- CA Healthcare Acquisition Corp (Nasdaq: CAHC), a special purpose acquisition company (SPAC), announced a definitive merger agreement with LumiraDx. These are the details.
CA Healthcare Acquisition Corp (Nasdaq: CAHC), a special purpose acquisition company (SPAC) focused on investing in a growth-oriented healthcare company that recently raised $115 million in its IPO, announced a definitive merger agreement with LumiraDx Limited, a next-generation point of care (POC) diagnostics testing company. This combination reflects a value of $5 billion for Lumira’s existing equity, before giving effect to the transaction. And since its founding, LumiraDx has raised $700 million in equity capital including investments by Morningside Ventures, U.S. Boston Capital Corporation, The Bill & Melinda Gates Foundation, Petrichor Healthcare Capital Management, and other global strategic partners.
LumiraDx developed its high sensitivity antigen test for COVID-19 on the LumiraDx Platform. And the test is currently being used by the National Health Service (NHS) and Boots in the UK, CVS Health in the U.S., a significant number of accident and emergency rooms in Italy, and other parts of Europe and is being deployed in partnership with the Bill and Melinda Gates Foundation in a growing number of African countries where access to laboratory diagnostics is limited. And the LumiraDx COVID-19 antigen test has received Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) and achieved CE Mark. Plus the LumiraDx Platform and COVID-19 antigen tests are also available in Japan and Brazil and being rolled out in more than 60 countries globally.
The LumiraDx Platform menu also includes point of care tests for COVID-19 Antibody, INR, and D-Dimer with high levels of accuracy comparable to central lab-based tests – all of which have achieved CE Mark and are now commercially available in Europe. The Platform is designed to go wherever the patient is, whether it is in a hospital, medical office, pharmacy, or in other non-traditional settings such as schools or airports.
Ron Zwanziger (Chairman and CEO of LumiraDx) and his management team will continue to lead LumiraDx post-transaction. And he and a core group of executives founded LumiraDx in 2014 after previously founding and growing a number of successful POC diagnostic companies that were then sold to global healthcare companies for an aggregate consideration of over $10 billion. The team’s previous leadership experience includes Alere, the industry’s largest point of care testing business, which was sold to Abbott in 2017.
Later this year, subject to regulatory approval or clearance, LumiraDx is planning to launch Amira, a low-cost mass-screening and home testing system for COVID-19 – which will support widespread efforts to safely reopen the economy. And LumiraDx anticipates the retail price of Amira will be $2-4 per test, significantly lower than many existing COVID-19 tests currently on the market and estimates the incremental market opportunity at $5-15 billion. The company also submitted a pre-EUA request to FDA in March 2021 and plans to achieve CE Mark for POC and over-the-counter applications in the fall of 2021.
LumiraDx is estimating 2021 revenue of $600 million – $1 billion driven by the LumiraDx Platform usage, geographic expansion, and Amira mass screening system.
$400 Million In Newly Secured Financing
LumiraDx had also announced today that it has secured two new financing commitments totaling $400 million. BioPharma Credit PLC and its subsidiaries provided a $300 million loan to LumiraDx. Plus Capital One, National Association has provided a commitment letter for up to $100 million on an asset-based revolving credit facility.
Summary Of Merger Transaction
The deal implies an equity valuation at closing for the combined company of in excess of $5 billion. And all current LumiraDx shareholders will retain the entirety of their existing holdings in the combined company. Plus the additional capital from the CACH’s cash held in trust, after any redemptions, together with the new financing commitments and cash from operations will provide growth capital to support increasing production, continued R&D activities and commercial and manufacturing expansion.
The combined company is going to be led by existing CEO Ron Zwanziger and the other Co-Founders, and LumiraDx’s existing board and governance principles will not change. And upon closing of the transaction, LumiraDx and its common shares are expected to trade on Nasdaq under the ticker symbol “LMDX.” The deal is currently expected to close late Q2, early Q3 this year, subject to approval by the securityholders of each of CAHC and LumiraDx and satisfaction of customary closing conditions.
The deal has been unanimously approved by the Board of Directors of both LumiraDx and CA Healthcare Acquisition Corp.
LumiraDx is based in the UK with R&D and manufacturing centers in Scotland, England and the U.S., and sales and marketing operations across Western Europe, the U.S., Japan, South Africa, Colombia and Brazil. And the company has more than 1,200 employees across 17 countries.
“LumiraDx is at the tipping point of driving a transformation in diagnostic testing. This new public recognition will solidify our already growing presence in the point of care testing market. COVID-19 has demonstrated how important it is to have rapid and highly accurate diagnostic tests, at mass scale, and available everywhere. It has validated the performance of our Platform and enabled us to partner with governments, health systems, retail chains and other customers to expand testing across community care settings both in high and low-and middle-income countries. This access to increased testing will change the way care pathways are currently practiced, improving patient outcomes and saving human lives.”
— Ron Zwanziger, Chairman and CEO of LumiraDx
“LumiraDx’s next-generation point of care solutions provide a significant opportunity for our shareholders. Ron and his management team have decades of entrepreneurial success in innovative diagnostics businesses and the LumiraDx Platform and testing menu offer healthcare providers and other customers major advantages over traditional central labs. LumiraDx has a clear strategy for addressing the large and underpenetrated testing market to increase next-generation POC market share. In the near-term, demand for fast, low-cost COVID-19 tests is driving strong and transformational growth for LumiraDx’s solutions.”
— Larry Neiterman, Chairman and CEO of CAHC
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