Arya Sciences Acquisition Corp IV agreed to a business combination with Adagio Medical, taking the cardiac ablation company public.
Upon the closing of the transaction, Adagio is set to become a subsidiary of Aja Holdco, still operating under its existing management team and under the name “Adagio Medical.” Arya expects to list the combined company’s common stock on the Nasdaq market under the “ADGM” ticker.
Arya, a special purpose acquisition corporation (SPAC), is the latest to try and take a medtech company public through this type of merger. SPAC mergers took the medtech industry by storm a few years ago but produced varying results in the years following. Read here about some of the outcomes of these planned acquisitions.
In this SPAC deal, investors committed to participate in the transaction in the form of $20 million in convertible debt. They also committed $22 million in equity financing. Investors include affiliates of Perceptive Advisors, RA Capital Management, RTW Investments and ATW Partners.
Adagio Medical develops cryoablation technologies that create contiguous, transmural lesions to treat cardiac arrhythmias. Those include paroxysmal and persistent AFib, atrial flutter, and ventricular tachycardia.
“The business combination agreement and Adagio Medical’s evolution to a public company is a natural next step in our relationship with Perceptive Advisors and other investor groups who have long supported Adagio Medical’s innovations aimed to improve the efficacy of cardiac ablations,” said Olav Bergheim, president and CEO of Adagio Medical. “We are expanding the clinical trials program for Adagio Medical’s proprietary ultra-low temperature cryo (ULTC) and pulsed field cryoablation (PFCA) technologies, with some of the pivotal data and new product launches expected in the first half of 2024.”
Bergheim believes the SPAC merger ensures sufficient capital to support European commercialization for its ULTC system. The company also believes it can initiate a U.S. pivotal IDE trial and advance its ULTC and PFCA clinical programs for treating AFib.
More about the SPAC merger taking Adagio Medical public
According to a news release, the transaction implies a post-transaction fully diluted equity value of $128 million. The companies expect current Adagio shareholders to convert 100% of their existing equity interests into shares of the combined company.
They expect current Adagio investors to own approximately 10.2% of the combined company. Perceptive and Arya expect to hold approximately 58.2%. The respective boards of both companies approved the proposed transaction. They expect to complete the merger in the second quarter of 2024, subject to shareholder approval.
“When Arya IV was formed, our objective was to identify a company with the potential to successfully address a significant, unmet need and to advance the treatment of patients,” said Adam Stone, chief investment officer of Perceptive Advisors and CEO of ARYA. “In Adagio Medical, we’ve come to believe that the company’s innovative cardiac ablation technology, thoughtful commercialization strategy, and experienced leadership team make it an exceptional fit to meet our objectives.”
