Mergers with special purpose acquisition corporations (SPACs) have become lucrative financial transactions for biopharmaceutical firms because they can raise significant capital and become publicly traded companies in a single transaction, bypassing the traditional initial public offering path. But without near-term milestone achievements or a high-profile management team, many drug developers that have gone public since the start of 2020 have not traded well in the US stock market to date.
SPACs, otherwise known as blank check companies, launch IPOs to raise money that they hold in trust until they merge with another entity. The target company uses the SPAC’s cash to fund its ongoing operations and takes over the blank check firm’s stock market listing
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