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InnovationRx is your weekly digest of healthcare news. To get it in your inbox, subscribe here. W hither the SPAC IPO? The hot way to go public in 2021 – a reverse merger with a blank check company – seems to be falling out of fashion in 2022. Today the Securities and Exchange Commission announced it would be cracking down on SPACs as the federal agency proposed new rules related to disclosures around sponsors, conflict of interest and dilution. They would also change the way SPAC sponsors and their target companies can talk about projections. (Flashback to when “SPAC King” Chamath Palihapitiya told investors Medicare Advantage insurer Clover Health already had 200,000 lives under contract for 2021 when pitching his SPAC deal, when in reality the company only had half that number.) “Functionally, the SPAC target IPO is being used as an alternative means to conduct an IPO,” SEC Chair Gary Gensler said in a statement. “Thus, investors deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers.” While there were a total of 613 SPAC IPOs in 2021, there have only been 53 so far this year. There are currently 77 healthcare-related SPACs searching for a target company and 13 that have signed definitive agreements, according to SPACTrak. The public markets have not been particularly kind to healthcare SPACs, many of which have seen significant declines from the initial $10 per share pricing. Hims & Hers was trading around $5.32, Clover Health around $3.65 and Talkspace at $1.74 on Wednesday. UnitedHealth’s interest in LHC Group has been designed to further the insurer’s population health strategy to keep patients out of the hospital and cared for in lower-cost outpatient settings. Optum owns an array of outpatient care assets including doctor practices, urgent care centers and surgery centers. LHC Group has 30,000 employees that provide more than 12 million in-home care visits annually from 964 locations in 37 states and the District of Columbia.
