SPAC Market Remains Hot as MoonLake Therapeutics Hits the Nasdaq

Nasdaq_Ben Hider/Getty Images

Ben Hider/Getty Images

There has been a string of mergers in the life sciences via special purpose acquisition companies (SPAC)s in order to speed initial public offerings (IPOs). The latest is MoonLake Therapeutics and Helix Acquisition Corp., a SPAC sponsored by Cormorant Asset Management. Once the deal is done, the company will be renamed MoonLake Immunotherapeutics and trade on the Nasdaq under the ticker symbol MLTX.

The combined business will have a value of about $620 million. MoonLake focuses on developing treatments for inflammatory skin and joint diseases. The funds it will acquire under the transaction will be used to accelerate the development of sonelokimab for multiple inflammatory indications in dermatology and rheumatology.

In a Phase IIb study of more than 300 patients with moderate-to-severe psoriasis, sonelokimab “numerically outperformed” Novartis' Cosentyx (secukinumab), as well as demonstrated a favorable benefit-risk profile. The company expects to launch additional Phase II trials targeting other IL-17A/F-driven diseases such as psoriatic arthritis (PsA), ankylosing spondylitis or radiographic axial spondyloarthritis (AS or RaxSpA), and hidradenitis supurativa (HS).

MoonLake was founded in 2021, and after the deal, will have access to approximately $230 million in cash. Helix brings in about $115 million and also has about $115 million held in trust. The trust is a PIPE (private investment in public equity), which is when an institutional or accredited investor buys stock directly from a public company below market price.

In this case, the PIPE is led by Cormorant. It includes BVF Partners, 683 Capital Partners, Asymmetry Capital Management, funds managed by Ghost Tree Capital Group, Monashee Investment Management, RTW Investments, Surveyor Capital (a Citadel company), TCG X and funds managed by Tekla Capital Management.

A SPAC is essentially a shell company whose entire purpose is raising money and identifying a target to merge with and take public. Recent SPAC-related deals have included Amicus Therapeutics and ARYA Sciences Acquisition Corp IV on September 29, Clarus Therapeutics and Blue Water Acquisition Corp. on September 9, Humacyte and Alpha Healthcare Acquisition Corp. on August 27, and a May 11 deal between Ginkgo Bioworks and Soaring Eagle Acquisition Corp., just to name a few.

“This financing is an important milestone for our company,” said Jorge Santos da Silva, chief executive officer of MoonLake. “On behalf of the founders, we are grateful to the MoonLake team and our investors for ensuring access to the capital we need to advance our sonelokimab clinical programs and create the potential to transform the lives of patients affected by IL-17A/F-driven inflammatory diseases.”

Bihua Chen, Founder and Chief Executive Officer of Cormorant and Chief Executive Officer of Helix stated, “Moonlake has a strong management team with deep scientific and operational experience in immunology and an exciting asset in sonelokimab, which has already shown clinical benefit in psoriasis. We are excited about the potential for sonelokimab impacting diseases such as HS, PsA, and AS or RaxSpA.”

In mid-September, a report by Fenwick noted that there were 16 life sciences de-SPAC mergers in the first half of 2021 compared to only four in the second half of 2020. The same report also noted that 2021 had been a strong year for IPOs in the life sciences, with 31 in the first quarter and 35 in the second. They’ve also been sizable deals. More than 83% of the life sciences IPOs raised $100 million or more in the first half of the year.

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