1. Scrip
  2. >>Business
  3. >>Financing

SPAC Mergers Take Biopharmas Public, But Valuations Often Sag Post-Closing

Deals Give Stock Market Access Without IPO

 
• By Mandy Jackson

Merging with a special purpose acquisition corporation is a viable funding tool, but it may not be the best choice for drug developers far from key milestones.

Money bag with the word SPAC - Special purpose acquisition company
SPAC mergers can be lucrative but it can be difficult to maintain and increase valuations afterwards • Source: Alamy/Andrii Yalanskyi

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...

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on Scrip for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required
Start Free Trial

Already a subscriber?

More from Financing

In Brief: Soleno To Raise $200m To Boost Vykat XR Launch

 
• By Manas Mishra

Soleno Therapeutics will raise about $200m gross proceeds from an offering of 2.35m of its common stock to fund the commercialization of Vykat XR, which became the first drug for Prader-Willi syndrome to gain US approval on March 26.

Investors Back Nuclidium’s Next-Gen Copper-Based Radiopharmaceuticals

 
• By Andrew McConaghie

The Swiss company believes its platform can make radiopharmaceuticals easier to produce and more accessible to patients.

Finance Watch: Two New Venture Capital Funds Provide $600m For Biopharma

 
• By Mandy Jackson

Private Company Edition: Catalio raised more than $400m for its fourth health care-focused VC fund, while AN Venture Partners raised $200m for Japan and beyond. In VC financings, among a dearth of mega rounds, Neuron23’s $96.5m series D is the largest round in recent weeks.

Actithera Raises $75m To Enter Competitive FAP-Targeting Radioligand Field

 
• By Andrew McConaghie

While companies such as Eli Lilly and Roche have faced setbacks to their fibroblast activation protein-targeting oncology therapies, Actithera believes its radiopharmaceuticals platform will prove more successful.

More from Business