Rallybio and Candid Therapeutics Announce Transformative Merger and Oversubscribed Financing to Advance TCE Therapeutics for Autoimmune Diseases
Rallybio Corporatin, and Candid Therapeutics, Inc. (“Candid”), a globally recognized clinical-stage biotechnology company specializing in T-cell engager (TCE) therapeutics for autoimmune diseases, have announced a definitive agreement under which Rallybio will acquire Candid through a strategic merger transaction (the “Merger”). Upon completion of the Merger, the combined company will operate under the name Candid Therapeutics, Inc., and will be listed on the Nasdaq stock exchange under the ticker symbol “CDRX.”
The merger represents a strategic alignment between two pioneering organizations in the field of autoimmune therapeutics. Candid is recognized for its advanced pipeline of TCE programs that span a broad array of B-cell and plasma cell targets, positioning the company as a leader in the development of novel therapies for autoimmune diseases. The transaction is designed to accelerate the development of Candid’s promising portfolio of therapies while leveraging Rallybio’s infrastructure, operational capabilities, and strategic expertise in biotechnology development.
As part of the transaction, Candid has successfully executed subscription agreements for an oversubscribed and upsized private financing round, generating over $505 million in gross proceeds (the “Financing”). This financing was led by a syndicate of prominent healthcare institutional investors and mutual funds, including Venrock Healthcare Capital Partners, RA Capital Management, Janus Henderson Investors, accounts advised by T. Rowe Price Associates, Inc., venBio Partners, Viking Global Investors, Cormorant Asset Management, Foresite Capital, Soleus Capital, TCGX, Vivo Capital, as well as other leading institutional investors. The substantial proceeds from the Financing, combined with the Merger, will provide the combined company with significant capital resources to support operations through 2030, facilitating the advancement of Candid’s diversified pipeline of TCE programs through multiple critical clinical milestones.
The combined company’s robust financial position is expected to enable the initiation and progression of pivotal Phase 2 studies for cizutamig, a B-cell maturation antigen (BCMA) targeting TCE, in patients with myasthenia gravis and interstitial lung disease (ILD) secondary to rheumatological conditions. Cizutamig has already demonstrated promising clinical results, including favorable tolerability, low rates of mild cytokine release syndrome (CRS), and therapeutic activity with less frequent dosing compared to therapies in the anti-FcRn drug class. The global Phase 2 clinical trials are planned to commence in 2026, marking a significant step forward in the potential treatment of autoimmune conditions.
The Merger has received unanimous approval from the boards of directors of both Rallybio and Candid, reflecting the strategic and clinical merit of the transaction. The completion of the Merger is expected in mid-2026, subject to customary closing conditions. These include approval by the stockholders of each company, the effectiveness of a registration statement to be filed with the Securities and Exchange Commission (SEC) to register shares of Rallybio common stock to be issued in connection with the Merger, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the satisfaction of other customary closing conditions. Following the closing, it is anticipated that pre-transaction Rallybio equityholders will own approximately 3.65% of the combined company, while pre-transaction Candid equityholders—including investors participating in the Financing—will own approximately 96.35%, assuming Rallybio has net cash at closing of $37.5 million. Additionally, pre-closing Rallybio stockholders will receive contingent value rights (CVRs), entitling them to a portion of certain cash proceeds from the previously announced sale of interests in REV102 and potential disposition of other Rallybio legacy assets.
A Diversified Pipeline with Significant Potential
Candid’s pipeline represents one of the most advanced and diversified collections of TCE therapeutics in autoimmune disease, providing the combined company with significant strategic optionality. Key highlights of the pipeline include:
- Cizutamig, a BCMA TCE: Cizutamig is positioned as a potential first- and best-in-class BCMA TCE for autoimmune diseases, with 87 patients dosed to date, including 47 patients across multiple autoimmune indications. The therapy has demonstrated a favorable tolerability profile, low rates of mild CRS, and evidence of deeper therapeutic activity with less frequent dosing compared to existing anti-FcRn therapies. Phase 2 studies in myasthenia gravis and ILD are planned to start in 2026, providing important clinical validation for the program.
- TCEs targeting CD19 and/or CD20: CND261, a CD20 TCE, has been administered to over 100 patients across oncology and autoimmune indications. Early data show low CRS rates and deep tissue B-cell depletion, signaling strong clinical potential. CND319, a dual-targeting CD19/CD20 TCE, has demonstrated a promising therapeutic index in non-human primate studies, with first-in-human clinical trials planned for mid-2026.
- Additional preclinical programs: The company’s pipeline also includes innovative dual-targeting TCEs against BCMA and CD19, reinforcing its position as a leader in next-generation TCE therapeutics.
Financial Strength and Leadership
The combined company is expected to be well-capitalized, with pro-forma cash of approximately $700 million at closing. This strong financial foundation will enable continued investment in clinical development, facilitating the achievement of multiple value-creating milestones across Candid’s portfolio of TCE programs.
Leadership will be helmed by Dr. Ken Song, M.D., Chairman, President, and Chief Executive Officer of Candid, who brings deep expertise in autoimmune drug development, TCE biology, and global clinical operations. Dr. Song stated, “This transaction marks an exciting moment for Candid as we lead the development of TCEs for patients with autoimmune diseases. By combining with Rallybio and securing over $505 million in new financing from a distinguished group of healthcare investors, we have the resources to advance what we view as a transformative therapeutic modality. With Phase 2 studies planned for cizutamig in 2026 and a rich pipeline of next-generation TCE programs, we will continue to push forward this new drug class.”
Dr. Stephen Uden, M.D., Co-Founder and Chief Executive Officer of Rallybio, added, “We are pleased to announce this transaction, which represents a compelling opportunity for Rallybio stockholders to participate in the future value creation of a well-capitalized, clinical-stage company with a differentiated and broad portfolio of TCE drug candidates. Candid’s clinical data in myasthenia gravis and across its autoimmune pipeline, combined with the strong endorsement of leading healthcare investors, further substantiates the merit of this transaction.”
Strategic Significance and Future Outlook
The Merger and associated financing position Candid Therapeutics as a leading force in the rapidly evolving field of TCE-based autoimmune therapies. The combined company’s diversified pipeline, robust financial resources, and experienced leadership team are expected to accelerate clinical development, deliver meaningful patient outcomes, and create long-term value for investors. With multiple clinical milestones on the horizon, including the initiation and readouts of Phase 2 studies for cizutamig, the company is poised to redefine the treatment landscape for patients with autoimmune diseases while advancing a next-generation class of TCE therapeutics.
Overall, the Rallybio-Candid transaction exemplifies a strategic consolidation in the biotechnology sector, combining scientific innovation, operational capability, and financial strength to drive forward transformative therapies for patients in need. The merger reinforces both companies’ commitment to improving outcomes for individuals living with autoimmune diseases and represents a significant milestone in the development of cutting-edge TCE-based therapeutics.
