A month after Rallybio’s plans to merge with privately held Candid Therapeutics dissolved, the struggling drugmaker is trying again, this time with the cancer drug developer Avenzo Therapeutics.
According to the deal announced Monday, the combined company will operate as Avenzo Therapeutics and continue developing a portfolio of small molecule and antibody-drug conjugate programs. It raised $215 million in a separate financing, and will trade on the Nasdaq stock exchange under the ticker symbol “AVZO.” The deal is expected to close by the end of the year.
The new merger plans are the second try for Rallybio, which went public in 2021 but has grappled with layoffs and disappointing study results for its lead prospect in the past two years. Rallybio had announced plans to merge with the immune drugmaker Candid Therapeutics in March, a deal that jumpstarted the former’s stock price.
At the time, Stephen Uden, the CEO of Rallybio, said in a statement that the deal “represents a compelling opportunity for Rallybio stockholders to participate in the future value creation of a well-capitalized, clinical-stage company with a differentiated and broad portfolio of [T cell engager] drug candidates.”
Candid last month said it would instead be acquired by UCB in a $2.2 billion transaction.
Both of Rallybio’s merger targets were well-funded biotech companies built around drugs acquired from Chinese pharmaceutical firms. Candid started up with $370 million and a pair of bispecific antibodies it was developing for autoimmune conditions. Avenzo, which banked roughly $450 million in venture funding before the merger, acquired four experimental cancer drugs from VelaVigo, DualityBio and Allorion Therapeutics.
Those drugs are part of a wave of R&D from Chinese biotechs that focus on well-known targets but aim to improve on therapies either already approved or in development. Avenzo is making a pair of next-generation CDK inhibitors, a type of drug widely used to treat certain breast cancers. It claims its therapies can be more selective than approved treatments like Ibrance and Verzenio, and presented updated early-stage clinical data Monday at the annual meeting of the American Society of Clinical Oncology for its drug AVZO-021.
Alongside them are two bispecific ADCs, which build on the class of popular cancer drugs by going after two cancer targets instead of just one. All four of Avenzo’s experimental medicines are in Phase 1 studies.
The new company will be led by Avenzo's current CEO, Athena Countouriotis, and co-founder and Chief Medical Officer Mohammad Hirmand. In a statement, Countouriotis called the deal “a turning point” for Avenzo that gives it “the resources to advance our pipeline beyond multiple potential data read outs.”
Its latest financing was backed by more than a dozen new and existing investors such as Blackstone Multi-Asset Investing, accounts advised by T. Rowe Price Investment Management, OrbiMed, SR One and Foresite Capital. Avenzo will have the cash to fund its operations through 2028, the companies said.
