RLYB Divests ENPP1 JV, Gains Cash & Royalty Upside from Recursion

Rhea-AI Filing Summary

Rallybio Corporation (NASDAQ: RLYB) has divested its 50 % ownership in RE Ventures I, LLC (the ENPP1 joint venture) to Recursion Pharmaceuticals for immediate and potential future consideration.

• Initial consideration: Recursion issued 1,457,952 Class A shares (VWAP $5.1442) valued at $7.5 million on 8 July 2025.
• Make-whole mechanism: If Rallybio’s net proceeds from selling the Initial Shares differ from $7.5 million, the party benefiting must true-up the difference in cash.
• Contingent equity: Upon achievement of specified development milestones for the ENPP1 compound, Rallybio may receive additional shares worth up to $12.5 million, with the same make-whole feature.
• Milestone & royalty stream: The agreement grants Rallybio undisclosed cash milestone payments and low-single-digit royalties on future net sales of ENPP1-related products.
• Following the sale, the ENPP1 JV becomes an indirect wholly-owned subsidiary of Recursion; Rallybio relinquishes all equity interest.

The transaction strengthens Rallybio’s liquidity with $7.5 million in equity that can be monetised, de-risks ongoing ENPP1 development costs, and leaves upside through contingent consideration and royalties. However, future value now depends on milestones achieved by Recursion, and Rallybio forgoes direct participation in the JV’s long-term upside.

Positive

• $7.5 million upfront consideration strengthens Rallybio’s near-term liquidity.
• Make-whole provision hedges share-price risk, ensuring minimum proceeds.
• Potential up to $12.5 million additional equity plus milestone cash and royalties offers future upside.
• Divestiture reduces development risk and cash burn related to ENPP1 program.

Negative

• Rallybio cedes 100 % ownership of the ENPP1 JV and its direct future upside.
• Future payments are contingent on milestones outside Rallybio’s control, introducing execution risk.

Insights

Biotechnology Equity Analyst

TL;DR: Rallybio gains $7.5 m cash-equivalent and upside rights, but surrenders JV ownership; overall moderately accretive to liquidity.

Impact assessment: Rallybio converts a non-controlling JV stake into immediately realisable equity plus milestones and royalties. The guaranteed $7.5 million bolsters near-term cash runway, important for clinical-stage companies with limited revenue. Make-whole provisions hedge market risk on share disposals, preserving value.

Strategically, Rallybio divests an asset requiring significant capital while retaining economic exposure through royalties. This reduces R&D spend and balance-sheet risk. The contingent $12.5 million in shares and development milestones provide upside but are uncertain.

Investors should weigh the loss of direct ENPP1 upside against improved liquidity and reduced burn. Net effect skews positive given no financial terms indicate dilution or liabilities for Rallybio.

M&A Specialist

TL;DR: Standard biopharma asset sale with equity, milestone, royalty mix; value hinges on Recursion’s execution.

The purchase agreement follows customary biotech structuring: upfront equity, true-up clauses, contingent shares, and downstream royalties. Rallybio’s risk transfer is clear; Recursion consolidates the asset, aligning control with full ownership.

Materiality is moderate: $7.5 million represents a small fraction of typical development costs but is meaningful for a pre-revenue company. The absence of lock-ups or escrow terms in the filing leaves execution timing flexible.

From an M&A lens the deal is neutral to slightly positive—liquidity improvement offset by relinquishing strategic optionality.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________________

FORM 8-K

______________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 08, 2025

______________________________________________________

RALLYBIO CORPORATION

(Exact name of Registrant as Specified in Its Charter)

______________________________________________________

Delaware			001-40693			85-1083789
(State or Other Jurisdiction of Incorporation)			(Commission File Number)			(IRS Employer Identification No.)
			234 Church Street, Suite 1020 New Haven, Connecticut			06510
			(Address of Principal Executive Offices)			(Zip Code)

Registrant’s Telephone Number, Including Area Code: 203 859-3820

(Former Name or Former Address, if Changed Since Last Report)

______________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

			o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
			o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
			o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
			o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

RLYB

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 1.01 Entry into a Material Definitive Agreement.

On July 8, 2025, Rallybio Corporation (“Rallybio”) entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Recursion Pharmaceuticals, Inc., (“Recursion”), Exscientia Ventures I, Inc., an indirect wholly-owned subsidiary of Recursion (“Buyer”) and Rallybio IPB, LLC, a wholly-owned subsidiary of Rallybio (“Seller”), pursuant to which Buyer purchased 50% of the issued and outstanding membership interests (the “Membership Interests”) of RE Ventures I, LLC (the “ENPP1 JV”) from Seller in exchange for cash and the issuance of shares (“Shares”) of Class A Common Stock of Recursion (the “Sale”). Prior to the closing of the Sale, Seller held 50% of the Membership Interests of the ENPP1 JV. As a result of the Sale, the ENPP1 JV became an indirect wholly-owned subsidiary of Recursion.

Pursuant to the terms of the Purchase Agreement, on July 8, 2025, Recursion issued to Seller an aggregate of 1,457,952 Shares (the “Initial Shares”) as partial consideration for the Sale, calculated by dividing $7,500,000 by a per share price of $5.1442, which is the volume weighted average price of Recursion’s Class A Common Stock over the seven consecutive trading days ending on July 7, 2025, the last trading day before the execution of the Purchase Agreement.

The Purchase Agreement also provides that, subject to certain conditions, if Seller sells the Initial Shares and the net proceeds from such sales are less than $7,500,000, then Recursion is required to pay to Seller an amount in cash equal to the amount by which such net proceeds are less than $7,500,000. If the net proceeds from such sales exceed $7,500,000, then Seller is required to pay Recursion an amount in cash equal to the amount by which such proceeds exceed $7,500,000.

In addition, under the terms of the Purchase Agreement, as additional contingent consideration for the Acquisition, if certain milestones with respect to the compound developed by the ENPP1 JV are satisfied, Recursion agreed to issue to Seller a number of Shares equal to the quotient obtained by dividing $12,500,000 by the volume weighted average price of the Class A common stock of the Company over the seven consecutive trading days ending on the day the milestone is met (the “Contingent Shares”), with cash payments to be made or received by Seller or Buyer, as applicable, under circumstances similar to the Initial Shares to the extent net proceeds received by Seller from sales of the Contingent Shares are less than or exceed $12,500,000.

As additional consideration, Seller is entitled to receive certain payments from Recursion if certain development and clinical milestones with respect to the compound developed by the ENPP1 JV are achieved. Recursion also agreed to pay Seller low single digit royalties on annual net sales of certain products developed by the ENPP1 JV.

The Purchase Agreement contains other customary terms including related to milestones, royalties, sale transactions, restrictive covenants and termination.

The foregoing description of the Purchase Agreement does not purport to be complete, and is qualified in its entirety by reference to the Purchase Agreement, a copy of which Rallybio expects to file with its Quarterly Report on Form 10-Q for the quarter ending September 30, 2025, and upon filing will be incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 8.01 Other Events.

On July 8, 2025, Rallybio issued a press release announcing the Sale. A copy of the press release is furnished as Exhibit 99.1. to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.						Description
99.1						Press release issued by Rallybio on July 8, 2025 regarding the Sale
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

									RALLYBIO CORPORATION
Date:			July 8, 2025			By:			/s/ Jonathan I. Lieber
									Jonathan I. Lieber Chief Financial Officer and Treasurer

FAQ

What did Rallybio (RLYB) announce in its July 8 2025 Form 8-K?

Rallybio sold its 50 % stake in the ENPP1 joint venture to Recursion, receiving $7.5 million in stock plus milestone and royalty rights.

How much immediate value does Rallybio receive from the ENPP1 JV sale?

Recursion issued 1,457,952 Class A shares valued at $7.5 million based on a seven-day VWAP of $5.1442.

What additional consideration can Rallybio earn from the transaction?

Up to $12.5 million in additional Recursion shares upon milestone achievement, cash milestones, and low single-digit sales royalties.

What protections exist if Recursion’s share price changes before Rallybio sells the shares?

A make-whole clause requires Recursion to pay cash if net sale proceeds fall below $7.5 million, or Rallybio to repay any excess.

Does Rallybio retain any ownership in the ENPP1 JV after the sale?

No. The ENPP1 joint venture becomes an indirect wholly-owned subsidiary of Recursion.