2021-05-06| IPO

Swiss Biotech Roivant Sciences Enters Wall Street with a $611 Million SPAC Merger

by Tyler Chen
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The number of special purpose acquisition company (SPAC) acquisitions is rising in the biotech industry due to its transformative way of changing how a company goes public. SPAC, also known as shell company, goes through an initial public offering (IPO) with the sole purpose of using the money to acquire another private firm. Then, the acquired firm is listed on the market and skips the IPO process.

On May 3rd, Swiss Biotech Roivant Sciences announced the buyout by a SPAC, Montes Archimedes Acquisition Corp. (MAAC), for an overall deal worth $611 million. The acquisition is expected to complete during the 3rd quarter of 2021.

A SPAC Deal Worth $611 Million

Roivant will receive $411 million from MAAC’s trust account and $200 million common stock private investment in public equity (PIPE) from Fidelity Management & Research Company LLC, Eventide Asset Management, Suvretta Capital, Palantir Technologies, RTW Investments, LP, Viking Global Investors, Sumitomo Dainippon Pharma, and SB Management, a subsidiary of SoftBank Group Corp.

After the buyout, assuming a share price of $10.00 per share and no redemptions of MAAC shares, Roivant is expected to have an initial market capitalization of $7.3 billion inclusive of its pro forma net cash balance of approximately $2.3 billion. Roivant’s founder Vivek Ramaswamy will remain the Executive Chairman, and the company will still be led by CEO Matthew Gline.

What is the Appeal?

Roivant Sciences focuses on the development of innovative drugs and therapeutics. Since founded in 2014, the firm has pushed over 40 medicines into development. Currently, it has plaque psoriasis and atopic dermatitis treating drug Tapinarof in Phase 3 clinical trials. Besides, ten drugs entered phase 2 with indications in dermatology, immunology, neurology and oncology. 

In 2019 December, Roivant struck a deal with Japanese pharma Sumitomo Dainippon Pharma (SDP) to sell five of its subsidiaries, Myovant, Urovant, Enzyvant, Altavant, and Spirovant with $3 billion.

“I look forward to the next chapter of Roivant’s growth by beginning our life as a public company with an exceptionally strong and diverse base of long-term investors,” said Mr. Gline. “We look forward to continuing to deliver important medicines to patients through our development engine and our rapidly growing drug discovery capabilities spanning multiple therapeutic areas and modalities.”

Article: Spotlight: The Rise of the SPAC in Biotech



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