The reverse merger’s 15 minutes of fame in medtech and biotech may have already timed out, but a trickle of SPAC deals have still come through this year.
The latest of these pairs up QT Imaging, the maker of an FDA-cleared, radiation-free mammography machine, with GigCapital5, a special purpose acquisition company (SPAC), to take the ultrasound maker public.
In the deal, announced Monday, QT Imaging will merge with GigCapital5, the fifth SPAC launched by GigCapital Global. It went public on the New York Stock Exchange last year under the ticker symbol “GIA.” Once the merger is complete, the newly combined public company will go by the moniker of QT Imaging Holdings, and the stock symbol will change to “QTI.”
In total, the deal assigns an equity value of $151 million to QT Imaging as it lines up its public debut.
The resulting company will emerge with $41 million collected from GigCapital5’s trust account, plus another $26 million in funds raised before the deal’s close—which is currently slated for sometime in the first half of 2023. The transaction has already been unanimously approved by the boards of directors of both QT Imaging and GigCapital5.
QT is planning to use the proceeds from the go-public deal to expand its commercial activities and pursue additional regulatory clearances from the FDA.
The company scored initial clearance of its QTscan breast imaging device in 2017. The ultrasound-based technology is meant to be used as an adjunct to traditional mammography, rather than a replacement. Because it doesn’t rely on radiation, contrast agent injections or compression, however, it can be used more frequently—and with less pain and fewer potential adverse effects—than mammography to help monitor women undergoing certain breast cancer treatments.
The Northern California company landed another clearance for the scanner’s software just this year: In September, it became the first ultrasound-based imaging device cleared to calculate the fibroglandular volume of the breast and its ratio to the total breast volume. The latter measurement can help assess breast cancer risk and track the progress of cancer treatment or prevention regimens.
QT Imaging is aiming to expand its QTscan technology beyond just breast cancer screenings. The ultrasound device could ultimately be adapted to scan the entire body, providing an alternative that’s both lower risk and less expensive than CT and MRI scans.
“QT Imaging’s core mission is to provide safe, highly accurate and inexpensive imaging systems to women and children,” John Klock, M.D., the company’s founder and CEO, said in Monday’s announcement. “Healthcare’s high costs are in large part due to the high cost of medical imaging, and this needs to be addressed with safe, low-cost comprehensive imaging solutions.”