## AVROBIO and Tectonic Combine to Create Next-Generation GPCR-Focused Biopharmaceutical Powerhouse

The two companies have entered into a definitive merger agreement to form a unified entity trading on Nasdaq under the ticker symbol "TECX." This combination represents a strategic consolidation designed to accelerate the development of novel protein-based therapeutics targeting G-protein coupled receptors (GPCRs)—a significant class of drug targets that has remained largely underexploited by traditional small-molecule approaches.

Following the transaction close, the combined organization will operate under the Tectonic Therapeutic name and maintain its headquarters in Watertown, Massachusetts. The merged entity will be led by Alise Reicin, M.D., Chief Executive Officer of Tectonic, alongside the broader Tectonic management cohort. One AVROBIO board representative will join the combined company's board of directors.

## Robust Financing Secured to Advance Clinical Pipeline

In conjunction with the proposed merger, Tectonic has secured $130.7 million in private placement commitments from a syndicate of established life sciences investment firms, including TAS Partners, 5AM Ventures, EcoR1 Capital, Polaris Partners, Farallon Capital Management-advised funds, Vida Ventures, and PagsGroup, among others.

The combined organization is projected to hold approximately $165 million in cash and liquid assets at closing, a war chest sufficient to support operational activities through the middle of 2027. These resources will be channeled toward advancing the clinical pipeline through multiple data-generating events and catalysts. The private placement is anticipated to close in tandem with the merger during the second quarter of 2024.

## TX45 and Beyond: A Pipeline Targeting Severe Unmet Medical Needs

Tectonic's lead asset, TX45—a Fc-relaxin fusion protein—represents the company's most advanced program and is positioned as a potential best-in-class therapeutic candidate. The compound has undergone optimization to overcome inherent limitations associated with the natural human relaxin hormone, achieving both superior biophysical characteristics and enhanced pharmacokinetic/pharmacodynamic (PK/PD) properties.

Phase 1a data has already generated encouraging signals, demonstrating PK/PD activity consistent with a best-in-class profile and supporting a monthly dosing regimen. Additional Phase 1a data are anticipated in mid-2024, with Phase 1b hemodynamic proof-of-concept studies planned for 2025 and Phase 2 randomized trial readouts expected in 2026.

TX45 is being developed for Group 2 Pulmonary Hypertension in patients with Heart Failure with Preserved Ejection Fraction (HFpEF)—a condition affecting more than 600,000 individuals in the United States with no approved pharmacological therapies.

Beyond the lead program, Tectonic is advancing a second candidate targeting Hereditary Hemorrhagic Telangiectasia (HHT), a rare genetic disorder characterized by abnormal blood vessel formation. The company plans to initiate human studies in the severe disease subpopulation during the fourth quarter of 2025 or first quarter of 2026. A third program employs a bispecific approach targeting two complementary receptors within fibrosis indications.

## The GEODeTM Platform: Solving the GPCR Discovery Challenge

GPCRs represent a central pillar of human physiology and account for the mechanism of action behind more than one-third of all approved medications globally. However, many GPCR subtypes remain therapeutically unexplored, and have historically presented formidable challenges to traditional drug discovery methodologies.

Tectonic's proprietary GEODeTM platform was specifically engineered to overcome these barriers by integrating advanced GPCR biochemistry, receptor engineering techniques, proprietary antibody screening libraries, and structure-guided protein engineering. This integrated approach enables the discovery of a diverse array of biologic molecules capable of engaging some of the most intractable receptors within the class—targets where conventional small-molecule pharmacology has proven ineffective or intractable.

## Transaction Structure and Ownership Distribution

Under the all-stock merger agreement, AVROBIO will acquire 100% of Tectonic's outstanding equity interests. Following completion, pre-merger AVROBIO shareholders are expected to retain approximately 22.3% ownership of the combined entity, while pre-merger Tectonic shareholders will hold roughly 40.2%, with ownership percentages calculated post-private placement. AVROBIO shareholders will additionally receive contingent value rights tied to potential proceeds from certain pre-transaction assets.

These ownership projections remain subject to adjustment based on AVROBIO's net cash position at closing, currently estimated near $65 million. Both company boards have approved the transaction, which is anticipated to conclude in Q2 2024, contingent upon shareholder votes, private placement funding closure, and standard regulatory approvals.

## Strategic Rationale and Expert Commentary

"This merger arrives at a pivotal juncture for Tectonic and represents an exceptional opportunity to scale our operations," stated Dr. Reicin. "Our platform unlocks therapeutic potential from GPCR targets that have resisted optimization through conventional biologics discovery. The combination with AVROBIO substantially strengthens our capacity to execute an efficient development program for TX45 and our broader pipeline."

Erik Ostrowski, Interim Chief Executive Officer and Chief Financial Officer of AVROBIO, emphasized: "The Board determined this transaction best serves shareholder interests. Tectonic possesses unrivaled expertise in GPCR biochemistry and biophysics, coupled with an accomplished management team positioned to drive innovation in this transformative therapeutic space."

## Joint Webcast and Timeline

AVROBIO and Tectonic hosted a webcast presentation on January 30, 2024 at 8:30 a.m. Eastern Time to discuss transaction particulars. Interested parties were advised to join 15 minutes prior, with replay materials subsequently made available via AVROBIO's investor relations portal approximately two hours following the live session conclusion.