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What do you get if you mix together tech billionaires, performance-enhancing drugs and a Spac merger? The answer is a surprisingly intriguing investment case, albeit one pumped up with risk.
On Wednesday, The Enhanced Group, best known as the creator of the future “steroid Olympics”, said it would list its shares in the US via a merger with a US blank cheque company sponsored by a Chinese businessman. It expects negligible revenue until its inaugural games next year. Nonetheless, Enhanced plans to go public at a mooted enterprise value of $1.3bn.
Enhanced’s primary backer, German entrepreneur Christian Angermayer, has built what looks like a sporting league running live events, plus a DIY pharmacy. It can sell media rights to competitions such as the Enhanced Games, which will be held in Las Vegas next year, where athletes under the care of doctors are permitted to take drugs otherwise banned in mainstream athletics. Alongside this, it can peddle medicines such as “peptide hormones” and “metabolic modulators” through online prescriptions and over-the-counter ventures.
That fits with the zeitgeist. Longevity is increasingly a pet project of Silicon Valley. Enhanced’s backers include PayPal and Palantir co-founder Peter Thiel, Donald Trump Jr, tech investor Balaji Srinivasan and Saudi prince Khaled bin Alwaleed bin Talal. True, there is some controversy over the games themselves: it is not yet clear what treatments for athletes cross ethical and safety barriers and which do not.
Fans may not be overly perturbed by that, as long as they are watching feats of extraordinary skill and strength. And perhaps they will be wowed enough by what they see to buy the pills and supplements that their boosted heroes are ingesting. Enhanced projects $357mn of revenue by 2028, evenly split between media, prescriptions and over-the-counter products. Its valuation would be less than 10 times that year’s forecast ebitda. Hims & Hers Health, a US online provider of sexual health and hair loss treatments, trades at more than 20 times, according to LSEG.
One question for investors is when Enhanced’s current backers might make a dash for it. Angermayer’s firm and its affiliates will be the biggest shareholders and will keep control through a dual-class structure. Insiders can sell some of their shares a month before the 2026 games and all of them 18 months after the event. But investors in a new $40mn financing will get to sell a slug of their existing holdings immediately, equivalent to four times their new contribution.
While enhanced athletes may beat the regular kind, it remains to be seen whether Enhanced can beat the Spac pack. The median return on Spac mergers completed on US exchanges since 2020 is minus 85 per cent, according to ListingTrack, with fortified projections rarely getting real results. Only 2 per cent of those closed in 2024 are above their listing price. Whatever the financial equivalent of a metabolic modulator is, this company will need a double dose.
sujeet.indap@ft.com