Rallybio Corporation and Avenzo Therapeutics Announce Transformative Merger to Create Leading Oncology Company, Backed by \$215 Million Financing
Key Highlights for Investors
- Rallybio Corporation (NASDAQ: RLYB) to acquire Avenzo Therapeutics in an all-stock merger. The combined entity will operate as Avenzo Therapeutics, Inc., and is expected to begin trading on Nasdaq under the new ticker symbol AVZO.
- Oversubscribed \$215 million private placement financing led by a syndicate of top healthcare institutional investors and mutual funds, including new investors such as Blackstone Multi-Asset Investing, T. Rowe Price, Vivo Capital, Affinity Asset Advisors, ADAR1 Capital, and existing investors like OrbiMed, SR One, Foresite Capital, Surveyor Capital (Citadel), Longwood Fund, NEA, Deep Track Capital, Samsara BioCapital, Lilly Asia Ventures, Sofinnova, and others.
- The raised capital is expected to fund operations into late 2028 and advance the company’s four clinical-stage oncology programs through multiple milestones.
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Shareholder Impact:
- Pre-transaction Rallybio equityholders are expected to own about 2.8% of the combined company, while pre-transaction Avenzo equityholders (including investors in the financing) will own approximately 97.2%. This is based on the assumption that Rallybio distributes nearly all its pre-closing net cash to its shareholders.
- Rallybio shareholders will also receive contingent value rights (CVRs) entitling them to potential net cash proceeds from the sale of interests in Rallybio’s former REV102 program and any other legacy asset sales.
- Transaction expected to close in Q4 2026, subject to shareholder approval, SEC registration, and customary closing conditions.
Strategic Rationale and Pipeline Details
This merger represents a significant pivot for Rallybio, transitioning from its historical focus on rare diseases to becoming a leader in next-generation oncology therapies. The combined company will be led by Dr. Athena Countouriotis (Chair, President, and CEO of Avenzo), with Dr. Mohammad Hirmand as Chief Medical Officer, and a seasoned oncology-focused leadership team.
Clinical Pipeline—Four Next-Generation Oncology Programs
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Selective CDK Portfolio:
- AVZO-021 (CDK2 inhibitor) and AVZO-023 (CDK4 inhibitor) are designed to improve upon current CDK4/6 therapies in HR+/HER2- breast cancer.
- AVZO-021 has shown clinical activity and a favorable safety profile in heavily pretreated HR+/HER2- breast cancer patients (64 patients to date); updated safety and efficacy results to be presented at the 2026 ASCO Annual Meeting.
- Both AVZO-021 and AVZO-023 are being studied in the ongoing ORION-1 Phase 1/2 study, with AVZO-023 evaluated in combination with endocrine therapy (with or without AVZO-021). Preliminary data from AVZO-023 + fulvestrant expected in late 2026.
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Bispecific ADC Portfolio:
- AVZO-1418: EGFR/HER3 bispecific ADC, studied in 30+ patients with various solid tumors (AVENTINE-1 Phase 1/2 study), showing clinical activity across multiple indications and doses.
- AVZO-103: Nectin4/TROP2 bispecific ADC, being evaluated as monotherapy in the BEACON-1 Phase 1/2 study (focus: urothelial cancer and other solid tumors).
- Updated data from AVENTINE-1 and initial BEACON-1 data expected in late 2026.
Financial and Governance Considerations
- Pro-forma cash position at closing, including the \$215 million financing, is expected to provide runway through multiple clinical milestones in 2027 and 2028.
- Rallybio intends to distribute substantially all pre-closing net cash to its shareholders, making the equity swap essentially a pipeline play for Avenzo’s assets, with additional upside via CVRs tied to potential legacy asset monetization.
- The merger and financing have been unanimously approved by both companies’ boards. Key investors and shareholders have signed support agreements to vote in favor.
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Advisors:
- Leerink Partners: Exclusive financial advisor to Avenzo
- Cooley LLP: Legal counsel to Avenzo
- Evercore: Lead financial advisor to Rallybio
- Citizens Capital Markets & Advisory: Co-financial advisor to Rallybio
- Ropes & Gray LLP: Legal counsel to Rallybio
- Leerink Partners, Goldman Sachs, Piper Sandler, Guggenheim Securities: Placement agents for the financing
- Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.: Legal counsel to the placement agents
- Conference Call: A webcast and conference call to discuss the transaction occurred June 1, 2026, at 8:30 a.m. ET. Replay available here.
Key Shareholder Considerations and Price-Sensitive Information
- This transaction substantially dilutes existing Rallybio shareholders, who will own only 2.8% of the combined company post-close, but provides an opportunity to participate in a highly regarded oncology pipeline and potential future CVR payments.
- The \$215 million financing and strong syndicate of investors provide significant validation of the new company’s strategy and pipeline, likely to be viewed positively by the market and potentially supportive of the share price.
- The shift in focus away from Rallybio’s legacy rare disease assets to Avenzo’s oncology pipeline is a major strategic change and could lead to price volatility depending on investor sentiment toward the new direction.
- The deal is subject to closing conditions, including shareholder votes and SEC registration, and carries execution risk, which shareholders should monitor.
- Existing Rallybio shareholders will receive CVRs for legacy asset monetization, offering some potential upside beyond the oncology pipeline.
- Investors should note the transaction will result in a new ticker symbol (AVZO) and new management team.
Forward-Looking Statements and Risks
The companies caution that the merger and financing are subject to numerous risks, including the possibility of the deal not closing, the need for continued capital beyond 2028, clinical trial risks, regulatory hurdles, integration challenges, and the fact that CVRs may not result in any future payments. Shareholders are urged to read all proxy and SEC filings before voting.
Contact Information
- Avenzo Therapeutics Media: Carla Taub, [email protected]
- Rallybio Investor and Media Relations: Samantha Tracy, (475) 47-RALLY (Ext. 282), [email protected]
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 their financial advisors before making any investment decisions. The information presented is based on publicly available filings and may be subject to change.
