Arrhythmia ablation tech maker Adagio Medical picks up the tempo with $128M SPAC deal

After operating at a slow-and-steady pace for a little over a decade, Adagio Medical is preparing to move to a new rhythm.

The Laguna Hills, California-based company, which makes cryoablation devices to treat cardiac arrhythmias, has signed on to a reverse merger with special purpose acquisition company ARYA Sciences Acquisition Corp IV that will result in Adagio’s public debut. When the combination is complete—expected in the second quarter of this year, per the company’s announcement this week—it’ll trade on the Nasdaq as “ADGM.”

The resulting company will have an equity value of $128 million and an enterprise value of $113 million. Current Adagio investors will hold around 10% of the post-SPAC entity, while nearly 60% will be claimed by the sponsor of the blank-check company, an affiliate of Perceptive Advisors.

As part of the transaction, investors have chipped in $20 million in convertible debt to provide support throughout the period between when Adagio signs the SPAC pact and when it’s officially closed, plus another $22 million in equity financing.

The boards of both Adagio and ARYA have signed off on the proposal. Final approval now comes down to both parties’ shareholders, alongside the completion of certain other closing conditions.

The newly public company will be led by Adagio’s existing management team.

Olav Bergheim, Adagio’s president and CEO, said in the announcement that the transition to public trading is a “natural next step” for the company and its investors, especially as it plans to expand clinical trials of its ultra-low temperature cryoablation (ULTC) and pulsed field cryoablation (PFCA) technologies and to begin rolling out some new products in the first half of this year. 

In particular, Bergheim said, “The business combination and related financings with ARYA will ensure that the company has sufficient capital to support its European commercialization of Adagio Medical’s ULTC system for treatment of ventricular tachycardias (VT) and initiation of the US Pivotal VT IDE trial and to further advance our worldwide ULTC and PFCA clinical programs for atrial fibrillation.”

Adagio was founded in 2011 with an aim of developing a range of minimally invasive cryoablation technologies, which treat cardiac arrhythmias—including atrial flutter, ventricular tachycardia and both paroxysmal and persistent atrial fibrillation—by emitting extremely cold gas to freeze and scar over heart tissue that’s linked to the irregular electrical signals behind arrhythmia.

The ULTC technology is already CE marked in Europe to treat atrial flutter and afib, and Adagio completed enrollment last year of another study on the continent applying the approach to ventricular tachycardia. In the U.S., the company has gotten the go-ahead from the FDA to conduct trials of the technology in both VT and persistent afib.

The PFCA catheter, meanwhile, combines both the ULTC approach and increasingly popular pulsed field ablation technology and is now being trialed in Europe.

As a private company, the startup raised tens of millions of dollars; in its most recent financing, a series E round that closed in late 2020, it took in $42.5 million from a mix of new and existing backers that included Perceptive in its first time throwing support behind Adagio.