Health Sciences to Combine with Immunovant


Health Sciences to Combine with Immunovant

Health Sciences Acquisitions Corp., the RTW Investments-backed SPAC focused on the biopharma/med-tech sector, announced their merger this morning with Immunovant Sciences, Ltd. (“Immunovant”), a clinical-stage biopharmaceutical company focusing on autoimmune diseases.

Specifically, Immunovant is developing “IMVT-1401, a fully human anti-FcRn monoclonal antibody with the potential to treat IgG-mediated autoimmune diseases.”  That’s a mouthful if you do not speak “bio-pharma”, but for those that do, “in a Phase 1 study of healthy volunteers receiving 4 weekly subcutaneous injections, IMVT-1401 delivered a mean IgG reduction of 63% at a dose of 340 mg and a mean IgG reduction of 78% at a dose of 680 mg.”

Proceeds from this transaction are expected to finance Phase 2 development of IMVT-1401 in three indications.

  • IMVT-1401 is currently being tested in a Phase 2a trial for Graves’ ophthalmopathy (potentially a first-in-class anti-FcRn), with top-line data expected by Q1 2020
  • And, in a Phase 2a trial for myasthenia gravis, with top-line data expected by Q2 2020
  • Immunovant also plans to file an IND for a third indication, warm autoimmune hemolytic anemia, later this year.

The company also intends to pursue additional indications in the future.

As for the transaction, upon the closing, HSAC will issue approximately 43 million HSAC shares to the current Immunovant shareholders for consideration of $395 million, not including the $35 million bridge financing. Additionally, Immunovant shareholders may receive up to an additional 20 million HSAC shares (the “Earnout Shares”) based on two price hurdles of $17.50 by March 31, 2023, and $31.50 by March 31, 2025, for 10 million shares each.  Those are some “eye-popping” hurdles…pun intended (reference: myasthenia gravis. Too much?).

However, what is interesting is that Chardan (as advisor) has once again, secured the shareholder vote and the closing condition of $65 million on the balance sheet, similar to what they did with the Chardan Healthcare (CHAC) transaction.  Meaning, HSAC entered into voting agreements with holders of 4,547,000 shares of HSAC common stock (which includes RTW Investments, LP, Adage Capital Management, Cormorant Asset Management, Eventide Asset Management, LLC, and Perceptive Advisors) where they have agreed to vote in favor of the transaction and to not redeem or sell their shares.  ADDITIONALLY, HSAC entered into agreements with other investors that agreed to purchase up to 2,374,400 shares of HSAC common stock at HSAC’s request and not to redeem at the vote.  So that’s a total of 6,921,000 shares that will be voting yes and not redeeming, well above the $65 million threshold. What it also does is effectively reduce the float by keeping those shares from selling, thereby, reducing supply. So there are less shares available for purchase and it would appear they are in demand since the current share price is ~ $10.30, up $0.28 from yesterday’s close.

Additionally, Immunovant also announced today that it completed a $35 million private bridge financing with RTW Investments, BVF Partners, and Roivant Sciences Ltd. (“Roivant”). The notes issued in this financing will convert into common shares of Immunovant immediately prior to the closing of the business combination.

Subscribers can find additional details on the transaction on the Health Sciences Profile Page, found HERE.

Quick Takes:  Regardless of how you feel about the clinical applications of Immunovant’s technology (although it looks very good to my un-trained eye), the fact that this deal and the bankers have already secured the vote and the closing condition of $65 million means this deal is effectively done.  It’s just a question of where you think the share price will trade.  However, those earn-out price hurdles of $17.50 and $31.50 are significantly north of trust value.  And rarely do companies set earn-out hurdles that they think are not at least reasonably achievable.  They really, really want those extra shares.  This transaction has had a nice pop in share price this morning, but it will be interesting to see where this one trades once the team starts marketing this deal and tells their story.  However, this one already looks like it will be well received.


  • Upon the closing of the transactions, HSAC will issue (or reserve for issuance upon the exercise of options) approximately 43 million HSAC shares to the current Immunovant shareholders.
  • 10,000 shares of Series A preferred stock of HSAC to be issued to Roivant
  • The aggregate value of the consideration to be paid by HSAC in the business combination is $395 million, before giving effect to Immunovant’s bridge financing.
  • Assuming no redemptions from HSAC shareholders, it is estimated that the current security holders of Immunovant will own approximately 77% of the combined company.

Immunovant shareholders may receive up to an additional 20 million HSAC shares (the “Earnout Shares”):

  • 10 million shares if the share price exceeds $17.50 by March 31, 2023
  • An additional 10 million shares if the share price exceeds $31.50 by March 31, 2025


  • Chardan is acting as HSAC’s M&A and capital markets advisor.
  • Leerink is acting as financial advisor to Immunovant.
  • Loeb & Loeb LLP is representing HSAC.
  • Cooley LLP is representing Immunovant.