Another SPAC strikes in biotech
For biotech companies looking to go public, there are two paths to Wall Street. You can hire the many lawyers and bankers needed to file for a traditional IPO, or you can sell your firm to a publicly traded shell designed to absorb private outfits. Cerevel Therapeutics, a Boston neuroscience company, went with option B.
Cerevel, led by high-profile biotech executive Tony Coles, is merging with a public shell launched by Perceptive Advisors that raised about $130 million in an IPO in June. Under the deal, about $445 million will change hands, and Cerevel will emerge as a publicly traded firm worth about $1.3 billion, all without having to go public the old-fashioned way.
Perspective’s fund is what’s called a special purpose acquisition company, or SPAC. These blank-check entities have existed for years on Wall Street but are fairly new to biotech. Essentially, a name-brand fund forms a SPAC, invites investors to buy into it through an IPO, and then later chooses a company with which to merge, creating a publicly traded firm by reverse-engineering. The pitch to investors is that the likes of Perceptive are better at picking targets than the average person considering whether to buy into a given IPO.
Read more.
Cerevel, led by high-profile biotech executive Tony Coles, is merging with a public shell launched by Perceptive Advisors that raised about $130 million in an IPO in June. Under the deal, about $445 million will change hands, and Cerevel will emerge as a publicly traded firm worth about $1.3 billion, all without having to go public the old-fashioned way.
Perspective’s fund is what’s called a special purpose acquisition company, or SPAC. These blank-check entities have existed for years on Wall Street but are fairly new to biotech. Essentially, a name-brand fund forms a SPAC, invites investors to buy into it through an IPO, and then later chooses a company with which to merge, creating a publicly traded firm by reverse-engineering. The pitch to investors is that the likes of Perceptive are better at picking targets than the average person considering whether to buy into a given IPO.
Read more.
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