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Human Longevity strikes a SPAC deal to go public and fuel U.S., global expansion

2 weeks ago 14
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Human Longevity, Inc., (HLI), a company aiming to use genomic insights to help people live longer, has found a way to extend its corporate life. The firm has reached a merger deal that will take the company public and infuse it with $345 million to bring its life-extending approach to more users in the U.S. and around the world.

San Diego-based HLI plans to combine with Freedom Acquisition I Corporation, a special purpose acquisition company (SPAC) whose shares currently trade on the New York Stock Exchange. It’s not yet a done deal. The companies have signed a letter of intent outlining the plans for the business combination. The letter, which has not yet been added to Freedom’s securities filings, is non-binding.

Consistent with the uncertainties facing companies trying to join the public markets under the current volatile financial conditions, HLI and Freedom said that “there can be no assurance that a definitive agreement will be entered or that the proposed transaction will be consummated.” But if the deal happens, the companies say that the combined business will be valued at about $1 billion, reaching the so-called unicorn status that HLI previously achieved and then lost.

HLI was founded by genomic sequencing pioneer J. Craig Venter. At its outset in 2014, the startup aimed to sequence the genes of patients with cancer and other diseases, building a database of sequences that could be used to develop new treatments for diseases of aging. The work included sequencing of the microbiomes of patients. In addition to its own research, HLI intended to make money by offering life science companies and academic institutions access to this database for their research efforts.

Some of HLI’s efforts led to business units that provided various services. But not all of them are still part of the company. For example, HLI sold its oncology division to NeoGenomics for $37 million in 2020. At the time of that deal, HLI said the transaction would enable the company to focus on longevity by providing analytics offerings to individuals.

HLI currently offers patients a comprehensive analysis—genomic sequencing, a whole-body MRI scan, and blood testing—for early detection and mitigation of serious diseases. In particular, HLI claims its approach can predict the lifetime and short-term risks of chronic age-related disease. The artificial intelligence-driven technology is available through a program that HLI calls Human Longevity Care. Users (HLI calls them “members”) who sign up get “precision mapping” that yields personalized insight into their health. Members also receive access to a dedicated physician, who serves as a “personal longevity leader” who provides care tailored to each patient’s personal longevity plan.

Though HLI claims it has invested more than $500 million in R&D since 2013, the company hasn’t disclosed how many members have signed up for its technology or how much money this business makes. Such details would typically be detailed in a regulatory filing, such as a prospectus or proxy statement. HLI and Freedom have not gotten that far yet. Each party is completing its due diligence on the deal, which means that the business combination agreement is still being worked out. If they do formally reach this agreement, then Freedom and HLI would respectively file documents with securities regulators related to the transaction. At that point, the deal would still need approval from the boards of directors of both companies and then shareholder approval.

Approval is no sure thing. The turbulent financial markets have already scuttled several SPAC deals. Valo Health and Amicus Therapeutics are among the companies that failed to complete their mergers due to the market conditions. HLI and Freedom said that they expect to sign a business combination agreement by the third quarter of this year, and then seek approval of the deal from Freedom’s shareholders by the first quarter of next year.

That time frame cuts things close from Freedom’s standpoint. Each SPAC sets a time limit for identifying and closing a business combination. The clock starts ticking after the IPO. If it expires before a deal is done, money in a SPAC’s account must be returned to investors. When Freedom completed its IPO in March 2021, it set a 24-month period to complete a business combination. That period can be extended, however.

If the merger closes in time, HLI will receive the $345 million in Freedom’s account—assuming no shareholder exercises rights to cash out shares. The combined company would keep Freedom’s NYSE listing but would trade under a new stock symbol. HLI, which is led by CEO Wei-Wu He, said that it plans to use the capital to grow its business and for more technology innovation.

“At HLI, we truly believe that data-driven technologies such as genome sequencing, AI, whole-body MRI will revolutionize human healthcare,” He said in a prepared statement. “We have invested for almost 10 years and over $500 million with an exceptionally dedicated team to put these technologies together to make this a reality for people to delay age-related chronic diseases. We believe this platform will save millions of lives and significantly reduce healthcare cost in the future.”

Image by istocksdaily, via Getty Images

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 Publicité par Adpathway