The shares of Aerovate Therapeutics, Inc. (NASDAQ: AVTE) are on a notable uptick after the announcement of a merger agreement between the company and Jade Biosciences. On US stock charts, AVTE stock was up 18.49% at $2.60 at the time of the most recent market check.
Merger Agreement Details
The final merger agreement will be executed as an all-stock transaction, marking a significant milestone for both companies. The innovative portfolios of Aerovate (AVTE) and Jade Biosciences, a privately held biotechnology business dedicated to developing innovative therapies for autoimmune diseases, will be combined.
There will be a lot of focus on JADE-001, a promising monoclonal antibody used to treat IgA nephropathy (IgAN). Upon completion of the deal, the new business will be known as Jade Biosciences and will trade on the Nasdaq under the ticker “JBIO.”
Financial Backing and Future Operations
To support this merger, Jade has successfully secured commitments for an oversubscribed private investment, projected to yield approximately $300 million from a consortium of healthcare investors. This financing will comprise common stock and pre-funded warrants, reflecting a strategic conversion of previously issued $95 million convertible notes.
The merger’s financial structure is designed to ensure that the combined company will possess a cash balance sufficient to fund operations through 2027 and facilitate the advancement of JADE-001 towards initial clinical proof-of-concept.
Ownership and Leadership Structure
Upon the merger’s completion, pre-merger Aerovate stockholders will hold approximately 1.6% of the newly formed company, while pre-merger Jade stockholders, including those involved in the pre-closing financing, are expected to own about 98.4%. Notably, Aerovate plans to distribute a cash dividend of approximately $65 million to its stockholders immediately prior to the merger’s closure.
Tom Frohlich, the current Chief Executive Officer of Jade, will lead the new entity, with the existing Board of Directors, chaired by Eric Dobmeier, retaining their positions. This merger represents a strategic path forward for Aerovate (AVTE), combining financial stability with Jade’s robust pipeline to create substantial value in the healthcare sector.