On paper, the biotech business model has all of the characteristics in place to make for a rocky IPO — these companies are years away from having any revenue from a commercial product. But once those first products hit the market, there's generally a path to profitability. As an added bonus, biotechs can bring in revenue from collaborations and licensing deals while testing their first drugs.
Multiple companies in Arch Venture Partners' portfolio are speaking to SPACs about potential mergers, according to cofounder Robert Nelsen. But they aren't being drawn toward that option.Many experts referred to SPACs as a fad, and healthcare investor Brad Loncar told InsiderCutting out the middleman could be a problem for biotech startups down the line
But it is a double-edged sword for the biotech startups themselves. It saves on cost, but it could also make it more difficult to market their company down the line. "In just the cases of companies that have gone public in reverse-mergers, it can be hard to pick up analysts," Atlas Venture Partner Steve Robinette said.
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