How did medtech SPAC mergers fare?

2023-05-03

并购

These businesses — built to bring private companies public — raise initial public offerings (IPOs). They then go and acquire existing companies, taking them public in the process. The value of these mergers varies, but some in the medtech space reached the billions, demonstrating the magnitude of the deals. However, since the SPAC mergers first began to pile up, the outcomes varied quite a bit. Changing market conditions, world events and more caused the sudden rush of SPAC mergers to slow down. Some never even got off the ground. Here’s a rundown of some of the biggest SPAC deals in medtech and how they fared. Accelus Accelus announced a SPAC deal in November 2021 valued at approximately $482 million. At the time, the company said it entered into a definitive business combination agreement with CHP Merger Corp. The commercial-stage medtech company aims to accelerate the adoption of minimally invasive surgery as the standard of care in the spinal space. It offers a portfolio of spinal implants using its Adaptive Geometry Technology and a compact precision robotics platform. However, in April 2022, Accelus and CHP mutually agreed to terminate their deal due to “market conditions.” “In light of market conditions, we believe that this strategic pivot will best enable our team to execute on our mission to transform the spine surgery space by accelerating the adoption of MIS as the standard of care,” said Chris Walsh, CEO and co-founder of Accelus. Aerami Inhaled drug delivery technology maker Aerami entered into a merger deal worth about $250 million in December 2021. FoxWayne Enterprises Acquisition Corp. expected their deal to close in the first quarter of 2022. However, within a few months of the announcement, Aerami and FoxWayne agreed to terminate their merger agreement, too. “In light of current unfavorable market conditions, Aerami and FoxWayne believe that terminating the business combination agreement is the best path forward for the parties and their respective stockholders,” a statement read. Aerami — formerly Dance Biopharm — wanted to use proceeds from the merger to accelerate its regulatory processes. It said it intended to FDA 510(k) clearance for its proprietary AFINA inhaler technology platform in 2022. The system remains uncleared. Better Therapeutics Unlike the previous two examples, Better Therapeutics completed its SPAC deal, finalizing terms in October 2021. Life following the SPAC deal started well, as the company hit multiple key research milestones that validated its digital therapeutics. It also submitted an FDA de novo request for its digital therapeutic that treats diabetes. The company hopes an FDA nod arrives for that product this year. However, like several companies in medtech, Better Therapeutics enacted layoffs earlier this year to combat economic challenges. In March, it commenced a workforce reduction of approximately 35% of its employees. Per the digital therapeutic developer’s most recent annual report, it had 44 employees as of Dec. 31, 2021. The layoffs could affect as many as 15 employees if the headcount remains similar. In a letter to employees, CEO Frank Karbe wrote that the company is implementing cost-saving actions to further extend its financial runway ahead of “critical milestones.” Butterfly Network Like Better Therapeutics, Butterfly Network got its SPAC merger over the line. The company completed its merger with Longview Acquisition Corp. in February 2021. Butterfly received approximately $859 million before transaction fees, including $414 million held in Longview’s trust account and $175 million from private placement investors. The handheld ultrasound technology developer had to reduce its workforce by 10% in August 2022, though. CEO Dr. Todd Fruchterman stepped down a few months later. Butterfly’s fortunes seem to have turned for now, though. The company projects sales growth of 20% this year and picked up a new FDA clearance for its AI-enabled ultrasound technology. HeartFlow In July 2021, HeartFlow entered into a merger agreement with Longview, the same company that took Butterfly public. The companies valued the deal at $2.4 billion, plus an estimated $400 million in cash after closing. However, unlike Butterfly’s deal with Longview, the deal never went through. HeartFlow and Longview came to the mutual decision as a “result of current unfavorable market conditions” in February 2022. The non-invasive, personalized cardiac test developer named a new CEO less than a month later and hasn’t looked back. The FDA cleared its AI-powered Plaque analysis and Roadmap Analysis products in October 2022. While not quite the capital infusion expected from the SPAC deal, HeartFlow also brought in a $215 million Series F recently. The company said the funding enables it to meet the growing demand for its commercial products. It develops the non-invasive HeartFlow FFRCT analysis. It uses artificial intelligence to create a personalized three-dimensional heart model. Commercial availability spans the U.S., UK, Canada, Europe and Japan. Hyperfine In another SPAC deal that actually went through, Hyperfine completed a deal with HealthCor Catalio Acquisition Corp. worth approximately $160 million. The company earmarked funds for its growth initiatives, including the commercial expansion of its Swoop FDA-cleared portable MRI system. Hyperfine appears to be operating as normal over the year-and-a-half since its SPAC deal went through. In June 2022, the company unveiled a new, FDA-cleared software upgrade to its MRI system. Another clearance for upgraded, AI-powered software came earlier this year. Hyperfine named industry veteran Maria Sainz as its new CEO last October. Memic Innovative Surgery (now Momentis Surgical) Memic and MedTech Acquisition Corp. entered a merger agreement in August 2021. The companies said the deal would create a combined company with an estimated pro-forma equity value of more than $1 billion. About seven months later, the deal was off. In March 2022, as a result of market conditions and associated volatility due to recent world events, the companies terminated their agreement. Memic develops Hominis, the first FDA-approved, robotically assisted surgical device for performing transvaginal hysterectomy. In July 2022, just a few months after the deal fell through, Memic rebranded to become Momentis Surgical. It also changed the name of its proprietary Hominis technology. The Tel Aviv, Israel-based company renamed Hominis as the Anovo surgical system. Pear Therapeutics Following a merger with Thimble Point Acquisition Corp., Pear Therapeutics officially began trading on the Nasdaq market under the “PEAR” ticker in December 2021. The transaction generated approximately $175 million in gross proceeds in total. Pear said it would use the funds to capitalize on its position as a leader in software for treating serious diseases. However, the deal did not work out as initially envisioned for the digital therapeutic developer. In July 2022, the company laid off roughly 25 workers (9% of its workforce). It attributed this decision to an overall operations restructuring and the macroeconomic environment. In November 2022, Pear cut another 22% of its workforce. These aimed to reduce its 2023 operating expenses, extend its cash runway and reduce its reliance on financing. The reduction affected approximately 59 employees, representing 22% of its workforce. In March, Pear announced that it engaged in a process to explore strategic alternatives to maximize shareholder value. Less than a month later, the company filed for protection under Chapter 11 of the U.S. Bankruptcy Code. It scaled down operations and reduced its workforce further as it looks for an asset sale. “Today is a difficult day for Pear Therapeutics,” CEO Corey McCann said. “We announced that Pear voluntarily filed for Chapter 11 and will seek to sell assets through a sales process. We also announced a reduction in force, including me. This is certainly not the outcome I envisioned when I founded Pear in 2013.”