SPAC on track: Preclinical T-cell company Estrella latest in string of biotechs to take blank check route

A string of recent SPAC mergers in biotech could put the so-called blank check deals back on track after near-extinction.   

The latest is early-stage cancer therapeutics-focused Estrella Biopharma, which signed a deal to merge with TradeUP Acquisition Corp. as a path to become a publicly traded company.

The agreement with the publicly traded special purpose acquisition company (SPAC) is expected to close in the first half of 2023. Upon closure, Estrella Biopharma will be renamed Estrella Immunopharma.  

While Estrella’s pre-money equity value wasn’t released, the estimated equity valuation of the company once combined with TradeUP is $398.5 million. It’s estimated that TradeUP’s cash proceeds to Estrella Immunopharma will be around $45.4 million cash. 

The Delaware-based preclinical biotech is developing therapies for solid tumors and blood cancers using its CD19 antibody redirected T cells with endogenous modular immune signaling (ARTEMIS) platform. Estrella in-licensed the technology from California-based Eureka Therapeutics earlier this year and aims to use it to overcome toxic side effects associated with CAR-T therapies for patients with both blood cancers and solid tumors.

Estrella's lead product candidate EB103 targets CD19, a protein expressed in most B-cell leukemias and lymphomas. Estrella is also working with clinical-stage biotech Imugene on its candidate CF33-CD19t, an oncolytic virus to treat solid tumors.

Estrella CEO Cheng Liu, Ph.D., who is also CEO of Eureka, will continue to lead the combined company.

SPAC mergers were a staple in biotech just a couple of years ago. However, the blank check deals went sour in the beginning of 2022, with the deals all but left for dead—not a single SPAC merger occurred in the first quarter

Things may be turning around now though, with several industry SPAC deals announced in recent weeks. They included Apollomics, which signed a deal to merge with Maxpro Capital Acquisition in September, while Ocean Biomedical entered an agreement with Aesther Healthcare Acquisition Corp. at the end of August.