For biopharmaceutical companies looking to go public, merging with a special purpose acquisition company can be an appealing alternative to the ‘traditional’ initial public offering process. Rather than teaming up with an underwriter to start selling its shares on a public exchange for the first time, a firm can merge with a publicly listed shell company – the SPAC. But following the SPAC boom of 2020 and 2021, when dozens of SPACs launched and began their search for a partner, the bubble seems to have finally burst.
SPACs launch IPOs to raise money which they hold in trust until they find another entity to merge with, a...