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SPAC (Special Purpose Acquisition Company) is emerging as a popular route that enables companies to join public stock markets without going through the IPO process, with digital health certainly riding this wave. The first two months of 2021 saw 144 SPACs, raising $44 billion, with ten digital health deals in the first quarter of 2021, including Revolution Healthcare, Blueprint Health Merger. The recent announcement of Science 37 going public through a reverse merger with Life Sci Acquisition II Corp – blank check company SPAC valuing Science 37 at an EV of $1.05 billion. The deal is expected to be completed by the third quarter of 2021. The deal brings with it $80 million in trust and $200 million in PIPE proceeds to drive the growth of Science 37 through geographic expansion, support further development of its trial technology platform and pursue merger & acquisitions (M&A) opportunities.

Despite the economic slowdown triggered by the pandemic, the SPAC deal comes as an indicator of continued investor interest in the technologies supporting digital health technologies and decentralized clinical trial delivery. The SPAC route over the IPO route offers optionality to investors in terms of withdrawing capital while the industry is still building use cases around return on investment (ROI) from executing scalable decentralized trials.

Science 37 will boost its position in the Decentralized and Virtual Clinical Trials (DVCT) market. Here are few reasons why:

1 –There has been a surge of interest around DVCT companies that are receiving lucrative venture funding and M&A opportunities. Signant Health, the leading enabler of evidence generation for modern clinical trials, recently announced the acquisition of VirTrial, a leading provider of software solutions for remote site startup and decentralized clinical trial conduct. In April, the global CRO ICON Plc. acquired its rival PRA Health Sciences for $12 billion. PRA conducts clinical trials remotely via its mobile health platform, Health Harmony. Science 37 aims to emerge as a leader in the space disrupting the $60 billion serviceable available market (SAM) that includes CRO, home health and recruitment, and eClinical Solutions. So far, it has carried out over 95 decentralized clinical trials and involved approximately 366,000 patients.

2 – Since the outbreak of the COVID-19 pandemic, Science 37 has forged strategic partnerships with several notable technology participants. Through these alliances, the company has expanded geographic reach (Medgate), grown customer base (PPD, Syneos Health), built capabilities around clinical endpoint data collection (ERT) and CNS virtual trials (Signant health). Maintaining a strong year-over-year growth Science 37 was able to add 27 new partnerships in the year 2020. The company has projected a 52% CAGR from 2020 to 2025 based on the net bookings and plans to reach revenue of $444 million by 2025.

The company also had been actively raising funds, with the addition of $35 million in Series D funding in March 2021, led by PPD and included major existing investors as well as industry partners. The funding was raised to support the scaling efforts of the company. The company has raised close to $175 million in total funding.

3 – In April 2021, Science 37 partnered with Advarra, a leading institutional review board (IRB) thus enabling expedited IRB approvals for COVID-19 trials as well as make quick amendments to virtualize ongoing trials. Advarra IRB reviews are known to have a turnaround time of 48 hours and offer industry-leading institutional biosafety committee (IBC) reviews that support new site registration to reduce study start-up time.

4 – The new developments are expected to enable Science 37 to maintain its leadership in delivering decentralized trials and intention to become the category-defining Clinical Trial Operating System by maintaining its core software as a service (SaaS) and application platform as a service (aPaaS) platform, connected devices at scale and globalization of Metasite. The other growth drivers include expansion of CRO, eCOA, Real World Evidence and clinical care areas while extending provider tech enablement and network sources.

References:
https://www.prnewswire.com/news-releases/signant-health-acquires-virtrial-to-enhance-its-digital-enablement-of-clinical-research-sites-and-evidence-generation-capabilities-301181547.html
SPAC
https://www.mobihealthnews.com/news/contributed-blank-check-uncovers-digital-health-spac-attack
https://www.nytimes.com/2021/02/10/business/dealbook/spacs-blank-check-deals.html
https://hbr.org/2021/02/the-spac-bubble-is-about-to-burst?#
https://www.medtechdive.com/news/digital-health-funding-hits-new-high-after-q1-rich-in-megadeals/597848/

About Amol Dilip Jadhav

Amol Dilip JadhavDr. Amol Jadhav is a Senior Industry Analyst within Frost & Sullivan's Healthcare & Life Sciences Growth Opportunity Analytics Practice. He has more than a decade of experience in the Life Sciences sector developing innovative diagnostic technologies and analytical tools, evaluating and analyzing growth opportunities, and developing actionable insights to support business expansion initiatives.

Amol Dilip JadhavAmol Dilip Jadhav

Dr. Amol Jadhav is a Senior Industry Analyst within Frost & Sullivan's Healthcare & Life Sciences Growth Opportunity Analytics Practice. He has more than a decade of experience in the Life Sciences sector developing innovative diagnostic technologies and analytical tools, evaluating and analyzing growth opportunities, and developing actionable insights to support business expansion initiatives.

Meghna Hiren ThakkarMeghna Hiren Thakkar

Dr. Meghna Thakkar is an Industry Analyst within Frost & Sullivan's Healthcare & Life Sciences practice. Her role includes tracking market dynamics, mergers and acquisitions, competitive intensity, innovative business models in the industry. She has 7 years of experience in research and strategy consulting for mid-size and top-tier pharmaceutical, biotech, med-tech, and drug discovery companies.

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