Special purpose acquisition company (SPAC) CA Healthcare Acquisition on Wednesday announced a merger agreement with point-of-care diagnostic testing firm LumiraDx.
The merger with CA Healthcare Acquisition would facilitate the listing of London-based LumiraDx on the Nasdaq under the ticker symbol LMDX.
SPACs are among the latest trends to hit the public markets and the scientific world as companies seek to go public more quickly and avoid some of the disadvantages of a traditional initial public offering of stock. The money raised by the SPAC through an IPO is used to acquire a target firm.
Boston-based CA Healthcare Acquisition recently went public on the Nasdaq, raising $115 million in an initial public offering.
The merger implies an equity valuation at closing for the combined company in excess of $5.0 billion, CA Healthcare Acquisition said.
LumiraDx said that BioPharma Credit and its subsidiaries provided it with a $300 million loan, and Capital One, National Association provided it with a commitment letter for up to $100 million on an asset-based revolving credit facility.
CA Healthcare Acquisition noted that since the founding of LumiraDx in 2014, the diagnostics company has raised $700 million in equity capital. It estimates 2021 revenue for LumiraDx of between $600 million and $1 billion, up from $139 million in 2020.
It said that the transaction will support LumiraDx’s pipeline of more than 30 assays for health conditions that include infectious disease, cardiovascular disease, diabetes, and coagulation disorders. The firm’s point-of-care diagnostic platform is designed to enable a broad menu of tests and provide results in less than 12 minutes, CA Healthcare Acquisition said, adding that LumiraDx’s COVID-19 antigen test is being deployed in collaboration with governments, health systems, retail chains, and global health foundations. Its COVID-19 Antibody, INR, and D-Dimer tests are available under CE mark in Europe, and the company’s customers include CVS Pharmacy, the UK National Health Service, and Bill and Melinda Gates Foundation.
LumiraDx is producing more than 1,000 point-of-care platforms per week and has a manufacturing capacity for more than 15 million tests per month. Since September 2020, it has shipped more than 13,000 instruments.
Later this year, LumiraDx plans to launch Amira, a low-cost mass-screening and home testing system for COVID-19. The company submitted a pre-EUA request to FDA in March and expects to obtain CE marking for point-of-care and over-the-counter applications in the fall.
Last October, LumiraDx obtained US Food and Drug Administration Emergency Use Authorization for its SARS-CoV-2 RNA STAR Complete assay, which uses a non-isothermal nucleic acid amplification technique that does not require nucleic acid purification or extraction. In August, the firm received EUA for its SARS-CoV-2 RNA STAR assay, which requires nucleic acid extraction. In the same month, the company obtained EUA for a rapid antigen test.
LumiraDx cofounder and CEO Ron Zwanziger, who was CEO of Alere before the firm was acquired by Abbott, will lead the combined company with the other LumiraDx cofounders. The transaction is expected to close late in the second quarter or early in the third quarter of this year.
Evercore and Raymond James & Associates are financial advisors to LumiraDx on the deal, and BTIG is financial advisor and capital markets advisor to CA Healthcare Acquisition.