Cancer Drug Startup Valo Inks Billion-Dollar SPAC Deal

Boston-based Valo Health has entered into a definitive merger agreement with Khosla Ventures Acquisition Co. (KVAC), a special purpose acquisition company or SPAC. The transaction represents a pro forma market value of approximately $2.8 billion for the combined company. Valo anticipates the pro forma cash balance of the combined company will be approximately $750 million before expenses. Founded by Flagship Pioneering, Valo has built an internal pipeline with two clinical-stage assets and 15 prioritized pre-clinical assets across cardiovascular metabolic renal, neurodegeneration and oncology fields, as well as a deep pipeline of additional candidates. This transaction positions Valo to use the full power of technology to accelerate multiple programs through clinical trials. 

Valo is building a fully integrated, end-to-end approach to developing drugs from target discovery through approval using its Opal Computational Platform. The platform is designed to accelerate the rate of drug discovery, compared to that of traditional operators, by allowing information and data to be shared in parallel at every stage of the drug discovery and development process, reducing the dependency on surrogates, and enabling insights across preclinical and clinical to drive towards therapeutic success.  

KVAC and Valo believe that AI and high throughput automation, melded with traditional drug development expertise, will improve drug discovery in a dramatic way, reduce the significant failure rate inherent in traditional drug development, improve return on research investment and increase drug approvals. KVAC believes that Valo’s use of AI across its pipeline from target discovery and therapeutic development, to clinical development, trial design, and patient care, gives Valo significant advantages over companies that have largely focused AI on trying to improve single points of the therapeutic pipeline.  

The closing of this transaction is anticipated to occur in the third quarter of 2021 and is subject to the approval of KVAC’s stockholders and the satisfaction or waiver of certain other customary closing conditions. (Source: Valo Health Website, 09 June, 2021)