Biotech SPACs Can Expect a Good Runway as Investors Focus on Quality

Published: Apr 26, 2021 By Gail Dutton

for: BioSpace

Special Purpose Acquisition Companies (SPACs) are here to stay, offering one more way for companies to access public markets. But doing so isn’t a quick snap of the fingers. Companies need a lot of preparation before they are ready to be acquired by a SPAC, and investors are becoming increasingly discerning, according to SPAC experts speaking at a recent Demy-Colton Virtual Salon, The Biotech SPAC-tacular. The flight to quality is real.

“One very important aspect of SPACs that not everyone recognizes is that, at its heart, a SPAC is a merger,” said Kevin Sheridan, managing director, global joint head of healthcare investment banking, pharmaceuticals, US Jefferies. “That means preparing a Securities and Exchange document, and undergoing a review and a vote. Then the company needs to register the shares of its private investment in public equity (PIPE) investors.”