Contrary to popular opinion, special purpose acquisition company (SPAC) mergers are not dead. The alternative IPO method is just to see tough times due to an unstable market.

Orchestra BioMed is the second company in recent weeks to jump on the SPAC bandwagon. Earlier this week, the New Hope, Pennsylvania-based company announced that it would be combining with Health Sciences Acquisitions Corporation 2.

The business combination is supported by a total of $20 million in forward purchase contracts and a guarantee agreement of up to $50 million.

Orchestra BioMed is in a strategic collaboration with Medtronic to develop BackBeat Cardiac Neuromodulation Therapy (CNT) as a potential integrated hypertension treatment for patients with pacemakers.

Back Beat CNT is a bioelectronic treatment compatible with standard pacemakers.

The recent randomized, double-blind, peer-reviewed pilot study MODERATO II showed that patients treated with the BackBeat CNT had marked reductions of 8.1 mmHg in ambulatory systolic blood pressure (SBP) over 24 hours and 12.3 mmHg office systolic blood pressure. (oSBP) compared to control patients at six months.

Orchestra BioMed said it plans to conduct a global pivotal trial to further evaluate the safety and efficacy of BackBeat CNT in lowering blood pressure in a similar target population of patients who were indicated for, and recently received a pacemaker implant.

The strategic collaboration with Medtronic will provide Orchestra BioMed with development, clinical and regulatory support for this planned multinational study. Upon regulatory approval, Medtronic will have worldwide rights to market BackBeat CNT-compatible pacing systems for this target population.

Orchestra BioMed will share in the revenue generated by Medtronic’s sales of BackBeat CNT compatible pacing systems.

Orchestra also received $40 million from Medtronic to bring its Series D to $110 million. The company also received a $20 million investment from RTW and investments from other existing Orchestra BioMed shareholders, including Perceptive Advisors, Terumo Corporation, SternAegis Ventures and others.

“These significant transactions further validate the potential of Orchestra BioMed’s flagship development programs and our new partnership-based business model. As a global leader in advanced pacemaker therapies, Medtronic is the ideal company to help us develop BackBeat CNT for the treatment of hypertension, which is remarkably common and poses a significant health risk to the pacemaker population. David Hochman, CEO and Co-Founder of Orchestra BioMed, said in a statement.

The company also announced a partnership with Terumo. The collaboration includes the execution of a global clinical program with the goal of obtaining regulatory approval for the commercial sale of Virtue SAB in multiple markets and indications. Terumo has made an upfront payment of $30 million to Orchestra BioMed and Terumo will potentially make additional clinical and regulatory milestone payments in the future.

Orchestra BioMed will significantly share Virtue SAB’s future commercial revenue through royalties and unit payments as the exclusive supplier to SirolimusEFR. Orchestra BioMed retains development and licensing rights to SirolimusEFR and other technologies used in Virtue SAB for clinical applications outside of coronary and peripheral vascular interventions.

“This new collaboration and our established strategic partnership with Terumo for the development and commercialization of the Virtue Sirolimus (SAB) angio-infusion balloon for the treatment of arterial disease illustrates our commitment to developing potential high-impact medical innovations with world leaders in medical technology,” Hochman said in a statement.

Return trend?

2021 has been a great year for medical technology companies that have gone public through SPACs. However, the good fortune of SPAC companies suddenly collapsed in 2022 as many abandoned this alternative method to a traditional IPO.

However, last month, Human Longevity broke the trend of medtech companies pulling out of SPACs. The San Diego, Calif.-based company has signed a non-binding letter of intent with Freedom Acquisition 1 Corporation for a business combination that is reportedly valued at $1 billion. The transaction is expected to close by 1Q23.

Human Longevity has developed an AI-based personalized health intelligence platform that combines genome sequencing, quantitative whole-body MRI and blood biomarkers, enabling early detection and mitigation risk assessments of critical diseases .