While RA Capital Management has yet to commit to a merger plan, it noted that its new blank-check company, Research Alliance III, could target companies abroad, including those from China.
RA Capital Management has a new shell company and it’s looking for overseas players—particularly those from China—to bring to the U.S. public market.
The new special purpose acquisition company (SPAC), called Research Alliance III, could have up to $57.5 million in firepower, according to an SEC filing on Tuesday. In looking for a target, the blank-check entity is keeping its options open, looking for a life science startup with an asset or a platform that could set it apart in the market—regardless of its location.
“RA Capital Management believes there are significant opportunities relating to promising drug therapies developed abroad, including in the [People’s Republic of China],” according to the securities document.
Research Alliance III hasn’t yet launched on the Nasdaq—the SEC filing on Tuesday is a prospectus to register its intent for an initial public offering (IPO)—nor has RA Capital Management committed to searching exclusively for a Chinese target.
SPACs offer an alternative—and typically easier—path for young companies to go public. The process starts with sponsors raising capital from investors by conducting an IPO for their shell company. Once successfully public, the resulting blank-check company will look for a target that it can merge with, effectively bringing that startup to the public markets and infusing it with a hefty sum of capital.
The SPAC became a popular track to Nasdaq in 2021, when the industry was flush with pandemic-era investment cash. Companies like Roivant, Cerevel Therapeutics—which has since been acquired by AbbVie for $8.7 billion—and the beleaguered 23andMe all went public that year via SPACs.
More recently, stem cell specialist PrimeGen US went public via SPAC, merging with DT Cloud Star Acquisition Corporation last month in a deal that valued the startup at around $1.5 billion. DT Cloud Star went public in July 2024 with a $69 million raise.
RA Capital Management itself has had a successful run with SPACs. Its first shell company, Research Alliance I, merged with POINT Biopharma in March 2021, giving the radiopharma player $300 million in capital. Eli Lilly swallowed POINT a couple years later for $1.4 billion.
The venture capital firm’s investment portfolio also includes biotechs such as 89bio, which was acquired by Roche last September for $3.5 billion, and Aktis Oncology, which became the first IPO of this year with a $318 million raise.
Now, RA Capital Management wants to turn this expertise eastward, looking to China for promising technologies in keeping with a broader trend across the biopharma industry. Top drugmakers have in recent months ramped up partnerships with Chinese biotechs in search of innovative therapies. Such deals include Novartis’ $1.5 billion play with SciNeuro for Alzheimer’s disease and AstraZeneca’s $2 billion bet for Jacobio Pharma’s KRAS blocker for cancer.
