Just four months after Blue Water Acquisition Corp. raised $50 million in an IPO, it set out on April 27 to merge with Clarus Therapeutics Inc., the developer of testosterone replacement therapy Jatenzo, valuing the Northbrook, Ill.-based firm at $379 million. Earlier in April, BCTG Acquisition Corp. announced plans to buy Cambridge, Mass.-based targeted precision cancer company Tango Therapeutics Inc. for $353 million, about seven months after completing its $167 million IPO. Both Clarus and Tango are seeking the public markets by merging with a special purpose acquisition company, or SPAC, a method that is becoming increasingly popular and an alternative to the traditional IPO.
The significant risks and high costs associated with neurological R&D has tended to keep companies and investors on the sidelines over the past few years. However, thanks to research progress and the development of new technologies, business development and investing in the space is heating up once again.
The volume of phase I-III clinical trial data so far in 2021 is a full 26% more than it was by this point last year, yet the proportion of news focused on the COVID-19 pandemic continues at much the same rate.
While biopharma deals are not showing any drastic changes over last year, three areas that continue to dominate the landscape include the pandemic, oncology and cell and gene therapies. The lack of mega-mergers so far this year, specifically those above $10 billion, is also holding M&A values down by about 61% compared to this point in 2020, even though the number of mergers has climbed.
The development of gene therapy has come a long way over the past two decades after getting off to a rocky start following the death of a young patient after being treated with an experimental therapy. Since that time continuing scientific progress has enabled the development of a robust product pipeline of promising therapies that could lead to, according to FDA estimates, 10 to 20 cell and gene therapy products a year within the next five years. The renaissance of the sector has also attracted record amounts of investment capital and significant business development.