SPACs back from brink with NK cell therapy biotech's plans for blank-check merger

After a number of high-profile special purpose acquisition company announcements toward the end of last year, these deals once again dropped off in 2023. But that doesn’t mean the low-key revival of this reverse merger model has died.

Case in point is NKGen Biotech, a natural killer (NK) cell therapy-focused company, which announced plans to go public via a merger with blank-check company Graf Acquisition Corp. IV. Santa Ana, California-based NKGen was set up in 2017 with a focus on neurodegenerative diseases and oncology and is now led by Paul Song, M.D., who took the top seat in January after moving from Fuse Biotherapeutics.

NKGen has one therapy already in the clinic. SNK01 is in phase 1 studies for advanced solid tumors both as a monotherapy and in combination with Merck & Co.’s Keytruda, Pfizer’s Bavencio and Affimed’s bispecific innate cell engager AFM24. The therapy is also in an early-stage Alzheimer’s study. The company also has an allogeneic program and a chimeric antigen receptor program listed as in preclinical and discovery-stage development, respectively.

While financial and other details will remain sparse until the merger is executed, we do know that Graf Acquisition Corp. IV is just the latest in a string of blank-check companies set up by serial SPAC founder James Graf with ambitions across a range of sectors. His previous ventures include Graf Industrial Corp., which merged with tech company Velodyne Lidar in 2020, and Platinum Eagle Acquisition Corp., which merged with workforce lodging provider Target Hospitality in 2019.

Before eyeing up NKGen Biotech, Graf Acquisition Corp. IV.’s remit was suitably vague. With $172 million cash in trust, the SPAC said on its website that it was open to a business combination with a company in any industry worldwide.

While SPAC deals were a hot tickets for biotechs to go public a couple of years ago, the rush cooled in 2022 as the industry hit tough times. With IPOs plummeting and companies slimming both their pipelines and teams, SPACs all but dried up. However, some companies started testing the SPAC waters again near the year’s end, including Liminatus and NewAmsterdam Pharma. Then, this January, Alzheimer’s-focused Aprinoia Therapeutics inked a SPAC deal.

Beyond Aprinoia, SPAC announcements have been sparse in the biotech world so far this year, but the already announced deals continue to roll ahead. In fact, this week, Zura Bio completed its merger with JATT Acquisition Corp. as part of plans to advance the biotech's autoimmune drug licensed from Pfizer.