USA – Cardiac device maker Orchestra BioMed intends to go public via a merger with SPAC Health Science Acquisitions Corporation 2 (HSA2), and has entered into a strategic collaboration with Medtronic.
The global strategic collaboration will progress the development of Orchestra BioMed’s BackBeat Cardiac Neuromodulation Therapy (CNT) as a potential treatment for hypertension in patients indicated for a cardiac pacemaker.
Orchestra BioMed raised US$110 million through Series D fundraising and entered a partnership with Medtronic to develop its BackBeat Cardiac Neuromodulation Therapy (CNT) as a treatment for hypertension in patients indicated for a cardiac pacemaker.
Medtronic will provide Orchestra BioMed with development, clinical, and regulatory support for a planned multi-national study.
On regulatory approval, Medtronic will have global rights to commercialize BackBeat CNT-enabled pacing systems for the study’s target population.
Besides Medtronic, the Series D round was led by RTW Investments and Perceptive Advisors, and joined by SternAegis Ventures and Terumo.
The private equity financing and merger are expected to raise proceeds of at least US$180 million, which Orchestra said should be sufficient to fund the combined company.
Finally, the company will go public through a definitive business combination agreement with the special purpose acquisition company HSAC2.
The deal is structured to provide a minimum of US$70 million in gross proceeds to the combined company at closing and up to US$160 million in the event of no redemptions by HSAC2 shareholders, according to a news release.
Orchestra BioMed said it expects the combined company to have a fully diluted pro forma market cap of US$407 million, assuming no redemptions, and US$317 million, assuming the minimum gross cash condition is met.
The Series D financing was not contingent on the consummation of the business combination.
The business combination agreement includes US$20 million in total forward purchase agreements from Medtronic and RTW (an affiliate of HSAC2’s sponsor and a leading life sciences investment firm), as well as an up to US$50 million trust backstop agreement with RTW.
Orchestra BioMed said it expects the combined company to have a fully diluted pro forma market cap of US$407 million, assuming no redemptions, and US$317 million, assuming the minimum gross cash condition is met.
The combined company’s pro forma fully diluted enterprise value will be US$158 million, according to Orchestra BioMed.
Upon the transaction’s closing, the company will operate under the name “Orchestra BioMed Holdings.”
Orchestra BioMed Chair, CEO and co-founder David Hochman will continue to lead the company, which will trade on the Nasdaq market under the “OBIO” ticker.
Assuming the minimum pro forma cash balance, the combined company is expected to have sufficient capital to fund operations into 2026 based on current plans and estimates.
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