Special purpose acquisition companies took off as investment vehicles in healthcare. Increased regulatory oversight and some flagging stock prices may cool off the trend, reports Managed Healthcare Executive.
The hot new healthcare investment vehicle may soon be yesterday’s news, as company underperformance and an increased focus by regulators have decreased interest in SPACs.
SPACs grabbed attention as a way for start-ups in healthcare and other industries to go public as an alternative to an initial public offering.
The trend took off in healthcare in 2020, marked by deals such as telehealth company Hims & Hers Health’s announced merger with Oaktree Acquisition Corp., and Medicare insurance start-up Clover Health’s announced merger with Social Capital Hedosophia Holdings Corp.
By the first quarter of 2021 there were 40 healthcare and life science IPOs tied to SPACs, raising almost $11 billion, according to S&P Global Market Intelligence data. But in the second quarter of 2021 there were just eight SPAC deals in the healthcare and life sciences sector. Read more.
