What is it about the bittersweet transition from summer to autumn that compels lonely souls to ruminate on dashed love and what could have been?

We’re talking about airlines, of course.

On Wednesday, The Wall Street Journal reported that Frontier Airlines and Spirit Airlines have renewed their yearslong on-again, off-again merger flirtation. Perhaps the umpteenth time’s the charm for these two ultra-budget lovebirds? 

Failure to Launch

To recap: After playing merger footsie for years, Frontier in 2022 placed an official bid to acquire the perpetually beleaguered Spirit Airlines in a deal valued at around $2.9 billion. Spirit agreed, only to get cold feet once JetBlue swept in with a competing offer, sparking a bidding war that ultimately culminated in JetBlue announcing its intention to acquire Spirit for $3.8 billion. But the US Justice Department took issue with the merger, and a federal judge blocked it on antitrust grounds earlier this year. Shares of Spirit began a long descent before rallying lately upon rumblings of a rekindling with Frontier (that’s the nice thing about love triangles — there’s always a fallback option).

The discussions come at a crucial time for Spirit:

• Spirit remains in ongoing discussions with bondholders about a possible bankruptcy filing, though last week it received a lifeline after a credit card processor agreed to delay a debt refinancing deadline, the WSJ reported.
• The airline now has until around Christmas to refinance $1.1 billion of bonds, or else it could lose the ability to process credit card transactions. Last week it also drew down all of its $300 million revolving credit facility.

Shares of Spirit soared over 45% on the news Wednesday. Its share price is now down roughly 80% year-to-date. Sources told the WSJ that any deal with Frontier would likely be a part of Spirit’s overall debt restructuring as it goes through bankruptcy proceedings.

If at First You Fail…: The DOJ won its case against the JetBlue-Spirit acquisition by arguing it would decrease competition in the budget airline space (JetBlue, for its part, argued that the combined airline could help increase competition with the industry’s Big Four). A Frontier-Spirit merger could face the same regulatory challenges, though the industry’s landscape has shifted somewhat this year. Major airlines have found ways to compete in the ultra-budget space, while Spirit, shockingly, has committed to offering more premium experiences and seating. Whether it’s enough to overcome regulatory concerns is uncertain — but, whatever the outcome, we urge airlines to give another inch or two of legroom.

Don’t bite the hand that gives you the filter that makes you look like a cat.

Bloomberg reported on Wednesday that Meta is bleeding third-party augmented reality developers to its rival, Snap. This is in large part because the company closed down its AR studio to redirect funds to AI development, despite just launching a pair of AR glasses. So why the mixed signals?

Reality Bites

Before ChatGPT devoured Silicon Valley’s attention, the metaverse was the next big thing. But augmented-slash-virtual reality headsets have yet to really break out of being a niche tech toy. Meta’s sunsetting of Meta Spark, its platform that helped third parties build AR effects, took developers by surprise. It only gave them around five months’ notice; Spark is expected to close down in January. Meta said it will focus on in-house development of AR effects and prioritize making them for things like its newly-released AR glasses, Orion.

But developers weren’t using Meta Spark primarily to make apps for metaverse hardware; they used it to make filters for existing products like Instagram. Now, they’re flocking over to Snapchat. For Meta, losing those developers makes it even less likely the metaverse is going to be a place people actually want to spend time:

• A problem Meta has faced with its virtual reality platform Horizon Worlds is that there’s not much for people to do in there. Picture an app store with no apps on it and a bunch of 3D avatars aimlessly wandering around, and you get the idea.
• Snapchat, meanwhile, is undergoing a major redesign, merging its existing features into a TikTok-esque video feed.

The Apple of Your Eye: Apple joined Meta in the VR headset space this year with its mixed AR/VR Apple Vision Pro headset. It launched at an eye-watering $3,500, and according to a report from The Information, it may have already hit market saturation. Sources told The Information that Apple is already scaling back production, and may stop altogether by the end of the year. That doesn’t mean it’s ducking out of the race, though. Bloomberg’s Mark Gurman reports the company is working on as many as four new products in the VR/AR space, including a cheaper alternative to the Vision Pro.

Modifi Biosciences wants to kill cancer by taking away its roadmap.

The small, preclinical-stage company — which develops therapies that stop cancer cells from making DNA — announced Wednesday that it has been acquired by global pharmaceutical giant Merck. The deal comes with a $30 million upfront payment, and shareholders will be able to earn up to $1.3 billion if milestones are met.

Venture Capitalists Don’t Get It

New Haven-based Modifi was spun out of Yale University in 2021 with technology developed at the school. Co-founders and Yale professors Dr. Ranjit Bindra and Seth Herzon, along with co-founder and onetime student Kingson Lin, created molecules that can attack brain cancers without damaging the healthy tissue around them. The treatment effectively stops cancer cells from making DNA, meaning they can’t split into new cells and the cancer can’t grow.

The company raised $10.7 million in seed funding, including from Yale Ventures and the American Cancer Society’s innovation arm, BrightEdge. But Bindra said the fact that they decided to stick to glioblastoma multiforme (GBM), which is relatively rare among other forms of the disease, was a sticking point for other potential investors:

• “We pitched to venture capitalists and the light switch would just go off when we talked about GBM,” Bindra told Fierce Biotech. “You talk to a group like Merck — the light switch goes on.”
• Merck, as it happens, is looking for drug candidates that could fill the gap when its landmark cancer immunotherapy Keytruda — which brought in $25 billion in sales last year — loses patent protection in 2028.

Shopping Spree: Beyond Modifi, Merck has been an active shopper as it looks to shore up the coming Keytruda revenue gap. Last year, it inked a $5.5 billion deal with Japan’s Daiichi Sankyo to jointly develop three cancer therapies, leading to a successful late-stage trial announced last month. It also bought autoimmune disease specialist Prometheus Biosciences for roughly $11 billion and, in January, spent $680 million on immuno-oncology firm Harpoon Therapeutics.