With new SPAC, Cormorant searching biotech’s ‘good hunting grounds’ for partner

19 Jan 2024
firstwordpharma.com
Clinical ResultIPOPhase 2Acquisition
Cormorant Asset Management created its second blank-check company, filing on Thursday to raise $100 million in an IPO and signalling its interest to partner with a therapeutic, diagnostic, or medical device developer.
The new SPAC, dubbed Helix Acquisition Corp. II, follows the success of Cormorant’s first public vehicle, which merged with MoonLake Immunotherapeutics in late 2021.
MoonLake has since grown its share price five-fold. The company is developing the anti-IL-17 nanobody sonelokimab to treat psoriasis, psoriatic arthritis, and hidradenitis suppurativa. Last year, positive Phase II data for the latter indication compared favourably with approved IL-17 antibodies Cosentyx (secukinumab) and Bimzelx (bimekizumab).
SPACs hit their stride in biotech’s boom times of 2020 and 2021, but their popularity dropped off as the IPO market began to dry up in 2022. Instead of deterring Cormorant, the firm said in its filing that the “challenging private and public fundraising environment” biotechs have faced the past two years, combined with ongoing, strong venture financings, “creates good hunting grounds for Helix II.”
“The significant increase in funding over the past five years to support the accelerating pace of underlying biological understanding and scientific discovery to develop better drugs coupled with a limited recovery in the IPO market in 2023 have increased our search space for an attractive target,” Cormorant said. “An alternative path to the public markets and a defined investor base, attractive offerings even in the best of market conditions, become exceptionally compelling in our environment today.”
A SPAC comeback could be a sign of hope for the battered biotech IPO market. Five biotechs have filed for a public listing since the start of the year, including CG Oncology, which set terms this week for an IPO that could garner the cancer company a $1-billion valuation. For more, see Spotlight On: Biotech IPOs expected to see slow ramp up in 2024.
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