NEWS

Whether "SPAC" will help innovative pharmaceutical companies to go public

Release time:

2022-03-11 15:18

In the context of innovative drug IPOs continue to break, the exchange for the newly listed innovative drug enterprises are also more stringent review, this year's new listed innovative drug enterprises are few, at the end of last year, the innovative drug field of a leading enterprise science and technology board listed on the first day of the break, but also let the market's investment sentiment in this sector almost fell to freezing point. Recently, with the HKEx vigorously promoting SPAC, Tianjing Biology and Dingpei Asset Management jointly launched SPAC. Will this be a new hope for innovative drug listing and financing?
SPAC( Special Purpose Acquisition Company) means "special purpose acquisition company" in Chinese, which refers to a shell company established to raise funds through an initial public offering (IPO) and to acquire a private company after the shell company goes public, so that the private company can go public quickly. SPAC is another extremely innovative way of listing in addition to the traditional IPO, backdoor listing and DPO direct listing.


Possible advantages of a target company going public with a SPAC over a traditional IPO:
-Listing with large financing step to complete. Before SPAC and the target company complete the merger and acquisition transaction, Metropolis conducts PIPE and other fund-raising, which is therefore equivalent to the completion of a listing, initial public offering and private placement.
-Short time. SPAC has completed the listing process (selection of intermediaries, preparation of prospectuses, submission of information to the SEC and the Exchange, roadshow pricing, etc.), the target company only needs to merge with the SPAC entity, and if the corporate structure and operation are in good condition, the listing may be completed within six months.
-Higher certainty. The various "uncertainties" of traditional IPOs, after the launch of the listing, there are uncertainties in whether it can be listed, how long it will be listed, the level of valuation, listing pricing, market reaction, etc., which may also bring huge harm. However, through the SPAC listing, the target company only needs to contact the SPAC company, is a relatively simple acquisition agreement negotiations, valuation, financing amount, completion schedule, equity structure, etc., is also relatively easy to determine.


-Lower fees. Because it is not a "full" listing process, some underwriting, sponsorship, listing and other fees are omitted.
-Sustainable development. The SPAC acquisition transaction is not a minority stake, but a strategic merger between the two parties, and the SPAC promoter will continue to bring in "value-added services", especially in the capital operation and other aspects to assist the development of the enterprise.
There are no fixed restrictions on SPAC's M & A targets, but from the perspective of investor preferences, companies with industry backgrounds such as technology, Internet, finance, big healthcare, and clean energy, especially those with light assets, good cash flow, rapid growth potential, and clear equity, are more popular.

Innovative Drug IPO,,, Heavenly Creatures,, Dingpei Asset Management,,SPAC