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Alpha Tau Medical to merge with SPAC at $1 billion valuation to battle cancer

Founded in 2016, Alpha Tau is an Israeli oncology therapeutics company that injects tumors with radioactive material in simple needle procedure

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

An illustration of how a needle containing alpha particles is inserted into a solid tumor; Alpha Tau Medical says it has developed a technology in which these alpha particles can live long enough to destroy the cells (Courtesy)
An illustration of how a needle containing alpha particles is inserted into a solid tumor; Alpha Tau Medical says it has developed a technology in which these alpha particles can live long enough to destroy the cells (Courtesy)

Alpha Tau Medical, an Israeli startup that says it can destroy tumors by injecting them with radioactive material in a simple needle procedure, said Thursday it will merge with special purpose acquisition company Healthcare Capital Corp. at a valuation of $1 billion.

The merger is expected to provide up to $367 million in gross proceeds, the companies said in a statement.

Net proceeds of the merger, which will see Alpha Tau have some $362 million of cash on its balance sheet, will be used for further Alpha Tau’s clinical strategy including getting an FDA marketing authorization, funding its R&D activities, expanding manufacturing capacity and preparing for commercialization. The funds are expected to last at least into 2024, the statement said.

Alpha Tau will continue to be led by its current management team, and upon closing, it is expected that HCC Chairman Dr. David Milch will be appointed to the Alpha Tau board of directors.

The proposed business combination is expected to be completed by the end of 2021, upon which Alpha Tau is expected to be listed on Nasdaq.

Investors in the merger deal, via the private investment in public equity (PIPE) fundraising round that happens at the time of the merger, include Yozma Investment Co. (part of Yozma Group Korea) and Grand Decade Developments (an affiliate of China Grand Pharmaceutical and Healthcare Holdings) as well as other technology investors including Israel’s OurCrowd, Regah Ventures and the co-founders of Apax Partners, Alan Patricof and Sir Ronald Cohen.

Medison Group, an early supporter of Alpha Tau and global pharma company that provides access to innovative therapies to patients in international markets, is also an investor in the PIPE, the statement said.

“This transaction represents another significant milestone on Alpha Tau’s journey to transform the treatment of solid tumors through the precision delivery of alpha radiation, said Uzi Sofer, CEO and chairman of Alpha Tau. “The completion of this transaction will allow the company to realize its vision and implement the clinical development plans and construction of our manufacturing plants around the world, in order to bring hope to millions of patients around the world.”

Founded in 2016, Alpha Tau Medical Ltd. is an Israeli oncology therapeutics company that focuses on research, development, and commercialization of the Alpha DaRT technology for the treatment of solid tumors.

In the treatment, called diffusing alpha-emitters radiation therapy (DaRT), a needle containing radium-224, a radioactive isotope, is inserted into the location of the tumor. Once positioned, it emits atoms that release alpha radiation that have the capacity to exterminate the cancer cells by causing irreparable breaks in the DNA of these cells.

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