Semnur Pharmaceuticals plans $2bn SPAC IPO

Semnur Pharmaceuticals has announced its intention to go public through a merger with Denali Capital Acquisition Corp., a special purpose acquisition company (SPAC). The proposed business combination values the equity at up to $2 billion, and the deal could yield up to $40 million in proceeds, contingent upon the number of SPAC shares acquired.

The merger is expected to be completed in the second half of 2024, pending approval from SPAC shareholders. If successful, the merged entity will continue to operate under the name Semnur Pharmaceuticals. This news was officially disclosed in a press release dated July 2.

Semnur Pharmaceuticals is a subsidiary of Scilex Holding Company, which specializes in non-opioid pain management treatments. The primary focus of the publicly traded biopharma company will be on its product candidate, SP-102, also branded as Semdaxa. This injectable gel, containing dexamethasone sodium phosphate, is being developed for the treatment of moderate to severe chronic radicular pain, commonly known as sciatica. Sciatica is a condition characterized by the pinching or compression of the sciatic nerves, which extend from the lower back down to the legs.

In the United States, over 30 million people suffer from low back and radicular pain. Currently, opioid prescriptions account for nearly 40% of the chronic pain market, despite the associated risks of dependency and abuse. Semnur has highlighted the urgent need for alternative pain therapies that do not carry these medical and societal challenges.

Semdaxa has shown promising results in a Phase III clinical trial (NCT0337216), achieving both primary and key secondary endpoints. Patients suffering from sciatica who were treated with Semdaxa reported a reduction in pain intensity over a month and also showed improved disability index scores. These findings suggest a considerable advancement in the treatment of adult patients with lumbosacral radicular pain. Currently, there are no FDA-approved therapies specifically for this condition; existing treatments often involve off-label use of corticosteroids.

The innovative drug Semdaxa will be available in a pre-filled syringe formulation and administered epidurally. Semnur recently had a positive Type C meeting with the FDA in November 2023, where the requirements for a new drug application (NDA) were agreed upon. The FDA had already granted Semdaxa fast-track status in 2022, expediting its development and review process.

Market research cited by Semnur estimates that Semdaxa could generate annual sales of $3.6 billion within five years of its launch, emphasizing its commercial potential. Jaisim Shah, CEO of Scilex, expressed his enthusiasm, stating, "This is an important milestone in our path towards unlocking the value of SP-102 (Semdaxa) treatment for lumbar radicular pain or sciatica. We look forward to closing the proposed business combination as soon as reasonably practicable and collaborating with the Denali team in this exciting next chapter."

While the healthcare SPAC market has seen a downturn since the pandemic-driven surge in 2021, significant deals have still been made in the past year. For instance, Tevogen Bio, a T cell therapy specialist, went public through a $1.2 billion deal in June 2023, and HDL Therapeutics, a medical device developer, merged with Swiftmerge Acquisition in a $480 million deal two months later.