finish line faster with new treatment options for patients in need.

The biggest ques­tions fac­ing gene ther­a­py, the XLMTM com­mu­ni­ty, and Astel­las af­ter fourth pa­tient death

After three patients died last year in an Astellas gene therapy trial, the company halted the study and began figuring out how to safely get the program back on track. They would, executives eventually explained, cut the dose by more than half and institute a battery of other measures to try to prevent the same thing from happening again.

Then tragically, Astellas announced this week that the first patient to receive the new regimen had died, just weeks after administration.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Lat­est news: It’s a no on uni­ver­sal boost­ers; Pa­tient death stuns gene ther­a­py field; In­side Tril­li­um’s $2.3B turn­around; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Next week is shaping up to be a busy one, as our editor-in-chief John Carroll and managing editor Kyle Blankenship lead back-to-back discussions with a great group of experts to discuss the weekend news and trends. John will be spending 30 minutes with Jake Van Naarden, the CEO of Lilly Oncology, and Kyle has a brilliant panel lined up: Harvard’s Cigall Kadoch, Susan Galbraith, the new head of cancer R&D at AstraZeneca, Roy Baynes at Merck, and James Christensen at Mirati. Don’t miss out on the action — sign up here.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 117,600+ biopharma pros reading Endpoints daily — and it's free.

President Biden and Pfizer CEO Albert Bourla (Patrick Semansky/AP Images)

Chaot­ic ad­comm sees Pfiz­er/BioN­Tech boost­ers re­ject­ed for gen­er­al pop­u­la­tion, but rec­om­mend­ed for old­er and high-risk pop­u­la­tions

With just days before President Joe Biden’s Covid-19 booster rollout is set to go into effect, an FDA advisory committee appeared on the verge of not recommending boosters for anyone in the US before a last-minute change of wording laid the groundwork for older adults to have access to a third dose.

The FDA’s adcomm on Vaccines and Related Biological Products (VRBPAC) roundly rejected Pfizer/BioNTech booster shots for all individuals older than 16 by a 16-2 vote Friday afternoon. Soon after, however, the agency posed committee members a new question limiting booster use to the 65-and-older population and individuals at high risk of disease due to occupational exposure or comorbidities.

As­traZeneca, Dai­ichi Sanky­o's ADC En­her­tu blows away Roche's Kad­cy­la in sec­ond-line ad­vanced breast can­cer

AstraZeneca and Japanese drugmaker Daiichi Sankyo think they’ve struck gold with their next-gen ADC drug Enhertu, which has shown some striking data in late-stage breast cancer trials and early solid tumor tests. Getting into earlier patients is now the goal, starting with Enhertu’s complete walkover of a Roche drug in second-line breast cancer revealed Saturday.

Enhertu cut the risk of disease progression or death by a whopping 72% (p=<0.0001) compared with Roche’s ADC Kadcyla in second-line unresectable and/or metastatic HER2-positive breast cancer patients who had previously undergone treatment with a Herceptin-chemo combo, according to interim data from the Phase III DESTINY-Breast03 head-to-head study presented at this weekend’s #ESMO21.

Merck Research Laboratories CMO Roy Baynes

Mer­ck­'s Keytru­da un­corks full da­ta on lat­est ad­ju­vant win — this time in melanoma — adding bricks to ear­ly can­cer wall

In recent months, the battle for PD-(L)1 dominance has spilled over into early cancer with Merck’s Keytruda and Bristol Myers Squibb’s Opdivo all alone on the front lines. Keytruda now has another shell in its bandolier, and it could spell a quick approval.

Keytruda cut the risk of relapse or death by 35% over placebo (p=0.00658) in high-risk, stage 2 melanoma patients who had previously undergone surgery to remove their tumors, according to full data from the Phase III KEYNOTE-716 presented Saturday at #ESMO21.

Mer­ck flesh­es out Keytru­da win in first-line cer­vi­cal can­cer, adding more fire­pow­er to its ear­ly can­cer push

Merck has worked hard to bring its I/O blockbuster Keytruda into earlier and earlier lines of therapy, and now the wonder drug appears poised to make a quick entry into early advanced cervical cancer.

A combination of Keytruda and chemotherapy with or without Roche’s Avastin cut the risk of death by 33% over chemo with or without Avastin (p=<0.001) in first-line patients with persistent, recurrent or metastatic cervical cancer, according to full data from the Phase III KEYNOTE-826 study presented Saturday at #ESMO21.

Skin tu­mors in mice force Pro­tag­o­nist to halt lead pro­gram, crush­ing stock

Protagonist Therapeutics just can’t catch a break.

Six months after the Newark, CA-based biotech unveiled grand plans to launch its lead candidate for blood disorders into a Phase III trial, the FDA has slapped the program with a clinical hold. The halt — which applies to all trials involving the candidate, rusfertide — comes after skin tumors were discovered in mice treated with the drug, according to Protagonist.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 117,600+ biopharma pros reading Endpoints daily — and it's free.

Chi­nese biotech Ever­est signs $550M+ li­cens­ing deal for BTK in­hibitors on heels of Covid-19 pact

Everest Medicines is on a roll with two licensing deals in one week.

The Shanghai-based biotech has paid Sinovent and SinoMab $12 million upfront for the rights to a BTK inhibitor for renal diseases, the company announced Thursday. The deal comes just days after Everest came away with rights to a Covid-19 vaccine in China, Taiwan, Singapore, Thailand and Indonesia.

Everest will pay Sinovent and SinoMab up to $549 million in milestone payments and royalties. The agreement includes tech transfer of Sinovent and SinoMab’s manufacturing process for the candidate, named XNW1011.