A clinical-stage biotech focused on severe rare diseases, Rallybio is developing therapies like RLYB116, a once-weekly C5 inhibitor, and RLYB332, an antibody for iron-overload conditions. It was founded in 2018 by three former executives of Alexion Pharmaceuticals, who named the company for their mission to "rally" top scientists, partners, and resources from around the globe to pursue treatments other firms had passed over. In early 2026 it agreed to merge with the T-cell engager company Candid, with its legacy drug programs set to be sold off later through special Contingent Value Rights.
Rallybio posts a $43.7M Q2 net profit after a $50M Candid termination fee, while the Avenzo merger reshapes its future.
A terminated merger delivered the quarter's result. swung to $43.7 million from a $9.7 million loss a year ago, entirely because of a $50.0 million termination fee from Candid, while operating expenses fell 45% as the RLYB212 wind-down cut R&D to $0.8 million. The company is now betting on a new merger with Avenzo to fund its sole remaining candidate.
Key takeaways
reached $43.7 million, compared to a $9.7 million loss in Q2 2025, driven by a $50.0 million termination fee received after the Candid merger agreement was cancelled.
Research and development expenses fell 88% to $0.8 million, as the company wound down the discontinued RLYB212 program and reduced headcount.
General and administrative expenses rose 17% to $4.9 million, with $2.3 million of the increase tied to legal and professional fees for the pending merger with Avenzo.
Section summaries
Management's Discussion and Analysis
Net income of $43.7M in Q2 2026 driven by a $50.0M termination fee from Candid, while operating expenses fell 45% YoY.
⌄
Total fell to $0 from $0.2M in Q2 2025 due to the expiration of the J&J Collaboration Agreement in April 2026.
Research and development expenses decreased 88% to $0.8M, driven by the discontinuation of the RLYB212 program and lower headcount.
fell to zero from $0.2 million a year ago because the data-sharing agreement with Johnson & Johnson expired in April 2026.
Cash and cash equivalents rose to $92.8 million as of June 30, 2026, up from $9.4 million a year earlier, bolstered by the Candid termination fee and $23.4 million from maturing debt securities.
What changed
The Candid merger, flagged as the central event to watch in Q1 2026, was terminated, and the $50.0 million termination fee that was expected in May 2026 was received, driving the quarter's .
The Johnson & Johnson collaboration , which had been a small but consistent contributor since Q2 2024, ended with the agreement's expiration in April 2026, bringing quarterly revenue to zero.
The quarterly operating cash outflow swung to a $45.9 million inflow from a $8.4 million outflow a year ago, entirely due to the termination fee, masking an underlying operating cash burn that continues as the company advances RLYB116.
What to watch
Whether the Avenzo merger closes before year-end 2026, including the $215 million concurrent financing, which management says is critical to funding operations and RLYB116 development.
Any update on the development plan for RLYB116, the sole remaining lead candidate, and whether the combined company can advance it toward a clinical milestone.
The post-merger ownership structure, as pre-merger Rallybio stockholders are expected to own only about 2.8% of the combined company, and the value, if any, of the tied to legacy assets.
The combined company's ability to raise capital under SEC 'shell company' rules, which will restrict Form S-3 financing and affiliate stock resales for 12 months after the merger closes.
General and administrative expenses rose 17% to $4.9M, primarily due to $2.3M in legal and professional fees related to the pending Avenzo Merger.
Total other income, net, surged to $50.6M from $0.6M, almost entirely from the $50.0M termination fee paid by Candid Therapeutics.
Cash and cash equivalents stood at $92.8M as of June 30, 2026, bolstered by the termination fee and $23.4M from maturities of debt securities.
The company expects its cash to fund operations for at least 12 months but anticipates the Avenzo Merger, which includes a $215M concurrent financing, will close before year-end 2026.
Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are not required to provide the information under this item.
⌄
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are not required to provide the information under this item.
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business. Regardless of outcome,…
⌄
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors.
The proposed merger with Avenzo and the company's financial position, including its need for additional capital, are the most material risks.
⌄
Failure to complete the proposed merger with Avenzo could trigger a $600,000 termination fee, up to $750,000 in expense reimbursement, and significant transaction costs, while also causing a potential stock price decline.
The company's limited cash and history of significant operating losses ($14.4M for the six months ended June 30, 2026) mean it will require substantial additional capital to fund operations and the development of its lead candidate, RLYB116.
The company is heavily dependent on the success of its early-stage clinical candidate RLYB116, and any delays or failures in its development, regulatory approval, or commercialization would materially harm the business.
The combined company will be subject to stringent SEC '' rules post-merger, limiting its ability to raise capital via Form S-3 for 12 months and restricting resales of securities by former Avenzo affiliates.
The company's stockholders will experience substantial , owning only an estimated 2.8% of the combined company post-merger, and may not receive any value from the tied to legacy asset monetization.
The company's ability to use its $266.6 million in accumulated net operating loss carryforwards to offset future taxes could be limited by a future .