Rallybio Corporation Terminates Merger Agreement with Candid Therapeutics, Inc.; Waiver and Financial Implications Disclosed

Key Points:

• Rallybio Corporation (NASDAQ: RLYB) terminates its previously announced Agreement and Plan of Merger and Reorganization with Candid Therapeutics, Inc.
• A Waiver agreement has been executed among Rallybio, Candid Therapeutics, and UCB S.A., detailing the terms of the termination and associated payments.
• Rallybio to receive a \$50 million termination fee plus \$375,000 as reimbursement for expenses, both payable by Candid Therapeutics.
• Rallybio will withdraw its registration statement on Form S-4 previously filed in relation to the merger.

Details of the Termination and Waiver

On May 4, 2026, Rallybio Corporation filed a Form 8-K with the U.S. Securities and Exchange Commission (SEC) to formally announce the termination of its merger agreement with Candid Therapeutics, Inc. The merger, originally disclosed on March 1, 2026, was structured via an Agreement and Plan of Merger and Reorganization, which also involved Farmington Merger Sub, Inc., a wholly-owned subsidiary of Rallybio. The rationale for the termination, while not explicitly detailed in the filing, is formalized through a Waiver executed on May 1, 2026, by Rallybio, Candid Therapeutics, and UCB S.A.

Under the terms of this Waiver, Rallybio has agreed to waive the requirement that the \$50 million Parent Termination Fee be paid concurrently with the termination of the agreement, provided that Candid Therapeutics delivers both the \$50 million fee and a \$375,000 reimbursement (related to financial printer and SEC expenses) via same-day wire transfer as soon as practicable, but no later than the close of business on the termination date. This waiver only modifies the timing of the payment but not the obligation itself; Candid is still required to pay the termination fee in full.

Important Information for Shareholders

• Material Impact on Rallybio: The receipt of a \$50 million termination fee, in addition to \$375,000 in expense reimbursement, is a significant non-operating cash inflow for Rallybio. This will likely strengthen its cash position and could materially affect Rallybio’s financial results for the period.
• Strategic Uncertainty: The cancellation of the merger may impact Rallybio’s previously communicated growth strategy and pipeline expansion plans. Shareholders should be aware that the company’s strategic direction may change, and future M&A or partnership prospects are now less certain.
• Withdrawal of Form S-4: Rallybio will withdraw its registration statement on Form S-4, which was filed and subsequently amended in connection with the now-terminated merger. This means no new shares will be issued as part of the merger, and previously announced plans related to the combination will not proceed.

Potential Share Price Impact

This announcement could be price sensitive for Rallybio’s shares:

• The immediate cash inflow from the termination fee may be viewed positively by the market, as it bolsters Rallybio’s liquidity and financial flexibility.
• However, the termination of a strategic merger could also raise questions about Rallybio’s future direction and growth prospects, which may weigh on investor sentiment.
• The company’s management, led by CFO and Treasurer Jonathan I. Lieber, has signed the report, indicating that Rallybio intends to fully comply with its disclosure and reporting obligations.

Key Executives and Signatories

• Rallybio Corporation: Jonathan I. Lieber, Chief Financial Officer and Treasurer
• Candid Therapeutics, Inc.: Ken Song, CEO
• UCB S.A.: Loic Hameon, SVP BD, M&A and Alliance & Integration Management

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information herein is based on publicly available filings as of May 4, 2026, and may be subject to change.

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