Cerevel Therapeutics, which spun out of Pfizer two years ago, entered into a business combination deal with Arya Sciences Acquisition Corp II, a special purpose acquisition company (SPAC) sponsored by Perceptive Advisors.
Boston-based Cerevel Therapeutics, which spun out of Pfizer two years ago, entered into a business combination deal with Arya Sciences Acquisition Corp II, a special purpose acquisition company (SPAC) sponsored by Perceptive Advisors. Once the deal is completed, Arya II will redomicile as a Delaware corporation and be renamed Cerevel Therapeutics Holdings, trading on the Nasdaq under the ticker symbol “CERE.”
Ayra II’s trust account held about $150 million. A group of investors has agreed to raise about $320 million at $10 per share through a common stock PIPE. The investors include Perceptive Advisors, an affiliate of Ayra II’s sponsor, Adage Capital Management, Ally Bridge Group, Boxer Capital, EcoR1 Capital, Federated Hermes Kaufmann Small Cap Fund, Fidelity Management & Research Company, Invus Public Equities, Novalis LifeSciences, RA Capital Management, funds managed by Rock Springs Capital, Sphera Healthcare, Surveyor Capital, funds and accounts managed by T. Rowe Price Associates, and existing Cerevel Therapeutics shareholders including Bain Capital and Pfizer.
The merged companies expect to receive net proceeds of about $445 million when the deal closes. It plans to continue under the Cerevel Therapeutics management team, lead by chair and chief executive officer Tony Coles.
“Cerevel is using novel approaches in its quest to bring new treatments to patients living with neuroscience diseases, and today we are bringing that same spirit of innovation to our plans for becoming a public company,” said Coles.
He went on to say, “Since our founding as a joint collaboration between Bain Capital and Pfizer, Cerevel has pushed the boundaries to tackle some of the most vexing questions in neuroscience, using science to target the specific receptor sub-types involved in causing these devastating diseases. Over the next 12 months, we expect to have initiated at least six clinical programs across multiple indications, including schizophrenia, anxiety, epilepsy, and Parkinson’s disease. Today’s announcement ensures that we have access to the capital we will need to advance our clinical programs through to several key milestones in our quest to bring these therapies to patients.”
BioPharma Dive notes that 41 biotechs have launched initial public offerings (IPOs) this year, which is a third more than occurred at this time in 2019. But Cerevel’s approach was a bit unusual, turning to Arya. SPACs raise funds with the plan to acquire or merge with another company, where the combined companies then take the place of the SPAC on a stock exchange.
According to BioPharma Dive, more than 50 SPACs have been formed this year and raised a record $21 billion for private company takeouts. These deals include electric truck manufacturer Nikola, sports gambling company DraftKings and Multiplan, a health services firm.
The funds that came out of the merger and PIPE will be used to advance several programs. These include:
• CVL-231, a positive allosteric modulator (PAM) that targets M4, the muscarinic acetylcholine 4 receptor subtype. It is currently in a Phase Ib trial for schizophrenia, with data expected in the second half of 2021.
• CVL-865 is a PAM that selectively targets the alpha-2/3/5 subunits of the GABAA receptor. The company hopes to launch a Phase II trial for drug-resistant focal onset epilepsy in the second half of 2020, with data announced in the second half of 2022. It also hopes to launch a Phase I proof-of-principle trial of the compound for acute anxiety in the second half of 2020, with data in the second half of 2021.
• Tavapadon, a selective dopamine D1/D5 partial agonist, which the company hopes to study in several Phase III trials for early- and late-stage Parkinson’s disease as a monotherapy and in combination with levodopa. The company initiated a Phase III program for the drug in January 2020, including two trials in early-stage Parkinson’s, one in late-stage Parkinson’s, and an open-label safety extension trial. The first readouts from the program are expected in the first half of 2023.
