Humacyte Inc, a developer of universally implantable bioengineered human tissues and organs, said on Wednesday it has agreed to a deal to go public through a merger with blank-check acquisition company Alpha Healthcare Acquisition Corp.
The deal is expected to give Humacyte a market value of around $1.1 billion, Humacyte and Alpha Healthcare said in a statement. The share price of Alpha Healthcare, which is a special purpose acquisition company (SPAC), closed up 20.9%. It highlights the emerging sector in biotechnology of regenerative medicine, growing human cells and tissue for medical uses.
The merger will give Humacyte around $255 million in cash. Of this, Alpha Healthcare will provide $100 million with the rest coming from a private investment in public equity, or PIPE, transaction. Investors in the PIPE include dialysis company Fresenius Medical Care and OrbiMed. “To take the story to the next level, particularly to commercialize our products, which since we’re in Phase III we’re looking at commercialization in the next couple years, and also to drive forward our pipeline, we felt that accessing the public markets made a lot of sense,” Humacyte founder and Chief Executive Dr. Laura Niklason said in an interview.
Reuters reported on Tuesday that Humacyte and Alpha Healthcare had agreed to merge. Niklason founded Durham, North Carolina-based Humacyte in 2004. The company is developing lab-grown blood vessels that can be implanted in any patient, currently in a late-stage trial involving patients with vascular trauma – a life-threatening injury to their blood vessels.
Niklason said the company expects to finish patient recruitment for that trial in 2022 and hopes to have regulatory approval by 2023. Donor organs are susceptible to rejection when the recipient’s immune system recognizes the new tissue as foreign, often requiring potent immunosuppressive drugs.
Humacyte manufactures their engineered blood vessels so that they do not elicit an immune response, Niklason said, making them an off-the-shelf product that could be used regardless of a patient’s biological traits. The company said it foresees hospitals stocking their implants for use as needed.
Humacyte’s directors include Robert Langer, a U.S. chemical engineer and professor at the Massachusetts Institute of Technology. He also sits on the board of vaccine maker Moderna Inc. SPACs like Alpha Healthcare raise money through an initial public offering (IPO) to merge with a privately-held company that then becomes publicly traded.
“We looked at 95 transactions before we could identify Humacyte as the one we were most excited about,” Alpha Healthcare Chairman and CEO Rajiv Shukla said. “There are no effective medical solutions to some of the problems that Humacyte is focused on. And that’s a huge $150 billion-plus market opportunity,” Shukla added.
Upon closing of the deal, which is dependent on a vote by Alpha Healthcare’s shareholders, Humacyte’s shares will trade on the Nasdaq under the symbol “HUMA.”