[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Jade Biosciences, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes for periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a significant increase in cash and total assets for Jade Biosciences, Inc. as of June 30, 2025, compared to December 31, 2024, primarily driven by financing activities, while total liabilities decreased substantially due to convertible note conversions | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $220,942 | $69,386 | +$151,556 | | Total current assets | $222,984 | $69,654 | +$153,330 | | Total assets | $223,968 | $72,799 | +$151,169 | | Total current liabilities | $21,620 | $11,996 | +$9,624 | | Convertible Notes payable | $— | $107,600 | -$107,600 | | Total liabilities | $22,412 | $119,596 | -$97,184 | | Total stockholders' equity (deficit) | $201,556 | $(46,799) | +$248,355 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Jade Biosciences, Inc. reported significant net losses for the three and six months ended June 30, 2025, primarily due to increased research and development expenses and a change in the fair value of convertible notes payable | Metric (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Period from June 18, 2024 (Inception) Through June 30, 2024 | | :------------------------------------ | :------------------------------- | :----------------------------- | :---------------------------------------------------------- | | Research and development | $22,547 | $42,570 | $78 | | General and administrative | $5,231 | $8,592 | $512 | | Total operating expenses | $27,778 | $51,162 | $590 | | Loss from operations | $(27,778) | $(51,162) | $(590) | | Interest income | $1,828 | $2,443 | $— | | Change in fair value of Convertible Notes payable | $(6,184) | $(21,584) | $— | | Net loss | $(32,134) | $(70,303) | $(590) | | Net loss per share (basic and diluted) | $(0.86) | $(3.45) | $(0.19) | [Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) The statement reflects significant changes in stockholders' equity, primarily driven by the April 2025 reverse recapitalization, including preferred stock exchange, convertible note conversion, and common stock issuance from Pre-Closing Financing, leading to increased additional paid-in capital and reduced accumulated deficit - The company underwent a reverse recapitalization in April 2025, which involved the exchange of Series Seed convertible preferred stock for Series A non-voting convertible preferred stock, conversion of convertible notes into common stock and pre-funded warrants, and issuance of common stock and pre-funded warrants in the Pre-Closing Financing[14](index=14&type=chunk) | Metric (in thousands) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :------------------------------------ | :--------------------------- | :----------------------- | | Series Seed convertible preferred stock | $2 | $— | | Series A non-voting convertible preferred stock | $— | $2 | | Common stock | $1 | $3 | | Additional paid-in capital | $179 | $318,857 | | Accumulated deficit | $(46,979) | $(117,282) | | Total stockholders' equity (deficit) | $(46,799) | $201,556 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Jade Biosciences, Inc. experienced significant cash outflows from operating activities, offset by substantial cash inflows from financing activities, primarily due to the Pre-Closing Financing, resulting in a net increase in cash and cash equivalents | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Period from June 18, 2024 (Inception) Through June 30, 2024 | | :-------------------------------- | :----------------------------- | :---------------------------------------------------------- | | Net cash used in operating activities | $(38,916) | $— | | Net cash used in investing activities | $(136) | $— | | Net cash provided by financing activities | $190,608 | $— | | Net increase in cash and cash equivalents | $151,556 | $— | | Cash and cash equivalents at end of period | $220,942 | $— | - Non-cash financing activities included the conversion of **$129.2 million** in convertible note principal and accrued interest into common stock and pre-funded warrants, and a non-cash exchange of Series Seed Convertible Preferred Stock for Series A non-voting convertible preferred stock[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of Jade Biosciences, Inc.'s business, significant accounting policies, and the financial impact of key events such as the reverse recapitalization and Pre-Closing Financing, covering various financial statement components [1. Nature of the Business and Basis of Presentation](index=7&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) Jade Biosciences, Inc. (formerly Aerovate Therapeutics, Inc.) is a biopharmaceutical company focused on autoimmune diseases, with lead candidate JADE101 for IgA nephropathy, completed a reverse recapitalization in April 2025, incurred significant operating losses, and expects existing cash to fund operations for at least 12 months - Jade Biosciences, Inc. (formerly Aerovate Therapeutics, Inc.) was established on June 18, 2024, and focuses on developing therapies for autoimmune diseases, with JADE101 as its lead candidate for IgA nephropathy[20](index=20&type=chunk) - On April 28, 2025, the company consummated a reverse recapitalization and Pre-Closing Financing, with Pre-Merger Jade Biosciences, Inc. identified as the accounting acquirer[22](index=22&type=chunk)[26](index=26&type=chunk) - The company has incurred net losses of **$32.1 million** and **$70.3 million** for the three and six months ended June 30, 2025, respectively, and used **$38.9 million** in cash for operating activities during the six months ended June 30, 2025[29](index=29&type=chunk) - As of June 30, 2025, the company had **$220.9 million** in cash and cash equivalents, expected to fund operations for at least **12 months** from the financial statement issuance date[29](index=29&type=chunk)[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the company's significant accounting policies, including foreign currency translation, property and equipment depreciation, lease accounting, classification of convertible preferred stock, and net loss per share calculation - Assets and liabilities in foreign currency are translated at period-end exchange rates, while income and expenses use average rates, with unrealized gains/losses recorded in accumulated other comprehensive loss[33](index=33&type=chunk) - Operating lease liabilities and ROU assets are recorded at the present value of future minimum lease payments, discounted using the incremental borrowing rate, with lease expense recognized straight-line over the term[35](index=35&type=chunk) - Series A Preferred Stock is classified within stockholders' equity as it is not redeemable or puttable, and basic and diluted net loss per share are computed using the two-class method for participating securities[39](index=39&type=chunk)[40](index=40&type=chunk) [3. Reverse Recapitalization and Pre-Closing Financing](index=12&type=section&id=3.%20Reverse%20Recapitalization%20and%20Pre-Closing%20Financing) The reverse recapitalization on April 28, 2025, treated Pre-Merger Jade as the accounting acquirer, assuming Aerovate's net assets of $(448) thousand, with no goodwill or intangible assets recognized, and was accompanied by a Pre-Closing Financing that raised $334.2 million - The Merger was accounted for as a reverse recapitalization, with Pre-Merger Jade deemed the accounting acquirer. Aerovate's net liabilities of **$(448) thousand** were assumed, and no goodwill or intangible assets were recognized[47](index=47&type=chunk)[48](index=48&type=chunk) - The Pre-Closing Financing raised an aggregate of **$334.2 million**, which included **$95.0 million** from Convertible Notes and **$8.3 million** in accrued interest, converting into 43,947,116 shares of Pre-Merger Jade common stock and 12,305,898 pre-funded warrants[25](index=25&type=chunk) [4. Fair Value Measurements](index=14&type=section&id=4.%20Fair%20Value%20Measurements) The company's fair value measurements primarily involve money market funds (Level 1) and convertible notes payable (Level 3), with the convertible notes revalued to $129.2 million before conversion, resulting in a $21.6 million change in fair value for the six months ended June 30, 2025 | Asset/Liability (in thousands) | June 30, 2025 (Total) | December 31, 2024 (Total) | | :----------------------------- | :-------------------- | :------------------------ | | Money market funds | $219,750 | $65,000 | | Convertible Notes payable | $— | $107,600 | - The fair value of Convertible Notes payable increased by **$21.6 million** for the six months ended June 30, 2025, from **$107.6 million** at December 31, 2024, to **$129.2 million** immediately prior to conversion[50](index=50&type=chunk)[56](index=56&type=chunk) - The valuation of Convertible Notes payable utilized a scenario-based analysis incorporating assumptions like time to Next Equity Financing (**0.58-0.77 years**), **90% probability** of Next Equity Financing, **12.0% interest rate**, and **67.0% discount rate**[51](index=51&type=chunk)[52](index=52&type=chunk) [5. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=5.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities significantly increased from December 31, 2024, to June 30, 2025, primarily driven by higher accrued research and development contract costs and accrued employee compensation and benefits | Accrued Expense (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Accrued research and development contract costs | $5,281 | $2,791 | | Accrued employee compensation and benefits | $1,785 | $804 | | Accrued professional and consulting | $1,025 | $530 | | Total | $8,091 | $4,125 | [6. Convertible Notes Payable](index=15&type=section&id=6.%20Convertible%20Notes%20Payable) Jade Biosciences issued $95.0 million in Convertible Notes in July and September 2024, accruing interest at 12.0% per annum, which automatically converted into Pre-Merger Jade common stock and pre-funded warrants on April 28, 2025, resulting in no outstanding convertible notes as of June 30, 2025 - The company issued **$95.0 million** in Convertible Notes in July and September 2024, including **$20.0 million** from a related party (Fairmount)[54](index=54&type=chunk) - The Convertible Notes accrued interest at **12.0% per annum** and automatically converted into common stock, pre-funded warrants, or preferred stock upon a Next Equity Financing or other specified events[54](index=54&type=chunk)[55](index=55&type=chunk) - On April 28, 2025, the Convertible Notes, with a fair value of **$129.2 million** (including accrued interest), converted into 9,433,831 shares of Pre-Merger Jade Common Stock and 4,289,744 Pre-Merger Jade pre-funded warrants, resulting in no outstanding Convertible Notes as of June 30, 2025[56](index=56&type=chunk)[57](index=57&type=chunk) [7. Convertible Preferred Stock and Stockholders' Equity](index=16&type=section&id=7.%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity) This section details the company's equity structure, including pre-funded warrants, convertible preferred stock, and common stock, highlighting the conversion of Series Seed Preferred Stock to Series A Preferred Stock during the Merger and the issuance of common stock and pre-funded warrants in the Pre-Closing Financing - In April 2025, Pre-Merger Jade pre-funded warrants, exercisable for 7,766,247 shares of Pre-Merger Jade Common Stock, were purchased by investors and subsequently converted into Company pre-funded warrants[58](index=58&type=chunk) - As of June 30, 2025, **7,375,394** pre-funded warrants remain outstanding, with **390,853** having been exercised[59](index=59&type=chunk) - The Series Seed Convertible Preferred Stock was converted to **12,622 shares** of Company Series A Preferred Stock in April 2025, which are non-voting but convertible into **1,000 shares** of common stock each[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, the company had **32,626,730 shares** of common stock issued and outstanding, with **36,485,024 shares** reserved for issuance related to preferred stock conversion, pre-funded warrants, and equity incentive plans[64](index=64&type=chunk)[65](index=65&type=chunk) [8. Stock-Based Compensation](index=18&type=section&id=8.%20Stock-Based%20Compensation) Jade Biosciences, Inc. incurred $3.9 million and $6.3 million in stock-based compensation expense for the three and six months ended June 30, 2025, respectively, including expenses for stock options, restricted stock awards, and a liability-classified Parade Warrant Obligation, with significant unrecognized compensation costs remaining - The company recognized **$3.9 million** and **$6.3 million** in total stock-based compensation expense for the three and six months ended June 30, 2025, respectively[76](index=76&type=chunk) | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------------- | :------------------------------- | :----------------------------- | | Research and development | $2,556 | $4,222 | | General and administrative | $1,339 | $2,096 | | Total | $3,895 | $6,318 | - The Parade Warrant Obligation, a liability-classified warrant to purchase **1.00%** of outstanding shares on December 31, 2025, and 2026, resulted in **$1.5 million** and **$2.4 million** in stock-based compensation expense for the three and six months ended June 30, 2025, respectively[74](index=74&type=chunk)[77](index=77&type=chunk) - As of June 30, 2025, total unrecognized compensation cost was **$36.5 million** for unvested stock options (over **3.5 years**), less than **$0.1 million** for unvested RSAs (over **3.1 years**), and **$1.9 million** for the Parade Warrant Obligation (over **0.5 years**)[76](index=76&type=chunk) [9. Income Taxes](index=20&type=section&id=9.%20Income%20Taxes) Jade Biosciences, Inc. recorded no income tax expense for the periods presented due to a full valuation allowance on its deferred tax assets, reflecting uncertainty regarding future taxable income, and is evaluating the potential impacts of the recently enacted One Big Beautiful Bill Act (OBBBA) - The company maintains a full valuation allowance on its deferred tax assets due to uncertainty regarding future taxable income, resulting in no income tax expense for the three and six months ended June 30, 2025, or the period from June 18, 2024 (inception) to June 30, 2024[78](index=78&type=chunk) - The company is evaluating the potential impacts of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, which includes provisions like permanent extension of certain Tax Cuts and Jobs Act provisions and modifications to international tax frameworks[79](index=79&type=chunk) [10. Significant Agreements](index=21&type=section&id=10.%20Significant%20Agreements) Jade Biosciences, Inc. has significant agreements, including the Paragon Option Agreement for antibody discovery and options for JADE-001, JADE-002, and JADE-003 programs, involving milestone payments and royalties, the JADE-001 License Agreement granting exclusive rights for JADE101, and a Cell Line License Agreement with WuXi Biologics Ireland Limited for manufacturing therapeutic products - The Paragon Option Agreement covers antibody discovery for JADE-001, JADE-002, and JADE-003, with Jade having exclusive options to license and potential milestone payments up to **$12.0 million** for clinical development and **$10.0 million** for regulatory milestones per program, plus low-to-mid single-digit tiered royalties[80](index=80&type=chunk)[82](index=82&type=chunk) - For the six months ended June 30, 2025, the company incurred **$2.0 million** for JADE-001, **$4.1 million** for JADE-002 (including a **$1.5 million** milestone payment), and **$1.7 million** for JADE-003 in development costs under the Paragon Option Agreement, recognized as R&D expense[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - The JADE-001 License Agreement grants Jade exclusive rights to APRIL-targeting antibodies, with obligations to pay Paragon up to **$22.0 million** in development and regulatory milestones, including a **$1.5 million** fee paid in December 2024 for JADE101 nomination[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - A Cell Line License Agreement with WuXi Biologics Ireland Limited provides a non-exclusive, worldwide license for manufacturing therapeutic products, incurring non-refundable license fees of **$0.2 million** in November 2024 and **$0.1 million** in June 2025[96](index=96&type=chunk)[97](index=97&type=chunk) [11. Leases](index=26&type=section&id=11.%20Leases) In February 2025, Jade Biosciences, Inc. entered into a noncancelable operating lease for office space in Vancouver, Canada, with a 67-month term, recognizing an operating lease ROU asset and long-term lease liability of $0.8 million each as of June 30, 2025 - The company entered a **67-month** noncancelable operating lease for Vancouver office space in February 2025, with rent commencement on October 1, 2025[99](index=99&type=chunk) | Metric (in thousands) | June 30, 2025 | | :-------------------- | :------------ | | Operating lease ROU asset | $800 | | Long-term lease liability | $792 | | Total maturities | $1,172 | | Less: Imputed interest | $(361) | | Total present value of operating lease liability | $811 | - Operating lease expense for the three and six months ended June 30, 2025, was less than **$0.1 million** and **$0.1 million**, respectively, recorded in general and administrative expenses[100](index=100&type=chunk) [12. Commitments and Contingencies](index=27&type=section&id=12.%20Commitments%20and%20Contingencies) Jade Biosciences, Inc. maintains a 401(k) Plan for employees but has not made matching contributions, provides indemnification to directors and executive officers with potential unlimited future payments, and had no material legal proceedings or claims as of June 30, 2025 - The company maintains a 401(k) Plan but has not recorded any expense related to matching contributions for the periods presented[104](index=104&type=chunk) - Indemnification agreements with directors and executive officers may require unlimited future payments, but no material costs have been incurred to date, and no related liabilities are accrued[105](index=105&type=chunk) - As of June 30, 2025, the company was not a party to any material legal proceedings or claims[106](index=106&type=chunk) [13. Net Loss per Share](index=28&type=section&id=13.%20Net%20Loss%20per%20Share) Jade Biosciences, Inc. reported basic and diluted net loss per share for common and Series A Preferred stockholders, with potentially dilutive securities excluded from diluted EPS calculations due to net losses | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :---------------------------------------------------------------- | :------------------------------- | :----------------------------- | | Net loss per share attributable to common stockholders, basic and diluted | $(0.86) | $(3.45) | | Net loss per share attributable to Series A non-voting convertible preferred stockholders, basic and diluted | $(863.46) | $(3,450.78) | - Weighted-average shares used in computing net loss per share attributable to common stockholders were **28,431,158** for the three months and **15,932,206** for the six months ended June 30, 2025[108](index=108&type=chunk) - Potentially dilutive securities, including outstanding and unvested RSAs (**495,739**) and common stock options (**9,348,097**), were excluded from diluted net loss per share computation as their inclusion would be anti-dilutive[110](index=110&type=chunk) [14. Related Party Transactions](index=28&type=section&id=14.%20Related%20Party%20Transactions) Fairmount, Paragon, and Parade are identified as related parties due to beneficial ownership and board representation, with related party accrued expenses and other current liabilities decreasing from December 31, 2024, to June 30, 2025, primarily due to reduced reimbursable fees under the Paragon Option Agreement - Fairmount beneficially owns over **5%** of the company's capital, has two board representatives, and beneficially owns over **5%** of Paragon. Paragon and Parade each own less than **5%** of the company's share capital[111](index=111&type=chunk) | Related Party Accrued Expenses (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------- | :------------ | :---------------- | | Reimbursable fees under Paragon Option Agreement | $2,357 | $5,430 | | Paragon reimbursable legal fees | $23 | $74 | | Total | $2,380 | $5,504 | [15. Segment Reporting](index=29&type=section&id=15.%20Segment%20Reporting) Jade Biosciences, Inc. operates as a single reportable segment focused on the research and development of its JADE-001, JADE-002, and JADE-003 programs, with the CEO managing operations and allocating resources on a consolidated basis, using consolidated net loss to assess performance - The company has one reportable segment focused on the research and development of JADE-001, JADE-002, and JADE-003 programs[114](index=114&type=chunk) - The CEO manages operations on a consolidated basis, using consolidated net loss for resource allocation and performance assessment[114](index=114&type=chunk) | Operating Expenses (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | JADE-001 external R&D costs | $7,249 | $17,016 | | JADE-002 external R&D costs | $8,356 | $13,510 | | JADE-003 external R&D costs | $926 | $1,659 | | R&D personnel-related costs | $5,710 | $9,662 | | G&A personnel-related costs | $3,118 | $4,827 | | Total operating expenses | $27,778 | $51,162 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Jade Biosciences, Inc.'s financial condition and operational results, highlighting its status as a preclinical biopharmaceutical company, recent corporate developments, significant operating losses, and discussions on liquidity, capital resources, and critical accounting policies [Overview](index=30&type=section&id=Overview) Jade Biosciences, Inc. is a preclinical biopharmaceutical company focused on autoimmune diseases, with JADE101 as its lead candidate, has incurred significant operating losses since inception, funded operations through convertible notes and a Pre-Closing Financing, and expects existing cash to fund operations for at least 12 months - Jade Biosciences is a biopharmaceutical company developing novel biologic therapies for autoimmune diseases, with lead candidate JADE101 targeting APRIL for IgA nephropathy, planning a first-in-human clinical trial in **Q3 2025**[117](index=117&type=chunk) - The company has incurred operating losses since inception, with net losses of **$32.1 million** for the three months and **$70.3 million** for the six months ended June 30, 2025, and an accumulated deficit of **$117.3 million**[119](index=119&type=chunk) - Operations are funded primarily by **$95.0 million** from convertible notes and **$205.0 million** from the Pre-Closing Financing. As of June 30, 2025, cash and cash equivalents were **$220.9 million**, expected to fund operations for at least **12 months**[118](index=118&type=chunk)[125](index=125&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) Recent developments include the consummation of the Merger on April 28, 2025, with Pre-Merger Jade as the accounting acquirer, a Pre-Closing Financing that raised $334.2 million, Aerovate's 1-for-35 reverse stock split, and the company's redomestication from Delaware to Nevada, with common stock continuing to trade on Nasdaq under 'JBIO' - On April 28, 2025, the company completed a Merger, with Pre-Merger Jade Biosciences, Inc. identified as the accounting acquirer for financial reporting purposes[127](index=127&type=chunk)[130](index=130&type=chunk) - The Pre-Closing Financing, completed immediately prior to the Merger, raised an aggregate of **$334.2 million** through the issuance of Pre-Merger Jade common stock and pre-funded warrants[131](index=131&type=chunk)[132](index=132&type=chunk) - Immediately prior to the Merger, Aerovate effected a **1-for-35** reverse stock split, and the company changed its jurisdiction of incorporation from Delaware to Nevada (Redomestication), with its common stock continuing to trade on Nasdaq under 'JBIO'[134](index=134&type=chunk)[135](index=135&type=chunk) [Impact of General Economic Risk Factors on Our Operations](index=36&type=section&id=Impact%20of%20General%20Economic%20Risk%20Factors%20on%20Our%20Operations) Jade Biosciences, Inc. is exposed to significant risks from global economic uncertainties, including inflation, fluctuating interest rates, geopolitical factors, and supply chain disruptions, monitoring their impacts on capital access, manufacturing, clinical trials, and business partners - The company faces significant risks from global economic uncertainties, including inflation, fluctuating interest rates, tariffs, geopolitical factors (Russia-Ukraine, Middle East, China tensions), and supply chain disruptions[136](index=136&type=chunk) - These factors could impact access to capital, ability to manufacture drug products, conduct clinical trials, and affect clinical trial participants, employees, suppliers, vendors, and business partners[136](index=136&type=chunk) [Components of Results of Operations](index=36&type=section&id=Components%20of%20Results%20of%20Operations) Jade Biosciences, Inc. has not generated any revenue to date and does not anticipate product sales in the near future, with operating expenses consisting of research and development (R&D) and general and administrative (G&A) costs, both expected to increase significantly, and maintains a full valuation allowance against deferred tax assets - The company has not generated revenue from product sales and does not expect to in the foreseeable future, depending on successful development and commercialization of product candidates[137](index=137&type=chunk) - Operating expenses comprise research and development (R&D) and general and administrative (G&A) expenses, both projected to increase substantially due to pipeline advancement and public company costs[138](index=138&type=chunk)[141](index=141&type=chunk) - Other income (expense) includes interest income and changes in the fair value of convertible notes payable. A full valuation allowance is maintained against net deferred tax assets due to expected future losses[142](index=142&type=chunk)[143](index=143&type=chunk) [Results of Operations for the Three Months ended June 30, 2025 and the Period from June 18, 2024 (Inception) through June 30, 2024](index=38&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20ended%20June%2030,%202025%20and%20the%20Period%20from%20June%2018,%202024%20(Inception)%20through%20June%2030,%202024) For the three months ended June 30, 2025, Jade Biosciences, Inc. reported a net loss of $32.1 million, a significant increase from $0.6 million in the prior year period, driven by substantial rises in research and development and general and administrative expenses, alongside a $6.2 million negative change in the fair value of convertible notes payable | Metric (in thousands) | Three Months Ended June 30, 2025 | Period from June 18, 2024 (Inception) Through June 30, 2024 | Increase / (Decrease) | | :------------------------------------ | :------------------------------- | :---------------------------------------------------------- | :-------------------- | | Research and development | $22,547 | $78 | $22,469 | | General and administrative | $5,231 | $512 | $4,719 | | Total operating expenses | $27,778 | $590 | $27,188 | | Loss from operations | $(27,778) | $(590) | $(27,188) | | Interest income | $1,828 | $— | $1,828 | | Change in fair value of convertible notes payable | $(6,184) | $— | $(6,184) | | Net loss | $(32,134) | $(590) | $(31,544) | - Research and development expenses for the three months ended June 30, 2025, included **$7.2 million** for JADE-001, **$8.4 million** for JADE-002, **$0.9 million** for JADE-003, and **$5.7 million** in personnel-related costs (including **$1.1 million** stock-based compensation and **$1.5 million** for Parade Warrants)[146](index=146&type=chunk)[151](index=151&type=chunk) - General and administrative expenses for the three months ended June 30, 2025, included **$1.9 million** in professional and consulting fees and **$3.1 million** in personnel-related costs (including **$1.4 million** stock-based compensation)[150](index=150&type=chunk)[152](index=152&type=chunk) [Results of Operations for the Six Months ended June 30, 2025 and the Period from June 18, 2024 (Inception) through June 30, 2024](index=41&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20ended%20June%2030,%202025%20and%20the%20Period%20from%20June%2018,%202024%20(Inception)%20through%20June%2030,%202024) For the six months ended June 30, 2025, Jade Biosciences, Inc. reported a net loss of $70.3 million, significantly higher than the $0.6 million loss in the prior year period, primarily due to substantial increases in research and development and general and administrative expenses, coupled with a $21.6 million negative change in the fair value of convertible notes payable | Metric (in thousands) | Six Months Ended June 30, 2025 | Period from June 18, 2024 (Inception) Through June 30, 2024 | Increase / (Decrease) | | :------------------------------------ | :------------------------------- | :---------------------------------------------------------- | :-------------------- | | Research and development | $42,570 | $78 | $42,492 | | General and administrative | $8,592 | $512 | $8,080 | | Total operating expenses | $51,162 | $590 | $50,572 | | Loss from operations | $(51,162) | $(590) | $(50,572) | | Interest income | $2,443 | $— | $2,443 | | Change in fair value of convertible notes payable | $(21,584) | $— | $(21,584) | | Net loss | $(70,303) | $(590) | $(69,713) | - Research and development expenses for the six months ended June 30, 2025, included **$17.0 million** for JADE-001, **$13.5 million** for JADE-002 (including a **$1.5 million** milestone), **$1.7 million** for JADE-003, and **$9.7 million** in personnel-related costs (including **$1.7 million** stock-based compensation and **$2.5 million** for Parade Warrants)[155](index=155&type=chunk)[161](index=161&type=chunk) - General and administrative expenses for the six months ended June 30, 2025, included **$3.4 million** in professional and consulting fees and **$4.8 million** in personnel-related costs (including **$2.1 million** stock-based compensation)[159](index=159&type=chunk)[160](index=160&type=chunk)[168](index=168&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Jade Biosciences, Inc. has incurred significant operating losses and relies on proceeds from convertible notes and the Pre-Closing Financing for liquidity. As of June 30, 2025, the company had $220.9 million in cash and cash equivalents, expected to fund operations for at least 12 months. Future funding requirements are substantial and depend on development progress, regulatory approvals, and commercialization efforts, with potential for equity offerings, debt financings, or collaborations - The company has funded operations primarily through **$95.0 million** from Convertible Notes and **$205.0 million** from the Pre-Closing Financing[163](index=163&type=chunk) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | | :-------------------------------- | :----------------------------- | | Net cash used in operating activities | $(38,916) | | Net cash used in investing activities | $(136) | | Net cash provided by financing activities | $190,608 | | Net increase in cash and cash equivalents | $151,556 | - Net cash used in operating activities for the six months ended June 30, 2025, was **$38.9 million**, driven by a net loss of **$70.3 million**, partially offset by non-cash charges of **$27.9 million** (including **$21.6 million** change in fair value of convertible notes and **$6.4 million** stock-based compensation)[166](index=166&type=chunk) - Net cash provided by financing activities was **$190.6 million**, primarily from the **$205.0 million** gross proceeds of the Pre-Closing Financing, partially offset by **$14.5 million** in deferred offering costs[170](index=170&type=chunk) - Future funding requirements are substantial and depend on the progress of R&D programs, clinical trials, regulatory approvals, and commercialization efforts, with additional capital needed through equity, debt, or collaborations[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Contractual Obligations and Other Commitments](index=48&type=section&id=Contractual%20Obligations%20and%20Other%20Commitments) Jade Biosciences, Inc. enters into cancellable contracts with CROs, CMOs, and other vendors for research, clinical trials, and manufacturing. As of June 30, 2025, the company had no non-cancellable obligations under these agreements, but has contractual lease obligations for its Vancouver office and commitments under the Paragon Option Agreement and JADE-001 License Agreement - The company's contracts with CROs, CMOs, and other vendors are generally cancellable, with no non-cancellable obligations as of June 30, 2025[177](index=177&type=chunk) - Significant commitments include lease obligations for the Vancouver office and agreements under the Paragon Option Agreement and JADE-001 License Agreement[177](index=177&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section outlines critical accounting policies requiring significant judgment and estimates, including research and development contract cost accruals, stock-based compensation valuation using the Black-Scholes model, and the determination of common stock fair value. It also discusses the accounting for convertible notes under the fair value option prior to their conversion - Research and development contract costs are accrued based on estimates of services received and efforts expended, with significant judgments made in determining accrual balances[180](index=180&type=chunk)[182](index=182&type=chunk) - Stock-based awards are measured at fair value using the Black-Scholes model for stock options and the difference between purchase price and fair value for restricted stock awards, with compensation expense recognized over the vesting period[183](index=183&type=chunk)[184](index=184&type=chunk) - Prior to the Merger, common stock valuations were prepared by a third-party firm using a hybrid method, including an option pricing method (OPM) and probability-weighted expected return method (PWERM)[186](index=186&type=chunk) - Convertible Notes were accounted for under the Fair Value Option (ASC 825) due to embedded derivatives, re-measured at fair value at each balance sheet date until conversion, with changes recorded in other expense[191](index=191&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Jade Biosciences, Inc. is not required to provide quantitative and qualitative disclosures about market risk - Jade Biosciences, Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[195](index=195&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the principal executive and financial officers, evaluated the company's disclosure controls and procedures as effective as of June 30, 2025. There were no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[196](index=196&type=chunk)[197](index=197&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[198](index=198&type=chunk) [PART II. OTHER INFORMATION](index=54&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Jade Biosciences, Inc. is not currently involved in any material legal proceedings or claims that could have a significant adverse effect on its operations or financial condition - Management believes there are no pending claims or actions that could have a material adverse effect on the company's results of operations or financial condition[200](index=200&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with investing in Jade Biosciences, Inc., covering its limited operating history, substantial capital requirements, and expected future losses. It also details risks related to product discovery, development, and commercialization, reliance on third parties, business operations, intellectual property, government regulation, and common stock ownership [Risk Factor Summary](index=54&type=section&id=Risk%20Factor%20Summary) A summary of key risks highlights the company's preclinical stage, need for substantial additional capital, expected continued losses, intense competition, and dependence on the success of JADE101, alongside potential development delays, unproven discovery approaches, and regulatory challenges - The company is a preclinical stage biotechnology company with a limited operating history, no clinical trials completed, and no approved products, making it difficult to assess future success[203](index=203&type=chunk) - Substantial additional capital is required to finance operations; inability to raise funds could lead to delays or elimination of development programs[203](index=203&type=chunk) - The company expects to incur losses for the foreseeable future and may never achieve profitability, with no revenue generated from product candidates to date[203](index=203&type=chunk) - Significant competition exists from entities developing product candidates for the same diseases, and the company is substantially dependent on the success of JADE101[203](index=203&type=chunk) [Risks Related to Our Limited Operating History, Financial Position and Capital Requirements](index=57&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Position%20and%20Capital%20Requirements) Jade Biosciences, Inc. faces significant risks due to its preclinical stage and limited operating history, including uncertainty in clinical trial completion, regulatory approvals, and commercialization, requiring substantial additional capital to fund operations, and anticipating continued losses and increased expenses for the foreseeable future - As a preclinical stage company with limited operating history, Jade Biosciences has no significant experience in initiating or completing clinical trials, making future success and viability difficult to assess[206](index=206&type=chunk)[207](index=207&type=chunk) - The company will require substantial additional funding beyond its current **$220.9 million** cash and cash equivalents (as of June 30, 2025) to continue operations, with potential for dilution or operational restrictions if financing is not secured on favorable terms[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - Jade Biosciences expects to continue incurring significant net losses, having reported **$32.1 million** for Q2 2025 and an accumulated deficit of **$117.3 million**, with profitability dependent on successful product development and commercialization[212](index=212&type=chunk)[213](index=213&type=chunk) [Risks Related to Our Discovery, Development and Commercialization](index=61&type=section&id=Risks%20Related%20to%20Our%20Discovery,%20Development%20and%20Commercialization) Jade Biosciences, Inc. faces intense competition in drug development, particularly for autoimmune diseases, and its preclinical-stage product candidates (JADE101, JADE201, JADE-003) may fail or experience delays in development, with success highly dependent on JADE101's unproven approaches, challenges in patient enrollment, potential for adverse events, and the risk of internal program competition, alongside potential FDA non-acceptance of foreign clinical trial data - The company faces significant competition from multinational biopharmaceutical companies and others with greater resources and expertise in research, development, manufacturing, and commercialization[219](index=219&type=chunk) - JADE101, JADE201, and JADE-003 are in preclinical development and may fail or be delayed, impacting viability. The success of JADE101 is substantially dependent on observing IgA suppression and improved pharmacokinetic properties in humans, which is not guaranteed[223](index=223&type=chunk)[227](index=227&type=chunk) - The company's discovery approach, leveraging half-life extension and enhanced binding affinity, is unproven in humans, and clinical data may not translate from preclinical studies, posing risks to therapeutic effectiveness and safety[233](index=233&type=chunk)[234](index=234&type=chunk) - Difficulties in patient enrollment for clinical trials, especially for small patient populations like IgAN, could delay development activities. Preliminary or interim clinical data may change upon full analysis, affecting conclusions[241](index=241&type=chunk)[245](index=245&type=chunk) - Future clinical trials may reveal significant adverse events or undesirable side effects, such as decreased IgG levels observed with similar anti-APRIL antibodies, which could halt development, inhibit regulatory approval, or limit market acceptance[247](index=247&type=chunk) - Conducting clinical trials outside the United States, such as the planned Phase 1 trial in New Zealand, carries the risk that the FDA may not accept the data, potentially requiring additional costly and time-consuming trials[254](index=254&type=chunk) [Risks Related to Our Reliance on Third Parties](index=77&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Jade Biosciences, Inc. heavily relies on collaborations and licensing arrangements with third parties, particularly Paragon, for discovery capabilities and product candidate rights. The success of these collaborations is uncertain, and any failure to maintain them or comply with obligations could negatively impact the business. The company also depends on third-party CROs and CMOs for preclinical studies, clinical trials, and manufacturing, facing risks from their performance, compliance, and geopolitical factors, such as the BIOSECURE Act affecting foreign CMOs - The company relies on collaborations and licensing arrangements with third parties, especially Paragon, for discovery capabilities and product candidate rights. Fairmount, a related party, has significant influence over both Jade and Paragon[256](index=256&type=chunk)[257](index=257&type=chunk) - Failure to maintain collaborations, or if collaborators fail to perform contractual duties, could adversely affect the pipeline and development timeline, potentially leading to loss of intellectual property rights[258](index=258&type=chunk) - The company relies on third-party CROs and CMOs to conduct preclinical studies, clinical trials, and manufacturing, and has limited control over their activities, compliance with GCP/cGMP, and ability to meet deadlines[264](index=264&type=chunk)[265](index=265&type=chunk) - Reliance on foreign CROs and CMOs, including WuXi Biologics (Hong Kong), exposes the company to risks from U.S. legislation like the BIOSECURE Act, trade restrictions, and geopolitical instability, which could increase costs, delay supply, or prohibit collaboration[266](index=266&type=chunk)[267](index=267&type=chunk) - The company has a single source for JADE101 supply, and disruptions could negatively affect clinical development. CMOs may also face manufacturing difficulties, quality control issues, or regulatory non-compliance, impacting product supply and business operations[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) [Risks Related to Our Business and Operations](index=83&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) Jade Biosciences, Inc. anticipates significant organizational growth, requiring effective management and recruitment of qualified personnel. Operating in foreign markets introduces additional regulatory and intellectual property risks. The company's market opportunity estimates may be inaccurate, and misconduct by employees or third parties could lead to regulatory sanctions. Information technology systems are vulnerable to security breaches and failures, potentially causing data loss and operational disruptions. Compliance with evolving privacy, data protection, and environmental laws is crucial, and adverse tax changes could impact financial condition. Future acquisitions or alliances may not yield expected benefits, and cash held in financial institutions exceeds insured limits, posing a risk in case of bank failures - The company expects significant growth in employees and operations, requiring effective management, expansion of facilities, and recruitment of qualified personnel, which may be challenging due to limited resources and management experience[271](index=271&type=chunk)[272](index=272&type=chunk) - Operating in foreign markets subjects the company to additional regulatory burdens, varying requirements for safety and efficacy, and reduced protection of intellectual property rights[273](index=273&type=chunk)[274](index=274&type=chunk) - Market opportunity estimates and growth forecasts are subject to significant uncertainty and may prove inaccurate, potentially leading to lower-than-expected revenues if addressable patient populations or approved indications are smaller[275](index=275&type=chunk)[276](index=276&type=chunk) - Misconduct by employees, contractors, or collaborators, including noncompliance with FDA regulations, healthcare laws, or data privacy standards, could result in significant penalties, reputational harm, and operational disruptions[277](index=277&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) - Internal and third-party information technology systems are vulnerable to security breaches, cyber-attacks, and failures, which could lead to data loss, operational interruptions, significant liabilities, and reputational damage[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) - The company is subject to environmental, health, and safety laws, and adverse legislative or regulatory tax changes (e.g., Inflation Reduction Act, JOBS Act, OBBBA) could negatively impact its financial condition[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - Future acquisitions or strategic alliances may not realize expected benefits, and cash balances exceeding federally-insured limits at financial institutions pose a risk in the event of bank failures[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [Risks Related to Our Intellectual Property](index=91&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Jade Biosciences, Inc. faces substantial risks regarding its intellectual property, as it does not currently own issued patents and relies on in-licensed rights, making patent protection uncertain. The early stage of its IP portfolio, potential for challenges to patent validity, and reliance on trade secrets expose the company to competitive threats. Difficulties in obtaining or maintaining necessary third-party licenses, disputes over inventorship, and the limited lifespan of patents further complicate its competitive position. Changes in patent laws and interpretations, such as those from the Leahy-Smith Act and Supreme Court rulings, could diminish patent value and enforcement capabilities - The company does not currently own any issued patents or pending patent applications and relies on in-licensed rights (e.g., JADE-001 from Paragon), making its ability to obtain and protect patent rights uncertain[296](index=296&type=chunk)[297](index=297&type=chunk) - The intellectual property portfolio is at an early stage, and future licensed or owned patent applications may not result in issued patents, or issued patents may be infringed, designed around, invalidated, or difficult to enforce[297](index=297&type=chunk) - Reliance on trade secrets carries risks of disclosure or misappropriation, which could erode competitive position. Confidentiality agreements may not be fully effective[298](index=298&type=chunk) - The company may be subject to intellectual property lawsuits or need to file them, incurring substantial costs and diverting management attention. Competitors may infringe patents, or third-party patents could be alleged to render product candidates infringing[307](index=307&type=chunk)[308](index=308&type=chunk) - Changes in U.S. patent laws (e.g., Leahy-Smith Act) and judicial interpretations (e.g., Amgen v. Sanofi) have increased uncertainties and costs, potentially narrowing patent scope and weakening patent owners' rights, especially for antibody claims[316](index=316&type=chunk)[317](index=317&type=chunk) - Obtaining and maintaining patent protection requires compliance with various procedural and fee payment requirements, and non-compliance can lead to abandonment or lapse of patent rights[321](index=321&type=chunk) - The company may fail to identify relevant third-party patents or incorrectly interpret their scope or expiration, adversely affecting its ability to develop and market products[322](index=322&type=chunk) [Risks Related to Government Regulation](index=101&type=section&id=Risks%20Related%20to%20Government%20Regulation) Jade Biosciences, Inc. faces lengthy, expensive, and unpredictable regulatory approval processes from the FDA and foreign authorities, with no guarantee of approval or timely commercialization. Post-approval, the company will be subject to extensive ongoing regulatory obligations and potential penalties for non-compliance. Disruptions at regulatory agencies, healthcare reform measures, and strict pricing controls in foreign markets could further hinder operations and revenue generation. The pursuit of accelerated approval also carries risks, including the need for confirmatory trials and potential withdrawal of approval - The regulatory approval processes (FDA and foreign) are lengthy, expensive, and unpredictable, with no guarantee of approval for product candidates like JADE101 and JADE201[328](index=328&type=chunk)[329](index=329&type=chunk) - Even if approved, regulatory authorities may impose limitations on use, require post-marketing studies, or approve with undesirable labeling, significantly impacting commercialization[331](index=331&type=chunk) - The company must meet stringent chemistry, manufacturing, and control (CMC) requirements for product approval, a complex task requiring specialized expertise[332](index=332&type=chunk) - Product candidates approved as biologics may face competition from biosimilars sooner than anticipated if exclusivity periods are shortened or the FDA does not consider them reference products[333](index=333&type=chunk)[335](index=335&type=chunk) - Ongoing regulatory obligations post-approval, including reporting, surveillance, and cGMP/GCP compliance, are extensive and can lead to significant expense or penalties if not met[336](index=336&type=chunk) - Disruptions at regulatory agencies (FDA, SEC) due to funding shortages or global health concerns could delay reviews and approvals. Healthcare and regulatory legislative reforms may also adversely affect the business[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) - Business operations are subject to healthcare regulatory laws (fraud, abuse), and non-compliance can lead to significant penalties. Unfavorable pricing regulations and reimbursement policies, especially in foreign markets, could harm revenue[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk)[345](index=345&type=chunk) - The company is subject to U.S. and foreign export/import controls, sanctions, anti-corruption, and anti-money laundering laws, with violations potentially leading to criminal liability and other serious consequences[344](index=344&type=chunk) - Seeking accelerated approval for product candidates does not guarantee faster development or approval and may require costly post-approval confirmatory studies, with potential for withdrawal if clinical benefit is not verified[346](index=346&type=chunk)[347](index=347&type=chunk) [General Risk Factors](index=111&type=section&id=General%20Risk%20Factors) Jade Biosciences, Inc. faces risks of costly product liability claims, which may exceed insurance coverage. Its business is vulnerable to economic downturns, inflation, fluctuating interest rates, and geopolitical events, which could materially impact financial results. These macroeconomic conditions can disrupt clinical trials, manufacturing, and access to capital - The company is exposed to potential product liability and professional indemnity risks inherent in pharmaceutical development, with future claims potentially exceeding insurance coverage or making insurance difficult to maintain[348](index=348&type=chunk) - Litigation costs and outcomes, including securities, employment, and intellectual property matters, could result in substantial costs and diversion of resources[349](index=349&type=chunk) - The business is susceptible to adverse effects from economic downturns, inflation, fluctuating interest rates, natural disasters, public health crises, political crises, and geopolitical events, which can disrupt operations and access to capital[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) [Risks Related to the Ownership of Our Common Stock](index=113&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The market price of Jade Biosciences, Inc.'s common stock is expected to remain volatile due to various factors, including clinical trial results, financial projections, and macroeconomic conditions. Nevada law and the company's organizational documents contain anti-takeover provisions. The exclusive forum provision in its bylaws may limit stockholders' ability to choose a judicial forum. The company will incur additional costs as a public company and, as an 'emerging growth company,' may have reduced disclosure requirements. The ability to use net operating loss carryforwards may be limited, and the class structure of capital stock may limit common stockholders' influence - The market price of the common stock is expected to be volatile due to factors such as clinical trial results, financial projections, acquisitions, regulatory actions, intellectual property disputes, and general market conditions[353](index=353&type=chunk)[354](index=354&type=chunk) - Nevada law and the company's articles of incorporation and bylaws contain anti-takeover provisions that may discourage, delay, or prevent changes in ownership or management[355](index=355&type=chunk) - The company's bylaws limit the judicial forum for certain actions, potentially restricting stockholders' ability to choose a favorable forum or increasing enforcement expenses[356](index=356&type=chunk)[357](index=357&type=chunk) - The company will incur additional costs and demands on management due to compliance with public company laws and regulations, including Sarbanes-Oxley Act requirements[358](index=358&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) - The ability to use net operating loss (NOL) carryforwards and other tax attributes may be limited due to ownership changes, including the recent merger, potentially increasing future income tax liability[371](index=371&type=chunk) - The class structure of capital stock, with non-voting Series A Preferred Stock convertible into common stock, may limit common stockholders' ability to influence corporate matters[372](index=372&type=chunk) - As an 'emerging growth company,' the company benefits from reduced disclosure requirements, which may make its common stock less attractive to some investors and potentially increase stock price volatility[373](index=373&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=122&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[376](index=376&type=chunk) [Item 3. Defaults Upon Senior Securities](index=122&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[377](index=377&type=chunk) [Item 4. Mine Safety Disclosures](index=122&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety di

[Executive Summary and Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary) Jade Biosciences' Q2 2025 highlights include a reverse merger, significant financing, and JADE101 pipeline advancement [Q2 2025 Highlights and Strategic Direction](index=1&type=section&id=Q2%202025%20Highlights%20and%20Strategic%20Direction) Jade Biosciences reported a productive second quarter, marked by the closing of a reverse merger and significant financing, advancing its pipeline, particularly JADE101, towards clinical-stage development - Closed a reverse merger and significant financing during the quarter[2](index=2&type=chunk) - Continued to advance a pipeline aimed at delivering potentially best-in-class therapies for systemic and organ-specific autoimmune diseases[2](index=2&type=chunk) - Presented compelling preclinical data on JADE101, supporting its potential as a best-in-class disease-modifying therapy for IgA nephropathy (IgAN)[2](index=2&type=chunk) - Anticipates transitioning into a clinical-stage company in the coming months[2](index=2&type=chunk) [Pipeline and Corporate Updates](index=1&type=section&id=Pipeline%20and%20Corporate%20Updates) Jade Biosciences provided pipeline updates for JADE101 and JADE201, alongside a key corporate appointment [JADE101 Program Update](index=1&type=section&id=JADE101%3A%20potentially%20best-in-class%20anti-APRIL%20monoclonal%20antibody%20for%20IgA%20nephropathy%20%28IgAN%29) Jade Biosciences provided a comprehensive update on JADE101, its lead candidate for IgA nephropathy, highlighting strong preclinical data and outlining the plan for its Phase 1 clinical trial [Preclinical Data and Mechanism](index=1&type=section&id=JADE101%20Preclinical%20Data) Preclinical data for JADE101 demonstrated ultra-high APRIL binding affinity, potent inhibition of APRIL signaling, and sustained IgA suppression, supporting its potential for best-in-class activity and convenient dosing - Presented preclinical data for JADE101 at the 62nd European Renal Association Congress[4](index=4&type=chunk)[5](index=5&type=chunk) - JADE101 showed **ultra-high APRIL binding affinity (~50 femtomolar KD, >750-fold higher than sibeprenlimab)** and potent, complete inhibition of APRIL signaling in vitro[5](index=5&type=chunk) - Demonstrated deep, sustained IgA suppression with an extended half-life of approximately **27 days** after a single **30 mg/kg intravenous dose** in non-human primates (NHPs)[5](index=5&type=chunk) - Pharmacokinetic (PK) profile in NHPs supports potential for convenient, infrequent subcutaneous dosing (no more than every eight weeks) in clinical settings[5](index=5&type=chunk) - Binds a unique epitope on trimeric APRIL protein, selected to avoid high molecular weight immune complexes, aiming for predictable PK and reduced immunogenicity risk[5](index=5&type=chunk) [Clinical Development Plan](index=1&type=section&id=JADE101%20Clinical%20Development%20Plan) The Phase 1 clinical trial for JADE101 is set to begin in Q3 2025, with interim data expected in the first half of 2026 to inform later-stage studies - Phase 1 healthy-volunteer study of JADE101, administered as a subcutaneous injection, is expected to begin in the **third quarter of 2025**[4](index=4&type=chunk)[5](index=5&type=chunk) - Interim, biomarker-rich data are anticipated in the **first half of 2026**, intended to guide dose and dose interval selection for later-stage JADE101 studies in IgAN patients[4](index=4&type=chunk)[5](index=5&type=chunk) [JADE201 Program Update](index=2&type=section&id=JADE201%3A%20development%20candidate%20from%20the%20JADE-002%20antibody%20discovery%20program) JADE201, a development candidate from the JADE-002 program, is on track to enter the clinic in the first half of 2026, with potential applications in multiple systemic autoimmune diseases - JADE201, the development candidate from the JADE-002 antibody discovery program, remains on track to enter the clinic in the **first half of 2026**[8](index=8&type=chunk) - JADE201 has the potential to be evaluated in multiple systemic autoimmune diseases[8](index=8&type=chunk) - Further details on JADE201 are expected to be disclosed in the **second half of 2025**[8](index=8&type=chunk) [Corporate Developments](index=2&type=section&id=Corporate) Jade Biosciences announced the appointment of Brad Dahms as its new Chief Financial Officer - Appointed Brad Dahms as Chief Financial Officer (CFO), an accomplished biopharmaceutical executive with extensive experience in CFO and senior leadership roles[6](index=6&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Jade Biosciences reported its Q2 2025 financial results, detailing a net loss and a robust cash position [Financial Summary](index=2&type=section&id=Financial%20Summary) Jade Biosciences reported a net loss of $32.1 million for Q2 2025, supported by $220.9 million in cash and cash equivalents, with R&D and G&A expenses totaling $22.5 million and $5.2 million respectively Q2 2025 Key Financial Metrics | Metric | Q2 2025 (in millions) | | :------------------------------------ | :-------------------- | | Cash & Cash Equivalents (as of June 30, 2025) | $220.9 | | Research and Development (R&D) expenses | $22.5 | | General and Administrative (G&A) expenses | $5.2 | | Other expenses, net | $4.4 | | Net loss | $(32.1) | | Shares Outstanding (as of June 30, 2025) | 52.6 | - Cash and cash equivalents of **$220.9 million** as of June 30, 2025, supports cash runway through the **end of 2027**, including multiple clinical inflection points[4](index=4&type=chunk)[8](index=8&type=chunk) - Net loss totaled **$32.1 million** for the second quarter of 2025, which includes non-cash stock-based compensation of **$4.0 million**[8](index=8&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows a significant increase in cash and total assets, and a shift from a stockholders' deficit to a positive equity position, primarily driven by recent financing activities Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $220,942 | $69,386 | +$151,556 | | Other assets | $3,026 | $3,413 | -$387 | | Total assets | $223,968 | $72,799 | +$151,169 | | Total liabilities | $22,412 | $119,596 | -$97,184 | | Total convertible preferred stock and stockholders' equity (deficit) | $201,556 | $(46,797) | +$248,353 | - Cash and cash equivalents increased by **$151.6 million** from December 31, 2024, to June 30, 2025[14](index=14&type=chunk) - Total liabilities decreased significantly by **$97.2 million**, while total stockholders' equity shifted from a deficit of **$(46.8) million** to a positive **$201.6 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) The company reported a net loss of $32.1 million for Q2 2025 and $70.3 million for the six months ended June 30, 2025, driven by increased R&D and G&A expenses, and a significant expense from the change in fair value of convertible notes Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Period from June 18, 2024 (Inception) Through June 30, 2024 | | :-------------------------------------------------------------------------------- | :------------------------------- | :----------------------------- | :---------------------------------------------------------- | | Research and development | $22,547 | $42,570 | $78 | | General and administrative | $5,231 | $8,592 | $512 | | Total operating expenses | $27,778 | $51,162 | $590 | | Loss from operations | $(27,778) | $(51,162) | $(590) | | Interest income | $1,828 | $2,443 | — | | Change in fair value of Convertible Notes payable | $(6,184) | $(21,584) | — | | Total other expense, net | $(4,356) | $(19,141) | — | | Net loss | $(32,134) | $(70,303) | $(590) | | Net loss per share attributable to common stockholders, basic and diluted | $(0.86) | $(3.45) | $(0.19) | - Research and development expenses increased substantially to **$22.5 million** for Q2 2025 and **$42.6 million** for the six months ended June 30, 2025, reflecting active pipeline development[8](index=8&type=chunk)[16](index=16&type=chunk) - Other expenses, net, for Q2 2025 included a **$6.2 million** expense from the change in fair value of convertible notes, partially offset by **$1.8 million** in interest income[8](index=8&type=chunk)[16](index=16&type=chunk) [About Jade Biosciences, Inc.](index=3&type=section&id=About%20Jade%20Biosciences%2C%20Inc.) Jade Biosciences is a biotech company developing best-in-class therapies for autoimmune diseases, with JADE101 as its lead [About Jade Biosciences, Inc.](index=3&type=section&id=About%20Jade%20Biosciences%2C%20Inc.) Jade Biosciences is a biotechnology company focused on developing best-in-class therapies for autoimmune diseases, with a pipeline including lead candidate JADE101 for IgA nephropathy and other preclinical programs - Focused on developing best-in-class therapies to address critical unmet needs in autoimmune diseases[9](index=9&type=chunk) - Lead candidate, JADE101, targets the cytokine APRIL for the treatment of immunoglobulin A nephropathy[9](index=9&type=chunk) - Pipeline also includes JADE201 and an undisclosed antibody discovery program, JADE-003, both in preclinical development[9](index=9&type=chunk) - Launched based on assets licensed from Paragon Therapeutics, an antibody discovery engine[9](index=9&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a cautionary disclaimer for forward-looking statements about Jade's future pipeline and financial performance [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary disclaimer, indicating that certain statements about Jade's future pipeline, business, and financial performance are forward-looking and subject to various risks and uncertainties - Includes express or implied statements relating to Jade's expectations, hopes, beliefs, intentions, or strategies regarding the future of its pipeline and business[10](index=10&type=chunk) - Forward-looking statements involve risks and uncertainties that may cause actual results or performance to be materially different, such as trial delays, failure to demonstrate safety/efficacy, unanticipated costs, and regulatory approval issues[10](index=10&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the date they are made, and Jade does not undertake any duty to release public updates or revisions[10](index=10&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Contact details for media and investor inquiries regarding Jade Biosciences [Contact Information](index=4&type=section&id=Contact%20Information) Contact details for media and investor inquiries regarding Jade Biosciences - For media and investor inquiries, contact Priyanka Shah at Media@JadeBiosciences.com, IR@JadeBiosciences.com, or 908-447-6134[12](index=12&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 28, 2025 Jade Biosciences, Inc. (Exact name of Registrant as specified in its charter) Nevada 001-40544 83-1377888 (State or other jurisdiction of incorporation) (Commission File Number) 221 Crescent St., Building 23 Suite 105 Waltham, MA 02453 (Address of principal executive offices) (Zi ...

Product Development - AV-101, the only product candidate in development, did not meet primary or secondary endpoints in the Phase 2b/Phase 3 IMPAHCT study, leading to the decision to halt its development[76][78]. - The successful development of future product candidates remains highly uncertain, with no estimated timelines or costs available[99]. Workforce and Expenses - As of March 31, 2025, approximately 92% of the workforce has been terminated, resulting in costs of approximately $6.5 million related to severance benefits[79]. - Research and development expenses have been incurred for shutting down clinical trials and operations following the halt of AV-101 development[98]. - Research and development expenses for Q1 2025 were $0.0 million, a decrease of $20.1 million compared to $20.1 million in Q1 2024, primarily due to the discontinuation of clinical operations[104]. - General and administrative expenses for Q1 2025 were $3.4 million, down from $4.5 million in Q1 2024, reflecting a decrease of $1.2 million mainly from reduced headcount-related costs[105]. - Total operating expenses for Q1 2025 were $3.4 million, a significant decrease of $21.2 million from $24.6 million in Q1 2024[103]. - Net loss for Q1 2025 was $2.5 million, compared to a net loss of $23.2 million in Q1 2024, representing an improvement of $20.7 million[103]. Financial Position - Cash and cash equivalents and short-term investments as of March 31, 2025, totaled $76.2 million, expected to fund operations for at least the next twelve months[110]. - Net cash used in operating activities for Q1 2025 was $2.4 million, a significant reduction from $23.7 million in Q1 2024[119]. - Net cash provided by investing activities for Q1 2025 was $12.9 million, compared to $8.8 million in Q1 2024[121]. - The company has received aggregate net proceeds of $79.8 million from the sale of convertible preferred stock and $5.0 million from convertible promissory notes to related parties since inception[107]. - As of March 31, 2025, approximately $6.0 million of shares remain available for sale under the At-the-Market Offering Program[109]. - The company’s future capital requirements will depend on the costs and timing of the Merger and any future product development efforts[111]. Merger and Corporate Actions - A merger agreement was entered into on October 30, 2024, with Jade Biosciences, Inc., involving a two-step merger process[80][82]. - The merger is expected to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code[80]. - The merger is subject to closing conditions, including stockholder approvals and Nasdaq's approval for listing shares[86]. - A special cash dividend of $69.6 million, or approximately $2.40 per share, was declared, payable to stockholders of record as of April 25, 2025[92]. - An "at-the-market" offering program was established to sell up to $75.0 million of common stock, generating $67.9 million in net proceeds as of March 31, 2025[95]. Market Risks and Economic Factors - The company does not believe that interest rate fluctuations have had a material effect on its results of operations during the three months ended March 31, 2025 and 2024[127]. - The company is exposed to market risk related to changes in foreign currency exchange rates but does not currently hedge this risk, believing it has not materially affected operations during the three months ended March 31, 2025 and 2024[128]. - Inflation has generally increased the company's cost of labor and research and development contract costs, but it does not believe inflation has had a material impact on its financial position or results of operations to date[129]. - The company may experience some effects from rising inflation rates in the near future, particularly on clinical trial costs and labor costs to attract and retain qualified personnel[129].

Core Viewpoint - Aerovate Therapeutics has received stockholder approval for a merger with Jade Biosciences, which includes a 1-for-35 reverse stock split of Aerovate's common stock, set to take effect prior to the merger closing [1][2][3]. Group 1: Merger and Stock Split Details - The Board of Directors approved a reverse stock split at a ratio of 1-for-35, reducing Aerovate's outstanding common stock from approximately 30 million shares to about 0.8 million shares [2][3]. - The reverse stock split will not affect the number of authorized shares, which has been increased from 150 million to 300 million shares in connection with the merger [3]. - Following the merger, the combined company's common stock will trade under the new name "Jade Biosciences, Inc." with the ticker symbol "JBIO" starting April 29, 2025 [2]. Group 2: Cash Dividend and Shareholder Impact - A special cash dividend of $69.6 million, estimated at $2.40 per share, will be payable to Aerovate's stockholders of record as of April 25, 2025, unaffected by the reverse stock split [5]. - Stockholders entitled to fractional shares due to the reverse stock split will receive a cash payment equivalent to the fraction of a share multiplied by the closing price on April 28, 2025 [3]. Group 3: Company Profiles - Aerovate Therapeutics focuses on improving the lives of patients with rare cardiopulmonary diseases [7]. - Jade Biosciences is developing therapies for autoimmune diseases, with its lead asset targeting immunoglobulin A nephropathy and a first-in-human trial expected in the second half of 2025 [8].

Core Viewpoint - Aerovate Therapeutics, Inc. has declared a special cash dividend of $69.6 million, approximately $2.40 per share, in connection with its merger with Jade Biosciences, Inc. [1] Company Overview - Aerovate Therapeutics is a biotechnology company focused on improving the lives of patients with rare cardiopulmonary diseases [5] - Jade Biosciences is developing therapies for autoimmune diseases, with its lead asset targeting IgA nephropathy [6] Dividend Details - The cash dividend will be payable to stockholders of record as of April 25, 2025, with a payment date scheduled for April 29, 2025 [1] - The estimated per share dividend is based on 28,985,019 shares of Aerovate's common stock outstanding as of April 9, 2025 [1] Merger Information - The payment of the cash dividend is contingent upon the closing of the merger, expected to occur around April 28, 2025, pending stockholder approval [3] - A special meeting for Aerovate's stockholders to vote on the merger is scheduled for April 16, 2025 [3]

Core Viewpoint - Aerovate Therapeutics, Inc. expects to declare a cash dividend of approximately $67.6 to $69.6 million to pre-Merger stockholders in connection with its merger with Jade Biosciences, Inc. [1][2] Company Overview - Aerovate Therapeutics is a biotechnology company focused on improving the lives of patients with rare cardiopulmonary diseases [4] - Jade Biosciences is developing therapies for autoimmune diseases, with its lead asset targeting immunoglobulin A nephropathy [5] Merger Details - The cash dividend is contingent upon the approval of Aerovate's board of directors and is expected to be announced later in April 2025 [2] - A special meeting for Aerovate's stockholders to vote on the merger is scheduled for April 16, 2025, with the closing expected by April 30, 2025 [2][3] Financial Information - As of April 4, 2025, there are 28,985,019 shares of Aerovate's common stock outstanding [1]

Development and Clinical Trials - Aerovate Therapeutics halted the development of AV-101 after the Phase 2b trial did not meet its primary endpoint for improvement in pulmonary vascular resistance (PVR) compared to placebo[22]. - The Phase 2b trial results showed no meaningful improvements in the secondary endpoint of change in six-minute walk distance (6MWD) across all dose groups[38]. - The company has halted enrollment in the Phase 3 clinical trial for AV-101 and is not currently pursuing further clinical development of this product[198]. - The biotechnology and pharmaceutical industries are characterized by intense competition, with the company halting enrollment in the Phase 3 study of AV-101 in PAH as of June 2024[60]. Workforce and Financial Impact - Approximately 92% of Aerovate's workforce, totaling 47 individuals, were terminated as part of the Workforce Reduction Plan, incurring costs of approximately $6.7 million[23]. - The company is undertaking a comprehensive review of strategic alternatives, which may include the merger or other transactions to maximize shareholder value[198]. - If the merger is not completed, the company may face significant costs, including legal and accounting fees, which will reduce cash available for business operations[199]. - The company may incur a termination fee of $2.34 million to Jade or vice versa, depending on the circumstances of the merger agreement termination[212]. Merger Agreement and Financial Projections - Aerovate entered into a Merger Agreement with Jade Biosciences, with the intention of merging and creating a surviving corporation[24]. - A cash dividend of approximately $65.0 million is expected to be declared to pre-Merger stockholders upon the closing of the merger[25]. - The Concurrent Investment prior to the merger is expected to raise approximately $300.0 million, reflecting the conversion of previously issued $95 million of convertible notes[30]. - The merger could result in Jade's securityholders owning approximately 34.0% of the company's common stock on a fully-diluted basis, while the company's securityholders would own about 1.6%[195]. - The completion of the merger is subject to stockholder approvals, and failure to obtain these approvals may delay or prevent the merger[197]. Intellectual Property and Patent Strategy - Aerovate's intellectual property portfolio includes six U.S. patents and 19 foreign patent applications, with expiration expected between May 14, 2040, and February 15, 2042[45]. - The company has multiple patents related to AV-101, with expiration dates projected for May 14, 2040, in various jurisdictions including the US, Europe, China, and Japan[46][47]. - The intellectual property strategy includes proprietary patent rights for drug products, treatment methods, and innovative manufacturing processes[48]. - The company has conducted freedom to operate analyses to ensure its ability to operate within the complex patent landscape of inhalable kinase inhibitors[50]. Regulatory Environment - The FDA regulates pharmaceutical products extensively, impacting all stages from research to marketing[63]. - The FDA requires extensive preclinical and clinical testing before a new drug can be marketed, which can take many years[66]. - An IND application must become effective within 30 days unless the FDA raises safety concerns, which can delay clinical trials[68]. - The FDA has a goal of responding to standard NDAs within ten months and six months for priority reviews after acceptance for filing[80]. - Approval of a product may include limitations on its indicated uses and may require post-market studies to monitor safety and efficacy[84]. Market and Competitive Landscape - The global sales for PAH products in 2023 were estimated at $6.2 billion, highlighting the market potential despite the high five-year survival rate of 61% to 65% for PAH patients[35]. - Key competitive factors for the company's products include efficacy, safety, convenience, price, and reimbursement availability[62]. - The company faces risks related to third-party patent infringements, which could require obtaining licenses or ceasing commercialization of infringing products[59]. Corporate Governance and Compliance - The company is classified as an "emerging growth company" and will retain this status until it meets certain revenue or market value thresholds, including total annual gross revenue of at least $1.235 billion or a market value exceeding $700 million[184]. - The company is subject to various financial disclosure and securities trading regulations as a public entity, including oversight by the SEC and compliance with Nasdaq regulations[174]. - The company must comply with the Foreign Corrupt Practices Act, which prohibits corrupt payments to foreign officials to obtain or retain business[175]. - The company is subject to numerous data privacy and security laws, including HIPAA and GDPR, which govern the handling of personal information and health-related data[173]. Employee Relations and Culture - The company is committed to fostering a diverse workforce and a culture of inclusion, aiming to empower employees for professional growth and long-term job satisfaction[180]. - The company has objectives focused on recruiting, retaining, and incentivizing employees to enhance stockholder value and achieve business goals[179]. Legislative and Policy Changes - The Inflation Reduction Act of 2022 may affect the healthcare industry by reducing out-of-pocket costs for Medicare beneficiaries and allowing government negotiation of drug prices[168]. - The pricing and reimbursement landscape in the EU allows member states to control prices and reimbursement for medicinal products, often requiring evidence of cost-effectiveness[155].

Workforce Reduction and Costs - The company halted the development of AV-101 for pulmonary arterial hypertension (PAH) after the Phase 2b trial did not meet its primary endpoint, resulting in the termination of nearly 90% of its workforce by September 30, 2024[83][84]. - The company incurred approximately $6.4 million in costs related to the Workforce Reduction Plan, primarily for one-time severance benefits[84]. Financial Performance - Total operating expenses for the three months ended September 30, 2024, were $17.4 million, a decrease of $3.96 million compared to $21.37 million for the same period in 2023[104]. - Research and development expenses decreased to $10.3 million for the three months ended September 30, 2024, down from $16.9 million in the same period in 2023, primarily due to reductions in contract manufacturing and clinical trial costs[104]. - The net loss for the three months ended September 30, 2024, was $16.2 million, an improvement of $3.3 million compared to a net loss of $19.6 million in the same period in 2023[104]. - General and administrative expenses for the nine months ended September 30, 2024, were $16.5 million, an increase of $3.6 million compared to $12.9 million for the same period in 2023[109]. - Research and development expenses for the nine months ended September 30, 2024, were $51.7 million, up from $46.4 million in 2023, reflecting an increase of $5.3 million[108]. - Total operating expenses for the nine months ended September 30, 2024, were $68.2 million, compared to $59.3 million for the same period in 2023, marking an increase of $8.9 million[107]. - Net loss for the nine months ended September 30, 2024, was $64.2 million, compared to a net loss of $55.1 million in 2023, representing an increase of $9.1 million[121]. - Other income for the nine months ended September 30, 2024, was $4.0 million, a decrease of $0.2 million from $4.2 million in 2023[110]. Cash and Financing Activities - Cash and cash equivalents and short-term investments as of September 30, 2024, totaled $88.7 million, expected to fund operations for at least twelve months[114]. - The company has received aggregate net proceeds of $79.8 million from the sale of convertible preferred stock and $5.0 million from convertible promissory notes to related parties since inception[111]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $60.1 million, compared to $42.0 million in 2023, indicating an increase in cash outflow[121]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $24.9 million, down from $45.5 million in 2023[126]. Future Operations and Revenue - The company currently has no products approved for sale and does not anticipate generating revenue in the near future[96]. - The successful development of any future product candidates remains highly uncertain, impacting the company's ability to generate future revenue[100]. - The company entered into a Merger Agreement on October 30, 2024, which is expected to significantly impact future operations[112]. Economic Factors - The company has opted out of the extended transition period under the JOBS Act, meaning it will adopt new or revised accounting standards at the same time as public companies[131]. - The company does not believe that interest rate fluctuations have had a material effect on its results of operations during the nine months ended September 30, 2024 and 2023[134]. - The company is exposed to foreign currency exchange rate fluctuations due to contracts with vendors outside the United States, but does not currently hedge this risk[135]. - Inflation has generally increased the company's cost of labor and research and development contract costs, but it does not believe inflation has had a material impact on its financial position or results of operations to date[136]. Accounting and Reporting - The company reflects research and development expenses in its consolidated financial statements by matching those expenses with the period in which services are expended[130].

Group 1 - Monteverde & Associates PC is investigating Aerovate Therapeutics, Inc. regarding a proposed merger with Jade Biosciences, where pre-merger Aerovate stockholders are expected to own approximately 1.6% of the combined company, while pre-merger Jade stockholders are expected to own approximately 98.4% [1] - Monteverde & Associates PC has been recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report and has a successful track record in recovering money for shareholders [1][2] - The firm operates from the Empire State Building in New York City and emphasizes its experience in class action securities litigation [2][3] Group 2 - The firm encourages shareholders with concerns regarding the merger to contact them for additional information free of charge [3] - Monteverde & Associates PC highlights the importance of legal representation in class actions and provides contact information for inquiries [4]