Aerovate Therapeutics Enters into Merger Agreement with Jade Biosciences

Aerovate Therapeutics, a Delaware corporation, recently announced that it has entered into an Agreement and Plan of Merger with Jade Biosciences, Inc., a Delaware corporation. This Merger Agreement, which was signed on October 30, 2024, outlines the terms for Aerovate to merge with and into Jade, with Jade surviving the merger as the resulting corporation. The overall transaction includes two mergers, with the aim of qualifying for federal income tax purposes as a tax-free reorganization under the Internal Revenue Code of 1986, as amended.

As part of the closing of the Merger, Aerovate is poised to declare a cash dividend amounting to approximately $65.0 million to its pre-Merger Aerovate stockholders, subject to adjustments specified in the Merger Agreement.

Upon the effective time of the Merger, each outstanding share of Jade’s common stock will be converted into Aerovate’s common stock based on an Exchange Ratio calculated in accordance with the Merger Agreement. The Exchange Ratio formula estimates that pre-Merger Jade stockholders will hold approximately 98.4% of the combined company, while pre-Merger Aerovate stockholders will own around 1.6% on a fully-diluted basis. These percentages may be adjusted based on Aerovate’s net cash at the closing.

The Merger Agreement outlines several proposals that Aerovate will seek approval from its stockholders for, such as issuing shares in connection with the Merger, adopting new equity incentive plans, amending the certificate of incorporation, and effecting a reverse stock split among others.

In addition to the Merger, Jade finalized a Securities Purchase Agreement with certain existing Jade stockholders and new investors for an aggregate purchase price of around $300.0 million. These transactions are conditional upon the satisfaction or waiver of the conditions set forth in the Merger Agreement.

Furthermore, the Merger is subject to various closing conditions like approval by Aerovate and Jade stockholders, Nasdaq’s approval for listing, and the filing of a registration statement with the SEC, among others.

As the Merger progresses, Aerovate’s board of directors is set to consist of members designated by Jade. Concurrently with the Merger Agreement, support and lock-up agreements have been undertaken by key stockholders and executives of both companies, ensuring alignment on stock voting and transfer restrictions post-Merger.

The Merger Agreement and related documents have been furnished in the Form 8-K filing, providing investors and stakeholders with detailed insights into the terms and conditions of Aerovate’s impending merger with Jade Biosciences.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Aerovate Therapeutics’s 8K filing here.

About Aerovate Therapeutics

Aerovate Therapeutics, Inc, a clinical-stage biopharmaceutical company, develops drugs that enhance the lives of patients with rare cardiopulmonary diseases in the United States. It focuses on advancing AV-101, a dry powder inhaled formulation of imatinib for the treatment of pulmonary arterial hypertension, which is in Phase 2b/Phase 3 trial.