RA Capital Management announced on Mar. 25 the creation of a new special purpose acquisition company, Research Alliance III, aimed at bringing overseas life science startups—especially those from China—to the U.S. public market.
The move comes as interest grows in alternative routes for biotechs to access public capital. SPACs have become a popular option, offering young companies an easier path to go public by merging with a publicly listed shell company and receiving significant funding in the process.
According to a recent securities filing, Research Alliance III could raise up to $57.5 million through its initial public offering (IPO). The document states, “RA Capital Management believes there are significant opportunities relating to promising drug therapies developed abroad, including in the [People’s Republic of China].” However, RA Capital has not committed exclusively to targeting Chinese companies or launched on Nasdaq yet; Tuesday’s filing was only a prospectus registering its intent for an IPO.
SPACs saw heightened activity in 2021 when pandemic-driven investments fueled numerous deals that brought companies like Roivant and Cerevel Therapeutics—later acquired by AbbVie for $8.7 billion—to the market via this route. More recently, PrimeGen US merged with DT Cloud Star Acquisition Corporation last month in a deal valuing PrimeGen at about $1.5 billion after DT Cloud Star raised $69 million during its own IPO last July.
RA Capital has previous experience using SPACs: its first shell company merged with POINT Biopharma in March 2021, providing POINT with $300 million before it was later acquired by Eli Lilly for $1.4 billion. The firm’s portfolio also includes biotechs such as 89bio (acquired by Roche for $3.5 billion) and Aktis Oncology (which completed this year’s first biotech IPO at $318 million).
Looking ahead, RA Capital plans to leverage its track record while focusing more attention on Chinese innovation—a trend echoed across the industry as major pharmaceutical firms increase partnerships with Chinese biotechs seeking novel therapies.
