Announcement • Nov 01
Jade Biosciences, Inc. entered into a definitive merger agreement to acquire Aerovate Therapeutics, Inc. (NasdaqGM:AVTE) in a reverse merger transaction.
Jade Biosciences, Inc. entered into a definitive merger agreement to acquire Aerovate Therapeutics, Inc. (NasdaqGM:AVTE) in a reverse merger transaction on October 31, 2024. 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. 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.
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.
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.
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.
