New Haven-based Rallybio Corp. said Monday its planned merger with a San Diego biotechnology company has been terminated, with Rallybio set to receive a $50 million breakup fee after its partner opted to pursue another deal.
In a regulatory filing, Rallybio said Candid Therapeutics Inc. ended the merger agreement May 3 in connection with entering into an alternative transaction with UCB S.A., a Belgian biopharmaceutical company.
The termination triggers a provision previously outlined in the companies’ merger agreement that requires Candid to pay Rallybio $50 million if it abandons the deal to pursue another transaction.
The merger, announced in early March, would have combined Rallybio with Candid and effectively ended the New Haven company’s run as a standalone public entity. Under the deal, the combined company was expected to operate under the Candid Therapeutics name and be led by Candid’s executive team.
The agreement had been backed by more than $505 million in committed private financing, with a required minimum of $200 million needed for the transaction to close. The companies had projected the combined business would have roughly $700 million in cash at closing, funding operations through 2030.
Instead, Rallybio, a clinical-stage biotechnology company focused on developing treatments for rare and severe diseases, will now remain independent. The company said it plans to withdraw its previously filed registration statement tied to the merger.
The filing did not outline Rallybio’s next strategic steps following the termination. In a statement, a company spokesperson said it will continue evaluating alternatives “with the goal of maximizing value for shareholders,” and expects to provide an update at a later time. The spokesperson didn’t elaborate further.
The company’s stock rose sharply Monday morning, trading near $14, up nearly 50%.
The breakup comes after a turbulent period for Rallybio, which has scaled back drug development programs, reduced its workforce and faced capital constraints in recent years. The company previously warned it would need to raise additional funding to advance its pipeline and had taken steps to maintain its Nasdaq listing, including a reverse stock split earlier this year.
The company reported 14 full-time employees as of Dec. 31, 2025, down from 25 a year earlier, according to its annual report.
