There’s a new Chamath Palihapitiya special purpose acquisition company (SPAC) coming to the markets soon, and its name is ProKidney. The medical technology company will merge with Social Capital Suvretta Holdings III (NASDAQ:DNAC) in a transaction valued at $2.6 billion. Furthermore, the transaction will provide ProKidney with up to $825 million in cash proceeds and is expected to close during Q3 of this year.
ProKidney is a biotech company that seeks to use its technology to repair and restore kidneys. To do this, the company utilizes a patient’s own kidney cells to restore normal kidney function. REACT, the company’s lead product candidate, has the ability to “slow, stabilize, and even reverse decline in kidney function.” With REACT, patients can possibly delay the onset of dialysis and save money in the process. In addition, REACT has received guidance from the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) to host Phase 3 clinical trials. The Phase 3 trials began in the U.S. during January.
So, is the potential of REACT enough to buy DNAC stock? Let’s jump into the details of Chamath’s latest SPAC.
DNAC Stock: 11 Things to Know About the ProKidney SPAC Merger
- ProKidney’s fully committed private investment in public equity (PIPE) is worth $575 million.
- The PIPE is headlined by a $125 million investment from Social Capital. Furthermore, the PIPE received $50 million from existing investors and $370 million from a variety of institutional investors.
- Proceeds from the SPAC transaction will “fund REACT’s Phase 3 development program, accelerate manufacturing buildout, and ultimately prepare for its global commercial launch.”
- Furthermore, REACT has received Regenerative Medicine Advanced Therapy (RMAT) designation.
- The RMAT designation allows ProKidney to interact with regulators during Phase 3 trials.
- ProKidney estimates that there are over 75 million people who have chronic kidney disease in the U.S. and E.U.
- However, Palihapitiya believes that “ProKidney has the opportunity to change the way we approach and treat chronic kidney disease.”
- Additionally, Palihapitiya and Social Capital have collaborated to create four SPACs that have each raised $250 million.
- Each SPAC will target four different biotech sectors: “neurology, oncology, organs and immunology.”
- Furthermore, the ProKidney merger is currently under investigation by Halper Sadeh, a law firm.
- Halper Sadeh is investigating whether the transaction is “fair to Social Capital holders,” among other claims.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
