Corxel Pharmaceuticals may not have always planned to dust off the special purpose acquisition company (SPAC) route to the public markets, but the obesity-focused biotech is happy with its choice.
“I wouldn't say that we set out to find a SPAC,” Corxel's Chief Financial Officer Kevin Xie, Ph.D., told Fierce in an interview. “But this particular one, given the background of the founders and the clean structure of the SPAC—all these things play into what we're looking for as the next chapter being a publicly traded company.”
The SPAC path to the public markets hit peak popularity among biotechs back in 2022, but interest has since waned even as more drug developers have sought to IPO.
Still, blank-check companies continue to be launched. Earlier this month, TriGemX Bio, formerly known as Kallyope, announced it would be going public via a merger with a SPAC from life sciences-focused investment firm TCGX. The firm has already launched another SPAC with a similar ambition via a $100 million IPO, while Frazier Life Sciences recently hit the Nasdaq with its second biotech-focused SPAC.
In Corxel's case, the biotech has agreed in principle to merge with Amanat Acquisition in the first half of next year. Amanat is led by former CEO Bitterroot Bio and Sio Gene Therapies CEO Pavan Cheruvu, M.D., and the SPAC listed on the Nasdaq with a $75 million IPO in May and a mission to find a suitable healthcare-related company to take public.
As well as the $75 million that Amanat brings to the table, the merger with Corxel will also include around $300 million in PIPE financing from investors like TCGX, New Enterprise Associates, SR One, LifeSci Venture Partners and RA Capital Management. The merged company will trade under a new name that has not been disclosed yet.
The cash will be used to advance Corxel’s lead oral GLP-1 obesity drug, CX11, through phase 3 development. Corxel foresees the SPAC funding runway to last through 2029.
Corxel is an obesity-focused biotech that operates in the U.S. and Asia, under the name Corxel HK. The SPAC merger only includes the U.S. entity and the obesity assets it is developing.
Shanghai-headquartered Corxel licensed the ex-China rights to CX11 from biotech Vincentage in late 2024. Since then, Vincentage reported 12.4% weight loss over a year, setting up the biotech to pursue Eli Lilly’s orforglipron to Chinese regulators. Corxel followed that readout with its own phase 2 results of weight loss of up to 11.5% at 36 weeks in adults with obesity or who were overweight with at least one comorbidity.
“We feel like we're in a very good position to continue pushing the program to phase 3,” Xie said. “So going public and getting the funding ready is a key critical moment for that step.”
Corxel has already been in communication with the FDA about aligning on the phase 3 protocol, according to Xie. Enrollment for the late-stage study is expected to kick off as early as the first quarter of next year, the CFO said.
“Clinically, the obesity space is very competitive,” Xie said. “Some people feel overwhelmed to pick a winner, but if you look at it lane by lane, we do feel like we're in the right lane, and the drug has the right profile. We just need to keep pushing forward.”
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