by Roger Longman
If you’re a biotech company, what do you do if…your current VCs won’t put up enough money; new VCs will...
Dynogen Tries the SPAC Alternative
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Special Purpose Acquisition Companies--SPACs--are springing up in the wide spaces abandoned by IPOs-- and they look tempting for those biotechs who can't get to a Big Pharma deal without first raising a big slug of money. That's Dynogen's problem: no deal until it can show solid efficacy from its two lead compounds. With no IPO or big private financing likely, Dynogen turned to a SPAC, a public shell company created to find a Dynogen-like opportunity. But SPAC investors can extract a big price for their cooperation-particularly in the current risk-averse public market.
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