Dive Brief:
- Privately held immunology drug developer Avere Therapeutics is seeking to go public through a reverse merger with NextCure, announcing Tuesday a transaction that will also add $320 million in new funding via a sale of shares and convertible notes led by Fairmount and Hansoh Pharma.
- The transactions will help Avere advance an experimental psoriasis pill licensed from Hansoh that could compete with AbbVie’s shot Skyrizi and Johnson & Johnson’s new drug Icotyde. Avere is banking on its pill, codenamed AVR-001, succeeding as an extended-dose product that will need to be taken less frequently than daily Icotyde.
- Avere will be headed up by the executive team that helmed Akero Therapeutics through its $4.7 billion acquisition by Novo Nordisk for its drug to treat the liver disease MASH. After the deal closes, the new company will have enough funding to complete Phase 2 testing of AVR-001 and initiatie a global Phase 3 trial.
Dive Insight:
NextCure became a target following research setbacks and a decision to layoff a chunk of its staff in 2024, a restructuring that funded its operations through 2026. After the transaction closes, its shareholders will own just over 1% of the company, although they will be eligible to receive up to 90% of the proceeds from any deal to outlicense the drugs NextCure developed via a security called a contingent value right.
Once the deal wraps up in the second half of 2026, shares of the combined company will trade on the Nasdaq stock exchange under the ticker symbol “AVRX.”
Avere has licensed AVR-001 from Hansoh in exchange for $120 million in upfront fees and potentially up to $2.18 billion more in milestone payouts, as well as potential sales royalties, should the drug get to market.
Hansoh has initiated a Phase 2b trial in Chinese patients that is expected to have results in 2027. Avere has filed papers to begin U.S. testing and expects to start a separate Phase 2b trial in 2027. The company said its current funding will last through that plus initiation of a global Phase 3 trial and the beginning of a Phase 2b trial in ulcerative colitis.
IL-23 is a long-standing target of immunology drugmakers, as J&J’s Stelara was one of the first to directly inhibit the immune cytokine when it was introduced in 2009. A new generation of IL-23 blocking injections, such as Skyrizi, J&J’s Tremfya and Sun Pharma’s Ilumya emerged in recent years, and now J&J has raised the stakes by launching a daily oral peptide in Icotyde, an approach that Avere is also following.
“We are focused on rapidly delivering a once-weekly oral IL-23 therapy that combines best-in-class convenience with efficacy competitive with other emerging oral IL-23 therapies,” said Avere CEO Andrew Cheng in a statement.
