SPAC HighCape Capital soars 140% on deal to buy protein-sequencing firm Quantum-Si

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Traders work on the floor at the opening bell of the Dow Industrial Average at the New York Stock Exchange on March 18, 2020 in New York.


Shares of special purpose acquisition company HighCape Capital Management LLC exploded as much as 140% on Thursday after the company agreed to buy biotech firm Quantum-Si. 

Quantum-Si has created the world’s first semiconductor chip that can enable protein sequencing and analyze proteins in a digitized format.  

 “DNA sequencing changed medicine and research by revealing what could happen in the body; protein sequencing shows what is happening right now,” ” said Dr. Jonathan Rothberg, Founder of Quantum-Si in a press release.

The transaction was also supported by a $425 PIPE, or private investment in public equity, with participation from Foresite Capital Management, LLC, Eldridge, accounts advised by ARK Invest, Glenview Capital Management, LLC, and Redmile Group, LLC. 

The expected value of the combined company is $1.46 billion. It will trade on the NASDAQ under the ticker symbol “QSI.” 

Quantum Si’s end-to-end solution is on track to launch commercially in 2022 for research use, according to the press release. 

The SPAC merger follows over 130 other blank-check companies that have gone public in 2021 as mania for the funding model continues. For context, in 2020 it took until early October for 130 SPACs to make their debut, according to data from investment firm Accelerate.

In a Thursday CNBC interview, Dr. Rothberg said that it’s not just the SPAC format that’s propelling more biotech companies to receive funding, it’s the “sophistication of investors.” 

“Our PIPE investors understood proteomics. I didn’t have to give them a lecture,” he said. “And so I’d say it’s a combination of the SPAC being there after we worked and spent $200 million to make a semiconductor that sees the molecules of life, and then an educated investor base that normally invests in public companies that knows that this is the future: digitization, artificial intelligence, [and] diagnostics on proteins.” 

Dr. Rothberg is the founder of multiple life science and medical device companies including Butterfly Network, CuraGen, and AI Therapeutics. He is best known for investing high-speed, DNA sequencing.

 

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