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Palihapitiya's SPAC to merge with ProKidney in $2.6 billion deal

Social Capital Suvretta Holdings Corp. III and ProKidney will have a combined equity value of $2.64 billion, the companies said.


Crystal Tse | Bloomberg 

Photo: Bloomberg
Photo: Bloomberg

A blank-check firm started by serial dealmaker Chamath Palihapitiya and Suvretta Capital is merging with medical technology company ProKidney, according to a statement, confirming a Bloomberg report earlier this month.

Social Capital Suvretta Holdings Corp. III and ProKidney will have a combined equity value of $2.64 billion, the said. The transaction also includes a $575 million equity placement that will provide ProKidney with as much as $825 million in cash proceeds, assuming investors in the special purpose acquisition company don’t redeem their shares.

The $575 million private investment in public equity is led by a $125 million investment from Palihapitiya’s Social Capital, and includes $50 million from ProKidney’s existing investors, about $30 million from Suvretta Capital’s Averill strategy and the remainder from institutional investors and family offices, the statement shows.

ProKidney is developing a technology to treat chronic kidney disease by using the patient’s own cells to restore kidney function, according to its website. The company was started by a group of investors led by Pablo Legorreta, the founder and chief executive officer of Royalty Pharma Plc.

Proceeds from the transaction will fund the phase three development of the company’s lead product candidate, accelerate manufacturing build-out and ultimately prepare for a global commercial launch.

“ProKidney can help usher in a new era of better health for millions of chronic kidney disease patients living with the fear of kidney failure and a life on dialysis,” Tim Bertram, founder and CEO of ProKidney, said according to the statement.

The partnership between Palihapitiya and Suvretta Capital has so far resulted in four SPACs that have each raised $250 million. The SPACs are each targeting a different subsector within biotechnology: neurology, oncology, organs and immunology.

Their Social Capital Suvretta Holdings Corp. I SPAC is in talks to merge with Akili Interactive, a startup that specializes in technology-based cognitive therapies, Bloomberg reported this month.

“For decades, health-care providers have been limited to addressing the symptoms of chronic kidney disease – largely through burdensome regimens like dialysis – with no cure for the underlying disease,” Palihapitiya said in the statement. “ProKidney has the opportunity to change the way we approach and treat chronic kidney disease.”

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First Published: Tue, January 18 2022. 19:33 IST