Apexigen tests the market's appetite for CD40 agonism

Undaunted by the biotech bear market, the US-Chinese oncology group Apexigen has triggered plans to list via a Spac. With no traditional biotech flotations since mid-February options must be limited for those inclined to list, but why any developer would want to brave the public markets right now is a separate question. Apexigen last raised money in 2020 so was presumably in need of funds, and the Spac deal promises $63m after costs, assuming no redemptions. This relatively modest sum still requires full support from the Spac’s own shareholders, which is far from guaranteed; several Spac deals have fallen through in recent months. Apexigen will hope that its lead project, sotigalimab, appeals. This is one of the most advanced CD40 agonists, an immuno-oncology mechanism that in reality still has much to prove. The company collects royalties on Novartis’s macular degeneration drug Beovu, which its antibody technology helped create, so Apexigen's platform could be said to be validated. But the transaction comes with a $50m equity line in place, as well as warrants, both of which threaten substantial dilution for future investors. On top of terrible market conditions, this deal feels like a very hard sell.