🔒Rallybio to merge with San Diego biotech in deal backed by $505M in financing

New Haven-based Rallybio Corp. has agreed to merge with a San Diego biotechnology company in a deal backed by more than $505 million in new investor financing that will effectively end Rallybio’s run as a standalone public company. The merger partner, Candid Therapeutics, is a clinical-stage biotech developing immune-cell-targeting therapies for autoimmune diseases. Its lead drug candidate, cizutamig, is being studied for conditions including myasthenia gravis and certain inflammatory lung diseases. Rallybio, which has struggled in recent years, is a clinical-stage biotechnology company focused on developing treatments for rare and severe diseases. Under the agreement, Rallybio will acquire Candid in a stock transaction, and the combined company will operate as Candid Therapeutics and trade on the Nasdaq under the ticker symbol CDRX. The deal has been unanimously approved by both companies’ boards and is expected to close in mid-2026, subject to shareholder approval and other customary conditions. In connection with the merger, a group of healthcare-focused institutional investors and mutual funds has committed more than $505 million in a concurrent private financing. The companies said the combined business is expected to have about $700 million in cash at closing, which would fund operations through 2030. Following the deal, current Rallybio shareholders are expected to own about 3.65% of the combined company, while Candid shareholders — including investors participating in the new financing — are expected to own about 96.35%. The announcement caps a turbulent stretch for Rallybio, which went public in 2021. The company in recent years discontinued drug development programs, slashed its workforce and struggled to maintain its Nasdaq listing. In July 2025, Rallybio announced the sale of its interest in REV102 — a preclinical therapy targeting a rare bone disease called hypophosphatasia — to Utah-based Recursion Pharmaceuticals for up to $25 million, including an upfront equity payment of $7.5 million. However, the company warned it would need to raise “substantial additional capital” to advance any drug candidates to market, and its cash runway was projected to last only through 2027. Rallybio’s shares fell below the $1 minimum bid price requirement for Nasdaq listing beginning in January 2025 and remained non-compliant for months. To regain compliance, Rallybio executed a 1-for-8 reverse stock split effective Feb. 6, and received a Nasdaq compliance clearance letter on Feb. 24 — less than a week before signing the merger agreement with Candid. Following the close of the merger, Dr. Ken Song, chairman, president and CEO of Candid, is expected to lead the combined company as president and CEO. All current Rallybio executive officers and directors are expected to resign. Rallybio CEO Dr. Stephen Uden, co-founder of the New Haven company, said that the deal offers stockholders an opportunity to participate in the future growth of “a well-capitalized, clinical-stage company with a differentiated and broad portfolio” of drug candidates. As of Dec. 31, 2024, Rallybio said it employed 25 full-time employees.