As discussed in the last iteration of this column focused on late-stage biotech firms, SPACs have increasingly turned to the drug development sector as a safe space on the board while various types of volatility have cropped up in the fourth quarter of 2026.
This comes in part because the risk profile of a clinical-stage biotech company does not necessarily change with broader macro conditions, but there are even more de-risked corners of the drug development space.
Armada III (NASDAQ:AACI) may have provided an example of this last week by announcing a $892 million business combination with pharmaceutical manufacturer Brains Bioceutical.
Brains Bioceutical has an interest in developing and licensing-in its own proprietary drug candidates, but the main boom in its business is expected to be in manufacturing ingredients and complete medicines for partners in the industry.
This picks-and-shovels portion of the pharmaceutical space hasn’t always been considered as particularly attractive, given that it faces some of the same race-to-the-bottom price dynamics as other forms of base manufacturing. But, the emergence of higher demand for injectable treatments and more advanced therapies has changed this picture.
In general, the margins for generic medicine, particularly oral pills, remain relatively low in the neighborhood of 20%-30%. But, manufacturers of liquid formulations and injectables see margins as high as 45% and up to 60% for those handling supply chain movement and export for branded treatments, according to Pharma Manufacturing Club.
Driven largely by the growth in GLP-1s and gene therapy treatments, these latter manufacturing types pushed the broader sector into +12% year-on-year growth in 2025, including +40% in manufacturing services and +33% in advanced therapies. This corner has also seen a major boost in M&A with 29 large-scale acquisitions last year by players seeking to expand their capacities, according to a report by AliraHealth.
All of this puts independent pharma manufacturers at a crossroads with high pressures to sell to one of the hungry pharma majors or re-invest in their own capacities to remain competitive.
Delpharm
One such company facing this dilemma is Boulogne, France-based Delpharm.
Delpharm has undergone a series of private equity phases since its original founding in 1988. But, the company has so valued its independence that Delpharm’s management gradually bought back its equity in the company from majority owner Activa Capital over a decade, securing 100% ownership in 2016.
It now boasts 6,500 employees that generate about 8,000 finished products for 170 customers. With 18 manufacturing facilities across France, Italy and Poland, it is diversified across solid capsule products, semi-solids and both sterile and non-sterile liquid medicines.
That work now generates about €1.1 billion ($1.2 billion) in annual turnover and it re-invests 6% to 8% of that turnover into internal innovation and capacity building annually. Some of that has come in the form of M&A with at least seven transactions that folded in new facilities over the past seven years.
Although the company prides itself on being closely held, a SPAC transaction could bring it a number of advantages. For one, the committed capital proceeds from a potential deal could be invested more quickly into either organic or inorganic expansion of Delpharm’s offerings into higher-margin product types.
For another, the company’s sturdy foundation would not necessarily guarantee it a smooth traditional IPO roadshow given that it is based in Europe. On top of this, the company has already been working to establish a footprint in the North American market, recently opening two new sites in Montreal in recent years.
A listing on a major US exchange could supercharge these efforts and also potentially set the stage for creating a presence on the US side of the border with the trade benefits that could provide.
Simtra BioPharma Solutions
Simtra BioPharma, meanwhile, already positioned itself to attack those portions of the market.
It is exclusively focused on higher-margin sterile injectable treatments and serves as a full-service contract manufacturing partner in this domain. The company has also already diversified geographically with major production facilities in Indiana and Germany and recently moved its corporate headquarters across the river from Wall Street in New Jersey.
An eventual trip to the US public markets may have already been a part of the strategy for Simtra as it was carved out from former parent Baxter International (NYSE:BAX) by private equity firms Advent International and Warburg Pincus in 2023 for $4.25 billion in cash.
At the time of that deal, Simtra was generating about $600 million in revenue and it has only expanded its capacities since. In fact, the company cut the ribbon on a $250 million expansion of its Indiana manufacturing facility just last week and completed additions to its German factory in June.
With those build-outs complete, the time could now be right for Advent and Warburg Pincus to cash in on their strategy with a SPAC deal as Simtra could hit the market as a pure play in the injectables space right as the market is hot.
Cellares
There is still space for SPACs to dream big with cutting-edge players in this subsector, however. San Francisco-based Cellares is working to build the first platform for mass manufacturing living cell-based drugs.
Traditional contract development and manufacturing organizations (CDMOs) like Delpharm and Simtra rely on production processes that include a fair amount of manual work and the production of cell therapies is particularly delicate.
Cellares has instead developed automated platforms for this work called Cell Shuttles that require -90% less labor and -90% less facility space while each of these Cell Shuttles can work on 16 batches simultaneously and up to 6,000 batches per year.
So far, it has successfully automated formulation processes for 14 medicines, including particularly sensitive CAR-T cancer treatments and stem cell drugs. It signed a 10-year agreement with Cabaletta Bio in April to supply the raw materials to continue to make CAR-T therapies for clients, and its inaugural smart factory site is up and running in New Jersey.
Additional facilities are under construction in Europe and Japan while proofs of concept are being studied in South Korea.
To help fund this work, the company added a $50 million expansion to its $327 million Series D in June, but that did not prevent it from having to make some layoffs two months later when one client partnership fell through.
The company clearly has a lot on its plate and development in this space is not cheap. A reliably quick trip to the public markets via a SPAC, therefore, could give it some of the flexible fundraising tools it needs rather than having to tap into the private market wells here and there as it rolls out this innovative new technology.
