Tectonic Therapeutic Closes Merger with AVROBIO and $130.7M Private Placement

Tectonic Therapeutic, Inc. (NASDAQ: TECX), a clinical-stage biotechnology company, has successfully completed its merger with AVROBIO, Inc. The newly combined entity will continue under the name Tectonic Therapeutic, Inc., with shares set to be traded on the Nasdaq Global Market starting June 21, 2024, under the ticker symbol "TECX."

As part of this strategic move, Tectonic also finalized a significant private placement, raising $130.7 million from a group of investors. This funding includes contributions from a major mutual fund, TAS Partners, 5AM Ventures, EcoR1 Capital, Polaris Partners, and others. These transactions have resulted in Tectonic securing approximately $181 million in cash, cash equivalents, and investments. These resources are expected to fund the company's operational plans well into mid-2027.

Dr. Alise Reicin, President and Chief Executive Officer of Tectonic, expressed enthusiasm about the transition into a publicly traded entity. She highlighted upcoming milestones, such as the initiation of a randomized Phase 2 clinical trial for TX45, the company's lead program. This trial will target Group 2 Pulmonary Hypertension with Heart Failure with Preserved Ejection Fraction (HFpEF), a condition affecting over 600,000 people in the U.S. alone, and for which there are currently no approved therapies. Initial results from the ongoing Phase 1a clinical trial in this patient group are anticipated by mid-2024, with Phase 1b results expected in 2025 and Phase 2 results in 2026.

In addition to TX45, Tectonic is advancing a second program aimed at treating Hereditary Hemorrhagic Telangiectasia (HHT), the second-most common genetic bleeding disorder. There are about 70,000 HHT patients in the U.S., with 10-20% suffering from severe disease characterized by frequent bleeding, anemia, and sometimes requiring blood transfusions. A potential development candidate for HHT treatment is expected to be selected later this year, with clinical studies starting by late 2025 or early 2026.

The merger with AVROBIO also entailed certain financial and structural adjustments. AVROBIO implemented a 1-for-12 reverse stock split of its common stock and issued a non-transferable contingent value right (CVR) to its shareholders. This CVR entitles holders to specific cash payments from potential proceeds related to AVROBIO's pre-transaction assets. Following the stock split and the merger, there are approximately 15,371,780 shares of the combined company’s common stock on a diluted basis. Prior AVROBIO shareholders now own about 24.8% of the combined company's stock, while prior Tectonic shareholders, including those who participated in the private placement, hold approximately 75.2%.

Tectonic Therapeutic specializes in developing therapeutic proteins and antibodies that target G-protein-coupled receptors (GPCRs). The company leverages its proprietary technology platform, GEODe™ (GPCRs Engineered for Optimal Discovery), to address significant unmet medical needs. Tectonic’s research focuses on creating biologic medicines to modify disease courses in areas where current therapeutic options are inadequate or non-existent.

In conclusion, Tectonic Therapeutic’s merger with AVROBIO marks a pivotal moment in the company's journey. With substantial financial backing and a clear roadmap for its clinical programs, Tectonic aims to bring innovative treatments to patients suffering from challenging conditions like HFpEF and HHT.