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Editorial Coverage: The year 2020 has already seen 127 SPAC
IPOs, which have collectively raised over $48.5 billion in proceeds
— more than the past
ten years combined. A special purpose acquisition company
(SPAC) is essentially a blank-check company formed to raise capital
through an IPO with the sole intent of buying or merging with
another operating company. SPACs have evolved to become an
expedited and cost-effective way of doing an M&A deal and have
been utilized by multiple Wall Street heavyweights. Going public
via a SPAC enables a company to get a deal done in weeks instead of
months, and the approach is proving to be an especially attractive
vehicle for biotech companies by providing ready access to capital
and much greater public visibility. A successful biotech SPAC
hinges on shrewd management and a target company that offers a
strong risk/reward proposition, is focused on unmet medical needs,
and has proven scientific and clinical leadership. After
evaluating over 50 companies to meet these criteria for
success, KBL Merger Corp.
IV (NASDAQ: KBLM) entered into a definitive merger agreement
with 180 Life Sciences Corp. (180
Profile), which is expected to close
within one month. 180 Life Sciences represents a new business model
in biotech. The company is founded and run by four world-renowned
scientists and entrepreneurs who invested their own money to start
the company. Of considerable note: the founders own the majority of
the equity in 180 Life Sciences and aren’t selling any in this
transaction. Immatics
N.V. (NASDAQ: IMTX) received proceeds of around $250
million in a biotech SPAC business combination. Immunovant Inc. (NASDAQ: IMVT), a
biopharmaceutical company, went public via a SPAC business merger,
and four months later, the company was able to raise $134 million
in a new public offering. AdaptHealth
Corp. (NASDAQ: AHCO), the third-largest distributor of
home medical equipment in the United States, also went public via a
SPAC business merger in July and has appreciated 50% since. After
raising $1.1 billion, a business combination is expected this month
between Churchill Capital Corp III (NYSE:
CCXX) and MultiPlan Inc., a market leader in
health-care cost-management solutions. It’s already been a heck of
a year for SPACs, and some say the best is yet to come.
- SPACs offer new method for IPOs and M&As.
- SPACs have attracted big names and big money.
- SPACs work well for biotech — quick access to capital and high
visibility.
- 180 Life Sciences Corp. is anticipated to merge before year
end, expectations high for success.
Click here to view
the custom infographic of the 180 Life Sciences Corp.
(NASDAQ: KBLM) editorial.
SPAC Attack
The flurry of SPACs this year is a reaction to a multiplicity of
long simmering factors. The traditional IPO process is inherently
costly, cumbersome and risky. Most companies follow the traditional
IPO process, but it’s an expensive and extensive process. After
months of negotiations, due diligence and road shows — bankers
price the IPO and then a block of shares are sold at the set price
to institutional investors — not everyone ends up pleased with
either the pricing or the process.
It only took a few
high-profile SPACs led by big names to show investors and
companies that there are faster and simpler ways to go public other
than a conventional IPO, especially during these uncertain times of
COVID-19. SPACs are proving to be a good option for companies
looking to go public, especially in the biotech arena. SPACs allow
companies to get financed and reach the public market quicker.
SPACs have also traded well, many delivering outsized returns,
bolstering both investor confidence and demand.
Perfect Target
KBL Merger Corp. IV is the fourth SPAC run by CEO Marlene Krauss,
MD. She’s a pioneer in the field, completing her first SPAC in
1998, and is a member of an elite group of only three women,
including herself, who have served in the capacity of SPAC CEO and
chairperson. She was also one of the first people to obtain both an
MD degree and MBA degree from Harvard, and she’s one of the few
physicians to lead a SPAC. Through her unique combination of
intimate knowledge and shrewd experience, she was able to find and
fund Summit Autonomous Inc., which manufactures Summit Technology
excimer laser, the first laser to be approved by the FDA for LASIK
refractive eye surgery. The advent of LASIK created a new industry
and a much-improved standard of care. Summit, now a subsidiary of
Novartis, was sold to Alcon for $893 million. Krauss’s devotion to
improving lives by improving health-care solutions has led to the
transaction with 180LS. Krauss and her team closely evaluated and
discarded more than a dozen companies before finally selecting
180LS to merge with KBLM.
That company — 180 Life
Sciences Corp. — was started by
four world-renowned
scientists and entrepreneurs who invested their own money to
start the company. These same distinguished biomedical pioneers
were the first to successfully develop new anti-inflammatory drugs
in the late ‘90’s, drugs such as the anti-TNF biologics and the
anti-integrin inhibitors. These drugs are still on the market,
generating multiple billions of dollars per year in sales; in
addition, they have spawned a new class of therapeutics to treat
inflammation. The talent and genius at 180 Life Sciences is now
focused on creating the next generation of innovative
anti-inflammatory drugs to inhibit the ravages of chronic
inflammation and provide relief for millions of patients with
inflammatory disease.
Expectations are high for 180 Life Sciences (180LS) since the
founders have all succeeded at this before: developing large-market
novel drugs that were sold to big pharma for multiple billions of
dollars. Now they’re aspiring to do it again — but in their own
unique way. They’ve minimized both the risk and the cost typically
associated with biotechnology by creating a collaborative system of
basic science and clinical trials conducted simultaneously at three
major universities across the globe: Stanford University, Hebrew
University and Oxford University. The international collaboration
between this cadre of scientific luminaries and the effective
sharing of programs and platforms developed through decades of
research and clinical development has resulted in the creation of
180LS with three drug platforms
at various stages of clinical development.
The company’s primary targets are fibrosis and inflammation
using anti-TNF therapy, which suppresses the immune system by
blocking the activity of a substance in the body that can cause
inflammation and lead to immune-system diseases. The Fibrosis &
Anti-TNF program based at Oxford University is completing phase
2b/3. This program is led by Jagdeep Nanchahal, a surgeon-scientist
running the phase 2 trials, and Marc Feldmann, a world-renowned
immunologist and a pioneer of anti-TNF therapy. Preclinical studies
in liver fibrosis and nonalcoholic steatohepatitis (NASH) are set
to begin in late 2020. Two additional clinical programs are
projected to start Q3/4 2021 with a grant awarded by the UK’s
National Institute for Health Research.
The other two preclinical programs are Inflammatory Pain,
directed by Raphael Mechoulam at the Hebrew University in Israel,
which is focused on discovering novel compounds to treat chronic
inflammatory pain; and A7nAChR, which is led by Lawrence Steinman
and Jonathan Rothbard, MD, seeking to develop a treatment for
ulcerative colitis in ex-smokers by targeting the a7nAChR, a
nicotine receptor in the body and a central factor in the body’s
method of controlling inflammation. James N. Woody, MD, PhD, is CEO
of 180LS and was instrumental in the discovery of Remicade, the
first anti-TNF blockbuster, as chief scientific officer at
Centocor. Woody previously founded Avidia and Proteolix, both of
which were subsequently sold to Amgen, and also served as general
manager of Roche Biosciences, the former Syntex Pharmaceutical
Company.
This unique global collaboration of scientific pioneers and
biomedical entrepreneurs mitigates costs and risks while maximizing
opportunities for 180LS. The team’s cumulative experience, acumen
and respect from big pharma enhances opportunities for developing
drugs to commercialization as well as increased opportunities for
licensing and joint ventures.
Bringing Opportunity to Fruition
It’s often said that opportunity and convenience seldom walk
hand in hand. In fact, to bring opportunity to fruition is never
convenient — it requires hard work, intelligence and diligence. Due
to the vision and diligence of Krauss, 180 Life Sciences is slated
to merge with KBL Merger Corp. IV soon, obtaining capital to press
its mission to completion. This is an opportunity to potentially
affect the trajectory of treatment protocols for millions of
patients with untreatable inflammatory disease and these vast unmet
medical needs may soon have new solutions created from the hard
work and the brilliance of the collaborative team at 180 Life
Science. For investors, it’s also an opportunity to participate in
what may become a potential blockbuster drug spawned from a SPAC.
It’s been a heck of a year, and the best may be on the horizon.
SPAC Success
Immatics N.V.
(NASDAQ: IMTX), a clinical-stage biopharmaceutical
company active in the discovery and development of T cell
redirecting cancer immunotherapies, went public
through a business combination with Arya Sciences Acquisition
Corp., a SPAC sponsored by Perceptive Advisors. Proceeds from the
transaction were approximately $250 million. Immatics is developing
targeted immunotherapy candidates based on its suite of
technologies that enables the identification of otherwise
inaccessible intracellular protein targets displayed on the cell’s
surface. Accessing these targets is generally recognized as an
important key to unlocking hard-to-treat cancers.
Immunovant Inc.
(NASDAQ: IMVT), a clinical-stage biopharmaceutical
company focused on enabling normal lives for patients with
autoimmune diseases, went public via
a SPAC business merger in December 2019. Once public, the
company was able to raise $134 million in a public
offering priced at $14.50 a share, and the stock just hit
$38.50. Immunovant is developing IMVT-1401, a novel, fully human
anti-FcRn monoclonal antibody, as a subcutaneous injection for the
treatment of autoimmune diseases mediated by pathogenic IgG
antibodies. The company just announced closing of a $200 million
public offering.
AdaptHealth Corp. (NASDAQ: AHCO), the
third-largest distributor of home medical equipment in the country,
also went public via a
business combination with DFB Healthcare Acquisitions Corp., a
special purpose acquisition company. The combined company
represented an initial enterprise value of approximately $1 billion
and market capitalization of approximately $800 million.
AdaptHealth offers a full suite of medical products for both rental
and sale, with a focus on respiratory and/or mobility equipment,
including CPAP sleep equipment, oxygen equipment, wheelchairs,
walkers and hospital beds. The company has created a scalable,
purpose-built, and centralized operating platform that optimizes
client service and delivery, improves compliance, drives
operational and financial efficiencies, and increases
enterprise-wide profitability.
After raising $1.1 billion, a business
combination is expected on October 8, 2020, between Churchill Capital Corp III (NYSE:
CCXX) and MultiPlan Inc., a market leader in
health-care cost-management solutions and a trusted partner to over
700 health-care payers in the commercial health, dental, government
and property and casualty markets. MultiPlan interprets clients'
needs and customizes innovative solutions that combine its payment
integrity, network-based and analytics-based services. Churchill
Capital Corp III is a public investment vehicle formed for the
purpose of effecting a merger, acquisition, or similar business
combination. Churchill III was founded by a group of leading
current and former business and financial leaders.
This year may well be remembered as the year of the SPAC,
representing a new paradigm in IPOs and M&A transactions. If
past is prologue, expect even more SPACs in years to come. The
ready access to capital and speed to public markets make SPACs
attractive vehicles, especially for biotech companies such as 180
Life Sciences.
For more information about 180 Life Sciences Corp., please
visit 180 Life
Sciences Corp. and see the 180 Life Sciences
company presentation.
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This release contains “forward-looking statements” within the
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Additional Information about the 180 Life Sciences Business
Combination and Where to Find It
KBL Merger Corp. IV (“KBL”) has filed a registration statement
on Form S-4, which includes a preliminary proxy
statement/prospectus for KBL’s stockholders, with the Securities
and Exchange Commission. KBL’s definitive proxy
statement/prospectus will be mailed to KBL’s stockholders that do
not opt to receive the document electronically. KBL and 180 Life
Sciences urge investors, stockholders and other interested persons
to read the preliminary proxy statement/prospectus, as well as
other documents that will be filed with the SEC, because these
documents will contain important information about the proposed
business combination transaction. Such persons can also read KBL’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2019, for a description of the security holdings of its officers
and directors and their respective interests as security holders in
the consummation of the proposed business combination transaction.
KBL’s definitive proxy statement/prospectus, which is included in
the registration statement, will be mailed to stockholders of KBL
as of a record date to be established. KBL’s stockholders will also
be able to obtain a copy of such documents, without charge, by
directing a request to: KBL Merger Corp. IV, 30 Park Place, Suite
45E, New York, NY 10007; e-mail: admin@kblvc.com These documents can also be
obtained, without charge, at the SEC’s web site (http://www.sec.gov)
Participants in Solicitation
KBL and its directors and executive officers may be deemed to be
participants in the solicitation of proxies for the special meeting
of KBL’s stockholders to be held to approve the proposed
transactions in connection with the business combination with 180
Life Sciences. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of
KBL’s stockholders in connection with the proposed business
combination with 180 Life Sciences are set forth in the amended
preliminary proxy statement/prospectus included in the registration
statement that was filed with the SEC on August 28, 2020. You can
find information about KBL’s executive officers and directors in
its Annual Report on Form 10-K for the fiscal year ended December
31, 2019, which was filed with the SEC on April 7, 2020. You can
obtain free copies of these documents from KBL using the contact
information above.
Non-Solicitation
This communication is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed business combination between KBL and 180
Life Sciences and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of KBL and 180 Life
Sciences, nor shall there be any sale of any such securities in any
state or jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Source:
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