Aerovate Therapeutics and Jade Biosciences Announce Merger Agreement Merger to create a company focused on advancing Jade Biosciences' portfolio of novel therapies that aim to redefine the standard of care for patients w

Aerovate Therapeutics and Jade Biosciences Announce Merger Agreement

Merger to create a company focused on advancing Jade Biosciences'

portfolio of novel therapies that aim to redefine the standard of care for patients with autoimmune diseases

Jade Biosciences, the fourth company founded on assets licensed

from Paragon Therapeutics, expects to initiate a clinical trial for JADE-001 in the second half of 2025

Approximately $300 million raised to date, including anticipated

proceeds from an oversubscribed pre-closing private financing, expected to fund operations through 2027

Conference call scheduled for October 31, 2024, at 8:30 AM EDT

Vancouver, BC, Canada and San Francisco, CA - October

31, 2024 - Aerovate Therapeutics, Inc. (Nasdaq: AVTE) ("Aerovate") and Jade Biosciences ("Jade"), a privately

held biotechnology company focused on developing best-in-class therapies for autoimmune diseases, today announced that they have entered

into a definitive merger agreement for an all-stock transaction. The resulting entity will focus on advancing Jade's portfolio

of novel biologics, including JADE-001, a promising anti-APRIL ("A PRoliferation Inducing Ligand") monoclonal antibody ("mAb")

for IgA nephropathy ("IgAN"). 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. Prior to closing, Aerovate expects to declare a cash dividend to pre-merger Aerovate

stockholders, distributing excess net cash expected to be approximately $65 million.

Tom Frohlich, Chief Executive Officer of Jade, commented: "Jade

is focused on developing breakthrough treatments for autoimmune diseases, including JADE-001, which modulates plasma cell survival and

immunoglobulin production, and which we plan to initially develop for the treatment of IgA nephropathy. As the fourth antibody therapeutics

venture founded on assets licensed from Paragon Therapeutics, a leader in antibody discovery, Jade leverages Paragon's proven success

in developing innovative biologics. This merger, coupled with strong financial backing, positions us well to advance our programs into

clinical development and make meaningful progress in treating autoimmune diseases."

"We believe this merger with Jade represents the best path forward

for Aerovate stockholders," said Tim Noyes, Chief Executive Officer of Aerovate. "The anticipated cash dividend, combined

with Jade's promising pipeline, offers a compelling opportunity for significant value creation, both in the near term and over

Jade Pipeline Overview and Development Milestones

Jade's focus is to develop transformational, disease modifying

therapies targeting inflammation and immunology-related diseases. The company's lead program, JADE-001, is a potential best-in-class

antibody designed to block the APRIL protein, which plays a key role in the development of IgAN, a chronic kidney disease resulting from

IgA-mediated inflammation and damage that can impair kidney function over time. By targeting the underlying pathogenesis of IgAN, JADE-001

aims to reduce IgA levels, lower protein levels in the urine (a key marker of kidney damage), and preserve long-term 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,"

said Andrew King, Chief Scientific Officer of Jade. "This profile makes it especially well-suited for patients with IgAN, a population

that requires lifelong, disease-modifying therapy, often beginning in early adulthood."

JADE-001 is anticipated to enter the clinic in the second half of

2025, with initial data expected in the first half of 2026. In addition, Jade has initiated preclinical development of JADE-002 and JADE-003,

two undisclosed optimized antibody programs.

About the Proposed Transactions

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.

Aerovate is not expected to contribute funds to the new entity and

expects to pay a dividend of approximately $65 million to pre-merger Aerovate stockholders immediately prior to the closing of the merger.

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

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.

Advisory and Legal Counsel

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.

Conference Call Details

Jade will host a conference call on October 31, 2024, at 8:30 AM EDT

to discuss the merger details. To join the webcast, please register here. A replay of the webcast can be accessed following the

call by visiting JadeBiosciences.com.

About Jade Biosciences

Jade Biosciences is focused on developing best-in-class therapies

to address critical unmet needs in autoimmune diseases. Its lead asset, JADE-001, will target the anti-A PRoliferation-Inducing Ligand

(APRIL) pathway for immunoglobulin A (IgA) nephropathy, with Investigational New Drug Application-enabling studies underway and initiation

of a first-in-human trial expected in the second half of 2025. Jade's pipeline also includes two undisclosed optimized antibody

discovery programs, JADE-002 and JADE-003, currently in preclinical development. Jade was launched based on assets licensed from Paragon

Therapeutics, an antibody discovery engine founded by Fairmount. For more information, visit JadeBiosciences.com or follow the

Company on LinkedIn.

About Aerovate Therapeutics, Inc.

Aerovate Therapeutics is a biotechnology company that was focused

on improving the lives of patients with rare cardiopulmonary disease. For more information, please visit www.aerovatetx.com.

Forward-Looking Statements

Certain statements in this communication,

other than purely historical information, may constitute "forward-looking statements" within the meaning of the federal

securities laws, including for purposes of the "safe harbor" provisions under the Private Securities Litigation Reform

Act of 1995, concerning Aerovate, Jade, the proposed pre-closing financing and the proposed merger between Aerovate and Jade

(collectively, the "Proposed Transactions") and other matters. These forward-looking statements include, but are not

limited to, express or implied statements relating to Aerovate's and Jade's management teams' expectations, hopes,

beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: the Proposed

Transactions and the expected effects, perceived benefits or opportunities of the Proposed Transactions, including investment

amounts from investors and expected proceeds, and related timing with respect thereto; expectations regarding or plans for

discovery, preclinical studies, clinical trials and research and development programs, in particular with respect to JADE-001,

JADE-002 and JADE-003, and any developments or results in connection therewith, including the target product profile of JADE-001;

the anticipated timing of the commencement of and results from those studies and trials; expectations regarding the use of proceeds;

the sufficiency of post-transaction resources to support the advancement of Jade's pipeline through certain milestones and the

time period over which Jade's post-transaction capital resources will be sufficient to fund its anticipated operations; the

cash balance of the combined entity at closing; expectations regarding the treatment of IgAN and associated diseases; expectations