Semnur Pharmaceuticals to go public in SPAC deal of up to $2 billion with Denali Capital

(Reuters) - Drug developer Semnur Pharmaceuticals said on Tuesday it has signed a letter of intent to go public through a merger with special purpose acquisition company Denali Capital Acquisition Corp in a pre-transaction equity deal valued at up to $2 billion.

California-based Semnur, a unit of Scilex Holding, develops non-opioid pain therapies.

Semnur said the combined company, if the deal goes through, will operate as Semnur Pharmaceuticals with Scilex as the majority holder. It plans to seek approval from the SPAC's shareholders in the second half of 2024.

The company intends to use proceeds from the deal to fund development of its lead drug candidate, SP-102, which is being tested in late-stage trials for patients with moderate-to-severe chronic radicular pain or sciatica, Semnur said.

Sciatica refers to irritation, inflammation, pinching or compression in one or more nerves that run down the lower back and into the legs.

SPACs are shell companies that raise money in an initial public offering and put it in a trust for the purpose of merging with a private company and taking it public. SPACs typically have up to two years from the time they list their shares to close a merger.

(Reporting by Mariam Sunny in Bengaluru; Editing by Krishna Chandra Eluri)