Benevolent AI aims to defy Spac doom

Biopharma groups that have listed via a deal with a special purpose acquisition company have had a torrid time of it – particularly in the last few weeks as the emergence of the Omicron variant wiped billions from the stock markets. Hoping to defy the odds is the drug discovery company Benevolent AI, which today announced the biggest deal with a European Spac yet seen. Accounting for the transaction costs, Benevolent hopes to raise €390m ($441m) by merging with Amsterdam-listed Odyssey Acquisitions, including €135m of fully-committed Pipe funding and €300m of gross cash held by Odyssey. The deal confers on Benevolent a pre-money valuation of €1.1bn and a post-money valuation of €1.5bn, prior to any redemptions. Astrazeneca, which has already partnered with Benevolent on drug discovery, is one of the group’s new investors. Benevolent will have to work hard growing its market cap if the performance of other Spacs is anything to go by. Since 2020, only one Spac-listed biotech, Cerevel, has seen significant success on the markets, tripling in value. The rest of the cohort has been so woeful that even including Cerevel, the median share price change to close yesterday was a loss of 21%. 

Top 3 best and worst performing biopharma companies listed via Spac since 2020
Merger target Spac (sponsor) Date deal announced Total raised (IPO proceeds + Pipe) ($m) Market cap at close Dec 5, 2021 ($m) Share price change to close Dec 5, 2021 (%)
The best...
Cerevel Arya Sciences Acquisition Corp II (Perceptive Advisors) Jul 30, 2020 441 4,490 205%
Immatics Arya Sciences Acquisition Corp (Perceptive Advisors) Mar 17, 2020 250 685 9%
Tango Therapeutics* BCTG Acquisition (Boxer Capital of Tavistock Group) Apr 14, 2021 353 883 1%
The worst...
Gemini Therapeutics* FS Development Corp (Foresite Capital) Oct 15, 2020 216 103 -76%
Reviva Tenzing Acquisition (Tenzing) Jul 21, 2020 64 51 -64%
NRX Pharmaceuticals Big Rock Partners Acquisition (Big Rock Partners Sponsor) Dec 14, 2020 $16m (plus future earnouts on milestones) 323 -45%
And those yet to come...
Pardes Biosciences* FS Development Corp II (Foresite Capital) Jun 29, 2021 276 Deal yet to close Deal yet to close
EQRX CM Life Sciences III (Casdin Capital and Corvex Management) Aug 6, 2021 1,800 Deal yet to close Deal yet to close
Benevolent AI Odyssey Acquisition (Zaoui & Co) Dec 5, 2021 440 Deal yet to close Deal yet to close
Assumes $10 pre-announcement share price. Median share price change of all 17 companies that have closed a Spac deal since the start of 2020 is -21%. *Warrantless structure. Source: & company statements.

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