Rallybio Just Gave Away 97% of Itself (and Investors Are Thrilled)

Who Is Avenzo, and Why Should You Care?

Avenzo was founded in August 2022 by Athena Countouriotis, M.D. and Mohammad Hirmand, M.D., both former leaders at Turning Point Therapeutics. If that name rings a bell, it should: Bristol Myers Squibb acquired Turning Point for $4.1 billion. These founders have done this before.

Before the Rallybio deal was even announced, Avenzo had already raised a staggering $446 million across seed, Series A/A-1, and Series B rounds. The investor list reads like a who's who of healthcare finance: OrbiMed, Foresite Capital, SR One, NEA, Deep Track Capital, Lilly Asia Ventures, Sofinnova, and Sands Capital, among others.

The pipeline is built around four clinical-stage oncology programs, all in Phase 1 or Phase 1/2 trials targeting solid tumors:

• AVZO-021: A selective CDK2 inhibitor (blocks a key protein that tells cancer cells to divide) aimed at HR+/HER2- breast cancer and tumors with a genetic quirk called CCNE1 amplification.
• AVZO-023: A selective CDK4 inhibitor designed to work alongside AVZO-021 and hormone therapy, potentially overcoming resistance to existing drugs like Ibrance.
• AVZO-1418: A bispecific antibody-drug conjugate (think of it as a guided missile that locks onto two targets at once, EGFR and HER3) for lung cancer and other solid tumors.
• AVZO-103: Another bispecific ADC, this one targeting Nectin4 and TROP2, with a focus on bladder and breast cancers.

All four programs are early. None have pivotal data yet. But the targets are validated, the science is trendy (CDK inhibitors and ADCs are two of oncology's hottest categories right now), and the founding team has a track record of building exactly this kind of portfolio and selling it to Big Pharma.

Follow the Money

The $215 million concurrent private placement is arguably the most important part of this deal. It was oversubscribed, which means investors wanted in so badly that demand exceeded the available allocation. The placement was run by Leerink Partners, Goldman Sachs, Piper Sandler, and Guggenheim Securities, and the investor list includes Blackstone, T. Rowe Price, Vivo Capital, OrbiMed, NEA, and Foresite Capital.

That's not speculative retail money. Those are sophisticated, long-term healthcare investors writing large checks. When Blackstone and T. Rowe show up in a biotech PIPE (private investment in public equity), it signals institutional conviction.

Combined with cash at closing, the financing is expected to fund operations into late 2028. That's enough runway to generate Phase 1 data across all four programs and start several Phase 2 studies. In biotech, having two-plus years of cash is the difference between negotiating from strength and negotiating from desperation.

What Rallybio Shareholders Actually Get

Let's be honest: if you bought Rallybio for its rare-disease pipeline, this deal is a funeral with a consolation prize. Legacy shareholders end up with roughly 2.8% of the combined company on a fully diluted basis. Avenzo's equityholders and the new financing investors take the other 97.2%.

But there are a few sweeteners. Rallybio plans to distribute most of its remaining cash to existing shareholders before the deal closes. And those CVRs could pay out if proceeds are generated from the previously disclosed sale of the ex-US interest in the RLYB212 FNAIT program or any potential monetization of other legacy assets. It's a long shot, but it's not zero.

The break fees tell you who has the leverage here: if Avenzo walks, it owes $20 million. If Rallybio walks, it owes just $600,000. That asymmetry speaks volumes about which side of this deal holds the cards.

The Bigger Picture

Rallybio-Avenzo is a textbook example of a trend reshaping small-cap biotech. Dozens of public companies are trading at or below their net cash value right now, with investors having lost faith in their pipelines. Meanwhile, well-funded private biotechs need public listings but don't want to risk an uncertain IPO.

The result? A wave of "combine to survive" mergers where the private company gets a clean public vehicle and the public company's shareholders get a small piece of something potentially much bigger. Recent deals like Kalaris-AlloVir have followed a similar playbook.

The combined Avenzo Therapeutics will be led by Countouriotis as CEO and Chair and Hirmand as CMO, with a seven-member board. The deal is expected to close in Q4 2026.

The Bottom Line

From sub-dollar stock to oncology platform in under a year: that's the Rallybio story now. Whether it's a success story or a cautionary tale depends entirely on what happens in Avenzo's clinics over the next two years. Four Phase 1 programs, $215 million in fresh capital, and a founding team that already sold one company for $4.1 billion.

The ingredients are there. Now comes the cooking.

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