Rallybio and Avenzo Therapeutics Announce Merger Backed by $215 Million Financing to Advance Next-Generation Oncology Pipeline
Rallybio Corporation and Avenzo Therapeutics have entered into a definitive merger agreement that will create a publicly traded oncology-focused biotechnology company with a portfolio of four clinical-stage cancer programs and a substantial capital base to support future development. The transaction, which includes an oversubscribed $215 million private financing, is designed to accelerate the advancement of Avenzo’s pipeline of targeted therapies and antibody-drug conjugates while providing Rallybio shareholders an opportunity to participate in the growth of the combined organization.
Upon completion of the merger, the combined company is expected to operate under the name Avenzo Therapeutics, Inc. and trade on the Nasdaq stock exchange under the ticker symbol “AVZO.” Company leaders describe the transaction as a transformational step that will position the organization to pursue multiple clinical milestones across its oncology portfolio over the next several years.
The merger comes at a time when investor interest in innovative cancer therapies remains strong, particularly in programs targeting mechanisms that may overcome resistance to existing treatments or provide improved efficacy and safety profiles compared with current standards of care.
Merger Creates a New Public Oncology Company
Under the terms of the agreement, Rallybio will acquire Avenzo through a merger transaction that has already received unanimous approval from the boards of directors of both companies.
The deal is expected to close during the fourth quarter of 2026, subject to customary closing conditions. These conditions include approval by stockholders of both companies, the effectiveness of a registration statement with the U.S. Securities and Exchange Commission, and satisfaction of other regulatory and legal requirements typically associated with public-company mergers.
Following completion of the transaction, Avenzo’s management team will assume leadership of the combined organization. The company will continue focusing on the development of innovative oncology therapies targeting difficult-to-treat cancers and areas of significant unmet medical need.
The transaction effectively transforms Avenzo from a privately held clinical-stage biotechnology company into a publicly traded enterprise with access to broader capital markets and additional resources to support pipeline development.
$215 Million Financing Strengthens Growth Plans
A major component of the transaction is an oversubscribed private placement financing that will provide approximately $215 million in gross proceeds.
The financing attracted participation from a broad group of new and existing healthcare-focused investors, reflecting strong confidence in Avenzo’s clinical pipeline and long-term strategy.
Among the investors participating in the financing are leading institutional healthcare and life sciences investment firms, including Blackstone, T. Rowe Price Investment Management, Vivo Capital, Affinity Asset Advisors, and ADAR1 Capital Management.
The financing also included support from existing investors such as OrbiMed, SR One, Foresite Capital, New Enterprise Associates, Deep Track Capital, Sands Capital, Lilly Asia Ventures, and Sofinnova Investments, among others.
Management expects the combined company’s cash position at closing to provide funding into late 2028. This capital runway is anticipated to support several important development milestones, including clinical data readouts, expansion studies, and initiation of multiple Phase 2 programs.
Ownership Structure Following the Transaction
The merger is structured so that Rallybio shareholders will receive a distribution of substantially all of Rallybio’s pre-closing net cash before the transaction is completed.
As a result, ownership of the combined company will primarily reside with Avenzo stakeholders and investors participating in the financing.
Based on current assumptions, pre-transaction Rallybio equity holders are expected to own approximately 2.8% of the combined company. Meanwhile, existing Avenzo shareholders and investors participating in the concurrent financing are expected to collectively own approximately 97.2%.
In addition, Rallybio shareholders will receive contingent value rights, or CVRs, tied to potential future proceeds from certain legacy Rallybio assets. These rights may entitle holders to receive net cash proceeds generated from the previously announced sale of interests associated with Rallybio’s former REV102 program as well as any future monetization of remaining legacy assets.
This structure enables Rallybio investors to maintain exposure to potential future value while facilitating the transition to a company focused entirely on oncology development.
Building a Diverse Oncology Pipeline
One of the central attractions of the merger is Avenzo’s portfolio of four clinical-stage oncology programs.
The company has assembled a pipeline consisting of targeted small-molecule therapies and next-generation antibody-drug conjugates designed to address significant unmet needs across multiple solid tumor indications.
Each program is currently being evaluated in ongoing U.S.-based clinical trials.
Management believes the portfolio provides diversification across mechanisms of action and cancer types while creating multiple opportunities for value-generating clinical milestones.
Advancing a Selective CDK Portfolio
A key component of Avenzo’s strategy involves the development of selective cyclin-dependent kinase inhibitors.
The company’s lead programs, AVZO-021 and AVZO-023, are designed to overcome limitations associated with currently approved CDK4/6 inhibitors used in hormone receptor-positive, HER2-negative breast cancer.
AVZO-021 is a selective CDK2 inhibitor intended to target resistance pathways that emerge after treatment with CDK4/6 inhibitors. To date, the therapy has been studied in 64 patients as both a monotherapy and in combination with fulvestrant.
According to the company, the drug has demonstrated evidence of clinical activity in heavily pretreated patients while maintaining a generally favorable tolerability profile.
Avenzo plans to present updated Phase 1 safety and efficacy data at the 2026 Annual Meeting of the American Society of Clinical Oncology.
The company’s second selective kinase program, AVZO-023, is a selective CDK4 inhibitor that is being investigated in combination with endocrine therapy, with or without AVZO-021.
Both compounds are currently being evaluated in the ongoing ORION-1 Phase 1/2 clinical trial involving patients with hormone receptor-positive, HER2-negative breast cancer.
Additional preliminary clinical results from the AVZO-023 program are expected later in 2026.
Expanding a Bispecific ADC Platform
In addition to kinase inhibitors, Avenzo is developing a portfolio of bispecific antibody-drug conjugates, a rapidly growing area of oncology research.
Antibody-drug conjugates combine the targeting precision of antibodies with potent anticancer agents, allowing selective delivery of therapeutic payloads directly to tumor cells.
Avenzo’s first bispecific ADC candidate, AVZO-1418, simultaneously targets EGFR and HER3, two receptors frequently implicated in cancer growth and progression.
The therapy has already been evaluated in more than 30 patients across multiple solid tumor types as part of the ongoing AVENTINE-1 Phase 1/2 study.
Preliminary clinical activity has been observed across several dose levels and tumor indications, encouraging continued development.
The company plans to present updated findings from this program later this year.
Avenzo’s second ADC program, AVZO-103, targets both Nectin4 and TROP2, two clinically validated cancer-associated proteins expressed across a range of tumor types.
The drug is currently being evaluated as monotherapy in the Phase 1 portion of the BEACON-1 study, including patients with urothelial cancer and other advanced solid tumors.
Initial clinical data from this study are also expected later in 2026.
Experienced Leadership Team to Guide Growth
The combined company will be led by Dr. Athena Countouriotis, who currently serves as Chair, President, and Chief Executive Officer of Avenzo.
She will be joined by Dr. Mohammad Hirmand, Avenzo’s Co-founder and Chief Medical Officer, along with an experienced management team possessing extensive expertise in oncology drug development, clinical operations, regulatory strategy, and biotechnology commercialization.
Management believes this leadership team is well positioned to advance the company’s growing portfolio through the next stages of clinical development.
Multiple Catalysts Expected Through 2028
Avenzo expects to generate numerous value-driving clinical milestones over the next two years.
These include updated Phase 1 data across multiple programs, initial combination data for AVZO-021 and AVZO-023 with fulvestrant, advancement of antibody-drug conjugate studies, and initiation of several Phase 2 clinical trials.
The substantial cash position expected at closing is intended to provide sufficient resources to pursue these objectives without the immediate need for additional financing.
According to Avenzo leadership, the merger and financing together establish a strong foundation for long-term growth and clinical execution.
Positioning for the Next Stage of Development
Company executives from both organizations expressed enthusiasm regarding the strategic rationale behind the transaction.
Dr. Athena Countouriotis described the merger as a pivotal moment for Avenzo, enabling the company to enter the public markets while advancing a portfolio of potentially differentiated oncology therapies. She noted that the combination of public market access and significant new capital should allow the company to pursue multiple development opportunities and clinical readouts across its pipeline.
Meanwhile, Rallybio Co-Founder and Chief Executive Officer Dr. Stephen Uden emphasized that the transaction provides Rallybio shareholders with exposure to a promising oncology portfolio led by an experienced management team.
With a strengthened balance sheet, four active clinical-stage programs, and multiple anticipated catalysts on the horizon, the newly formed Avenzo Therapeutics aims to establish itself as an emerging force in oncology drug development and pursue innovative therapies for patients facing difficult-to-treat cancers worldwide.
About the Proposed Transaction
Under the terms of the merger agreement, Rallybio will acquire Avenzo pursuant to the Merger. At the closing of the Merger, Avenzo stockholders will receive newly issued shares of Rallybio common stock, with the exchange ratio to be determined based on the relative valuations of the two companies at closing. Immediately following the closing of the Merger, the combined company will change its name to Avenzo Therapeutics, Inc. and trade on Nasdaq under the ticker symbol “AVZO”.
In connection with the Transaction, a syndicate of leading healthcare institutional investors and mutual funds has committed to invest $215 million in the Financing. The Financing is expected to close immediately prior to the Merger. In connection with the Transaction, certain stockholders of Avenzo and Rallybio have executed support agreements, pursuant to which they have agreed to vote all their shares of capital stock in favor of the Transaction.
Leerink Partners is serving as exclusive financial advisor, and Cooley LLP is serving as legal counsel to Avenzo. Evercore is serving as lead financial advisor, Citizens Capital Markets & Advisory is serving as co-financial advisor, and Ropes & Gray LLP is serving as legal counsel to Rallybio. Leerink Partners, Goldman Sachs & Co. LLC, Piper Sandler, and Guggenheim Securities are serving as placement agents for the Financing. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is serving as legal counsel to the placement agents.
