Proteomics company SomaLogic to chase $1.2B public valuation through SPAC deal

stock market
Fresh off a $214 million series A financing round late last year, SomaLogic announced plans to go public through a SPAC deal backed by Corvex Management and Casdin Capital. (Pixabay)

SomaLogic is a unicorn among unicorns: Not only did the company, which builds AI-powered technology for protein analysis, wait to close its series A funding round until it had more than two decades of experience under its belt, but it has quickly followed up its $214 million fundraising late last year with new plans to go public.

“The weird thing about SomaLogic, of course, is that we had our series A at age 21, so that puts us at a slightly different category than most companies that are doing their series A as real startups,” CEO Roy Smythe told Fierce Medtech in an interview. “We had already been thinking about public transition plans, and it was really a combination of market dynamics and competitive dynamics that made us decide to speed up.”

In a deal valuing the not-quite-starting startup at $1.23 billion, SomaLogic will link up with CM Life Sciences II—a blank check company backed by Corvex Management and Casdin Capital that recently filed its own $240 million IPO in February for the sole purpose of pursuing an acquisition like this.

The decision to go public with the help of a special purpose acquisition company, or SPAC, rather than following the traditional IPO pathway, was an easy one, Smythe said.

“If you have the right SPAC partner, then you get more than just money—you get some expertise and help to grow the business beyond just the cash that you bring in,” he said.

“This just allows us to more quickly double down on a more comprehensive approach to proteomics, in both measurement and applications, in ways that might be hard for some of our competitors to recapitulate over the next period of time,” he continued. “It also allows us to bring more minds and assets to the table to help us build the business.”

RELATED: No SPAC slack as more shell companies targeting biotech buys hit Wall Street

The deal is projected to close in the third quarter of 2021, when CMLS II will take on the SomaLogic name and be listed on the Nasdaq as SLGC. SomaLogic’s existing management team will continue to oversee operations, but several more life sciences industry leaders will be added to the board of directors after the deal is complete, and Smythe said the company may add some of CMLS II’s directors to the board as well.

In the process, SomaLogic will receive up to $651 million in cash from CMLS II’s IPO earnings and common stock purchases from a handful of investors, bringing its total amount of cash available after various transaction-related expenses to $686 million.

But the influx of capital won’t change SomaLogic’s strategy in any way—“It’s just that we can actually do it now,” Smythe said. After the deal closes and public trading begins, the company will be able to direct more funding to R&D and the partnerships needed to further develop its technology and to significantly speed up that development.

RELATED: 23andMe intertwines with Branson's Virgin Group to go public in $3.5B SPAC deal

SomaLogic creates proteomics assays that can measure thousands of human proteins at once, churning out data that can be used for drug development and other life sciences research. Those measurements are further analyzed by AI and machine learning algorithms alongside a database of more than 450,000 samples for diagnostic purposes.

Currently, available tests can determine cardiovascular risks, glucose tolerance, body fat percentage, resting energy rate and more, and a recent paper demonstrated the technology’s ability to monitor the long-term effects of COVID-19 on the heart.