SPAC Mergers Are Viable Funding Tools, But The Test Is Yet To Come
Performance Has Been Subpar For Most That Have Taken SPAC Route
Dozens of health care-focused special purpose acquisition corporations have gone public during the past two years but many biopharma firms that have merged with SPACs have not performed well to date, raising the question of how long the SPAC boom will last.
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With 88 initial public offerings in the US through the end of the third quarter of 2021, the biopharma industry is two IPOs ahead of the full-year 2020 total, but with an average return of -4% momentum may slow.
Renaissance Capital expects an initial public offering surge in September; Biomedtracker data show financings for COVID-19 programs fell from Q1 to Q2; Revelation will merge with a special purpose acquisition corporation; Ascendis netted $379.3m in a follow-on offering; and Disc Medicine raised $90m in venture capital.
Public Company Edition: Three $100m-plus US initial public offerings launched on 15 July after two smaller biopharma IPOs earlier in the month. Also, Gelesis announced a SPAC merger, Brii and Amniotics launched ex-US IPOs, and Intellia, Cerevel and Kymera priced large follow-on offerings.