aibioRallybio sells 50% stake in ENPP1 joint venture to Recursion for cash and shares
Tickers RLYB
Recursion issued 1,457,952 of its shares to Rallybio's selling subsidiary. Rallybio could receive more shares, development milestone payments and low single digit royalties later.
Key facts
- Company
- Rallybio Corporation (NASDAQ: RLYB)
- News type
- Mergers
- Primary source
- Rallybio Corp Form 8-K filed July 8, 2025 (SEC EDGAR)
Rallybio Corporation (Nasdaq: RLYB) sold its 50% stake in the ENPP1 joint venture to a subsidiary of Recursion Pharmaceuticals, Inc. on July 8, 2025, in exchange for cash and shares of Recursion Class A Common Stock. Rallybio disclosed the sale in a Form 8-K filed the same day under Items 1.01, 2.01 and 8.01. Jonathan I. Lieber, its chief financial officer and treasurer, signed the filing.
The deal
Rallybio signed a Membership Interest Purchase Agreement with Recursion, Exscientia Ventures I, Inc., an indirect wholly owned Recursion subsidiary that is the buyer, and Rallybio IPB, LLC, a Rallybio subsidiary that is the seller. The buyer acquired 50% of the membership interests of RE Ventures I, LLC, which the filing calls the ENPP1 JV. Before the sale, the seller held the other 50%. After it, the joint venture is an indirect wholly owned subsidiary of Recursion.
The consideration
Recursion issued 1,457,952 Class A shares to the seller as partial consideration. The filing says that number comes from dividing $7.5 million by $5.1442, the volume weighted average price of Recursion's Class A stock over the seven consecutive trading days ending July 7, 2025, the last trading day before signing.
The agreement does not fix the value of those shares. It includes a cash true-up in both directions. If the seller's net proceeds from selling the initial shares fall short of $7.5 million, Recursion must pay the difference in cash. If they exceed $7.5 million, the seller must pay the excess to Recursion. The value Rallybio realizes therefore depends on the price at which the shares are sold, and the 8-K does not give a figure for those proceeds.
Further consideration depends on events that have not yet happened. If milestones for the compound developed by the joint venture are met, Recursion agrees to issue shares worth $12,500,000, priced on the seven trading days ending on the day the milestone is met, with the same cash true-up. The seller is also entitled to development and clinical milestone payments. Recursion agreed to pay low single digit royalties on annual net sales of certain products the joint venture develops. The 8-K does not name the milestones, the compound or the amounts of the milestone payments.
What the filing leaves out
The 8-K says its description of the agreement is not complete. Rallybio expects to file the Membership Interest Purchase Agreement with its quarterly report on Form 10-Q for the quarter ending September 30, 2025. Until then, the milestone thresholds, royalty rates and termination terms are not stated in the 8-K. A press release issued July 8, 2025 is furnished as Exhibit 99.1, and the 8-K itself adds nothing about it.
The company's position
The annual report for 2024, filed March 13, 2025, reports a net loss of $57.8 million for 2024, down from $74.6 million for 2023. The accumulated deficit was $293.0 million at December 31, 2024. Cash, cash equivalents and marketable securities were $65.5 million at that date.
The report says that amount is expected to fund operations for more than 12 months from the date the financial statements were issued. Its liquidity section gives a shorter estimate, into the second half of 2026. The same section says the company does not anticipate that this cash will be enough to fund any of its product candidates through regulatory approval, and that it will need to raise substantial additional capital.
The company's two most advanced programs are RLYB212, an anti-HPA-1a antibody in a Phase 2 trial for the prevention of fetal and neonatal alloimmune thrombocytopenia in pregnant women, and RLYB116, an inhibitor of complement component 5. The 8-K does not say how the sale affects either program or how the joint venture's development costs are funded after the transfer.
Reading the sale
The filing puts the initial stake at $7.5 million on paper. Against that, Rallybio reported a 2024 net loss of $57.8 million and held $65.5 million in cash and securities at year end. The contingent $12,500,000, the milestone payments and the royalties all depend on events and sales the filing does not describe, and the shares Rallybio receives will move with Recursion's stock price until they are sold. The 8-K names no financial adviser or law firm for either side.