Rallybio Corporation RLYB agreed on Tuesday to sell its interest in REV102, an ENPP1 inhibitor in preclinical development for hypophosphatasia (HPP), to joint venture partner Recursion Pharmaceuticals Inc. RXRX.
The deal consideration of up to $25 million includes an upfront equity payment of $7.5 million and near-term milestones.
With the upfront payment, Rallybio expects its cash runway to extend into mid-2027.
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The REV102 program, which originated from a joint venture between Rallybio and Recursion, focused on discovering and developing novel, orally available small-molecule inhibitors of ENPP1 for treating patients with HPP.
HPP is a rare, inherited metabolic bone disease caused by a deficiency in the enzyme alkaline phosphatase (ALP).
This deficiency disrupts the mineralization of bones and teeth, leading to a range of skeletal and dental abnormalities.
The lead candidate from the joint venture, REV102, entered into IND-enabling studies in early 2025.
Under the terms of the agreement, Rallybio is eligible to receive certain payments, including $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 in connection with the initiation of dosing in a Phase 1 clinical study, as defined in the agreement.
Rallybio is also eligible to receive low single-digit royalties on all future net sales by Recursion. In addition, Rallybio may be eligible to receive certain payments in the event of Recursion’s sale of the REV102 program.
Recursion Pharmaceuticals announced a reduction in personnel and infrastructure to extend its cash runway in June.
The company announced an approximately 20% reduction in its workforce, extending its cash runway into the fourth quarter of 2027.
The Nvidia-backed biotech company expects its cash burn to be below $450 million in 2025 and under $390 million in 2026.
Price Action: At the last check on Tuesday, RLYB stock was up 36.8% at $0.47, and RXRX stock was up 0.81% at $4.97 during the premarket session.
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