Fenwick Partner Robert Freedman Discusses Reverse Mergers in the Biotech Sector

Fenwick partner Robert Freedman spoke with Mergers & Acquisitions on how biotech companies are increasingly turning to reverse mergers as a substitute funding strategy to traditional IPOs.

The article explains that biotech companies in a pre-revenue stage are facing unique challenges in the current IPO market due to the high cost of development projects and need for significant, subsequent funding. Reverse mergers, which involve a private company acquiring a majority stake of a public shell company, offer a promising alternative path to going public, although they come with their own risks and challenges. “A lot of them aren’t as successful as an IPO. It’s a splashier thing to do an IPO,” Freedman cautioned.

Read the full article here.