RallyBio Announces Major Restructuring Amid Clinical Setbacks

RallyBio, a nanocap biotech company, has announced a significant workforce reduction and strategic shift following recent clinical trial disappointments. The company's latest moves underscore the challenges faced by small biotechs in the current pharmaceutical landscape.

Workforce Reduction and Financial Impact

RallyBio revealed plans to cut 40% of its workforce, affecting nine roles, in a move expected to be completed by the end of the second quarter of 2025. This restructuring will cost the company approximately $1.7 million, primarily in severance and benefit expenses. The announcement comes just 15 months after a previous 45% workforce reduction, highlighting the company's ongoing struggles.

Pipeline Refocus Following Lead Drug Discontinuation

The latest cuts follow RallyBio's decision to discontinue work on RLYB212, its lead drug candidate for the prevention of fetal and neonatal alloimmune thrombocytopenia (FNAIT). The phase 2 trial for RLYB212 was halted after drug concentrations in the first enrolled patient fell short of the target range. In response, RallyBio has shifted its focus to other pipeline candidates, including:

• RLYB116: A once-weekly low-volume C5 inhibitor
• REV102: An early-stage program
• RLYB332: Another early-stage candidate

Financial Outlook and Future Plans

Despite the setbacks, RallyBio reported $54.5 million in cash reserves as of the end of March, which the company believes will sustain operations into 2027. CEO Stephen Uden expressed confidence in the potential of RLYB116, stating that the company is "on track to initiate dosing in the RLYB116 confirmatory clinical pharmacokinetic/pharmacodynamic (PK/PD) study" in Q2, with results expected later this year.

Uden emphasized the company's expertise in the complement field and the potential for RLYB116 to address multiple billion-dollar market opportunities. He also highlighted the value of RallyBio's preclinical pipeline, including REV102 and RLYB332, suggesting a strategic pivot towards these earlier-stage assets.