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2021-02-21| IPO

Durham-Based Regenerative Medicine Company, Humacyte Joins Expanding List of Biotech SPACs

by Eduardo Longoria
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On February 17th, Alpha Healthcare Acquisition Corp., a special purpose acquisition company (SPAC), announced the execution of a definitive business combination agreement along with a fully committed PIPE financing agreement with Humacyte, Inc.

Humacyte is a clinical-stage biotechnology company that is developing implantable bioengineered human tissue for commercial use.

 

Financial Activities

A group of leading investors has committed to participate in a common stock PIPE of approximately $175 million at $10.00 per share. In addition to the closure of this deal, the company will also receive up to $100 million held in AHAC’s trust account at the closing of the transaction, subject to any redemptions by existing AHAC shareholders.

Additionally, existing Humacyte investors will be subject to a 12-month lockup with 50% eligible for sale after 6 months if the 20-day VWAP (Volume Weighted Average Price) over any 30-day period equals or exceeds $15.00.

Current shareholders of Humacyte will exchange their approximately 80 million shares for Class A Shares on a one for one basis. Humacyte’s shareholders may also receive an additional 7,500,000 Class A Shares if the 20-day VWAP of the Class A Shares over any 30-day period equals or exceeds $15.00 and an additional 7,500,000 Class A Shares if the 20-day VWAP of the Class A Shares over any 30-day period equals or exceeds $20.00.

Assuming that no AHAC shareholders elect to redeem their shares, it is estimated that the current shareholders of Humacyte will own approximately 73% of the issued and outstanding shares in the Combined Company at closing. The Combined Company is expected to receive gross proceeds of approximately $255 million at the closing of the transaction, assuming no redemptions. The transaction is expected to close in the second quarter of 2021.

Humacyte has raised $480 million in financing to date, including $150M equity investment from Fresenius Medical Care.

 

Why Bet on Humacyte?

Besides the financial position of Humacyte, the firm’s biotechnology platform has a lot of benefits for its customers as well as potential investors.

Humacyte has multiple potential products and benefits from extensive intellectual property rights on these technologies. The company has assembled a seasoned team of 130 employees, consisting of scientists, clinical, manufacturing, regulatory, and commercial experts that are working towards the stable and consistent production of replacement human tissues that will offer the potential for lower risk of amputation and tissue rejection.

Among the tissues that Humacyte’s platform is intended to produce are bioengineered lungs, tracheas, urinary conduits, and esophagi. Being able to produce these tissue replacements offers Humacyte solutions to various diseases and thus tap into a variety of markets.

Human Acellular Vessel (HAV), if approved, will provide a potential alternative to synthetic grafts and address patients needing to replace damaged blood vessels due to diabetes or heart disease. Humacyte’s HAVs may potentially provide long-lasting revascularization with an off-the-shelf vessel and eliminate the need for using a patient’s leg vein. This is especially valuable as 500,000 coronary access bypass grafts (CABG) are placed every year in the US.

There is a total of 155 million USD worth of market share that Humacyte can seize using both their vascular and non-vascular products. Additionally, as the first company to receive Regenerative Medicine Advanced Therapy (RMAT) designation, granted by the USFDA in 2017, Humacyte has a head start on much of its competition regarding regulatory approval.

This platform is part of the opening door of interchangeable body parts. Not only will this interchangeability extend human life, but it will improve the quality of those lives. With Humacyte going public, this platform has the opportunity to grow rapidly and benefit society as a result.

Related Article: BIOCEO21 Highlights: Criteria for Successful Launches of Biotech SPACs

References

  1. https://humacyte.com/2021/02/17/humacyte-a-transformative-biotechnology-platform-company-capable-of-manufacturing-universally-implantable-bioengineered-human-tissue-at-commercial-scale-going-public-via-merger-with-alpha-healthcare/
  2. https://www.reuters.com/article/alpha-healthcare-ma-humacyte-idUSL8N2KN0CN

 

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