SEC SPAC Crackdown | Second Boosters | $5.4B For Home Health

Plus: CDC drops Covid warning for cruise ships

Whither 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.The deal is expected to close in the second half of 2022, the companies said.

Deals Of The Week

Healthtech For Kids: Brightline, a virtual behavioral health startup focused on children, teenagers and their families, raised a $105 million Series C led by KKR. The company will use the funding to expand its offerings, including specialty programs for caregivers of young children with autism and kids who identify at LGBTQ+ or BIPOC. Brightline offers on-demand virtual care, including coaching programs and clinical services, in all 50 states. 

AI Unicorn: ConcertAI, which provides software solutions to life sciences and healthcare companies, has raised a $150 million Series C led by Sixth Street, which values the 5-year-old company at $1.9 billion. Its software helps speed up product launches and clinical trials. 

B For Brightside: Mental health telemedicine company Brightside announced Tuesday that it had raised a $50 million series B round led by MCME Capital and Mousse Partners. The company’s raised $75 million to date. 

Seed For Drug Discovery: Drug discovery company Zephyr AI, which was founded by Rally Health founder Grant Verstandig and came out of stealth in November, announced Wednesday that it has raised an $18.5 million seed funding round led by Lerner Group Investments and M-Cor Holdings.

Noteworthy

Contrary to popular opinion, cannabis smoke from a bong is a potential health hazard for non-smokers, according to new research.

Collectively Americans owed $195 billion in medical debt in 2019, according to a new analysis, but conquering it is possible. 

Global health is broken. Here’s how young people plan to repair it. 

Coronavirus Updates

President Joe Biden publicly received his second Covid booster shot today. Prior to the vaccination, he announced the launch of Covid.gov,a “one-stop shop” for providing resources about masks, treatments, vaccines, tests and more. The President also called on Congress to pass an emergency Covid funding package of $22.5 billion. “In the last two weeks, the Administration has had to stop reimbursing health care providers for treating the uninsured, cancel monoclonal antibody orders and cut states’ supply, reduce orders of treatments for the immunocompromised, and pull the U.S. out of line for future vaccine and next-generation treatment purchases,” the White House said in a statement. The request is coming at a time when Covid cases have started to plateau nationwide and tick up in certain states as the BA.2 variant becomes dominant in the U.S.

In other coronavirus news:

Black people with cancer who contracted Covid-19 had significantly worse outcomes than white people with cancer who got Covid-19, according to a new study. 

The highly transmissible BA.2 Omicron variant comprised more than half of COVID-19 infections last week, the CDC said yesterday.

The CDC recommended that people who have received two shots of a Covid-19 vaccine produced by Johnson & Johnson follow up with a booster of one of the mRNA vaccines from Pfizer-BioNTech and Moderna.

Authorities in Shanghai have expanded its pandemic restrictions by locking down western parts of the city two days ahead of schedule as the number of Covid-19 cases in China's financial hub continued to sharply rise.

For the first time since the early days of the Covid-19 pandemic, a majority of Americans are choosing to go maskless in public, a new poll suggests. 

Across Forbes

• Cargill Dodges Russian Missiles But Vows To Keep Feeding Both Sides Of The Ukraine War

• How Bad Inflation Might Get, According To The Companies That Will Raise Prices

• Did The Son Of The World’s Third-Richest Man Trade NFTs With Inside Information?

What Else We Are Reading

• Biden likely to sign a bill that would crack down on China's chokehold on the antibiotic supply (Endpoints News)

• A Google billionaire's fingerprints are all over Biden's science office (POLITICO)

• The internet’s funniest doctor is in on the joke (STAT)