Zigakibart

Paragon Therapeutics, a company that spins out antibody biotechs, has forged a second reverse merger for its portfolio this week. Its autoimmune spinoff Jade Biosciences will take the Nasdaq spot of Aerovate Therapeutics in an all-stock deal, the companies said Thursday morning. The move comes two days after Paragon’s PD-1xVEGF startup Crescent Biopharma emerged and immediately said it would take the public position spot of GlycoMimetics. Paragon’s other children, Spyre and Oruka, also went through reverse mergers. Only Apogee Therapeutics has gone the traditional IPO route. Jade unveiled two months ago with $80 million and a chief scientific officer, Andrew King, who was previously in the same role at kidney disease biotech Chinook Therapeutics. Jade said last week it is being led by CEO Tom Frohlich . The combined company will trade as $JBIO and focus on Jade’s pipeline of biologics, including a lead program in the hot area of IgA nephropathy , a chronic kidney disease that has seen multiple recent FDA approvals, financings and acquisitions. The lead asset, JADE-001, is an anti-APRIL monoclonal antibody that will begin clinical trials in the second half of 2025. It has two other preclinical antibodies for undisclosed diseases. Jade also disclosed a $300 million financing that will support R&D and operations “through 2027,” which will get JADE-001 to proof-of-concept data, the company said. Jade stockholders will own about 98% of the combined entity, and Aerovate will pay a dividend of about $65 million to its pre-merger stockholders right before the deal closes, which is anticipated in the first half of next year. Aerovate laid off nearly all its staff this summer after failing a mid-stage test in pulmonary arterial hypertension.

Dive Brief:Jade Biosciences, a privately held developer of immune disease drugs, will combine with Aerovate Therapeutics in a reverse merger that gives Jade a fast pass to trade on public markets.Prior to the merger, which the companies announced Thursday, Jade expects to raise $300 million via a private financing involving more than a dozen life sciences investors, among them Fairmount, Venrock Healthcare Capital Partners, RA Capital Management and Samsara BioCapital.The combined company, which will be almost entirely owned by pre-merger Jade stockholders, will operate with Jades name and trade on the Nasdaq under the ticker JBIO. The deal is expected to close in the first half of 2025.Dive Insight:Jade is the fourth spinout of Paragon Therapeutics to go public via a reverse merger and the third this year, following Oruka Therapeutics and Crescent BioPharma. (A fifth, Apogee Therapeutics, conducted an initial public offering last year.)Founded by Fairmount in 2021, Paragon specializes in discovering promising new antibody drugs, which it then licenses to newly created companies to advance their development.In Jades case, Paragon designed an antibody the companies believe could be a best-in-class treatment for a kidney disease called IgA nephropathy. The drug targets a protein known as APRIL thats thought to play a major role in the development of the disease, which over time erodes kidney function.JADE-001 is engineered to deliver superior potency and an extended half-life compared to other anti-APRIL monoclonal antibodies in development, optimizing efficacy with convenient, infrequent dosing, Andrew King, Jades chief scientific officer, said in a Thursday statement.Specifically, Jade aims to dose its drug every two months, compared to anti-APRIL antibodies being developed by Otsuka and Novartis that are dosed once per month or once every two weeks. (Otsuka last week said its antibody, sibeprenlimab, succeeded in a Phase 3 trial, while Novartis expects data for its drug, zigakibart, in 2026.)More broadly, IgAN has become a competitive area of drug development. Along with zigakibart, Novartis acquired another treatment for the disease in its acquisition of Chinook Therapeutics last year. Biogen and Vertex Pharmaceuticals bought IgAN developers in deals of their own this year. Travere Therapeutics and Calliditas Therapeutics have both launched new therapies for the disease in the U.S.Jade is much further behind. Its lead asset is set to enter the clinic in the second half of next year, with results to follow in 2026.But it will be well-funded, with enough cash from its pre-merger financing to run operations through 2027. Prior to closing the merger, Aerovate intends to distribute a cash dividend of $65 million to its pre-merger shareholders; the company had $99 million in funds available to it as of March 31 and raised $24 million in April.Aerovates fortunes nosedived in June, however, when a Phase 2 study of its experimental therapy for pulmonary arterial hypertension missed its main goal. The companys share price collapsed and, in July, it announced plans to consider strategic alternatives, like a sale or reverse merger.Pre-merger Jade shareholders will own just over 98% of the combined company, while pre-merger Aerovate stockholders will own 1.6%.Tom Frohlich, currently CEO of Jade, will lead the combined company, which will be advised by a board of directors that includes representatives from Samsara BioCapital, Oruka Therapeutics and Fairmount, among others. '