Rallybio Agrees to Reverse Merger

Rare Daily Staff

Rare disease drug developer Rallybio said it agreed to a reverse merger with Avenzo Therapeutics in a transaction that will transform the combined entity into a publicly traded oncology company, backed by a $215 million private placement from a syndicate of major healthcare investors.

The combined company will operate as Avenzo Therapeutics and trade on Nasdaq under the ticker AVZO, with Avenzo shareholders expected to own roughly 97.2 percent of the business. Rallybio shareholders will retain just 2.8 percent, plus contingent value rights tied to any future proceeds from legacy assets.

The deal, expected to close in the fourth quarter of 2026, underscores the extent of Rallybio’s retreat from its original rare disease strategy following multiple development and financing challenges over the past two years.

Rallybio was co-founded in 2018 by three former Alexion Pharmaceuticals executives: Martin Mackay, Stephen Uden, and Jeffrey Fryer. But the company has faced mounting pressure after discontinuing key programs and narrowing its pipeline. The company previously deprioritized or exited assets outside its lead C5 inhibitor, RLYB116, and earlier this year announced the sale of its REV102 program. Like many small-cap biotech firms, Rallybio has also contended with a difficult financing environment, limiting its ability to advance multiple programs independently.

Avenzo is a clinical-stage oncology company with four early-stage programs spanning selective CDK inhibitors and bispecific antibody-drug conjugates. Rallybio plans to distribute most of its remaining cash to shareholders ahead of closing, further emphasizing that the surviving entity will be built around Avenzo’s pipeline rather than Rallybio’s assets.

Avenzo secured $215 million in an oversubscribed private placement concurrent with the merger, with participation from both new and existing investors, including Blackstone, T. Rowe Price, Vivo Capital, OrbiMed, NEA, and Foresite Capital.

The company said the combined cash position is expected to fund operations into late 2028 and support multiple clinical milestones, including phase 1 updates across all four programs and the initiation of several phase 2 studies.

The combined company will be led by Avenzo CEO Athena Countouriotis, with Rallybio’s management stepping aside as operational control shifts to the oncology-focused team.

Photo: Rallybio co-founders Martin Mackay, Stephen Uden, and Jeffrey Fryer