Orion Biotech Opportunities Corp., a special purpose acquisition company formed by MSD Partners and Panacea Venture, pulled off a $200 million IPO. Now, it is on the hunt for biotech or life sciences companies to acquire in North America, Europe or Asia.
The SPAC will begin trading on the Nasdaq on Friday under the ticker “ORIAU.”
SPACs are also known as blank check companies. These shell companies go public with the intention of acquiring or merging with another company. They typically do so “many months or more than a year after, the SPAC has completed its own IPO," according to the Securities and Exchange Commission.
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Investors who back a SPAC are essentially trusting the shell company’s management team to make the right bet. In Orion’s case, that team includes CEO James Huang, the founding managing partner of Panacea, Vice President Chrystyna Bedrij Stecyk, a co-founder and principal of Griffin Securities, and Chief Financial Officer Mark Kayal, the senior controller of MSD Partners.
Like other SPACs, Orion is keeping options open, saying only that it will focus on healthcare companies “with the potential to drive transformational change through novel therapies or technologies,” according to a securities filing.
Orion’s IPO comes the same week that Ginkgo Bioworks inked a $2.5 billion SPAC deal with Soaring Eagle Acquisition Corp. that would see it list on the New York Stock Exchange. The synthetic biology player picked up $1.7 billion from the SPAC and is set to raise another $775 million through a private placement.
Several other life sciences companies have chosen the SPAC route to Wall Street rather than pursue a traditional IPO, including synthetic lethality biotech Tango Therapeutics, Roivant Sciences and 23andMe.
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It's a path biotechs take for different reasons. For Humacyte, a developer of regenerative tissue, the SPAC track gave it more time to pitch its story to investors.
“If we consider the current era with an IPO roadshow that lasts two, three, four, five days where we get one 45-minute meeting with each investor, it really doesn’t do the technology and the company justice," said CEO Laura Niklason, M.D., Ph.D., in a previous interview.
For Cerevel, a SPAC deal allowed the company to condense its two-step plan of a crossover round and an IPO into one step, all while avoiding the unknown market risk of taking a company public, CEO Tony Coles, M.D., said in a previous interview.
“We had been planning a more traditional route to market of a series B/crossover round, and then an IPO later in the fall,” Coles said. “The lead investor of the series B happened to be Perceptive Advisors, who were also the sponsors for Arya II, the SPAC. In a strategic conversation with them, we started thinking seriously about trying to do in one step what takes most companies two steps to do.”