Minneapolis-based FOXO Technologies is entering the public world. Through a merger with publicly traded special purpose acquisition company (SPAC) Delwinds Insurance Acquisition Corp., FOXO plans to hit the NYSE under the ticker “FOXO” at an estimated enterprise value of $369 million. According to the Star Tribune, the company would have an estimated equity value of $563 million at $10 per share. FOXO says the transaction, combined with its recent capital moves, is expected to raise up to $224 million.
“Our goal is to modernize life insurance by making advances in longevity science fundamental to the product itself,” FOXO CEO and Founder Jon Sabes said in a release. “This transaction is transformative in our effort to support the industry’s effort to modernize in the face of accelerating advances in science and technology to reach more consumers at a time when interest in life insurance is at all-time highs.”
FOXO leverages machine learning with its non-invasive saliva-based testing to gauge a person’s health to allow insurers to predict risk. The company’s epigenetic biomarkers track health patterns such as exercise as well as alcohol and tobacco use.
“Science is beginning to accept aging is a disease that perhaps can be cured. FOXO is growing a portfolio of intellectual property around epigenetic biomarkers that correlate patterns of DNA methylation that measure individual rates of aging, health, and disease,” FOXO Chief Scientific Officer Brian Chen, PhD, said in the release. “Beyond using saliva-based epigenetic biomarkers to measure the very things life insurers use blood and urine to test for today, we intend to further consumers understanding of aging and what they can do to extend their health span.”
Merging with an SPAC, or blank check company, is an increasingly popular route to the publicly traded world. The process eschews the costly and time-consuming process of a traditional IPO, but has faced controversy due to its speculative nature on the investment side. Nevertheless, recent data shows the number of companies going public via blank check mergers outnumbers traditional IPOs by five.
To learn more about the FOXO merger, read the release below.
Minneapolis, MN & Houston, TX, Feb. 24, 2022 (GLOBE NEWSWIRE) — FOXO Technologies Inc. (“FOXO”), a technology company applying epigenetic science and AI to modernize the life insurance industry, has entered into a definitive merger agreement with special purpose acquisition company Delwinds Insurance Acquisition Corp. (“Delwinds”) (NYSE: DWIN). As a result of the transaction, which values the combined company (the “Company”) at an estimated enterprise value of $369 million, FOXO is expected to become publicly listed and plans to trade on the NYSE under ticker symbol ‘FOXO’. Proceeds from the merger are expected to accelerate the development of FOXO’s platform to offer saliva-based epigenetic biomarker underwriting technology and consumer engagement services to the global life insurance industry.
The transaction, combined with recent capital raising actions by FOXO, is expected to raise up to $224 million in total gross cash proceeds, including up to $201 million of cash held in Delwinds’ trust account, assuming no redemptions by Delwinds public stockholders. Proceeds from the transaction will fund FOXO’s intended launch of proprietary products and services including life insurance accompanied by the FOXO Longevity Report™ that drive its distribution and services platform to create “Life Insurance Designed to Keep you Alive.”™
MODERNIZING UNDERWRITING WITH EPIGENTICS AND MACHINE LEARNING
According to LIMRA International, Inc., an international research association for life insurance and financial services companies, among the most significant current issues in the life insurance industry are the lengthy timelines and invasive blood and urine specimen requirements associated with underwriting. FOXO is at the forefront of commercializing proprietary saliva-based epigenetic biomarkers with a plan to create a simpler, smoother, non-invasive underwriting process. FOXO expects its seamless saliva based underwriting process to provide enhanced protective value and represent a step-change improvement to the global life insurance industry.
FOXO’s proprietary epigenetic biomarker technology is designed to address the same underwriting questions blood and urine specimens address today. Epigenetic biomarkers are chemical modifications, called DNA methylation, that alter gene expression from external stimuli such as lifestyle and environment. FOXO derives epigenetic biomarkers by applying advanced machine learning to identify patterns of DNA methylation at over 800,000 (CpG) sites along the epigenome that correlate to measures of health and wellness. FOXO uses micro-array technology developed and supplied by Illumina (NASDAQ: ILMN) and machine learning technology developed and supplied by DataRobot to commercialize its epigenetic biomarker technology. FOXO is also responsible for developing technology that supports epigenetic science, including the Infinium Mouse Methylation Array, developed in partnership with leading technical experts, and the open-source bioinformatics software package MethylSuite.
LONGEVITY SCIENCE FUNDAMENTAL TO LIFE INSURANCE
FOXO’s services platform will allow insurers to personalize the consumer experience and support the healthy longevity of their customers by integrating molecular health and wellness into life insurance. Life insurers have a vested interest in the health, wellness, and longevity of their customers. By aiming to make longevity science fundamental to life insurance, FOXO could enhance the core value proposition of life insurance by providing consumers immediate tangible value via the FOXO Longevity Report™.
The FOXO Longevity Report™ provides consumers with insights into rates of biological aging based on the ‘epigenetic clock’ developed by Dr. Steve Horvath at UCLA. In addition to the ‘epigenetic clock’, the FOXO Longevity Report™ includes proprietary epigenetic-based wellness measures to inform and support consumer health and longevity. FOXO’s services platform is designed to enable insurers to personalize their customers experience and interact with them at an individual level to support health and longevity. FOXO’s consumer engagement services, along with its saliva-based underwriting technology, will be marketed to carriers globally seeking to make longevity science fundamental to their products.
EXPANSION AND OPPORTUNITIES
COVID-19 is generating increased demand for life insurance with renewed concerns over health, wellness, and mortality. To address this opportunity and make longevity science a part of life insurance, FOXO intends to launch proprietary term insurance products through the FOXO Life Insurance Company (“FOXO LIFE”) (www.foxolife.com) in 2022.
FOXO LIFE aims to make its insurance products available for purchase through a seamless digital experience expected to be reinsured by SCOR Global Life USA Reinsurance Company (“SCOR”) (Standard & Poor’s AA- / Stable). FOXO LIFE’s insurance products will initially be underwritten using SCOR’s automated underwriting engine Velogica™ and serve as the workbench for incorporating saliva-based epigenetic biomarkers into the underwriting process. FOXO LIFE anticipates quickly expanding to sell a full suite of ‘longevity science powered’ life insurance products with carriers through managing general agency (“MGA”) relationships in the near term. FOXO LIFE also looks to market and sell insurance products through independent agent distribution channels that embrace saliva-based underwriting technology and healthy longevity as key market differentiators. FOXO intends to make life insurance easier to purchase, while supporting the healthy longevity of consumers, positioning FOXO to impact the recognized life insurance protection gap in the United States.
FOXO’s management team boasts years of combined experience in financial, health and wellness product creation and distribution, biotechnology, machine learning, software development and architecture. Upon the closing of the transaction, the Company’s board of directors is expected to include Illumina bioinformatics scientist Bret Barnes PhD and health technology entrepreneur Murdoc Khaleghi PhD, together with FOXO Founder and CEO Jon Sabes and Delwinds Chairman and CEO Andrew J. Poole. In addition, the members of FOXO’s scientific advisory board, which include epigenetic scientists Peter Laired, PhD and Hui Shen, PhD from the Van Andel Institute, and data scientist and AI researcher Randall Olson, PhD, from Absci are expected to continue as advisors to the Company.
Jon Sabes, Founder and CEO of FOXO, said: “Our goal is to modernize life insurance by making advances in longevity science fundamental to the product itself. This transaction is transformative in our effort to support the industry’s effort to modernize in the face of accelerating advances in science and technology to reach more consumers at a time when interest in life insurance is at all-time highs.”
Erin Sharoni, Chief Product Officer of FOXO, said: “We’re using technology to identify and address the same risk factors that life insurance companies currently seek to identify and address with current, more invasive techniques. Our goal is for insurance applicants to soon be able to apply for life insurance and carriers will get the same, or better, risk information without engaging in a long, invasive process involving blood and urine specimen collection. Moreover, our modern technology platform may be used to help inform and direct consumers in supporting their own longevity. Epigenetic technology is creating significant opportunities in what is being called ‘The Biological Century’ to alter the trajectory of human health and lifespan.”
Brian Chen, PhD, Chief Scientific Officer of FOXO, said: “Science is beginning to accept aging is a disease that perhaps can be cured. FOXO is growing a portfolio of intellectual property around epigenetic biomarkers that correlate patterns of DNA methylation that measure individual rates of aging, health, and disease. Beyond using saliva-based epigenetic biomarkers to measure the very things life insurers use blood and urine to test for today, we intend to further consumers understanding of aging and what they can do to extend their health span.”
Bret Barnes, Director of FOXO, said: “FOXO’s vision to apply epigenetic science to life insurance underwriting is an exciting application of the technology. Using micro-arrays to analyze patterns of DNA methylation that correlate and measure current states of health and wellness represents an excellent use case of the technology platform. FOXO’s accomplished management team and scientific experts position the company well to achieve this vision. I look forward to working alongside Jon Sabes, his team and my fellow board members as we govern and lead FOXO and work toward commercial success.”
Andrew J. Poole, Chairman and CEO of Delwinds, said: “FOXO is aiming to modernize the life insurance industry with an unbending and disruptive vision of science and technology. FOXO will provide value to policyholders that goes beyond mortality coverage and introduces step-change underwriting technology. We look forward to working closely with FOXO and playing a part in enabling, fostering and commercializing health span for all.”