Healthcare Capital Corp.
PROPOSED BUSINESS COMBINATION: Alpha Tau Medical Limited
ENTERPRISE VALUE: $650 million
ANTICIPATED SYMBOL: DRTS
Healthcare Capital Corp. proposes to combine with Alpha Tau Medical Limited, the developer of the pioneering alpha-radiation cancer therapy Alpha DaRT™.
Alpha Tau’s proprietary Alpha DaRT™ (Diffusing Alpha-emitters Radiation Therapy) enables highly potent and conformal alpha-irradiation of solid tumors through the intra-tumoral insertion of radium-224 impregnated sources mainly affecting the tumor, sparing the healthy tissue around it. In the company’s first-in-human clinical trial for Squamous Cell Carcinoma (“SCC”) tumors of the skin & oral cavity exhibited 100% overall response rate and approximately 78% complete response rate. In June 2021, Alpha Tau received FDA Breakthrough Device Designation for the use of Alpha DaRT™ in the treatment of SCC of the skin and oral cavity without curative standard of care.
Alpha Tau has developed a robust clinical trial strategy with leading global centers, including its flagship US multi-center feasibility study currently ongoing, led at Memorial Sloan Kettering Cancer Center in New York, which recently enrolled its first patient.
SUBSEQUENT EVENT – 2/17/22
Amendment to Sponsor Support Agreement
New Forfeited Equity
| Founder Shares | Private Placement Warrants | ||
|
4,658,000 |
TRANSACTION
- The Business Combination values Alpha Tau at an implied pre-money equity value of $600 million, and is expected to add approximately $337 million of cash to its balance sheet upon closing, inclusive of $275 million in HCC’s trust (assuming no redemptions by public shareholders) and $92 million in PIPE proceeds, net of transaction expenses.
- All existing Alpha Tau shareholders will retain 100% of their current equity holdings and are expected to hold approximately 59% of the pro forma company immediately following the closing.
PIPE
- $91.5 million fully-committed PIPE at $10.00 per share. Anchored by a combination of Healthcare-focused financial and strategic investors including:
- Yozma Investment Co. (part of Yozma Group Korea)
- Grand Decade Developments (an affiliate of China Grand Pharmaceutical and Healthcare Holdings)
- OurCrowd, Regah Ventures and the co-founders of Apax Partners, Alan Patricof and Sir Ronald Cohen.
- Medison Group, an early supporter of Alpha Tau and global pharma company that provides access to highly innovative therapies to patients in international markets
SPONSOR AGREEMENT (FORFEITURE AND EARNOUT)
- The Sponsor agrees that immediately prior to the Effective Time, the Sponsor shall automatically be deemed to irrevocably transfer to SPAC, surrender and forfeit for no consideration, the Sponsor Equity (“Forfeited Equity“)
- The Sponsor agrees that in the event that the Aggregate Transaction Proceeds exceed $225,000,000 but are less than $250,000,000, the Sponsor shall surrender and forfeit for no consideration such percentage of the Redemption Equity that is equal to 100% minus the quotient of:
- (x) the amount by which the Aggregate Transaction Proceeds exceed $225,000,000 (not to exceed $25,000,000), divided by
- (y) $25,000,000 (for the avoidance of doubt, such transfer, surrender and forfeiture shall be in addition to the transfer, surrender and forfeiture of the Sponsor Equity.
- In the event that the Aggregate Transaction Proceeds are less than or equal to $225,000,000, the Sponsor shall surrender and forfeit for no consideration the Sponsor Equity set forth on Part II of Schedule B (“Redemption Equity”)
- Sponsor shares shall only vest if, during the period beginning on the Closing Date and continuing through the date that is three years after the Closing Date (the “Earnout Period”), the volume-weighted average price of Company Ordinary Shares exceeds $14.00 per share for 20 trading days within any 30-trading day period (the “Conditional Equity“)
Forfeited Equity
| Founder Shares | Private Placement Warrants | |
| 1,031,250 | 1,020,000 |
Amendment to Sponsor Support Agreement
New Forfeited Equity
| Founder Shares | Private Placement Warrants | ||
|
4,658,000 |
Part II
Redemption Equity
| Founder Shares | Private Placement Warrants | |
| 1,718,750 | 1,700,000 |
Part III
Conditional Equity
| Company Ordinary Shares | Company Warrants | |
| 1,375,000 | 1,360,000 |
LOCK-UP
Sponsor
- The Sponsor and such insiders agreed not to transfer any of the Alpha Tau’s equity securities owned by the Sponsor and such insiders, except to certain permitted transferees, beginning at the Effective Time and continuing until the earlier of
- (x) 180 days following the Closing Date and
- (y) following the date that the last sale price of the Alpha Tau Ordinary Shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date.
Alpha Tau
- Alpha Tau Shareholders agreed not to transfer any of Alpha Tau’s equity securities owned by owned by such Alpha Tau Shareholders, except to certain permitted transferees, beginning at the Effective Time and continuing until the earlier of
- (x) 180 days following the Closing Date and
- (y) following the date that the last sale price of the Alpha Tau Ordinary Shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date.
NOTABLE CONDITIONS TO CLOSING
- The aggregate amount of freely usable cash proceeds available for release to the Company from the Trust Account in connection with the Transactions (after taking into account the Company stockholder redemptions and the payment of the Company’s deferred underwriting fees in connection with the consummation of the Transactions), plus the aggregate amount of cash proceeds pursuant to the Subscription Agreements being equal to or exceed $225,000,000;
NOTABLE CONDITIONS TO TERMINATION
- By either the Company or Alpha Tau if the Effective Time has not occurred by January 7, 2022 (the “Termination Date”)
- provided, however, that such Termination Date shall be automatically extended to March 7, 2022 if the SEC has not declared the Registration Statement effective on or prior to December 1, 2021
ADVISORS
- Citigroup is acting as financial advisor to Alpha Tau.
- Citigroup, Piper Sandler, and Cantor Fitzgerald are acting as joint placement agents on the PIPE.
- Cantor Fitzgerald is acting as a capital markets advisor to HCC.
- Value Base M&A Ltd. is also acting as financial advisor on the transaction.
- Latham & Watkins LLP and Meitar | Law Offices are acting as legal advisors to Alpha Tau.
- Ellenoff Grossman & Schole LLP and FBC & Co. are acting as legal advisors to HCC.
- Winston & Strawn LLP is acting as legal advisor to the placement agents.
MANAGEMENT & BOARD
Executive Officers
William Johns, 62
Chief Executive Officer and Director
William Johns is a healthcare information technology entrepreneur and former investment banker. Since January 2010, Mr. Johns has served as founder and Chief Executive Officer of National Provider Network, LLC, which offers advanced healthcare focused software applications and services to medical enterprises. Prior to that, Mr. Johns spent 20 years in investment banking, including with Salomon Brothers, Citigroup and Fox-Pitt Kelton. From 1996 to 2001, Mr. Johns worked as a financial institution coverage banker and rose to the title of Co-Head of European Financial Institutions investment banking for Salomon Smith Barney. From 2003 to 2004, Mr. Johns served as US Head of Corporate Finance for Fox-Pitt Kelton. Mr. Johns received his A.B. in Economics and Political Science with honors from the University of Michigan and an MBA from Columbia University.
Philip A. Baseil, 64
Chief Financial Officer
Philip A. Baseil has 30 years of experience driving global profitable growth for companies. From March 2015 to September 2020, Mr. Baseil served as the Chief Operating Officer of the Tradex Division of Cardinal Health (NYSE: CAH). At Tradex, Mr. Baseil was responsible for building relationships with stakeholders and innovators in market sectors including healthcare, dental, veterinary, retail, and laboratory operations. Prior, Mr. Baseil served as the Chief Operating Officer of Tradex International Inc. from August 2011 to March 2015, where he applied executive-level supervision, directly impacting overall sales revenues, profitability and operational effectiveness. Business Development: Researched, created vision, and spearheaded the growth of key accounts into alternate site B2B & B2C market segments resulting in long term sustainable revenue growth and product success. From 2009 to July 2011, Mr. Baseil was the President and Chief Executive Officer of Driving Profitable Growth, LLC where he founded and managed a full-service consultancy providing advisory services to private equity firms active in the medical device technology, instruments, disposables, and pharmacy industry space. Mr. Baseil received a B.S. in Pharmacy from Creighton University and is a registered Pharmacist in New Jersey.
Board of Directors
Dr. David Milch, 66
Chairman of the Board of Directors
Dr. David Milch has been a self-employed independent investor in the life sciences and technology areas for the past 30 years. Recently, Dr. Milch pursued a number of media opportunities, as the lead investor, including Mila-Media, BeTerrific! and others. In 2014, Dr. Milch invested in the first biopharma spinout from well-known genomics research leader Jackson Laboratories, Cyteir Therapeutics, with co-investors Celgene Corporation, Venrock, Silverlake and others. In 2010, Dr. Milch established the Dr. David M. Milch Foundation to serve “Tikkun Olam” (healing the world) in two primary areas: Arts for Social Impact which focuses on film, theater, and other modes of creativity, and Youth Mentoring, which helps foster leadership development and civic responsibility. In 2008, Dr. Milch was part of the small angel group which capitalized Games24X7 in India, currently named RummyCircle. Dr. Milch received his B.S. in Biology at Stanford University and his M.D. from Harvard Medical School.
Dr. Thomas Insel, 68
Director
Dr. Insel is a psychiatrist and neuroscientist, and has been a national leader in mental health research policy and technology. In March 2020, he co-founded NEST Health, a global therapeutic online community for recovery and he co-founded Cortical Capital, a venture fund specifically for behavioral health innovation. In 2017, he co-founded Mindstrong Health, a Silicon Valley start-up building tools for people with serious mental illness. In 2015, Dr. Insel moved from government service to begin a career in the private sector. He led the Mental Health Team at Verily (formerly Google Life Sciences) in South San Francisco. From 2002-2015, Dr. Insel served as Director of the National Institute of Mental Health (NIMH), the component of the National Institutes of Health (NIH) committed to research on mental disorders. During his tenure in public service, Dr. Insel also served as Acting Director of the National Center for Advancing Translation Science (2012) and Co-Director of President Obama’s BRAIN Initiative. Prior to serving as NIMH Director, Dr. Insel was Professor of Psychiatry at Emory University where he was founding director of the Center for Behavioral Neuroscience in Atlanta. Additionally, since May of 2019, Dr. Insel has been a special advisor to California Governor Gavin Newsom and Chair of the Board of the Steinberg Institute in Sacramento, California. He is the author of the forthcoming book Recovery, published by Penguin Random House. Dr. Insel is a member of the National Academy of Medicine and has received numerous national and international awards including honorary degrees in the U.S. and Europe. He also sits on the advisory boards of multiple neuroscience-behavioral health companies, as well as the Foundation for NIH. Dr. Insel received his B.A. and M.D. from Boston University.
Peter Kash, 59
Director
Dr. Kash holds a doctorate in Education and an MBA in Finance, he is the Vice-Chairman of TargImmune Therapeutics (Switzerland), which he co-founded in January 2016. Since September 2017, he has also served as Managing Director of FFD, LLC in addition to serving as a member of the advisory board of Gravitas Global Advisors LLC since August 2018. He was the formerly a co-founder and partner of Two River Group and President of Capital Securities specializing in creating and financing several biotech companies including: Kite Pharma, Edgemont Pharmaceuticals and Intercept Pharmaceuticals. He has also served as Chairman and Vice Chairman of Keryx Biopharmaceuticals, ID Vaccines, Intercept, Javelin, Nile Therapeutics, and Velcera. Dr. Kash has worked on Wall Street for over 30 years including at Shearson Lehman Hutton and Paramount Capital. At Paramount he co-founded and financed PolaRx Biopharmaceuticals, developing the first cancer drug from China, Trisenox approved by the FDA. Dr. Kash has autored several books, and has served over 25 years as an Adjunct/Visitng Professor of Entrepreneurship at such leading instutitions as: the Wharton School of Business, Nihon University (Japan) and Hebrew University (Israel). Dr. Kash received his B.S. in Management Science from S.U.N.Y. Binghamton and his MBA in International Banking and Finance from the Lubin School of Business at Pace University.
Bruce E. Roberts, 55
Director
Mr. Roberts is the owner and managing director of RM Global Partners LLC, a specialized life sciences investment bank and asset management firm, with offices in New York and Israel, where he has been since 2014. Prior to, he was the owner and managing director of Roberts Mitani Advisors, LLC a global investment banking firm, from June 1993 to October 2014. He has completed multiple transactions in the life sciences space for clients including Micrus Endovascular (acquired by JNJ), Encysive Pharmaceuticals (acquired by Pfizer), Anterios (acquired by Allergan) and MediBeacon, among many others, and has advised on life science investment strategies for corporate clients including Toyota, AmorePacific Group, and Cosmotec. Mr. Roberts is also Chairman of Nectero Medical, a company developing treatments for vascular aneurysm disease, a board member of Control Medical Technology, a company commercializing novel blood clot management devices, and a managing partner of Health Family Capital, LLC, a family office focused on private healthcare investing. He serves on the national board of directors of AdvaMed Accel, the emerging company arm of the leading trade association for U.S. medical technology companies. Prior to his banking and asset management career, Mr. Roberts was an owner and director of Flori Roberts, a consumer skin care company sold to Ivax Pharmaceuticals, and practiced corporate and securities law at Sidley Austin. His past directorships also include Endologix, a U.S. device company focused on aneurysm treatment; Devax, a U.S. coronary stent company; BioEnterprise, a regional bio accelerator; and Global Biomedical Partners AG, a Swiss based biomedical-focused private equity fund management company (sold to HBM Bioventures). He has also lectured on private equity at the Executive MBA program of the NYU Stern School of Business and served as a judge for the Genesis Generation Challenge, an initiative of the Genesis Prize Foundation. Bruce received an A.B. in History and Government from Harvard College, summa cum laude, and a J.D. from Harvard Law School. Newsom and Chair of the Board of the Steinberg Institute in Sacramento, California.