For the second time in as many months, a medtech maker with visions of the public market has pulled out of a lucrative reverse merger deal. This time, its Memic Innovative Surgery, developer of the FDA-cleared Hominis system for robotic-assisted surgery.
Last August, Memic announced its intent to merge with MedTech Acquisition Corporation, a special purpose acquisition company, to take the surgical robot public. As of this week, however, the deal is off.
In an announcement published Thursday, the companies said they had mutually decided to terminate their business combination, citing “market conditions and associated volatility as a result of recent world events.”
It seems to have been an amicable split: In separate statements, the CEOs of both companies expressed optimism about the future of Memic and its robotic surgery system, even without the $1 billion public valuation that was supposed to follow the SPAC deal. Indeed, just a few months before announcing the merger, Memic raked in $96 million in VC funding to begin the platform’s commercial rollout.
“With the recent adoption of our Hominis system by three leading U.S. hospitals, we are excited about the ability of the Hominis system to perform robotic transvaginal techniques that were previously unfeasible, fulfilling a significant unmet need in women’s health, with the potential to be applied to a broad range of indications in the future including general surgery,” Memic CEO Dvir Cohen said. “We are grateful for the support we have received from the MedTech team, whose commitment to surgical robotics we share.”
The reverse merger was expected to create a combined company with a billion-dollar valuation and about $360 million in cash in its coffers. The deal was to be supported by proceeds from the blank-check company’s own $250 million IPO and from a planned private investment round totaling $76 million.
MedTech Acquisition is led by Chairman Karim Karti, who served as chief operating officer of iRhythm Technologies as well as president and CEO of GE Healthcare’s imaging division, and CEO Christopher Dewey, who held seats on the boards of Memic, Mako Surgical, Auris Surgical Robotics, Procept BioRobotics, ShockWave Medical, Magic Leap and more.
After about a year’s worth of unbridled dominance as the preferred way for ambitious medtech and biotech companies to make their public debuts, SPAC mergers are now facing a steep dropoff in popularity.
“Unfavorable market conditions” were cited as the reason for another recent SPAC backtrack in medtech. HeartFlow canceled its combination with Longview Acquisition Corp. II in February, about seven months after the duo laid out plans for a merger that would’ve resulted in a combined company valued at $2.4 billion.
Amid economic volatility and a host of challenges unique to these types of mergers, SPAC deals have become “less attractive than other potential alternatives,” Otello Stampacchia, Ph.D., founder of VC shop Omega Funds and head of its Omega Alpha SPAC, told Fierce Biotech’s Kyle LaHucik earlier this year. He added, “I do get the feeling people are being a little bit more, shall I say, realistic and pragmatic, maybe, about this.”