NextCure Inc. (NextCure (NXTC)) is pulling a classic biotech move: merging with a private company to give it a public listing while raising a pile of cash. On Tuesday, NextCure agreed to merge with privately held Avere Therapeutics in an all-stock transaction that will bring Avere's oral IL-23 therapy to the public markets. The combined company will operate as Avere Therapeutics and trade on Nasdaq under the ticker AVRX, with the deal expected to close in the second half of 2026.

The merger comes with a $320 million private placement led by Fairmount and Hansoh Pharmaceutical Group, with participation from several institutional investors. The financing includes $251 million in convertible notes. According to the companies, the proceeds are expected to fund operations through a global Phase 2b psoriasis trial readout, the start of a Phase 3 psoriasis study, and the initiation of a Phase 2b ulcerative colitis trial.

The star of the show is AVR-001, a once-weekly oral therapy being studied for inflammatory diseases like psoriasis and ulcerative colitis. Avere recently secured exclusive rights outside Greater China to develop, manufacture, and commercialize AVR-001 through a licensing agreement with Hansoh. Under that deal, Hansoh will receive $120 million in upfront payments and could earn up to $2.18 billion in development and sales milestone payments, plus royalties on future sales.

Avere expects to begin a Phase 2b study in the U.S. in early 2027, with results anticipated in the first half of 2028. Hansoh also expects to report results from a Phase 2b psoriasis study in China in 2027. So there's a lot of clinical data on the horizon.

Upon completion of the transaction, pre-merger NextCure shareholders are expected to own approximately 1.21% of the combined company, while Avere shareholders, including participants in the financing, are expected to own about 98.79%. That's a pretty clear signal of who's driving the bus. Andrew Cheng, CEO of Avere, will lead the combined company, and Avere's current board will assume oversight after the merger.

NextCure shareholders aren't being left completely empty-handed. They'll receive a contingent value right entitling them to 90% of any net proceeds generated from future monetization of NextCure's pipeline assets during the two years after the deal closes. So if NextCure's old pipeline assets turn out to be worth something, shareholders get a cut.

As for the stock market's reaction: NextCure shares were up 198.63% at $6.51 at the time of publication on Tuesday, according to market data. That's a big move, but it reflects the market's enthusiasm for the new direction.