Tectonic Therapeutic has completed a reverse merger with AVROBIO and will begin trading on the Nasdaq global market as Tectonic Therapeutic (ticker symbol ‘TECX’) on 21 June.
Coinciding with the merger, the new company also completed a private placement of $130.7m with multiple US and European investors. Following the placement, Tectonic reported total cash reserves of $181m, before payment of final transaction-related expenses, which is expected to fund operations until mid-2027.
As part of the merger, Avrobio enacted a 1-for-12 reverse stock split of its common shares, along with an issuance of a non-transferable contingent value right. Under that, shareholders will have the rights to cash payments received by Tectonic, if any, related to Avrobio’s pre-transaction legacy assets.
Avrobio’s stockholders will own approximately 24.8% of the new company while old Tectonic shareholders, including the investors in the private placement, will hold 75.2% of the combined company's outstanding common stock. The merged company’s stock debuted at a share price of $16.80 on the Nasdaq.
The companies first announced the merger back in January, prompted by Avrobio’s cash-strapped coffers. The company’s money woes started last year when it stopped development work on its gene therapy programmes. Avrobio also sold its investigational haematopoietic stem cell (HSC) gene therapy programme, designed to treat cystinosis, to Novartis in an all-cash deal valued at $87.5m.
Tectonic’s lead asset, TX000045 (TX45), is a G protein-coupled receptor (GCPR) targeting the Fc-relaxin fusion molecule. It activates relaxin family peptide receptor 1 (RXFP1) in cardiovascular cells and its overexpression can have a cardioprotective effect. The therapy is being evaluated in a Phase Ia trial in patients with group 2 pulmonary hypertension due to left-sided heart disease, one of the most common forms of pulmonary hypertension.
“We expect to initiate a randomised Phase II clinical trial for our lead program, TX45, in group 2 pulmonary hypertension in the setting of left heart disease with preserved ejection fraction in the second half of this year,” said Dr Alise Reicin, president and CEO of Tectonic.
“Results from the ongoing Phase Ia clinical trial in this patient population are expected in mid-2024, to be followed by Phase Ib results expected in 2025 and results from the Phase II clinical trial expected in 2026.”
The company’s second programme targets hereditary haemorrhagic telangiectasia (HHT), a genetic bleeding disorder that causes vessel enlargement and malformations. Tectonic plans to select a development asset for HHT later this year and start clinical trials in the fourth quarter (Q4) of 2025 or Q1 2026.
