The latest healthcare SPAC comes in at $200M with a laser focus on artificial intelligence

A new health­care SPAC is ex­pect­ed to price dur­ing Fri­day’s ses­sion, and it’s one that wants to take ad­van­tage of the in­dus­try’s buzzi­est sec­tor.

The blank check com­pa­ny will make a $200 mil­lion de­but on Nas­daq, com­ing to the pub­lic mar­ket on the backs of Stan­ley Cap­i­tal fundrais­ing. This SPAC is not on­ly tar­get­ing life sci­ences, but life sci­ences com­pa­nies with a spe­cif­ic fo­cus on ar­ti­fi­cial in­tel­li­gence. One need not look past the name as ev­i­dence — Health­care AI Ac­qui­si­tion Corp.

Ac­cord­ing to the S-1 fil­ing, the SPAC is aim­ing to tar­get com­pa­nies ‘with high AI readi­ness and tech­no­log­i­cal trans­for­ma­tion po­ten­tial.’ The pri­ma­ry fo­cus will be in the US and Eu­rope in op­er­a­tions ‘where the ad­di­tion­al in­te­gra­tion of an AI or au­toma­tion so­lu­tion can cre­ate in­cre­men­tal trans­for­ma­tion­al val­ue.’

Si­mon Cot­tle

Led by Stan­ley Cap­i­tal’s found­ing part­ners Si­mon Cot­tle and Patrick Hargutt, the SPAC team be­lieves such val­ue can be found in any of three sec­tors in health­care. The first two deal less with drug R&D but re­main tan­gen­tial: with­in the S-1, the team lays out how AI will blos­som in clin­i­cal tri­al soft­ware and health­care IT.

But the com­pa­ny lays out most of its de­tails re­gard­ing the third area — out­sourced phar­ma­ceu­ti­cal ser­vices, such as CROs and CMOs. The S-1 lays out how such out­sourc­ing has trend­ed up in the last sev­er­al years, cit­ing a BCC Re­search es­ti­mate say­ing this ser­vices mar­ket will grow to $266 bil­lion by 2025.

‘The out­sourc­ing typ­i­cal­ly oc­curs at all stages of the val­ue chain from dis­cov­ery, R&D, med­ical af­fairs, com­mer­cial­iza­tion and man­u­fac­tur­ing. We will fo­cus on the last three sub­sec­tors of the val­ue chain,’ the S-1 reads.

It’s an area where AI-cen­tered com­pa­nies have al­ready tried tak­ing ad­van­tage. In 2019, Atom­wise teamed up with Charles Riv­er on an AI al­liance, and In­sil­i­co — which could be on the heels of go­ing pub­lic it­self af­ter a $255 mil­lion megaround in June — signed a deal with WuXi AppTec as one of its ear­ly moves back in 2018.

In­vest­ment in­to AI- and da­ta sci­ence-fo­cused com­pa­nies has rock­et­ed up else­where as well, and ear­li­er this week se­r­i­al en­tre­pre­neur Gary Glick launched his newest biotech in Odyssey Ther­a­peu­tics, which is plac­ing a huge em­pha­sis on da­ta sci­ence. Though much re­mains un­known about the biotech’s R&D op­er­a­tions, about a third of Odyssey’s rough­ly 100 em­ploy­ees are da­ta sci­en­tists.

SPACs, mean­while, con­tin­ue rais­ing boat­loads of cash de­spite a much more tur­bu­lent mar­ket space than ear­li­er this year. Al­though 2021 saw sev­er­al SPAC deals in the first six to eight months of the year, last month Flag­ship’s Va­lo Health and a Khosla Ven­tures SPAC sur­pris­ing­ly called off their re­verse merg­er, cit­ing ‘mar­ket con­di­tions.’
https://endpts.com/the-latest-healthcare-spac-comes-in-at-200m-with-a-laser-focus-on-artificial-intelligence