Pittsburgh’s Carmell Therapeutics is going public via SPAC

South Side-based Carmell has entered into a definitive business combination agreement with special acquisition company Alpha Healthcare Acquisition Corp. III. Upon the agreement being finalized, the SPAC will be renamed Carmell Therapeutics Corporation, according to a statement issued by the companies late Wednesday night.

The corporation’s common stock is expected to be listed on the Nasdaq via the ticker symbol CTCX, with an estimated market cap of $328 million.

“The business combination of Alpha and Carmell allows us to advance the clinical development of our platform technology, to add significant regenerative medicine experience to the Carmell board of directors and to access high-quality institutional investors,” Carmell Therapeutics CEO and President Randy Hubbell said in the release.

Back in September 2022, after a draft registration statement had been filed with the US Securities and Exchange Commission for a public stock listing, Hubbell told Technical.ly the company could showcase the merit of its products to its future customers by taking the company public. Hubbell said the move allowed the company to show the value of its regenerative medicine products focused on tissue, hair, skin and bones.

Why a SPAC? As Technical.ly has previously reported, SPACs act as shell companies that exist solely for the sake of bringing other companies public through mergers and acquisitions. Going public through a SPAC is usually much faster than pursuing an IPO route, which can take over a year to finalize.

Under the proposed agreement, Carmell’s shareholders will receive a combined 15 million shares of ALPA’s Class A common stock in exchange for their existing Carmell shares. The combined company is expected to receive $154 million in estimated gross proceeds when the deal is complete.

“We believe that the better place to be is in the public markets where we can attract capital, because we look a lot like a biotech company,” Hubbell said in September. “Biotech companies have had success in the public markets by creating value for their investors by successfully advancing through the clinical regulatory pathway and bringing forth significant clinical data.”

As of the fall, the Carnegie Mellon University spinout had completed Phase 2 of a study showing its Bone Healing Accelerant has the ability to accelerate and heal bone and soft tissue damage. The second product Carmell was preparing was its Tissue Healing Accelerant which focuses on chronic wound healing and hair regrowth for individuals with alopecia.

Under the SPAC agreement, Rajiv Shukla, CEO of Alpha Healthcare Acquisition Corp. III, will serve as the chairman of the combined company, while Hubbell remains the CEO.

“By potentially accelerating healing time and reducing the rate of infections, Carmell’s product candidates, if approved, are expected to significantly improve patient outcomes and reduce cost to payors,” Shukla said in the company statement.

Carmell’s latest announcement comes just weeks after another Pittsburgh biotech firm, Lipella Pharmaceuticals, joined the Nasdaq.

Atiya Irvin-Mitchell is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.