Seattle startup Intrinsic Drugs plans to go public by way of a merger with a shell firm, Phoenix Biotech Acquisition Corp. The four-year previous biotech startup is growing potential therapeutic compounds matching molecules present in human milk.
The deal is anticipated to lift $178.8 million by way of the particular goal acquisition firm, generally known as a SPAC. The events additionally will search funding by way of a non-public placement, a monetary mechanism that would result in more money.
The mixed firm might be known as Intrinsic Drugs and might be led by Intrinsic CEO and co-founder Alex Martinez and co-founder Jason Ferrone, its president and chief working officer.
Intrinsic Drugs had beforehand filed to go public by way of a conventional IPO, however withdrew its submitting in July.
Human milk oligosaccharides, sugar-based molecules, are thought to assist modulate the immune system and have an effect on the gathering of microbes within the gut. Some analysis suggests they might additionally have an effect on neurological functioning.
The corporate has preclinical applications growing artificial milk oligosaccharides for atopic dermatitis, autism spectrum dysfunction, rheumatoid arthritis and different circumstances. The brand new funding will help the corporate’s plans to provoke a part 2 scientific trial for sufferers with irritable bowel syndrome.
“With this dedication from PBAX, we are going to problem the established order to ship a differentiated class of microbiome and immune-modulating medicines with the potential to supply true aid to people affected by GBA issues,” stated Martinez in an announcement Monday asserting the deal, referring to the gut-brain axis. High-line information from the part 2 trial are anticipated within the first half of 2024.
The deal values Intrinsic Drugs at $136 million, based on a press launch. PBAX shareholders should approve the deal, which is anticipated to shut within the first half of subsequent 12 months. The mixed firm is anticipated to commerce on the Nasdaq beneath the image INRX.
“After evaluating almost 100 biotech corporations, Intrinsic emerged because the standout alternative for our enterprise mixture,” stated PBAX CEO and director Chris Ehrlich in an announcement. Ehrlich is a former senior managing director of pharmaceutical investing agency Locust Stroll Companions, and beforehand served as CEO of a Locust Stroll SPAC that merged with eFFECTOR Therapeutics final 12 months.
Ehrlich managed 100% of Phoenix’s inventory previous to its IPO final 12 months; institutional shareholders now personal about 79% of the shell firm.
Also referred to as clean examine corporations, SPACs re-emerged in an enormous means throughout the pandemic as capital flowed to newly shaped entities and entrepreneurs who used SPACs to extra rapidly enter the general public markets.
However the efficiency of post-merger SPACs has steadily dropped, significantly since January amid the bigger market downturn, and extra offers are getting spiked. CNBC earlier this 12 months known as the SPAC market oversaturated.
The 4 Seattle corporations that went public by way of a SPAC final 12 months, together with protein evaluation firm Nautilus Biotechnology, have seen their share costs sputter amid the broader financial downturn.
The merger additionally comes amid an general speedy cooldown in public choices. In keeping with Endpoints Information’ IPO tracker, 147 biotech corporations went public in 2021; 48 of these had been SPAC mergers. Up to now this 12 months, solely 25 biotech corporations have gone public, 12 by way of a SPAC merger.