aibioRallybio holders to own 2.8% of the combined company in Avenzo reverse merger
Tickers RLYB
Rallybio's holders would keep 2.8% of the merged company, while Avenzo's holders would own 56.6% and investors in a $215.0 million financing 40.6%. Rallybio stockholders vote on the deal on November 4.
Key facts
- Company
- Rallybio Corporation (NASDAQ: RLYB)
- News type
- Mergers
- Primary source
- Rallybio Form 424B3 proxy statement/prospectus (SEC)
Rallybio Corporation (Nasdaq: RLYB) would keep only 2.8% of the company that results from its planned reverse merger with Avenzo Therapeutics, a clinical-stage oncology company. The proxy statement and prospectus dated October 15, 2026 says Avenzo's equityholders would own 56.6% and investors in a $215.0 million concurrent financing 40.6%, on a fully diluted basis. Those splits rest on assumptions the parties set: a $15.0 million value for Rallybio after its expected distributions, and a fixed $300.0 million value for Avenzo. The merger agreement was signed on May 31, 2026.
Cash goes out first
Rallybio puts its net cash, as defined in the merger agreement, at about $82.2 million as of August 15, 2026. It intends to distribute substantially all of it to current stockholders, and the proxy says that payment may come after closing. That cash therefore does not stay in the combined company. The annual report describes a contingent value right for Rallybio holders in the earlier Candid deal, tied to proceeds from the sale of its legacy assets and to any cash received from Recursion Pharmaceuticals, Inc. under a purchase agreement dated July 8, 2025. The sources here do not say whether the same right applies in the Avenzo deal.
The exchange ratio is assumed at about 0.5020 Rallybio shares for each Avenzo share. It will move with Rallybio's final net cash and share count at closing, and it does not yet reflect a reverse split. Avenzo may owe Rallybio a $20.0 million termination fee in certain circumstances, including a change or withdrawal of Avenzo's board recommendation, according to the 8-K filed for the merger agreement.
Votes, listing and dilution
On November 4, Rallybio stockholders will vote on issuing shares to Avenzo's holders, a change of control, a reverse split of 1-for-2 to 1-for-9 with the final ratio agreed by both companies, a rename to Avenzo Therapeutics, Inc., and an increase in authorized shares from 200,000,000 to 500,000,000. Rallybio expects to issue about 193,644,387 shares, plus options on 19,136,431 shares, before any reverse split. The combined board would have seven directors, designated before closing, and each current Rallybio executive officer and director is expected to resign. Avenzo's chair and chief executive, Athena Countouriotis, M.D., would hold the same roles in the combined company.
Support agreements signed with the merger agreement bind holders of about 24.3% of Rallybio's outstanding stock and about 78% of Avenzo's capital stock to vote in favor. Rallybio had 5,312,584 shares outstanding on the record date, and its stock closed at $16.91 on October 14.
Closing requires Nasdaq to approve the combined company's listing. The proxy says that condition is not expected to be waived, but the companies may agree to waive it and proceed anyway. If they do, Rallybio will not send an updated proxy or seek a new vote. Stockholders would therefore vote without knowing whether the combined shares will be listed.
The money behind the deal
Rallybio's 2025 net loss was $9.0 million, down from $57.8 million in 2024. It used $29.8 million in operations in 2025, against $49.3 million the year before, and reported revenue of $858,000. Its annual report from March 2026 described an earlier merger agreement with Candid, a T-cell engager company, signed March 1, 2026. That deal assumed a $47.5 million value for Rallybio, based on net cash of $37.5 million, and $505.5 million of concurrent financing. In the Avenzo deal, Rallybio's assumed value falls to $15.0 million.
The filings give no clinical results for Rallybio's lead C5 inhibitor, RLYB116, which the annual report describes as having the potential to treat diseases of complement dysregulation. They also give no clinical results for Avenzo's programs. The $300.0 million value for Avenzo is therefore a negotiated figure, not a trial-based one.
What comes next
The first step is the November 4 meeting. After a vote, the companies still have to agree on the reverse split ratio, make the distributions the proxy describes, and secure the Nasdaq listing before the combination can close. Until then, Rallybio's holders are being asked to approve a company whose lead asset has no clinical data in these filings, and whose value to them rests mainly on a cash payout.