🔒New Haven biotech Rallybio posts quarterly profit after asset sale

New Haven-based Rallybio Corp. reported a third-quarter profit driven by the sale of a joint-venture asset, but warned it would need to raise significant capital in the future to get any of its drug candidates to market. The rare-disease biotech recorded net income of $16 million, or 36 cents per share, for the three months ended Sept. 30, compared with a net loss of $11.5 million in the same period a year earlier, according to its latest quarterly filing with the U.S. Securities and Exchange Commission. The swing to profitability was largely due to a $22.5 million gain on the sale of its interest in a joint venture with Utah-based Recursion Pharmaceuticals. Rallybio in July announced it would sell its interest in REV102 — a therapy in preclinical development to treat patients with a rare bone disease called hypophosphatasia — to Recursion for up to $25 million, including an upfront equity payment of $7.5 million. Rallybio ended the third quarter with $59.3 million in cash, cash equivalents and marketable securities, which management said should fund operations through 2027. However, the company also said it will need to “raise substantial additional capital in the future” to advance its drug candidates to market. Earlier this year, Rallybio implemented a 40% workforce reduction, cutting nine positions as part of a cost-saving plan announced alongside its first-quarter earnings in May. RallyBio has significantly reduced its workforce over the past two years. According to its annual reports, the company had 43 full-time employees as of Dec. 31, 2023, which was reduced to 25 full-time employees by the end of last year. As part of a strategic review, Rallybio announced in April that it would discontinue development of a therapy intended to prevent a rare immune disorder in fetuses and newborns. Rallybio, headquartered at 234 Church St. in New Haven, focuses on therapies for severe and rare diseases.