Aerovate Therapeutics, Jade Biosciences enter merger agreement

Aerovate Therapeutics (AVTE) and Jade Biosciences announced that they have entered into a definitive merger agreement for an all-stock transaction. The resulting entity will focus on advancing Jade’s portfolio of novel biologics, including JADE-001, a promising anti-APRIL monoclonal antibody for IgA nephropathy. Upon completion of the merger, the combined company plans to operate under the name Jade Biosciences and trade on Nasdaq under the ticker symbol “JBIO.” In support of the merger, Jade has secured commitments for an oversubscribed private investment that is expected to result in total gross proceeds of approximately $300 million from a syndicate of healthcare investors led by Fairmount, Venrock Healthcare Capital Partners, and a large investment firm, with participation from Deep Track Capital, Braidwell LP, Driehaus Capital Management, Frazier Life Sciences, RA Capital Management, Great Point Partners, Soleus Capital, Avidity Partners, Blackstone Multi-Asset Investing, Logos Capital, Deerfield Management, OrbiMed, and Samsara BioCapital, among other leading investment management firms. The financing includes common stock and pre-funded warrants to purchase additional shares of common stock and reflects the conversion of the previously issued $95 million convertible notes. The financing is expected to close immediately prior to completion of the merger, with the combined company’s cash balance at closing anticipated to fund Jade’s operations through 2027 and advance JADE-001 to initial clinical proof-of-concept. Prior to closing, Aerovate expects to declare a cash dividend to pre-merger Aerovate stockholders, distributing excess net cash expected to be approximately $65 million. Jade’s focus is to develop transformational, disease modifying therapies targeting inflammation and immunology-related diseases. The company’s lead program, JADE-001, is a potential best-in-class antibody designed to block the APRIL protein, which plays a key role in the development of IgAN, a chronic kidney disease resulting from IgA-mediated inflammation and damage that can impair kidney function over time. By targeting the underlying pathogenesis of IgAN, JADE-001 aims to reduce IgA levels, lower protein levels in the urine, and preserve long-term kidney function. JADE-001 is anticipated to enter the clinic in the second half of 2025, with initial data expected in the first half of 2026. In addition, Jade has initiated preclinical development of JADE-002 and JADE-003, two undisclosed optimized antibody programs. Under the terms of the merger agreement, pre-merger Aerovate stockholders are expected to own approximately 1.6% of the combined company, while pre-merger Jade stockholders – including those investors participating in the pre-closing financing – are expected to own approximately 98.4% of the combined entity. Aerovate is not expected to contribute funds to the new entity and expects to pay a dividend of approximately $65 million to pre-merger Aerovate stockholders immediately prior to the closing of the merger. The transaction has received approval by the Boards of Directors of both companies and is expected to close in the first half of 2025, subject to the satisfaction or waiver of certain customary closing conditions, including, among other things, approval by the stockholders of both companies, the effectiveness of a registration statement to be filed with the U.S. Securities and Exchange Commission to register the securities to be issued in connection with the merger. The combined company will be named Jade Biosciences and will be led by Tom Frohlich, Jade’s current CEO. Jade’s existing Board of Directors will remain in place, chaired by Eric Dobmeier, former President and CEO of Chinook Therapeutics and current Venture Partner at Samsara BioCapital. Board members include Lawrence Klein, Ph.D., CEO of Oruka Therapeutics; Erin Lavelle, former COO and CFO at ProfoundBio and Eliem Therapeutics; Chris Cain, Ph.D., Director of Research at Fairmount and Tomas Kiselak, Managing Member at Fairmount.