European biotechnology firms engaged in the discovery and development of therapeutics raised up to $2.15 billion in disclosed equity transactions during the second quarter, a drop of 36% on the same period of 2021. The closure of the IPO window was a major factor in the decline, but the completion of two sizeable special purpose acquisition company deals made up some of the shortfall. Listed firms raised slightly more in Q2 2022 than they did in the same period last year. Venture capital, although the single biggest source of equity funding during the quarter, was also down on the same period last year.

The music still goes on for biotech investment – it’s just not as loud and vibrant as it was during the heady days of 2020 and 2021, according to experts at this year’s LSX World Congress in London. After the rush to invest in biotech during the last two years, it has become an uphill battle to raise money – but the message from several panel experts at the event is that there is still hope.

The U.S. SEC is proposing rules that could close off the advantages of going public via a special purpose acquisition company, or SPAC.

Sorrento Therapeutics Inc.’s majority-owned subsidiary, Scilex Holding Co., and antibody drug developer Apexigen Inc. both announced plans late this week to go public via mergers with special purpose acquisition companies (SPACs), suggesting that, despite current market conditions, SPACs are still considered a viable option for firms seeking cash and access to public markets.

After two years of record venture capital financing, which peaked during the first quarter of 2021 with a whopping $38.27 billion raised, investments in biopharma have started to drop off, and industry watchers are expecting a slower deal pace ahead. The same is expected for the IPO market, which saw a record 134 companies go public in 2021. Those trends, combined with big pharma’s hefty cash balances, could mean an M&A surge in 2022, though the availability of special purpose acquisition companies could continue to offer private firms an attractive alternative to a buyout.

Based on the BCG Digital Ventures-Boston Consulting Group’s just issued 2022 Future of Digital Health: Health Care Innovation Predictions, the group expects 2022 to continue the trends seen over the last two years. Focus on “care anywhere” will support a continued increase in telemedicine use and, with it, advances in home-based testing, diagnostics and monitoring devices.

Akili Interactive Inc. is the latest in a growing field of med-tech startups that are merging with special purpose acquisition companies as a backdoor path to an initial public offering. On Wednesday, the digital medicine company reported plans to combine with Social Capital Suvretta Holdings Corp. I in a deal valued at approximately $1 billion.

Viveon Health Acquisition Corp. (VHAQ) reported a merger deal with regenerative aesthetics company Suneva Medical Inc. According to the terms of the deal, the special purpose acquisition company (SPAC), will issue 25 million shares and up to 12 million earnout shares to Suneva shareholders. The pro forma equity valuation of the companies is expected to be approximately $511 million, with the merger slated for completion in the first half of 2022.

Citing recent events that highlighted the risks of investing in companies based in China or that have the majority of their operations there, the U.S. SEC’s Division of Corporation Finance is seeking more specific disclosures from those companies about the legal and operational risks of investing in their securities.