Reunion of Successful Management and Legacy in the MASH Market

The core management team that led Akero Therapeutics, successfully developing a treatment for non-alcoholic steatohepatitis (MASH) and securing a $4.7 billion acquisition by Novo Nordisk, has reunited at Avere Therapeutics. Andrew Cheng, CEO, and other veteran executives are embarking on a new challenge in the high-unmet-need autoimmune disease area. Their proven track record of successful deals serves as a key asset in securing investor confidence, enabling the early-stage biotech to raise substantial capital and establish global partnerships.

Nasdaq Listing via Reverse Merger with NextCure

Avere, a private company, has announced a reverse merger agreement with NextCure (NXTC), a Nasdaq-listed company, opting for a direct route to the capital market. By leveraging NextCure's listing status, which had faced challenges with failed immuno-oncology programs and significant layoffs, Avere strategically streamlines the complex initial public offering (IPO) process. Upon completion of the transaction, the combined entity will trade on the Nasdaq under the ticker 'AVRX,' and existing NextCure shareholders will receive a contingent value right (CVR) guaranteeing less than 1% of the shares and 90% of the royalties from the out-licensing of the existing pipeline.

Introduction of Hansoh Pharma's Pipeline and Significant Funding

The core asset of the combined entity is AVR-001 (formerly HS-20118), an interleukin-23 (IL-23) receptor-targeting oral peptide candidate, acquired from Hansoh Pharma (3692.HK). Avere has secured exclusive rights outside of China in exchange for an upfront payment of $120 million and potential milestone payments of up to $2.18 billion. Simultaneously, the company has raised $320 million in investment from Fairmont and Hansoh Pharma, providing substantial funding for clinical development. This demonstrates an optimal cross-border partnership model, combining China's innovative technology with the United States' global business capabilities to accelerate new drug development.

Once-Weekly Oral Therapy to Revolutionize Psoriasis Treatment

AVR-001 is a once-weekly oral peptide autoimmune disease treatment that targets the interleukin-23 receptor (IL-23R). The $30 billion psoriasis market is currently dominated by AbbVie's injectable Skyrizi, and Johnson & Johnson (J&J) has recently approved Icotyde, a daily oral peptide. AVR-001 aims to disrupt the market by offering a once-weekly regimen that overcomes the limitations of existing injectables and daily oral medications. Its ability to improve patient compliance while delivering efficacy comparable to biologics is expected to be a key differentiator for commercial success.

Phase 2b Results in 2027 and Roadmap for Expanding Indications

Hansoh Pharma has already initiated a Phase 2b trial of AVR-001 in China, with results expected in 2027, and Avere plans to initiate a U.S. Phase 2b trial in 2027. The $320 million in funding will support the completion of the global Phase 2b trial and entry into a global Phase 3 trial, as well as the initiation of a Phase 2b trial for ulcerative colitis. The simultaneous clinical development in the U.S. and China, along with the expansion into multiple indications, provides strategic value, potentially leading to a major licensing deal or M&A with a multinational pharmaceutical company.