UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _____________________________________ FORM 10-Q _____________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-40693 RALLYBIO CORPORATI ...

Exhibit 99.1 Rallybio Reports Second Quarter 2025 Financial Results and Provides Business Updates – Data Readouts from Cohort 1 and Cohort 2 of RLYB116 Confirmatory PK/PD Study on Track for 3Q and 4Q 2025, Respectively – – Sold Interest in REV102 to Recursion Pharmaceuticals for Up to $25 Million, including an Upfront Equity Payment of $7.5 Million – – Cash Runway into Mid-2027 – NEW HAVEN, Conn., August 7, 2025 -- Rallybio Corporation (Nasdaq: RLYB), a clinical-stage biotechnology company translating scien ...

Core Viewpoint - Shares in Recursion Pharmaceuticals surged over 12% due to a de-risking event in its drug discovery pipeline related to the acquisition of a 50% interest in the ENPP1 inhibitor program REV102 from Rallybio [1][2] Group 1: Acquisition Details - Recursion acquired the remaining 50% interest in the ENPP1 inhibitor program REV102, which is being developed to treat hypophosphatasia (HPP), a rare genetic disorder affecting bone development [2][3] - The joint venture with Rallybio has resulted in the development of REV102, which is currently in the preclinical stage [3] Group 2: Financial Terms of the Deal - The deal includes an upfront equity payment of $7.5 million, an additional equity payment of $12.5 million if REV102 undergoes further preclinical trials, and a $5 million milestone payment upon initiation of dosing in a phase 1 study [6] - Recursion will also receive low-single-digit royalties on future sales of REV102 [6] Group 3: Implications for Development - The agreement reduces the risk associated with the development of REV102 and alleviates uncertainties related to Rallybio's financial condition, thereby adding value to Recursion's pipeline [7]

Core Insights - Recursion has acquired Rallybio's full interest in the ENPP1 inhibitor program (REV102) for treating hypophosphatasia (HPP), a rare genetic disorder [1][2] - The acquisition allows Recursion to accelerate the development of the first potential oral disease-modifying treatment for HPP patients, who currently have limited access to therapies [2][4] - REV102 targets the ENPP1 enzyme, aiming to restore the balance of inorganic pyrophosphate necessary for proper bone mineralization [3][4] Company Overview - Recursion is a clinical stage TechBio company focused on decoding biology to industrialize drug discovery, utilizing an integrated AI/experimental platform known as Recursion OS [8][9] - The company operates one of the most powerful supercomputers globally and conducts millions of wet lab experiments weekly to advance drug discovery [9] Program Details - REV102 is designed to be the first oral disease-modifying therapy for HPP, potentially offering advantages in convenience and safety over existing injectable treatments [5][6] - The program is currently in IND-enabling studies, with Phase 1 clinical trials expected to begin in the second half of 2026 [6] Financial Terms of the Agreement - Under the acquisition agreement, Rallybio will receive $7.5 million in upfront equity, a contingent equity payment of $12.5 million upon the initiation of additional preclinical studies, and a $5 million milestone payment related to Phase 1 clinical study dosing [7] - Rallybio is also eligible for low single-digit royalties on future net sales by Recursion and potential payments in the event of Recursion's sale of the REV102 program [7]

RLYB116 - C5 Inhibitor - RLYB116 is being developed as a potential first- and best-in-class treatment for severe, refractory hematologic diseases[4, 12] - The estimated peak commercial opportunity for RLYB116 in immune PTR (Platelet Transfusion Refractoriness) is over $1.1 billion annually, targeting approximately 20,000 patients[13, 50, 51] - The estimated peak commercial opportunity for RLYB116 in refractory APS (Antiphospholipid Syndrome) is over $4.0 billion, also targeting approximately 20,000 patients[13, 50, 51] - A Phase 2 trial for immune PTR is expected to begin in the middle of 2026, and a Phase 2 trial for refractory APS is expected to begin in the second half of 2026[13] - Clinical PK/PD study data for RLYB116 is expected in the second half of 2025, with Cohort 1 data in Q3 2025 and Cohort 2 data in Q4 2025[4, 18, 66] REV102 - ENPP1 Inhibitor - REV102 is a potential first- and best-in-class ENPP1 inhibitor for patients with hypophosphatasia (HPP)[4, 54] - Phase 1 study on track to initiate 2H 2026[55] - Preclinical data for REV102 in a later-onset HPP model is expected in the second half of 2025[4, 66] Financial Position - Rallybio's cash position as of March 31, 2025, was $54.5 million, which is expected to support operations into the first half of 2027[5]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Rallybio Corporation's unaudited condensed consolidated financial statements for the period ended March 31, 2025 [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$58.0 million** from **$68.1 million** by March 31, 2025, mainly due to reduced marketable securities Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14,779 | $13,903 | | Marketable securities | $39,716 | $51,608 | | Total current assets | $57,381 | $67,841 | | **Total assets** | **$57,983** | **$68,108** | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $3,910 | $6,242 | | **Total liabilities** | **$3,910** | **$6,454** | | **Total stockholders' equity** | **$54,073** | **$61,654** | - The company's cash, cash equivalents, and marketable securities totaled **$54.5 million** as of March 31, 2025[28](index=28&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss improved to **$9.4 million** in Q1 2025 from **$19.0 million** in Q1 2024, reflecting lower operating expenses and new collaboration revenue Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Collaboration and license revenue | $212 | $0 | | Research and development expense | $5,725 | $12,936 | | General and administrative expense | $4,157 | $6,851 | | Loss from operations | $(9,670) | $(19,787) | | **Net loss** | **$(9,439)** | **$(19,029)** | | Net loss per common share, basic and diluted | $(0.21) | $(0.47) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$10.2 million** in Q1 2025, while investing activities provided **$11.1 million**, resulting in an ending cash balance of **$14.8 million** Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,205) | $(15,457) | | Net cash provided by investing activities | $11,081 | $10,264 | | Net cash provided by financing activities | $0 | $0 | | **Net increase (decrease) in cash** | **$876** | **$(5,193)** | | **Cash and cash equivalents - end of period** | **$14,779** | **$19,301** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business operations, liquidity, and accounting policies, including the RLYB212 program discontinuation, Johnson & Johnson collaboration, and workforce reductions - In April 2025, the company announced the discontinuation of its RLYB212 program for the prevention of fetal and neonatal alloimmune thrombocytopenia (FNAIT)[27](index=27&type=chunk) - The company expects its cash, cash equivalents, and marketable securities of **$54.5 million** (as of March 31, 2025) to be sufficient to fund operations for more than 12 months from the report's issuance date[28](index=28&type=chunk) - In February 2024, the company initiated a workforce reduction of approximately **45%**, incurring charges of about **$3.3 million**, which were recognized in Q1 2024[59](index=59&type=chunk)[60](index=60&type=chunk) - In April 2024, the company entered into a two-year collaboration with Johnson & Johnson for FNAIT research, receiving a **$0.5 million** upfront payment, and also sold **$6.6 million** of common stock to JJDC, a J&J affiliate[39](index=39&type=chunk)[62](index=62&type=chunk) - A subsequent workforce reduction of approximately **40%** was approved on May 2, 2025, with expected charges of **$1.7 million** to be recognized in Q2 2025[72](index=72&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business strategy, financial results, and liquidity, highlighting the shift to lead program RLYB116, reduced Q1 2025 net loss, and the need for substantial additional capital [Business Overview](index=22&type=section&id=Business%20Overview) Rallybio, a clinical-stage biotech, focuses on rare diseases with lead program RLYB116, following the discontinuation of RLYB212, and advancing preclinical programs REV102 and RLYB332 - The company's lead program, RLYB116, is a C5 inhibitor, with a confirmatory PK/PD study in healthy volunteers planned for Q2 2025, expecting data in Q3 and Q4 2025[75](index=75&type=chunk) - The RLYB212 program for FNAIT was discontinued in April 2025 after Phase 2 PK data indicated the dose regimen could not achieve the minimum target concentration for efficacy[75](index=75&type=chunk)[84](index=84&type=chunk) - Preclinical programs include REV102, an ENPP1 inhibitor for hypophosphatasia, and RLYB332, a long-acting MTP-2 antibody for iron overload diseases[75](index=75&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Total operating expenses decreased by **$9.9 million** in Q1 2025, driven by reduced R&D and G&A costs, while collaboration revenue of **$0.2 million** was recognized Comparison of Operating Results (in thousands) | Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $212 | $0 | $212 | | Research and development | $5,725 | $12,936 | $(7,211) | | General and administrative | $4,157 | $6,851 | $(2,694) | | **Loss from operations** | **$(9,670)** | **$(19,787)** | **$10,117** | - R&D expenses decreased by **$7.2 million**, primarily due to a **$3.2 million** reduction in RLYB212 development costs and a **$2.6 million** decrease in personnel-related expenses following the March 2024 workforce reduction[111](index=111&type=chunk) - G&A expenses decreased by **$2.7 million**, mainly due to a **$2.3 million** reduction in payroll and personnel-related costs from the workforce reduction[112](index=112&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$54.5 million** in cash and equivalents, projected to fund operations into H1 2027, but substantial additional capital is required for product development - The company believes its existing cash, cash equivalents, and marketable securities of **$54.5 million** will fund operating expenses and capital requirements into the first half of 2027[90](index=90&type=chunk)[121](index=121&type=chunk) - The company will need to raise substantial additional capital to complete the development and commercialization of its product candidates[90](index=90&type=chunk)[91](index=91&type=chunk) - The company has an effective Shelf Registration Statement on Form S-3 for up to **$300.0 million**, subject to limitations restricting fundraising capacity to one-third of its public float in a 12-month period[115](index=115&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Rallybio is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide information under this item[140](index=140&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[143](index=143&type=chunk) - There were no changes in internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[144](index=144&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - Rallybio is not currently a party to any litigation or legal proceedings that, in management's opinion, are probable to have a material adverse effect on the business[146](index=146&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key risks including historical losses, capital requirements, dependence on RLYB116, clinical development uncertainties, competition, reliance on third parties, and potential stock price volatility and delisting - The company has a history of significant losses (**$9.4 million** in Q1 2025) and an accumulated deficit of **$302.5 million** as of March 31, 2025, expecting continued losses and potential unprofitability[148](index=148&type=chunk) - The company is heavily dependent on the success of RLYB116, an early-stage clinical candidate, with the recent RLYB212 program failure highlighting high clinical development risks[12](index=12&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - Significant additional capital is required to fund operations and complete development, as existing cash, expected to last into H1 2027, is insufficient to bring any product to market[151](index=151&type=chunk)[152](index=152&type=chunk) - The company faces Nasdaq delisting risk due to its stock price falling below the **$1.00** minimum bid requirement, with a compliance deadline of August 25, 2025[353](index=353&type=chunk)[354](index=354&type=chunk) - Rallybio relies on third-party contract manufacturing organizations (CMOs) for manufacturing, increasing risks related to supply, quality control (cGMP compliance), and regulatory approval of manufacturing sites[255](index=255&type=chunk)[256](index=256&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=85&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered equity sales during Q1 2025 and confirmed full utilization of its 2021 Initial Public Offering proceeds as of March 31, 2025 - The company has not issued any unregistered equity securities during the quarter ended March 31, 2025[387](index=387&type=chunk) - As of March 31, 2025, the proceeds from the company's IPO have been fully utilized[390](index=390&type=chunk) [Other Information](index=86&type=section&id=Item%205.%20Other%20Information) No directors or officers entered into, modified, or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers entered into, modified, or terminated a Rule 10b5-1 trading plan or non-Rule 10b5-1 trading arrangement during the first quarter of 2025[391](index=391&type=chunk) [Exhibits](index=87&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and an amendment to the Sales Agreement with TD Securities - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906[392](index=392&type=chunk) - An amendment to the Sales Agreement with TD Securities (USA) LLC, dated March 13, 2025, was filed as an exhibit[392](index=392&type=chunk)

Rallybio Q1 2025 Financial Results and Business Update [Business Highlights and Pipeline Update](index=1&type=section&id=Recent%20Business%20Highlights%20and%20Upcoming%20Milestones) Rallybio provides updates on its clinical and preclinical programs, including progress on RLYB116 and REV102, and the discontinuation of RLYB212, while evaluating RLYB332 development [RLYB116 Program](index=1&type=section&id=RLYB116%20Program) The company is on track to start a confirmatory PK/PD study for RLYB116, a C5 inhibitor for complement-driven diseases, in Q2 2025, with data readouts expected in the second half of 2025 - A confirmatory pharmacokinetic/pharmacodynamic (PK/PD) study for RLYB116 is set to begin dosing in the second quarter of 2025[4](index=4&type=chunk) - Data readouts are anticipated in **Q3 2025 for Cohort 1 (150 mg)** and **Q4 2025 for Cohort 2 (225 mg)**[4](index=4&type=chunk) - The study aims to demonstrate RLYB116's potential for complete and sustained complement inhibition with improved tolerability, positioning it as a potential best-in-class therapeutic for complement-driven diseases[3](index=3&type=chunk)[4](index=4&type=chunk) [REV102 Program](index=1&type=section&id=REV102%20Program) IND-enabling studies are underway for REV102, an ENPP1 inhibitor for hypophosphatasia (HPP), developed with Recursion Pharmaceuticals, with a Phase 1 study planned for the second half of 2026 - Investigational new drug application (IND)-enabling studies are underway for REV102, an ENPP1 inhibitor for treating hypophosphatasia (HPP)[7](index=7&type=chunk) - A Phase 1 study is expected to be initiated in the second half of 2026, supported by the ongoing studies[7](index=7&type=chunk) - Data from a preclinical model of later-onset HPP is expected to be presented in the second half of 2025[7](index=7&type=chunk) [RLYB332 Program](index=1&type=section&id=RLYB332%20Program) Rallybio is assessing future development for RLYB332, a long-acting antibody for iron overload diseases, with preclinical data showing superior impact on key parameters compared to other molecules - Rallybio continues to evaluate development plans for RLYB332, a long-acting monoclonal antibody for diseases of iron overload[6](index=6&type=chunk) - Preclinical data has shown RLYB332 has a superior impact on pharmacodynamic (PD) parameters like serum iron and transferrin saturation (TSAT) compared to comparator molecules[6](index=6&type=chunk) [RLYB212 Program](index=2&type=section&id=RLYB212%20Program) In April 2025, Rallybio discontinued the RLYB212 program for preventing fetal and neonatal alloimmune thrombocytopenia (FNAIT) due to Phase 2 PK data indicating the dose regimen failed to achieve required target concentrations for efficacy - The RLYB212 program for the prevention of fetal and neonatal alloimmune thrombocytopenia (FNAIT) was discontinued in April 2025[8](index=8&type=chunk) - The decision was based on Phase 2 clinical trial PK data showing the dose regimen was unable to achieve the minimum target concentration required for efficacy[8](index=8&type=chunk) [Corporate Update](index=2&type=section&id=Corporate%20Update) Rallybio is implementing a 40% workforce reduction, affecting nine positions, to be completed by the end of Q2 2025, resulting in approximately $1.7 million in charges for severance and benefits - A **40% workforce reduction**, representing nine positions, will be substantially complete by the end of Q2 2025[9](index=9&type=chunk) - The company estimates the reduction will result in aggregate charges of approximately **$1.7 million**, primarily for one-time employee severance and benefit costs[9](index=9&type=chunk) [First Quarter 2025 Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) For Q1 2025, Rallybio reported a net loss of $9.4 million, a significant reduction from the $19.0 million loss in Q1 2024, driven by lower expenses and collaboration revenue, ending the quarter with $54.5 million in cash, providing a runway into H1 2027 Q1 2025 Financial Highlights (in millions) | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Revenue | $0.2 | $0 | +$0.2 | | R&D Expenses | $5.7 | $12.9 | -55.8% | | G&A Expenses | $4.2 | $6.9 | -39.4% | | Net Loss | $9.4 | $19.0 | -50.5% | | Net Loss Per Share | $0.21 | $0.47 | -55.3% | - Cash, cash equivalents, and marketable securities were **$54.5 million** as of March 31, 2025[12](index=12&type=chunk) - The current cash position is expected to fund operations into the **first half of 2027**[12](index=12&type=chunk) - The decrease in operating expenses was primarily due to lower development costs for RLYB212 and RLYB116, and reduced payroll costs following a workforce reduction in Q1 2024[12](index=12&type=chunk) [Financial Tables](index=4&type=section&id=Financial%20Tables) The financial tables provide detailed, unaudited condensed consolidated statements of operations and balance sheets for the period ended March 31, 2025, compared to prior periods [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, Rallybio reported total revenues of $0.212 million and a net loss of $9.439 million, or $0.21 per share, compared to no revenue and a net loss of $19.029 million, or $0.47 per share, in the prior-year period Condensed Consolidated Statements of Operations (Unaudited) *(in thousands, except per share data)* | | For the Three Months Ended March 31, | | | :--- | :---: | :---: | | | **2025** | **2024** | | Collaboration and license revenue | $212 | $— | | **Total revenue** | **$212** | **$—** | | Research and development | $5,725 | $12,936 | | General and administrative | $4,157 | $6,851 | | **Total operating expenses** | **$9,882** | **$19,787** | | **Loss from operations** | **($9,670)** | **($19,787)** | | **Net loss** | **($9,439)** | **($19,029)** | | **Net loss per common share** | **($0.21)** | **($0.47)** | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Rallybio had $54.5 million in cash, cash equivalents, and marketable securities, with total assets of $58.0 million and total stockholders' equity of $54.1 million, compared to $65.5 million in cash and equivalents at the end of 2024 Condensed Consolidated Balance Sheet Highlights (Unaudited) *(in thousands)* | | **March 31, 2025** | **December 31, 2024** | | :--- | :---: | :---: | | Cash, cash equivalents and marketable securities | $54,495 | $65,511 | | Total assets | $57,983 | $68,108 | | Total liabilities | $3,910 | $6,454 | | Total stockholders' equity | $54,073 | $61,654 |

Rallybio Corporation (RLYB) 2025 Conference Summary Company Overview - Rallybio Corporation focuses on rare diseases and is undergoing a transformation to develop new assets [3][5] Key Points and Arguments Recent Challenges - Rallybio's lead program, RLYB-212, faced setbacks due to unexpected antigen expression in the placenta, leading to insufficient therapeutic levels during pregnancy [5][6][7] - The decision to discontinue RLYB-212 was described as difficult but prudent, emphasizing the importance of patient safety [7] Pipeline Developments - The company is now focusing on RLYB-116, a complement Factor V inhibitor, which is in the clinical trial phase [8][9] - RLYB-116 is based on an Affibody platform, allowing for a small volume subcutaneous injection, which is expected to be more convenient for patients [9][10][12] - The drug is designed to be stable at room temperature and has low production costs, providing pricing flexibility [12] Target Indications - The company is particularly interested in antiphospholipid syndrome (APS), a condition with limited treatment options currently dominated by warfarin [13][35] - APS affects approximately 150,000 to 200,000 people in the U.S., with a subset experiencing recurrent thrombosis despite anticoagulation [35][36] Clinical Strategy - Rallybio aims to demonstrate complete and sustained inhibition of complement C5 in clinical trials, with plans to start a new study in Q3 and Q4 [24][29] - The company is adopting an adaptive design for dosing, starting at 150 mg and potentially increasing based on patient response [25][26] Safety and Efficacy - The focus is on ensuring the drug is well-tolerated, with previous trials indicating side effects related to bacterial contamination [33] - The company aims to avoid complications associated with existing treatments, emphasizing the need for 100% compliance in complement therapies [19][20] Market Potential - There is a belief that there remains significant opportunity for C5 inhibitors in various conditions, despite competition from other therapies [51] - The company is exploring additional indications beyond APS, with plans to announce these in the coming weeks [30] Financial Position - Rallybio's current cash runway extends into the second half of 2026, with ongoing efforts to manage expenditures effectively [62] Additional Important Content - The discussion highlighted the importance of understanding the complement system and its various targets, indicating that while C5 is a key focus, other complement pathways may also present therapeutic opportunities [47][48] - The company is working with key opinion leaders to develop biomarkers for future studies, aiming to establish a strong foundation for clinical outcomes [44][45] This summary encapsulates the critical insights from the Rallybio Corporation conference, focusing on their strategic direction, clinical developments, and market opportunities in the rare disease space.

Core Viewpoint - Rallybio Corporation (RLYB) shares dropped 41.2% after the company halted the development of RLYB212 due to insufficient pharmacokinetic data from a phase II study [1][2] Group 1: Company Developments - RLYB212 was intended to prevent fetal and neonatal alloimmune thrombocytopenia (FNAIT) in pregnant women at risk but failed to meet target concentrations necessary for efficacy [1][2] - Following the setback with RLYB212, the company is now focusing on its lead candidate, RLYB116, which is a differentiated C5 inhibitor aimed at treating complement-driven diseases [4] - Rallybio plans to initiate dosing in a confirmatory pharmacokinetic/pharmacodynamic study for RLYB116 in the second quarter of 2025, targeting diseases such as paroxysmal nocturnal hemoglobinuria (PNH), generalized myasthenia gravis (gMG), and antiphospholipid syndrome (APS) [5] Group 2: Market Performance - Year to date, Rallybio shares have declined 74%, significantly underperforming the industry, which has seen an 8.9% decline [3] - The management estimates that the market opportunity for complement-mediated diseases like PNH, APS, and gMG exceeds $6 billion [8]

Part I [Business](index=7&type=section&id=Item%201.%20Business) Rallybio is a clinical-stage biotechnology company focused on developing therapies for severe and rare diseases, leveraging strategic collaborations and intellectual property while navigating extensive government regulation - The company's mission is to develop and commercialize life-transforming therapies for patients with severe and rare diseases, focusing on maternal fetal health, complement dysregulation, hematology, and metabolic disorders[21](index=21&type=chunk) Product Pipeline as of December 31, 2024 | Molecule | Approach | Indication | Discovery | Preclinical | Phase 1 | Phase 2 | Phase 3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | RLYB212 | Anti-HPA-1a Monoclonal Antibody | Prevention of FNAIT | | | ✅ | ✅ | | | RLYB116 | C5 Inhibitor Affibody®-ABD Fusion | Diseases of complement dysregulation | | | ✅ | | | | REV102 | ENPP1 Inhibitor Small Molecule | Hypophosphatasia (HPP) | | ✅ | | | Partnership with Recursion | | RLYB332 | Matriptase-2 Inhibitor Monoclonal Antibody | Diseases of iron overload and severe anemias | | ✅ | | | | | RLYB114 | C5 Inhibitor Pegylated Affibody® | Ophthalmological diseases of complement dysregulation | | ✅ | | | | | Undisclosed | - | Undisclosed metabolic disease | Partnership with AbCellera | | | | | [Our Product Candidates](index=8&type=section&id=Item%201.%20Business.Our%20Product%20Candidates) Rallybio's pipeline is led by RLYB212 for FNAIT and RLYB116 for complement-mediated diseases, with preclinical assets including RLYB332 for iron overload and REV102 for HPP - RLYB212 is in a Phase 2 clinical trial in pregnant women at higher risk for HPA-1a alloimmunization and FNAIT, with enrollment in three stages[27](index=27&type=chunk)[28](index=28&type=chunk) - Following biomarker analyses and manufacturing enhancements for RLYB116, the company plans to initiate a confirmatory clinical PK/PD trial in Q2 2025[36](index=36&type=chunk) - RLYB332, a long-acting MTP-2 inhibitor, has shown favorable preclinical PD data, supporting its potential as a best-in-class therapy for diseases of iron overload like beta thalassemia and MDS[37](index=37&type=chunk) - In collaboration with Recursion, the company advanced REV102, an ENPP1 inhibitor for HPP, and plans for additional preclinical development activities in 2025[39](index=39&type=chunk) [Competition](index=22&type=section&id=Item%201.%20Business.Competition) Rallybio faces competition across its pipeline, with no approved preventative therapies for FNAIT, and established competitors in PNH, gMG, and HPP markets - **FNAIT:** No approved therapies exist, with Johnson & Johnson evaluating nipocalimab for treatment[110](index=110&type=chunk) - **PNH:** Competes with approved drugs Soliris and Ultomiris (AstraZeneca), Empaveli (Apellis), and Fabhalta (Novartis)[111](index=111&type=chunk) - **gMG:** Competes with approved drugs from AstraZeneca, Argenx (Vyvgart), and UCB (Zilbrysq, Rystiggo)[112](index=112&type=chunk) - **HPP:** Competes with the only approved therapy, Strensiq (AstraZeneca)[113](index=113&type=chunk) [Intellectual Property](index=23&type=section&id=Item%201.%20Business.Intellectual%20Property) The company's intellectual property strategy relies on owned and in-licensed patents and trade secrets, with key patent expirations for FNAIT in 2035 and complement programs between 2033 and 2034 - The patent family covering RLYB212 and its use in preventing FNAIT includes issued patents in the U.S., Europe, and other regions, which will expire in **2035**, excluding any potential extensions[122](index=122&type=chunk) - The complement program, including RLYB114 and RLYB116, is protected by two patent families acquired from Sobi, with patents granted in the U.S., Europe, and Japan that are scheduled to expire between **2033 and 2034**[124](index=124&type=chunk) - The company has exclusively in-licensed patent rights for RLYB332 from Kymab Limited, with patent applications pending in the U.S. and over 20 other countries[125](index=125&type=chunk) [License and Collaboration Agreements](index=25&type=section&id=Item%201.%20Business.License%20and%20Collaboration%20Agreements) Rallybio has key agreements including asset purchases for RLYB212 and RLYB116/114, license agreements for RLYB332, a joint venture for ENPP1 inhibitors, and collaborations with AbCellera and Johnson & Johnson - Entered a collaboration with Johnson & Johnson in April 2024 to advance FNAIT research, involving data sharing, an upfront payment of **$0.5 million**, and potential milestone payments up to **$3.7 million**[155](index=155&type=chunk)[156](index=156&type=chunk) - Acquired RLYB212 assets from Prophylix for an upfront payment, with up to **$19.0 million** in development milestones and **$20.0 million** in sales milestones[142](index=142&type=chunk)[143](index=143&type=chunk) - Acquired RLYB116/RLYB114 assets from Sobi for a **$5.0 million** upfront payment, with up to **$51.0 million** in development milestones and **$65.0 million** in sales milestones[137](index=137&type=chunk)[138](index=138&type=chunk) - Licensed RLYB331 (now RLYB332) from Sanofi for a **$3.0 million** upfront payment, with up to **$43.0 million** in development/regulatory milestones and **$150.0 million** in commercial milestones[133](index=133&type=chunk)[134](index=134&type=chunk) [Government Regulation](index=30&type=section&id=Item%201.%20Business.Government%20Regulation) The company's operations are subject to extensive regulation by the FDA and comparable authorities, covering preclinical studies, clinical trials, manufacturing, and post-approval requirements, including pricing, reimbursement, and data privacy - The company must navigate a multi-step approval process with the FDA, including preclinical studies, an effective IND application, and adequate and well-controlled clinical trials (Phase 1, 2, 3) under GCPs[165](index=165&type=chunk)[166](index=166&type=chunk) - RLYB212 has received Orphan Drug Designation from both the FDA and EMA, which provides incentives like market exclusivity (**7 years** in the U.S., **10 years** in the EU) upon approval[214](index=214&type=chunk)[245](index=245&type=chunk) - RLYB212 has also received Rare Pediatric Disease Designation from the FDA, making it potentially eligible for a Priority Review Voucher upon approval, subject to certain conditions and statutory deadlines[218](index=218&type=chunk) - The company is subject to various U.S. healthcare laws, including anti-kickback statutes, false claims acts, and the Sunshine Act, as well as global data privacy laws like GDPR, which impose significant compliance obligations[259](index=259&type=chunk)[268](index=268&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including significant losses, capital needs, dependence on early-stage clinical candidates, regulatory uncertainties, reliance on third parties, intense competition, intellectual property disputes, patient recruitment challenges, and stock volatility - **Financial Risk:** The company has a history of significant losses (**$57.8 million** in 2024) and will require substantial additional capital, with failure to obtain financing risking program delays or discontinuation[276](index=276&type=chunk)[281](index=281&type=chunk) - **Clinical Development Risk:** The company is heavily dependent on the success of RLYB212 and RLYB116, which are in early-stage clinical development, and preclinical and early clinical results may not be indicative of later-stage trial outcomes[295](index=295&type=chunk)[308](index=308&type=chunk) - **Regulatory Risk:** The marketing approval process is lengthy, unpredictable, and may require companion diagnostics, and even if approved, products will face extensive ongoing regulation and potential competition from generics or biosimilars[319](index=319&type=chunk)[366](index=366&type=chunk)[368](index=368&type=chunk) - **Third-Party Reliance:** The company relies on third-party CMOs for all manufacturing and CROs for clinical trials, increasing risks related to supply, quality control, and trial execution[383](index=383&type=chunk)[393](index=393&type=chunk) - **Stock Risk:** The company received a notice from Nasdaq on February 24, 2025, for failing to maintain a minimum bid price of **$1.00** per share, posing a risk of delisting[476](index=476&type=chunk) [Cybersecurity](index=95&type=section&id=Item%201C.%20Cybersecurity) Rallybio has implemented a cybersecurity risk management program based on the NIST Cybersecurity Framework, overseen by the audit committee, and has not experienced any material incidents to date - The company's cybersecurity program is guided by the NIST Cybersecurity Framework and includes risk assessments, security controls, and an incident response plan[512](index=512&type=chunk)[513](index=513&type=chunk) - Oversight is provided by the audit committee of the board of directors, with management handled by a third-party IT service provider and internal staff[516](index=516&type=chunk) - As of the report date, the company has not experienced any cybersecurity incidents that have had a material effect on its operations or financial condition[515](index=515&type=chunk) [Properties](index=96&type=section&id=Item%202.%20Properties) The company's corporate headquarters is located in New Haven, CT, where it leases approximately 9,000 square feet of office space under a lease expiring on September 30, 2025 - Leases **9,000 sq. ft.** of office space for its headquarters at 234 Church Street, Suite 1020, New Haven, CT 06510[517](index=517&type=chunk) - The current lease expires on **September 30, 2025**[517](index=517&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=96&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Rallybio's common stock trades on Nasdaq under 'RLYB' since July 2021, with no dividends paid or anticipated, and proceeds from IPO and offerings supporting pipeline development - Common stock trades on Nasdaq under the symbol **'RLYB'** since its IPO in July 2021[521](index=521&type=chunk) - The company has never paid dividends and intends to retain future earnings to finance business operations and expansion[523](index=523&type=chunk) - Net proceeds from the IPO were **$83.0 million**, which are intended to support pipeline development, working capital, and general corporate purposes[528](index=528&type=chunk)[529](index=529&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=98&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For 2024, Rallybio's net loss decreased to $57.8 million due to lower R&D and G&A expenses, with $0.6 million in new collaboration revenue, and $65.5 million in cash expected to fund operations into H2 2026 [Results of Operations](index=104&type=section&id=Item%207.%20Results%20of%20Operations) For fiscal year 2024, Rallybio's net loss decreased to $57.8 million from $74.6 million in 2023, driven by a $17.8 million reduction in total operating expenses, primarily in R&D and G&A, and initial collaboration revenue Comparison of Operations for Years Ended Dec 31, 2024 and 2023 (in thousands) | (in thousands) | 2024 | 2023 | CHANGE | | :--- | :--- | :--- | :--- | | **Collaboration and license revenue** | $ 636 | $ — | $ 636 | | **Research and development** | 41,507 | 53,544 | (12,037) | | **General and administrative** | 19,625 | 25,388 | (5,763) | | **Total operating expenses** | 61,132 | 78,932 | (17,800) | | **Loss from operations** | (60,496) | (78,932) | 18,436 | | **Net loss** | $ (57,775) | $ (74,564) | $ 16,789 | Research and Development Expenses by Program (in thousands) | (in thousands) | 2024 | 2023 | CHANGE | | :--- | :--- | :--- | :--- | | RLYB212 | $ 21,287 | $ 25,685 | $ (4,398) | | RLYB116 | 4,841 | 8,791 | (3,950) | | Other program candidates | 1,901 | 3,411 | (1,510) | | Personnel expenses | 12,488 | 14,160 | (1,672) | | **Total R&D expenses** | **$ 41,507** | **$ 53,544** | **$ (12,037)** | - The decrease in R&D expenses was primarily due to lower development costs for RLYB212 and RLYB116, and reduced payroll expenses following a workforce reduction effective March 6, 2024[570](index=570&type=chunk) - The decrease in G&A expenses was mainly due to lower consulting fees, D&O insurance premiums, and reduced payroll costs from the 2024 workforce reduction[570](index=570&type=chunk) [Liquidity and Capital Resources](index=105&type=section&id=Item%207.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2024, Rallybio had $65.5 million in cash, cash equivalents, and marketable securities, projected to fund operations into the second half of 2026, with primary liquidity from equity financings - The company projects its existing cash of **$65.5 million** (as of Dec 31, 2024) will fund operations into the **second half of 2026**[552](index=552&type=chunk)[580](index=580&type=chunk) - In April 2024, the company raised approximately **$6.6 million** in gross proceeds through a private placement of common stock to Johnson & Johnson Innovation – JJDC, Inc[551](index=551&type=chunk)[577](index=577&type=chunk) Cash Flow Summary (in thousands) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $ (49,282) | $ (60,265) | | Net cash provided by investing activities | 33,492 | 27,658 | | Net cash provided by financing activities | 5,199 | 143 | | **Net decrease in cash and cash equivalents** | **$ (10,591)** | **$ (32,464)** | [Financial Statements and Supplementary Data](index=110&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited consolidated financial statements for 2024 show a net loss of $57.8 million and total assets of $68.1 million, with notes detailing the J&J collaboration, asset acquisitions, and a 2024 restructuring [Consolidated Financial Statements](index=118&type=section&id=Item%208.%20Consolidated%20Financial%20Statements) The consolidated financial statements show a net loss of $57.8 million for 2024, a decrease from $74.6 million in 2023, with total assets decreasing to $68.1 million primarily due to lower cash and marketable securities Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $13,903 | $24,494 | | Marketable securities | $51,608 | $85,435 | | **Total Assets** | **$68,108** | **$115,620** | | Total current liabilities | $6,242 | $9,263 | | **Total Liabilities** | **$6,454** | **$9,436** | | **Total Stockholders' Equity** | **$61,654** | **$106,184** | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Collaboration and license revenue | $636 | $— | | Research and development | $41,507 | $53,544 | | General and administrative | $19,625 | $25,388 | | Loss from operations | $(60,496) | $(78,932) | | **Net Loss** | **$(57,775)** | **$(74,564)** | | **Net Loss Per Share** | **$(1.33)** | **$(1.84)** | [Notes to Consolidated Financial Statements](index=122&type=section&id=Item%208.%20Notes%20to%20Consolidated%20Financial%20Statements) Key notes to the financial statements detail the J&J collaboration revenue, equity transactions including a $6.6 million stock sale to JJDC, deferred tax assets offset by a valuation allowance, and a February 2024 restructuring with a $3.3 million charge - In February 2024, the company initiated a restructuring, eliminating approximately **45%** of its positions and incurring charges of approximately **$3.3 million** for severance and benefits[749](index=749&type=chunk)[750](index=750&type=chunk) - The company has federal net operating loss carryforwards of **$167.4 million** that do not expire and federal R&D tax credit carryforwards of **$23.4 million** that begin expiring in 2039, with a full valuation allowance recorded against deferred tax assets[734](index=734&type=chunk)[735](index=735&type=chunk)[736](index=736&type=chunk) - The company recognized **$0.6 million** in revenue in 2024 related to its collaboration with Johnson & Johnson, with total consideration of **$1.2 million** from the associated equity sale premium and discount allocated to revenue to be recognized over the two-year performance period[703](index=703&type=chunk)[706](index=706&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, with no material changes during the quarter - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective[607](index=607&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[608](index=608&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Certain Relationships](index=111&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10 through 14, covering directors, executive officers, corporate governance, executive compensation, security ownership, and certain relationships, is incorporated by reference from the 2025 Proxy Statement - The information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the registrant's Definitive Proxy Statement for its 2025 Annual Meeting of Stockholders[614](index=614&type=chunk)[615](index=615&type=chunk)[616](index=616&type=chunk)[617](index=617&type=chunk)[618](index=618&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=111&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts such as asset purchase and license agreements, collaboration agreements, employment agreements, and officer certifications - Lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and officer certifications[622](index=622&type=chunk)