Rallybio Estimates $82.7 Million Cash Distribution in Merger With Avenzo
Key Facts
Rallybio estimated the special cash distribution tied to its merger with Avenzo Therapeutics at about $82.7 million in total, or $13.56 per share, according to a company filing with the U.S. Securities and Exchange Commission. The estimate is part of the transaction terms announced in June, and the company said payment of the distribution remains subject to shareholder approval and completion of the merger. Shareholders are scheduled to vote on the transaction and distribution at an annual meeting on November 4, 2026. Rallybio expects to complete the merger on or around November 6, subject to approval and the satisfaction of the conditions. The company's shares closed at $15.76 in the November 2 session, according to EL7 data.
The company set November 5 as the expected record date for determining eligible shareholders and warrant holders, with the amount to be deposited with the transfer agent that day before distribution on November 13. It said the record date could change depending on the timing of the shareholder meeting. It also expects the due bill period to run from November 4 to November 6, during which a buyer of the stock is entitled to the distribution while the seller is not. These dates tie the distribution to the transaction timeline and trading in the stock around the ex-distribution date. The announced amount remains an estimate until the final amount is determined and distributed.
The transaction includes a concurrent $215 million private financing for Avenzo, which is to take place immediately before the merger becomes effective and after its conditions are met. Under the transaction assumptions, former Avenzo shareholders, excluding the financing investors, are expected to own 56.6% of the combined company. Financing investors will own 40.6%, while former Rallybio shareholders will hold 2.8%. These percentages reflect the effect of the share issuance in the financing and the share exchange in the merger. The companies said in June that the combined company would be named Avenzo Therapeutics and that its shares were expected to trade on Nasdaq under the symbol AVZO.
Rallybio's results for the nine months ended September 30, 2026 showed net income of $32.662 million, compared with a net loss of $3.126 million in the year-earlier period. Revenue, however, fell to $212,000 from $636,000. The company attributed a $27.5 million increase in other income to the termination of its previous merger agreement with Candid Therapeutics on May 4 and the payment of the related termination fee. Candid paid Rallybio a $50 million termination fee, along with $0.4 million in reimbursement for certain expenses. The fees therefore contributed to income and were not an expense that reduced net income.
Rallybio had about $90.693 million in cash and cash equivalents on September 30, before the special distribution was announced. The difference between that balance and the estimated distribution shows the amount expected to be paid out by the company, while the final value remains tied to the transaction process. Contingent value rights also give former Rallybio shareholders a proportional share of net proceeds that may result from the disposition of the former company's assets. The filing cautions, however, that those rights may produce no payments if Rallybio, Avenzo or the combined company fail to enter into agreements to dispose of assets or collect proceeds from them. The rights remain separate from the estimated cash distribution.
When they announced the agreement in June, the companies said the private financing was expected to support the combined company's operations through late 2028, allowing its clinical programs and subsequent data milestones to advance. Plans announced included updates to preliminary data for some programs in late 2026, including Phase 1 data from the ORION-1 study of AVZO-023 in combination with fulvestrant. The scheduled November 4 vote comes ahead of the expected merger closing on or around November 6. The distribution remains subject to shareholder approval and satisfaction of the transaction conditions. The funds are scheduled to be distributed on November 13 under the company's current timetable.