Aerovate and Jade Biosciences Announce Merger

Aerovate Therapeutics, Inc. and Jade Biosciences have announced a definitive merger agreement that will see the two companies combine in an all-stock transaction. This newly formed entity will prioritize advancing Jade’s innovative portfolio of biologics, focusing on therapies for autoimmune diseases. A notable product in their lineup is JADE-001, a monoclonal antibody designed to treat IgA nephropathy (IgAN), which is a chronic kidney disease.

Once the merger is finalized, the combined company will adopt the name Jade Biosciences and will be listed on Nasdaq under the ticker symbol "JBIO." Jade Biosciences has already secured significant financial backing, with commitments from various healthcare investors. This includes an oversubscribed private investment expected to generate approximately $300 million in gross proceeds. The syndicate of investors is led by firms such as Fairmount, Venrock Healthcare Capital Partners, and other notable investment firms.

This financing, which comprises common stock and pre-funded warrants, is anticipated to close just before the completion of the merger. The combined company's cash reserves are expected to support operations through 2027 and advance JADE-001 to clinical development. Additionally, Aerovate plans to distribute approximately $65 million in excess net cash to its pre-merger stockholders as a special dividend.

Jade’s CEO, Tom Frohlich, emphasized the company’s dedication to developing groundbreaking treatments for autoimmune diseases, with JADE-001 spearheading these efforts. As the fourth venture based on assets from Paragon Therapeutics, Jade leverages Paragon's expertise in antibody discovery. This merger, supported by strong financial commitments, positions Jade to progress its clinical programs and contribute significantly to autoimmune disease treatments.

Aerovate’s CEO, Tim Noyes, expressed that the merger represents a favorable move for Aerovate stockholders, highlighting the synergistic potential of Jade’s promising pipeline and the anticipated cash dividend. Jade Biosciences aims to develop transformative therapies targeting inflammation and immunology-related diseases, with JADE-001 being a potential best-in-class antibody. This antibody inhibits the APRIL protein, a crucial factor in IgAN’s pathogenesis. By targeting the root cause, JADE-001 aims to reduce IgA levels, subsequently lowering urine protein levels and preserving kidney function.

Andrew King, Jade’s Chief Scientific Officer, noted that JADE-001 is engineered for enhanced potency and an extended half-life compared to other anti-APRIL antibodies, making it particularly suitable for IgAN patients who need long-term treatment. JADE-001 is expected to begin clinical trials in the latter half of 2025, with initial data anticipated by mid-2026. Furthermore, Jade is also advancing two other antibody programs, JADE-002 and JADE-003, currently in preclinical development.

In line with the merger terms, pre-merger Aerovate stockholders will hold approximately 1.6% of the combined company, while Jade’s pre-merger stockholders and new investors will own around 98.4%. Jade will take the lead in the new company, with Tom Frohlich as CEO and an established Board of Directors chaired by Eric Dobmeier.

The merger has received approval from both companies' Boards of Directors and is expected to close in the first half of 2025, pending customary closing conditions, including stockholder approval and the effectiveness of a registration statement with the SEC.

Jade Biosciences is focused on developing novel therapies for autoimmune diseases with its lead program, JADE-001, targeting the APRIL pathway for IgA nephropathy. The company's pipeline also includes JADE-002 and JADE-003, both in preclinical stages. Jade was established based on assets licensed from Paragon Therapeutics, a leader in antibody discovery.

Aerovate Therapeutics has been a biotechnology company dedicated to improving the lives of patients with rare cardiopulmonary diseases.