Aerovate Therapeutics, Inc. (Nasdaq: AVTE) (“Aerovate”) and Jade
Biosciences (“Jade”), a privately held biotechnology company
focused on developing best-in-class therapies for autoimmune
diseases, today 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 (“A PRoliferation
Inducing Ligand”) monoclonal antibody (“mAb”) for IgA nephropathy
(“IgAN”). 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.
Tom Frohlich, Chief Executive Officer of Jade, commented: “Jade
is focused on developing breakthrough treatments for autoimmune
diseases, including JADE-001, which modulates plasma cell survival
and immunoglobulin production, and which we plan to initially
develop for the treatment of IgA nephropathy. As the fourth
antibody therapeutics venture founded on assets licensed from
Paragon Therapeutics, a leader in antibody discovery, Jade
leverages Paragon’s proven success in developing innovative
biologics. This merger, coupled with strong financial backing,
positions us well to advance our programs into clinical development
and make meaningful progress in treating autoimmune diseases.”
“We believe this merger with Jade represents the best path
forward for Aerovate stockholders,” said Tim Noyes, Chief Executive
Officer of Aerovate. “The anticipated cash dividend, combined with
Jade’s promising pipeline, offers a compelling opportunity for
significant value creation, both in the near term and over the long
run.”
Jade Pipeline Overview and Development
Milestones
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 (a key marker of kidney damage), and preserve long-term
kidney function.
“JADE-001 is engineered to deliver superior potency and an
extended half-life compared to other anti-APRIL monoclonal
antibodies in development, optimizing efficacy with convenient,
infrequent dosing,” said Andrew King, Chief Scientific Officer of
Jade. “This profile makes it especially well-suited for patients
with IgAN, a population that requires lifelong, disease-modifying
therapy, often beginning in early adulthood.”
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.
About the Proposed Transactions
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 (the “SEC”) 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 Chief Executive Officer (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 Chief Operating Officer and Chief Financial Officer
at ProfoundBio and Eliem Therapeutics; Chris Cain, Ph.D., Director
of Research at Fairmount and Tomas Kiselak, Managing Member at
Fairmount.
Advisory and Legal Counsel
Gibson, Dunn & Crutcher LLP is serving as legal counsel to
Jade. Jefferies, TD Cowen, Stifel, and Wedbush & Co., LLC are
serving as placement agents to Jade, with Cooley LLP serving as
legal counsel to the placement agents. Wedbush Securities Inc. is
serving as exclusive strategic financial advisor to Aerovate, while
Goodwin Procter LLP is acting as its legal counsel. Lucid Capital
Markets, LLC is providing a fairness opinion to Aerovate's Board of
Directors.
Conference Call Details
Jade will host a conference call on October 31, 2024, at 8:30 AM
EDT to discuss the merger details. To join the webcast, please
register here. A replay of the webcast can be accessed following
the call by visiting JadeBiosciences.com.
About Jade Biosciences
Jade Biosciences is focused on developing best-in-class
therapies to address critical unmet needs in autoimmune diseases.
Its lead asset, JADE-001, will target the anti-A
PRoliferation-Inducing Ligand (APRIL) pathway for immunoglobulin A
(IgA) nephropathy, with Investigational New Drug
Application-enabling studies underway and initiation of a
first-in-human trial expected in the second half of 2025. Jade’s
pipeline also includes two undisclosed optimized antibody discovery
programs, JADE-002 and JADE-003, currently in preclinical
development. Jade was launched based on assets licensed from
Paragon Therapeutics, an antibody discovery engine founded by
Fairmount. For more information, visit JadeBiosciences.com or
follow the Company on LinkedIn.
About Aerovate Therapeutics, Inc.
Aerovate Therapeutics is a biotechnology company that was
focused on improving the lives of patients with rare
cardiopulmonary disease. For more information, please visit
www.aerovatetx.com.
Forward-Looking Statements
Certain statements in this communication, other
than purely historical information, may constitute “forward-looking
statements” within the meaning of the federal securities laws,
including for purposes of the “safe harbor” provisions under the
Private Securities Litigation Reform Act of 1995, concerning
Aerovate, Jade, the proposed pre-closing financing and the proposed
merger between Aerovate and Jade (collectively, the “Proposed
Transactions”) and other matters. These forward-looking statements
include, but are not limited to, express or implied statements
relating to Aerovate’s and Jade’s management teams’ expectations,
hopes, beliefs, intentions or strategies regarding the future
including, without limitation, statements regarding: the Proposed
Transactions and the expected effects, perceived benefits or
opportunities of the Proposed Transactions, including investment
amounts from investors and expected proceeds, and related timing
with respect thereto; expectations regarding or plans for
discovery, preclinical studies, clinical trials and research and
development programs, in particular with respect to JADE-001,
JADE-002 and JADE-003, and any developments or results in
connection therewith, including the target product profile of
JADE-001; the anticipated timing of the commencement of and results
from those studies and trials; expectations regarding the use of
proceeds; the sufficiency of post-transaction resources to support
the advancement of Jade’s pipeline through certain milestones and
the time period over which Jade’s post-transaction capital
resources will be sufficient to fund its anticipated operations;
the cash balance of the combined entity at closing; expectations
regarding the treatment of IgAN and associated diseases;
expectations related to Aerovate’s contribution and payment of
dividends in connection with the proposed merger transaction,
including the anticipated timing of the closing of the proposed
merger transaction (the “Closing”); the expectations regarding the
ownership structure of the combined company; and the expected
trading of the combined company’s stock on Nasdaq under the ticker
symbol “JBIO” after the Closing. In addition, any statements that
refer to projections, forecasts or other characterizations of
future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words
“opportunity,” “potential,” “milestones,” “pipeline,” “can,”
“goal,” “strategy,” “target,” “anticipate,” “achieve,” “believe,”
“contemplate,” “continue,” “could,” “estimate,” “expect,”
“intends,” “may,” “plan,” “possible,” “project,” “should,” “will,”
“would” and similar expressions (including the negatives of these
terms or variations of them) may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. These forward-looking statements
are based on current expectations and beliefs concerning future
developments and their potential effects. There can be no assurance
that future developments affecting Aerovate, Jade or the Proposed
Transactions will be those that have been anticipated. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond Aerovate’s control) or other assumptions
that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not
limited to, the risk that the conditions to the Closing or
consummation of the Proposed Transactions are not satisfied,
including Aerovate’s failure to obtain stockholder approval for the
proposed merger; the risk that the proposed pre-closing financing
is not completed in a timely manner or at all; uncertainties as to
the timing of the consummation of the Proposed Transactions and the
ability of each of Aerovate and Jade to consummate the transactions
contemplated by the Proposed Transactions; risks related to
Aerovate’s continued listing on Nasdaq until closing of the
Proposed Transactions and the combined company’s ability to remain
listed following the Proposed Transactions; risks related to
Aerovate’s and Jade’s ability to correctly estimate their
respective operating expenses and expenses associated with the
Proposed Transactions, as applicable, as well as uncertainties
regarding the impact any delay in the closing of any of the
Proposed Transactions would have on the anticipated cash resources
of the resulting combined company upon closing and other events and
unanticipated spending and costs that could reduce the combined
company’s cash resources; the failure or delay in obtaining
required approvals from any governmental or quasi-governmental
entity necessary to consummate the Proposed Transactions; the
occurrence of any event, change or other circumstance or condition
that could give rise to the termination of the business combination
between Aerovate and Jade; the effect of the announcement or
pendency of the merger on Aerovate’s or Jade’s business
relationships, operating results and business generally; costs
related to the merger; as a result of adjustments to the exchange
ratio, Jade stockholders and Aerovate stockholders could own more
or less of the combined company than is currently anticipated; the
outcome of any legal proceedings that may be instituted against
Aerovate, Jade or any of their respective directors or officers
related to the merger agreement or the transactions contemplated
thereby; the ability of Aerovate and Jade to protect their
respective intellectual property rights; competitive responses to
the Proposed Transactions; unexpected costs, charges or expenses
resulting from the Proposed Transactions; potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the Proposed Transactions; failure to
realize certain anticipated benefits of the Proposed Transactions,
including with respect to future financial and operating results;
the risk that Aerovate stockholders receive more or less of the
cash dividend than is currently anticipated; legislative,
regulatory, political and economic developments; and those
uncertainties and factors more fully described in periodic filings
with the SEC, including under the heading “Risk Factors” and
“Business” in Aerovate’s most recent Annual Report on Form 10-K for
the year ended December 31, 2023, filed with the SEC on March 25,
2024, subsequent Quarterly Reports on Form 10-Q filed with the SEC,
as well as discussions of potential risks, uncertainties, and other
important factors included in other filings by Aerovate from time
to time, any risk factors related to Aerovate or Jade made
available to you in connection with the Proposed Transactions, as
well as risk factors associated with companies, such as Jade, that
operate in the biopharma industry. Should one or more of these
risks or uncertainties materialize, or should any of Aerovate’s or
Jade’s assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking
statements. Nothing in this communication should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements in
this communication, which speak only as of the date they are made
and are qualified in their entirety by reference to the cautionary
statements herein. Neither Aerovate nor Jade undertakes or accepts
any duty to release publicly any updates or revisions to any
forward-looking statements. This communication does not purport to
summarize all of the conditions, risks and other attributes of an
investment in Aerovate or Jade.
No Offer or Solicitation
This communication and the information contained
herein is not intended to and does not constitute (i) a
solicitation of a proxy, consent or approval with respect to any
securities or in respect of the Proposed Transactions or (ii) an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities
pursuant to the Proposed Transactions or otherwise, nor shall there
be any sale, issuance or transfer of securities in any jurisdiction
in contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
the Securities Act of 1933, or an exemption therefrom. Subject to
certain exceptions to be approved by the relevant regulators or
certain facts to be ascertained, the public offer will not be made
directly or indirectly, in or into any jurisdiction where to do so
would constitute a violation of the laws of such jurisdiction, or
by use of the mails or by any means or instrumentality (including
without limitation, facsimile transmission, telephone and the
internet) of interstate or foreign commerce, or any facility of a
national securities exchange, of any such jurisdiction.
NEITHER THE SEC NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR
DETERMINED IF THIS COMMUNICATION IS TRUTHFUL OR COMPLETE.
Important Additional Information about
the Proposed Transaction Will be Filed with the SEC
This communication is not a substitute for the
registration statement or for any other document that Aerovate may
file with the SEC in connection with the Proposed Transactions. In
connection with the Proposed Transactions between Aerovate and
Jade, Aerovate intends to file relevant materials with the SEC,
including a registration statement on Form S-4 that will contain a
proxy statement/prospectus of Aerovate. AEROVATE URGES INVESTORS
AND STOCKHOLDERS TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT AEROVATE, JADE, THE PROPOSED TRANSACTIONS AND RELATED
MATTERS. Investors and stockholders will be able to obtain free
copies of the proxy statement/prospectus and other documents filed
by Aerovate with the SEC (when they become available) through the
website maintained by the SEC at www.sec.gov. Stockholders are
urged to read the proxy statement/prospectus and the other relevant
materials when they become available before making any voting or
investment decision with respect to the Proposed Transactions. In
addition, investors and stockholders should note that Aerovate
communicates with investors and the public using its website
(https://ir.aerovatetx.com/).
Participants in the
Solicitation
Aerovate, Jade and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
Proposed Transactions. Information about Aerovate’s directors and
executive officers, including a description of their interests in
Aerovate, is included in Aerovate’s most recent Annual Report on
Form 10-K for the year ended December 31, 2023, filed with the SEC
on March 25, 2024, subsequent Quarterly Reports on Form 10-Q filed
with the SEC, including any information incorporated therein by
reference, as filed with the SEC, and other documents that may be
filed from time to time with the SEC. Additional information
regarding these persons and their interests in the transaction will
be included in the proxy statement/prospectus relating to the
Proposed Transactions when it is filed with the SEC. These
documents can be obtained free of charge from the sources indicated
above.
Jade Biosciences Contact
Media: Media@JadeBiosciences.com
Investors:IR@JadeBiosciences.com
Aerovate Therapeutics, Inc. Contact
Investors:IR@Aerovatetx.com
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