There are signs the SPAC could be making a comeback as a British biotech company will today use the unusual vehicle to become the first UK firm to list on the Nasdaq exchange in 2023.
Zura Bio, which develops medicines for immune system disorders, has raised $65 million (£53 million) via a special purpose acquisition company or SPAC called JATT.
The Cheshire-based business, which has partnered with US pharma giant Pfizer, said it will use the proceeds from the capital raise to fund its operations including the clinical development of pipeline drug candidates ZB-168, designed to treat diabetes, and torudokimab, which neutralizes the IL33 protein responsible for allergic inflammation-related bodily reactions.
There was a surge in the use of SPACs during the 2021 stock boom with over 600 companies created on the public markets, according to S&P Global data. But that number tumbled 85% to just 86 in 2022.
Jura CEO Dr Someit Sidhu said Jura’s decision to use a SPAC PIPE -- a Private Investment in Public Equity arrangement in which private investors agree to purchase shares without having to use the public markets -- allowed for a faster setup time and proved advantageous.
He told the Standard: “We’re going to be one of the few SPACs that closes in this period – the threshold for getting a successful transaction done has gone up massively.
“I don’t think this will bring back the SPACmania of previous years but it shows there is a utility for this type of vehicle.”
Someit, a medical doctor by training, said the firm’s decision to list in the US should be viewed as a sign of the success of the UK’s biotech industry rather than a failure of UK capital markets.
“We have this insular view of the world but drug development is a global business,” he said.
“We’ve got to make this a celebrated event of a UK startup achieving a global footprint.”
