2021 has seen a startling rise in the number of deals between special-purpose acquisition companies and medical technology, digital health and diagnostics groups seeking a fast and easy way to go public. A flurry of these deals in February was followed this week by Somalogic reversing into CM Life Sciences II in a transaction worth $651m, including a $375m Pipe investment. Somalogic specialises in protein analysis, and plays in three industries: clinical diagnostics, with its SomaSignal assays for cardiovascular disease, diabetes and cancer; aiding drug development; and basic research. Its revenues in 2020 were just $55m, but the Spac deal will bring Somalogic’s pro forma enterprise value to $1.2bn. News of the deal pushed CM’s share price up 10%, but this is an outlier among the class of 2021 – most have seen their valuation fall since announcing deals. Indeed the shine is perhaps coming off Spacs, at least in the health tech space. VG Acquisition Corp, the blank-cheque company backed by Virgin, has lost nearly a quarter of its value since announcing its intent to buy 23andMe – a fall rendered all the steeper by the fact that its value had soared 31% on the day of the announcement.
| Health tech Spac deals in Q1 2021 | ||||
|---|---|---|---|---|
| Target | Spac (main backer) | Focus | Deal announced | Share price since announcement |
| Somalogic | CM Life Sciences II (Casdin Capital and Corvex Management) | Proteomics | Mar 29 | 10% |
| Humacyte | Alpha Healthcare Acquisition Corp (AHAC Sponsor) | Bioengineered vascular grafts | Feb 17 | 4% |
| Owlet Baby Care | Sandbridge Acquisition Corp (Sandbridge Capital and Pimco) | Digital health | Feb 16 | (6%) |
| Sharecare | Falcon Capital Acquisition Corp (Falcon Equity Investors) | Telehealth | Feb 12 | (15%) |
| Sema4 | CM Life Sciences (Casdin Capital and Corvex Management) | Genomics | Feb 10 | (4%) |
| Nautilus Biotechnology | Arya Sciences Acquisition Corp III (Perceptive Advisors) | Proteomics | Feb 8 | 23% |
| 23andMe | VG Acquisition Corp (Virgin Group) | Genetic testing | Feb 4 | (24%) |
| Talkspace | Hudson Executive Investment Corp (Hudson Executive Capital) | Telehealth | Jan 13 | (14%) |
| Source: company announcements. https://www.evaluate.com/vantage/articles/news/snippets/health-tech-spacs-drift-downwards | ||||
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