Why are SPACs of interest to pharma and biotech?

1 April 2022

An overview of a trend that may - or may not - be here to stay in the biopharmaceutical sector.

Recent SPAC activity

The number of mergers with SPACs (or special purpose acquisition companies) has increased dramatically over the past five years as they provide private companies with a swift and alternative route to secure capital investment (Figure 1). According to Loeb & Loeb (2021), SPACs represented nearly 20% of the total IPO market in 2021. While there are signs that the force may be going out of the SPAC sector, with 86 SPAC listings in the second-half of 2021 worth $162.3 billion versus 122 mergers in first-half of 2021 worth $253.4 billion ( White & Case, 2022), healthcare continues to be an attractive target for SPAC sponsors.

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