Mergers with special purpose acquisition corporations (SPACs) have become lucrative financial transactions for biopharmaceutical firms because they can raise significant capital and become publicly traded companies in a single transaction, bypassing the traditional initial public offering path. However, the performance of drug developers that have taken the SPAC route to date has been largely negative, raising the question of how much longer these transactions will be viable financing options.
There also is the question of whether there are enough biopharma firms available to meet SPAC demands. Dozens of SPACs...