10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

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

 

https://cdn.kscope.io/d8296c95a5fd6c8e30d760f2b9a3e917-img113857645_0.jpg 

RALLYBIO CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

85-1083789

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

234 Church Street, Suite 1020

New Haven, CT

06510

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (203) 859-3820

 

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

 

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No

As of November 8, 2021, the registrant had 32,129,970 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements concerning:

the timing of our planned clinical trial application submission for RLYB116;
the initiation, timing, progress, results, and cost of our research and development programs, and our current and future preclinical and clinical studies, including statements regarding the timing of initiation and completion of our clinical trials for RLYB211, RLYB212, and RLYB116, and the natural history study for our FNAIT prevention program, and related preparatory work, and the period during which the results of the trials will become available;
the success, cost and timing of our clinical development of our product candidates, including RLYB212, RLYB116 and RLYB114;
the timing of our planned nomination of a compound for our ENPP1 program under our joint venture with Exscientia;
our ability to initiate, recruit and enroll patients in and conduct our clinical trials at the pace that we project;
our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations or warnings in the label of any of our product candidates, if approved;
our ability to compete with companies currently marketing or engaged in the development of treatments for diseases that our product candidates are designed to target, including PNH and gMG;
our reliance on third parties to conduct our clinical trials;
our reliance on third parties to manufacture drug substance for use in our clinical trials;
the size and growth potential of the markets for RLYB212, RLYB116, RLYB114 and any of our current product candidates or other product candidates we may identify and pursue, and our ability to serve those markets;
our ability to expand our pipeline through collaborations, partnerships and other transactions with third parties;
our ability to identify and advance through clinical development any additional product candidates;
the commercialization of our current product candidates and any other product candidates we may identify and pursue, if approved, including our ability to successfully build commercial infrastructure or enter into collaborations with third parties to market our current product candidates and any other product candidates we may identify and pursue;
our ability to retain and recruit key personnel;
our ability to obtain and maintain adequate intellectual property rights;
our expectations regarding government and third-party payor coverage and reimbursement;
our estimates of our expenses, ongoing losses, capital requirements and our needs for or ability to obtain additional financing;
our expected uses of the net proceeds from our initial public offering;
the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, including potential business development opportunities and potential licensing partnerships, and our ability to attract collaborators with development, regulatory and commercialization expertise;
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012;
our financial performance;
developments and projections relating to our competitors or our industry; and

i


 

other risks and uncertainties, including those listed under the section titled “Risk Factors.”

 

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in this Quarterly Report on Form 10-Q entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as guarantees of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual future results, levels of activity, performance and events and circumstances could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties. Except as required by applicable law, we are not obligated to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

 

Trademarks

We use Rallybio as a trademark in the United States and/or in other countries. This Quarterly Report on Form 10-Q contains references to our trademark and to those belonging to other entities, including Affibody®. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

 

Risk Factor Summary

Our business is subject to a number of risks that are discussed more fully in the “Risk Factors” section of this Quarterly Report on Form 10-Q. These risks include the following:

We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the foreseeable future. We have not commercialized any products and have never generated revenue from the commercialization of any product. We are not currently profitable, and we may never achieve or sustain profitability;
We will require significant additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development and commercialization of RLYB212, RLYB116 or any additional product candidates we may develop;
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates;
The ongoing COVID-19 pandemic in the United States and other countries has resulted in and may further result in disruptions to our preclinical studies, clinical trials, manufacturing and other business operations, which could adversely affect our business and the market price of our common stock;
We are heavily dependent on the success of RLYB212 and RLYB116, which are in preclinical IND-enabling activities. If we are not able to develop, obtain regulatory approval for, or successfully commercialize our product candidates, or if we experience significant delays in doing so, our business will be materially harmed;
We may not be successful in our efforts to identify additional product candidates. Due to our limited resources and access to capital, we must prioritize development of certain product candidates, the choice of which may prove to be wrong and adversely affect our business;
Preclinical studies and clinical trials are expensive, time consuming, and difficult to design and implement, and involve uncertain outcomes. Any product candidates that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates;

ii


 

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including our focus on rare diseases;
Results of preclinical studies, clinical trials, or analyses that we may announce or publish from time to time, may not be indicative of results obtained in later trials, and any interim results we may publish could be different than final results;
Any product candidates that we develop or the administration thereof, may cause serious adverse events or undesirable side effects, which may halt their clinical development, delay or prevent marketing approval, or, if approved, require them to be taken off the market, include safety warnings, or otherwise limit their sales;
The regulatory approval processes of the U.S. Food and Drug Administration (the "FDA"), the European Medicines Agency (the "EMA"), and comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for RLYB212, RLYB116 or any of our other product candidates, our business will be substantially harmed;
Our product candidates target rare diseases and conditions, and the market opportunities for RLYB212 and RLYB116, if approved, may be smaller than we anticipate. As a result, our commercial opportunity may be limited and because the target populations of our product candidates are for rare diseases, we must be able to successfully identify patients and capture a significant market share to achieve profitability and growth;
The FDA, EMA or other comparable foreign regulatory authorities could require the clearance or approval of an in vitro diagnostic or companion diagnostic device as a condition of approval for any product candidate that requires or would commercially benefit from such tests. Failure to successfully validate, develop and obtain regulatory clearance or approval for companion diagnostics on a timely basis or at all could harm our drug development strategy and we may not realize the commercial potential of any such product candidate;
We face significant competition from biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively;
We intend to continue to acquire or in-license rights to additional product candidates or collaborate with third parties for the development and commercialization of our product candidates. We may not succeed in identifying and acquiring businesses or assets, in-licensing intellectual property rights or establishing and maintaining collaborations, which may significantly limit our ability to successfully develop and commercialize our other product candidates, if at all, and these transactions could disrupt our business, cause dilution to our stockholders or reduce our financial resources; and
If we are unable to obtain, maintain and enforce patent protection for our technology and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and product candidates may be adversely affected.

 

The foregoing is only a summary of some of our risks. For a more detailed discussion of these and other risks you should consider before making an investment in our common stock, see “Risk Factors.”

 

iii


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

 

Unaudited Condensed Consolidated Balance Sheets

1

 

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

3

 

Unaudited Condensed Consolidated Statements of Cash Flows

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23

 

 

 

PART II.

OTHER INFORMATION

24

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 6.

Exhibits

73

Signatures

74

 

iv


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

RALLYBIO CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

(in thousands, except share and per share amounts)

 

SEPTEMBER 30,
2021

 

 

DECEMBER 31,
2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

186,978

 

 

$

140,233

 

Prepaid expenses and other assets

 

 

5,414

 

 

 

1,028

 

Total current assets

 

 

192,392

 

 

 

141,261

 

Property and equipment, net

 

 

445

 

 

 

287

 

Investment in joint venture

 

 

1,028

 

 

 

310

 

Total assets

 

$

193,865

 

 

$

141,858

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,599

 

 

$

1,579

 

Accrued expenses

 

 

4,745

 

 

 

4,264

 

Total current liabilities

 

 

7,344

 

 

 

5,843

 

Accrued expenses long-term

 

 

35

 

 

 

12

 

Total liabilities

 

 

7,379

 

 

 

5,855

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, $0.0001 par value per share; 200,000,000 shares
   authorized as of September 30, 2021 and December 31, 2020, respectively;
   and
32,129,970 and 23,410,348 shares issued and outstanding at
   September 30, 2021 and December 31, 2020, respectively

 

 

3

 

 

 

2

 

Preferred stock, $0.0001 par value per share; 50,000,000 shares authorized
   as of September 30, 2021 and December 31, 2020, respectively;
no shares
   issued or outstanding at September 30, 2021 and December 31, 2020,
   respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

268,095

 

 

 

183,015

 

Accumulated deficit

 

 

(81,612

)

 

 

(47,014

)

Total stockholders' equity

 

 

186,486

 

 

 

136,003

 

Total liabilities and stockholders' equity

 

$

193,865

 

 

$

141,858

 

 

 

See accompanying notes of the condensed consolidated financial statements

1


 

RALLYBIO CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

 

 

 

 

THREE MONTHS ENDED
SEPTEMBER 30,

 

 

NINE MONTHS ENDED
SEPTEMBER 30,

 

(in thousands, except share and per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

4,960

 

 

$

5,130

 

 

$

20,815

 

 

$

10,135

 

General and administrative

 

 

5,021

 

 

 

1,580

 

 

 

12,520

 

 

 

5,081

 

Total operating expenses

 

 

9,981

 

 

 

6,710

 

 

 

33,335

 

 

 

15,216

 

Loss from operations

 

 

(9,981

)

 

 

(6,710

)

 

 

(33,335

)

 

 

(15,216

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

12

 

 

 

42

 

 

 

42

 

 

 

144

 

Interest expense

 

 

 

 

 

(13

)

 

 

(10

)

 

 

(37

)

Other income (expense)

 

 

105

 

 

 

52

 

 

 

(13

)

 

 

173

 

Total other income, net

 

 

117

 

 

 

81

 

 

 

19

 

 

 

280

 

Loss before income taxes

 

 

(9,864

)

 

 

(6,629

)

 

 

(33,316

)

 

 

(14,936

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

(16

)

Loss on investment in joint venture

 

 

332

 

 

 

526

 

 

 

1,282

 

 

 

1,009

 

Net loss and comprehensive loss

 

$

(10,196

)

 

$

(7,155

)

 

$

(34,598

)

 

$

(15,929

)

Net loss per common share, basic and diluted

 

$

(0.37

)

 

$

(0.32

)

 

$

(1.44

)

 

$

(1.01

)

Weighted average common shares outstanding, basic and diluted

 

 

27,527,770

 

 

 

22,142,148

 

 

 

24,011,862

 

 

 

15,772,918

 

 

 

See accompanying notes of the condensed consolidated financial statements

 

2


 

 

RALLYBIO CORPORATION

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

For the Three Months Ended September 30, 2021 and 2020

 

COMMON

 

 

ADDITIONAL
PAID-IN

 

 

ACCUMULATED

 

 

STOCKHOLDERS'

 

(in thousands, except share amounts)

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

DEFICIT

 

 

EQUITY

 

June 30, 2020

 

 

22,793,410

 

 

$

2

 

 

$

182,510

 

 

$

(29,341

)

 

$

153,171

 

Issuance of restricted common stock

 

 

592,441

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

 

 

 

 

 

 

275

 

 

 

 

 

 

275

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(7,155

)

 

 

(7,155

)

Balance, September 30, 2020

 

 

23,385,851

 

 

$

2

 

 

$

182,785

 

 

$

(36,496

)

 

$

146,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

24,999,970

 

 

$

2

 

 

$

184,074

 

 

$

(71,416

)

 

$

112,660

 

Issuance of common stock upon completion of the initial public offering, net of underwriting commissions and discounts and offering costs of $9,721

 

 

7,130,000

 

 

 

1

 

 

 

82,966

 

 

 

 

 

 

82,967

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,055

 

 

 

 

 

 

1,055

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(10,196

)

 

 

(10,196

)

Balance, September 30, 2021

 

 

32,129,970

 

 

$

3

 

 

$

268,095

 

 

$

(81,612

)

 

$

186,486

 

 

 

For the Nine Months Ended September 30, 2021 and 2020

 

COMMON

 

 

ADDITIONAL
PAID-IN

 

 

ACCUMULATED

 

 

STOCKHOLDERS'

 

(in thousands, except share amounts)

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

DEFICIT

 

 

EQUITY

 

December 31, 2019

 

 

6,363,455

 

 

$

1

 

 

$

37,425

 

 

$

(20,567

)

 

$

16,859

 

Issuance of common stock, net of offering costs of $319

 

 

16,402,235

 

 

 

1

 

 

 

144,885

 

 

 

 

 

 

144,886

 

Issuance of restricted common stock

 

 

620,161

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

 

 

 

 

 

 

475

 

 

 

 

 

 

475

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(15,929

)

 

 

(15,929

)

Balance, September 30, 2020

 

 

23,385,851

 

 

$

2

 

 

$

182,785

 

 

$

(36,496

)

 

$

146,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

23,410,348

 

 

$

2

 

 

$

183,013

 

 

$

(47,014

)

 

$

136,001

 

Issuance of common stock upon completion of the initial public offering, net of underwriting commissions and discounts and offering costs of $9,721

 

 

7,130,000

 

 

 

1

 

 

 

82,966

 

 

 

 

 

 

82,967

 

Issuance of restricted common stock

 

 

1,589,622

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

 

 

 

 

 

 

2,116

 

 

 

 

 

 

2,116

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(34,598

)

 

 

(34,598

)

Balance, September 30, 2021

 

 

32,129,970

 

 

$

3

 

 

$

268,095

 

 

$

(81,612

)

 

$

186,486

 

 

 

See accompanying notes of the condensed consolidated financial statements

3


 

 

RALLYBIO CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

NINE MONTHS ENDED
SEPTEMBER 30,

 

(in thousands)

 

2021

 

 

2020

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net loss

 

$

(34,598

)

 

$

(15,929

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

74

 

 

 

42

 

Stock-based compensation

 

 

2,116

 

 

 

475

 

Loss on investment in joint venture

 

 

1,282

 

 

 

1,009

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(4,386

)

 

 

(75

)

Accounts payable

 

 

(607

)

 

 

(109

)

Accrued expenses

 

 

472

 

 

 

(191

)

Net cash used in operating activities

 

 

(35,647

)

 

 

(14,778

)

Cash Flows used in Investing Activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(196

)

 

 

(31

)

Investment in joint venture

 

 

(2,000

)

 

 

(1,585

)

Net cash used in investing activities

 

 

(2,196

)

 

 

(1,616

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Proceeds from the issuance of common stock upon completion of the initial public offering, net of underwriting commissions and discounts of $6,488

 

 

86,200

 

 

 

 

Proceeds from the issuance of common stock

 

 

 

 

 

145,205

 

Payments of offering costs

 

 

(1,612

)

 

 

(309

)

Net cash provided by financing activities

 

 

84,588

 

 

 

144,896

 

Net increase in cash and cash equivalents

 

 

46,745

 

 

 

128,502

 

Cash and cash equivalents—beginning of period

 

 

140,233

 

 

 

19,458

 

Cash and cash equivalents—end of period

 

$

186,978

 

 

$

147,960

 

Supplemental Disclosures of Noncash Investing and Financing Activities:

 

 

 

 

 

 

Offering costs in accounts payable and accrued expenses

 

$

1,621

 

 

$

10

 

Property and equipment in accounts payable and accrued expenses

 

$

36

 

 

$

6

 

 

 

See accompanying notes of the condensed consolidated financial statements

 

4


 

RALLYBIO CORPORATION

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. BUSINESS AND LIQUIDITY

Rallybio Corporation and subsidiaries (the "Company", "we", "our", or "us") is a clinical-stage biotechnology company built around a team of seasoned industry experts with a shared purpose and a track record of success in discovering, developing, manufacturing, and delivering therapies to meaningfully improve the lives of patients suffering from severe and rare diseases.

 

In August 2021, the Company completed its initial public offering (“IPO”), pursuant to which it issued and sold 7,130,000 shares of the Company’s common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $13.00 per share. The gross proceeds from the IPO, including the exercise of the underwriter's option to purchase additional shares were $92.7 million and the net proceeds were approximately $83.0 million, after deducting underwriting discounts and commissions and other offering costs.

 

Prior to the IPO, the Company was a 100% owned subsidiary of Rallybio Holdings, LLC ("Rallybio Holdings"), a Delaware limited liability company which was incorporated in Delaware on March 22, 2018 and Rallybio Holdings held 100% of the outstanding membership units in five wholly-owned subsidiaries; Rallybio, LLC, Rallybio IPA, LLC, Rallybio IPB, LLC, Rallybio IPD, LLC, and IPC Research, LLC prior to the IPO and it's liquidation. On June 30, 2021, Rallybio Holdings completed a series of transactions pursuant to which (i) Rallybio IPD, LLC, a direct subsidiary of Rallybio Holdings that was formed in Delaware in May 2020, was converted from a Delaware limited liability company to a Delaware corporation and changed its name to Rallybio Corporation, and (ii) four direct subsidiaries of Rallybio Corporation, each a Delaware limited liability company (collectively the "Merger Subs"), each consummated a separate merger with one of Rallybio Holdings direct subsidiaries, other than Rallybio IPD, LLC (collectively the "Asset Subsidiaries"), with the Asset Subsidiaries surviving the mergers and Rallybio Holdings receiving common stock of the Company in exchange for its interest in each Asset Subsidiary, which resulted in the Asset Subsidiaries becoming subsidiaries of the Company and the Company becoming the only direct subsidiary of Rallybio Holdings. On July 28, 2021, immediately prior to the completion of the IPO, Rallybio Holdings liquidated and distributed 100% of the capital stock of the Company, consisting solely of common stock, to the unitholders of Rallybio Holdings. The liquidation of Rallybio Holdings and distribution of the capital stock of Rallybio Corporation to the unitholders of Rallybio Holdings is referred to as the “Liquidation” and these other transactions are collectively referred to as the “Reorganization.” As a result of the Reorganization and subsequent Liquidation, the unitholders of Rallybio Holdings became the holders of common stock of Rallybio Corporation, and the Company's condensed consolidated financial statements are subsequently reported from Rallybio Corporation. See Note 2 for the basis of presentation of these financial statements after the Reorganization and Liquidation discussed herein.

 

The Company had cash and cash equivalents of $187.0 million at September 30, 2021. The Company currently expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital requirements for more than 12 months from the date the condensed consolidated financial statements are issued. However, we do not anticipate that the current cash and cash equivalents as of September 30, 2021 will be sufficient for us to fund any of our product candidates through regulatory approval, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates, if approved. We may satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit, corporate collaborations or license agreements, grant funding, interest income earned on invested cash balances or a combination of one or more of these sources.

In March 2020, the World Health Organization characterized the novel coronavirus as a global pandemic. Although there is significant uncertainty as to the likely effects this disease may have in the future, to date there has not yet been a significant impact to the Company’s operations or financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION


IPO and Reorganization — As discussed in Note 1, in connection with the Reorganization, all of Rallybio Holdings' direct subsidiaries, other than Rallybio Corporation, became direct subsidiaries of the Company prior to the Liquidation of Rallybio Holdings. Prior to the completion of the Company's IPO, Rallybio Holdings liquidated and unitholders of Rallybio Holdings became the holders of common stock of Rallybio Corporation. Subsequent to the Reorganization and the Liquidation of Rallybio Holdings the condensed consolidated financial statements are reported from Rallybio Corporation.

5


 

The capital structure of Rallybio Holdings prior to the Liquidation consisted of four classes of membership units: common units; Series A-1 preferred units; Series A-2 preferred units; Series B preferred units; and incentive common units ("incentive units"). The number of shares of common stock that the holders of each class of units received in the Liquidation was based on the value of Rallybio Holdings prior to the Liquidation, determined by reference to the initial public offering price per share of $13.00. The common stock of the Company was allocated to the holders of existing units in Rallybio Holdings as follows:

holders of 33,478,255 Series A-1 preferred units and Series A-2 preferred units of Rallybio Holdings received an aggregate of 5,257,590 shares of common stock of the Company;
holders of 104,442,965 Series B preferred units of Rallybio Holdings received an aggregate of 16,402,235 shares of common stock of the Company;
holders of 4,500,000 common units and 1,200,000 of performance based incentive common units of Rallybio Holdings received an aggregate of 706,701 and 188,454, respectively, in shares of common stock of the Company. Shares of common stock issued in respect of unvested common units and performance based incentive common units as of the Liquidation are shares of restricted common stock and subject to vesting in accordance with the vesting schedule applicable to such units; and
holders of 20,869,704 incentive units in Rallybio Holdings received an aggregate of 2,444,990 shares of common stock of the Company. Shares of common stock issued in respect of unvested incentive units as of the Liquidation are shares of restricted common stock and continue to be subject to vesting in accordance with the vesting schedule applicable to such incentive units.

As a result of the Liquidation, the holders of units in Rallybio Holdings collectively were issued an aggregate of 24,999,970 shares of common stock of the Company prior to the completion of the IPO.

The Reorganization and subsequent Liquidation resulted in a change in reporting entity as described in ASC 250. In accordance with the guidance applicable to these circumstances, the equity structure has been adjusted in all comparative periods up to the Liquidation to reflect the number of shares of the Company’s common stock, issued to Rallybio Holdings unitholders' in connection with the Liquidation. As such, historical Rallybio Holdings convertible redeemable preferred units, common units, and incentive units have been retroactively adjusted in these financial statements to shares and earnings per share in accordance with the ratio of common shares received by each membership unit class. Rallybio Holdings' convertible redeemable preferred units previously classified as mezzanine equity have been retroactively adjusted in these financial statements, converted into common stock, and reclassified to permanent as a result of the retrospective application of the Liquidation and change in reporting entity.

Unaudited Financial Information— The unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). In the opinion of the Company, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

The Company reviews new accounting standards as issued. As of September 30, 2021 the Company has not identified any new standards that it believes will have a significant impact on the financial statements of the Company. However, the Company is still evaluating the impact of adopting ASU 2016-02, Leases on its condensed consolidated financial statements.

There were no changes to significant accounting policies of the Company during the nine months ended September 30, 2021 other than noted below.

These accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020 and notes thereto contained in the Company’s final prospectus for its IPO filed with the SEC on July 30, 2021 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “IPO Prospectus”).

Deferred Offering CostsThe Company capitalizes incremental legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such equity financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders' equity as a reduction of additional paid-in-capital generated as a result of the offering. Should the planned equity financing no longer

6


 

be considered probable of being consummated, the offering costs are expensed immediately as a charge to operating expense. Upon completion of the Company's IPO in the third quarter of 2021, $3.2 million of deferred offering costs were charged against additional paid-in-capital. As a result, as of September 30, 2021, the Company did not have any deferred offering costs. 

3. ACCRUED EXPENSES

Accrued expenses consisted of the following as of September 30, 2021 and December 31, 2020:

 

 

(in thousands)

 

SEPTEMBER 30,
2021

 

 

DECEMBER 31,
2020

 

Research and development

 

$

1,981

 

 

$

1,065

 

Employee expenses

 

 

2,097

 

 

 

1,912

 

Professional fees

 

 

364

 

 

 

185

 

Other

 

 

303

 

 

 

112

 

Asset purchase obligation

 

 

 

 

 

990

 

 

 

$

4,745

 

 

$

4,264

 

 

 

4. STOCKHOLDERS' EQUITY

Following the closing of the Company's IPO, the Company's authorized capital stock consists of 200,000,000 shares of common stock, with a par value of $0.0001 per share, and 50,000,000 shares of preferred stock, with a par value of $0.0001 per share, all of which preferred stock are undesignated.

See Note 2 for a summary of the Reorganization and Liquidation of Rallybio Holdings that was completed prior to the Company's IPO, which resulted in a change in reporting entity. In accordance with the applicable accounting guidance related to changes in reporting entities, the financial statements for all periods presented have been retrospectively adjusted giving effect to the Reorganization and Liquidation as applicable to all periods presented. All preferred unit financing activity prior to the completion of the Company's IPO has been retrospectively adjusted in these financial statements to reflect the shares in Rallybio Corporation that were obtained in the Liquidation. For additional information on preferred unit financing prior to the Company's IPO and the Liquidation of Rallybio Holdings see the Company's audited consolidated financial statements for the year ended December 31, 2020 and notes thereto contained in the Company’s IPO Prospectus.

During the nine months ended September 30, 2020, the Company entered into a Series B Preferred Stock Agreement with a total aggregate purchase price of $145.2 million which has been retrospectively adjusted to reflect the shares of common stock obtained during the Reorganization and Liquidation of Rallybio Holdings, see Note 2.

5. SHARE-BASED COMPENSATION

As discussed in Note 2 of these condensed consolidated financial statements, prior to the Company’s IPO, Rallybio Holdings was Liquidated and as a result of the Liquidation, the unitholders of Rallybio Holdings received 100% of the common stock of the Company outstanding prior to the completion of the IPO. The number of shares of common stock that the holders of each class of units received in the Liquidation was based on the value of Rallybio Holdings prior to the Liquidation, determined by the initial public offering price per share of $13.00. Additionally, any shares of common stock issued in respect of unvested common or incentive units were issued as shares of restricted common stock and continue to be subject to vesting in accordance with the vesting schedule applicable to the initial awards.

The Company evaluated the liquidation of Rallybio Holdings units and subsequent issuance of common stock awards of the Company as a modification under ASC 718, Share Based Payments. Under ASC 718, a modification is a change in the terms or conditions of a stock-based compensation award. In assessing the modification, the Company considered the fair value, vesting conditions and classification as an equity or liability award before liquidation and replacement, compared to the Company’s common stock received as of the Liquidation to determine whether modification accounting must be applied. As the number of shares of common stock of the Company that the unitholders of Rallybio Holdings received in the Liquidation was based on the fair value of those units in Rallybio Holdings immediately prior to the Liquidation, unvested units were replaced with restricted common shares with the same vesting terms as the initial awards, and the classification of the awards as equity awards did not change from this action, no incremental stock-based compensation expense resulted from the modification.

7


 

2021 Equity Incentive PlanIn connection with the Company's IPO, the board of directors adopted the Rallybio Corporation 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan reserves 5,440,344 shares of common stock for future issuances of shares to employees, directors and consultants in the form of stock options, SARs, restricted and unrestricted stock and stock units, performance awards and other awards that are convertible into or otherwise based on the Company's common stock. Dividend equivalents may also be provided in connection with awards under the 2021 Plan. The share pool will automatically increase on January 1st of each year from 2022 to 2031 by the lesser of (i) five percent of the number of shares of the Company's common stock outstanding as of such date and (ii) the number of shares of the Company's common stock determined by the board of directors on or prior to such date. Additionally, in connection with the Company's IPO, the board of directors adopted the 2021 Employee Stock Purchase Plan, ("ESPP"), which reserves 291,324 shares of common stock for future issuances under this plan.

Restricted Common Shares — In 2018, founders were issued 706,701 common shares, including 530,027 common shares that were to vest over a four year period. In 2018, founders were also issued 188,454 restricted common shares, pursuant to restricted share agreements, which were to begin vesting upon achievement of certain performance conditions. Restricted common shares issued to the founders were to vest 25% upon the one-year anniversary of the initiation of a clinical program through one of its controlled subsidiaries, and monthly thereafter over the next 36 months. In 2019, it was determined that the performance condition of these restricted common shares became probable, vesting started, and the shares started expensing over the vesting period. The weighted average fair value of both the 530,027 and 188,454 restricted common shares granted during 2018 was $0.96 per share.

During the nine months ended September 30, 2021, the Company granted 1,589,622 restricted common shares to employees. The weighted average fair value of restricted common shares granted to employees for the nine months ended September 30, 2021 was $3.65 per share. No grants of restricted common shares were made during the three months ended September 30, 2021.

The restricted common shares that were granted during the nine months ended September 30, 2021 resulted from the Liquidation of profit interest incentive units of Rallybio Holdings that were granted during the nine months ended September 30, 2021, see Note 2. The assumptions that went into the option pricing models for determining the fair value of Rallybio Holdings incentive units granted during the nine months ended September 30, 2021 and 2020, prior to the Liquidation of Rallybio Holdings are as follows and do not include the retrospective adjustments described in Note 2:

 

 

 

 

NINE MONTHS ENDED
SEPTEMBER 30,

 

 

 

2021

 

 

2020

 

Expected volatility

 

71.7% - 99.5%

 

 

 

95.0

%

Expected term (years)

 

0.58 - 1.00

 

 

 

1.50

 

Risk free interest rate

 

0.04% - 0.10%

 

 

 

0.16

%

Expected dividend yield

 

 

 

 

 

 


A summary of the status of our nonvested restricted common stock at September 30, 2021 and changes during the nine months ended September 30, 2021 is as follows:

 

 

 

 

Restricted Shares

 

Nonvested restricted stock at December 31, 2020

 

 

1,184,252

 

Shares granted

 

 

1,589,622

 

Shares vested

 

 

(365,520

)

Outstanding nonvested restricted stock at September 30, 2021

 

 

2,408,354

 

 

8


 


Stock Options
— During the three months ended September 30, 2021, the Company granted 1,232,759 non-qualified stock options to employees and directors. Non-employee directors were granted 80,640 stock options on the date of the IPO that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of the Company's stockholders that follows the date of grant, subject to the director’s continued service on our board of directors through the vesting date at a grant date fair value of $9.15 per share. Executive officers and the Company's Chief Medical Officer were granted 640,000 stock options on the date of the IPO that vest 25% on the one-year anniversary of the date of grant, and monthly thereafter over the next 36 months, generally subject to the employee’s continued service through the applicable vesting date at a grant date fair value of $9.47 per share. The remaining option grants for the three months ended September 30, 2021 vest over four years and relate to new hires and service award grants and were granted at a grant date fair value of $9.34 per share. All options granted during the three months ended September 30, 2021 remain unvested and all are expected to vest.

The fair value of the stock options granted during the three months ended September 30, 2021 was determined using the Black-Scholes option pricing model with the following assumptions:

 

 

 

THREE MONTHS ENDED
SEPTEMBER 30,

 

 

 

2021

 

Expected volatility

 

87.76% - 87.87%

 

Expected term (years)

 

5.50 - 6.08

 

Risk free interest rate

 

0.79% - 0.97%

 

Expected dividend yield

 

 

 

Exercise price

 

12.80 -13.00

 

 

Given the Company’s common stock has not been trading for a sufficient period of time, the Company utilizes a collection of volatilities of peer companies to estimate the expected volatility of its common stock. The expected term is calculated utilizing the simplified method.

Share-based compensation is classified in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020 as follows:

 

 

 

 

THREE MONTHS ENDED
SEPTEMBER 30,

 

 

NINE MONTHS ENDED
SEPTEMBER 30,

 

(in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Research and development

 

$

266

 

 

$

47

 

 

$

620

 

 

$

107

 

General and administrative

 

 

789

 

 

 

228

 

 

 

1,496

 

 

 

368

 

 

 

$

1,055

 

 

$

275

 

 

$

2,116

 

 

$

475

 

 

 

6. INVESTMENT IN JOINT VENTURE

The Company, through one of its wholly-owned subsidiaries, has a 50% interest of the joint venture entity, RE Ventures I, LLC, a limited liability company (“REV-I”). For the nine months ended September 30, 2021, the Company funded $2.0 million, associated with development costs to REV-I. For the nine months ended September 30, 2020, the Company funded $1.6 million, associated with development costs, including $0.6 million related to the initial investment in REV-I, that was included in accrued expenses on the consolidated balance sheets as of December 31, 2019. The Company did not provide any additional financial support outside of capital contributions to REV-I during the three and nine months ended September 30, 2021 and 2020. The Company held a 50% interest in the joint venture as of September 30, 2021. As of September 30, 2021, based on management’s analysis, the Company is not the primary beneficiary of REV-1 and accordingly, the entity is not consolidated in the Company's financial statements.

During the three months ended September 30, 2021 and 2020, the Company recorded its allocable share of REV-I’s losses, which totaled $0.3 million and $0.5 million, respectively and $1.3 million and $1.0 million during the nine months ended September 30, 2021 and 2020, respectively, as a loss on investment in joint venture within the condensed consolidated statements of operations and comprehensive loss. After recognition of its share of losses for the period, the carrying value and maximum exposure to risk of the REV-I investment as of September 30, 2021 and December 31,

9


 

2020, was $1.0 million and $0.3 million, respectively, which was recorded in investment in joint venture in the accompanying condensed consolidated balance sheets.

7. COMMITMENTS AND CONTINGENCIES

Purchase Commitments—The Company enters contracts in the normal course of business with contract research organizations and other third-party vendors for clinical trials and testing and manufacturing services. These contracts generally do not contain minimum purchase commitments and are cancellable by us upon written notice. Payments that may be due upon cancellation consist of payments for services provided or expenses incurred prior to cancellation. As of September 30, 2021 and December 31, 2020 there were no amounts accrued related to termination charges.

There have been no significant changes to the disclosure of payments we have committed to make under our contractual obligations as summarized in our audited consolidated financial statements and related notes included in the IPO Prospectus.

8. NET LOSS PER COMMON SHARE

Basic and diluted loss per common share were calculated as follows:

 

 

 

 

THREE MONTHS ENDED
SEPTEMBER 30,

 

 

NINE MONTHS ENDED
SEPTEMBER 30,

 


(in thousands except share and per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(10,196

)

 

$

(7,155

)

 

$

(34,598

)

 

$

(15,929

)

Weighted average number of common shares
   outstanding, basic and diluted

 

 

27,527,770

 

 

 

22,142,148

 

 

 

24,011,862

 

 

 

15,772,918

 

Net loss per common share, basic and diluted

 

$

(0.37

)

 

$

(0.32

)

 

$

(1.44

)

 

$

(1.01

)

 

The weighted average number of common shares outstanding diluted for the three and nine months ended September 30, 2021 excludes approximately 3.6 million stock options and unvested restricted common shares, which were not dilutive and not included in the computation of net loss per common share. The weighted average number of common shares outstanding diluted for the three and nine months ended September 30, 2020 excludes approximately 1.0 million unvested restricted common shares, which were not dilutive and not included in the computation of net loss per common share.

 

10


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes included in the IPO Prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors" in Part II, Item 1A of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. See “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biotechnology company built around a team of seasoned industry experts with a shared purpose and a track record of success in discovering, developing, manufacturing and delivering therapies that meaningfully improve the lives of patients suffering from severe and rare diseases. Our mission is aligned with our expertise, and we believe we have assembled the best people, partners and science to forge new paths to life-changing therapies. Since our inception we have acquired a portfolio of promising product candidates that consists of five programs, and we are focused on further expanding our portfolio with the goal of making a profound impact on the lives of even more patients. We are drawing on our decades of knowledge and experience with a determination to tackle the undone, the too difficult, the inaccessible – and change the odds for rare disease patients.

 

Our most advanced program is for the prevention of fetal and neonatal alloimmune thrombocytopenia (“FNAIT”), a potentially life-threatening rare hematological disease that impacts fetuses and newborns. We are evaluating RLYB211, a polyclonal anti-HPA-1a antibody, in a Phase 1/2 clinical trial, which we believe has established proof of concept for RLYB211 and provides support for our proposed mechanism of action. We plan to move this program forward with our lead product candidate, RLYB212, a monoclonal anti-HPA-1a antibody, and submitted a clinical trial application (“CTA”) for RLYB212 in July 2021. We are also focused on developing therapies that address diseases of complement dysregulation, including paroxysmal nocturnal hemoglobinuria (“PNH”), generalized myasthenia gravis (“gMG”), and ophthalmic disorders. RLYB116 is a novel, potentially long-acting, subcutaneously administered inhibitor of complement factor 5 (“C5”) in development for the treatment of patients with PNH and gMG. We expect to submit a CTA for RLYB116 in the fourth quarter of 2021. RLYB114 is a pegylated C5 inhibitor in preclinical development for the treatment of complement-mediated ophthalmic diseases and we expect to submit a CTA for this product candidate in the first half of 2023. Additionally, in collaboration with Exscientia Limited (“Exscientia”), we have two discovery-stage programs focused on the identification of small molecule therapeutics for patients with rare metabolic diseases.

Since inception, we have devoted substantially all of our resources to raising capital, organizing and staffing our company, business planning, conducting discovery and research activities, acquiring or discovering product candidates, establishing and protecting our intellectual property portfolio, developing and progressing our product candidates, preparing for clinical trials and establishing arrangements with third parties for the manufacture of our product candidates and component materials, including activities relating to our preclinical development and manufacturing activities for each of our five programs and our Phase 1/2 clinical trial for RLYB211. We do not have any product candidates approved for sale and have not generated any revenue from product sales.

Since our inception, we have funded our operations primarily through equity financings. From our inception and prior to our IPO, we received proceeds of approximately $182.5 million from equity financing. In August 2021, we closed our IPO and issued and sold 7,130,000 shares of common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $13.00 per share. We received net proceeds of approximately $83.0 million, after deducting underwriting discounts and commissions and other offering costs payable by us.

As of September 30, 2021, we had cash and cash equivalents of $187.0 million. We believe that our existing cash and cash equivalents as of September 30, 2021, will be sufficient to fund our operating expenses and capital requirements into the second half of 2023. This estimate and our expectation to advance the preclinical and clinical development of RLYB212, RLYB116, and any other product candidates are based on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect, or our clinical trials may be more expensive, time consuming or difficult to design or implement than we currently anticipate. See “—Liquidity and Capital Resources.”

11


 

To date, we have devoted most of our financial resources to research and development, including our preclinical development and manufacturing activities for each of our five programs and our Phase 1/2 clinical trial for RLYB211. We have not commercialized any products and have never generated revenue from the commercialization of any product.

We have incurred significant operating losses since inception, including net losses of $10.2 million and $7.2 million for three months ended September 30, 2021 and 2020, respectively and $34.6 million and $15.9 million for nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, we had an accumulated deficit of $81.6 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect to incur significant additional operating losses in the foreseeable future as we advance our programs through preclinical and clinical development, expand our research and development activities, acquire and develop new product candidates, complete preclinical studies and clinical trials, finance our business development strategy, seek regulatory approval for the commercialization of our product candidates and commercialize our products, if approved. Our expenses will increase substantially if and as we:

initiate a Phase 1 clinical trial for RLYB212, our lead product candidate for our FNAIT prevention program;
file a CTA and initiate our clinical trial for RLYB116, and file an IND or a CTA for other product candidates;
advance our natural history alloimmunization study of FNAIT and other studies to support our development program and related regulatory submissions for RLYB212;
continue to develop and conduct clinical trials with respect to RLYB211;
seek regulatory approvals for RLYB212, RLYB116 and any other product candidates, as well as for any related companion diagnostic, if required;
continue and expand upon our discovery and development joint ventures with Exscientia;
continue to discover and develop additional product candidates;
hire additional clinical, scientific, and commercial personnel;
add operational, financial, and management personnel, including personnel to support our product development and planned future commercialization efforts and to support our operations as a public company;
acquire or in-license other product candidates or technologies;
maintain, expand, and protect our intellectual property portfolio;
secure a commercial manufacturing source and supply chain capacity sufficient to produce commercial quantities of any product candidate for which we obtain regulatory approval; and
establish a sales, marketing and distribution infrastructure to commercialize our programs, if approved, and for any other product candidates for which we may obtain marketing approval.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Our inability to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurances, however, that the current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.

In July 2021, Phase 1/2 clinical proof-of-concept data for RLYB211 was presented at the ISTH 2021 Virtual Congress. The data demonstrated the ability of an anti-HPA-1a antibody to rapidly and completely clear HPA-1a positive platelets from the circulation of HPA-1a negative participants, providing evidence that administration of an anti-HPA-1a antibody could be a viable approach for the prevention of FNAIT. In addition, treatment with RLYB211 was safe and well tolerated, and no serious adverse events were observed.

In September 2021, Rallybio initiated a fetal and neonatal alloimmune thrombocytopenia (FNAIT) natural history alloimmunization study. The prospective, non-interventional, multinational study is designed to determine the frequency of women at higher FNAIT risk among expectant mothers of different racial and ethnic characteristics, as well as the frequency of HPA-1a alloimmunization and pregnancy outcomes among women identified to be at higher FNAIT risk. Data from this study will be used to support a future registration trial for RLYB212, by providing historical controlled data to support a single-arm Phase 2/3 registration trial design, operationalizing de novo the laboratory test paradigm for FNAIT risk, and generating FNAIT laboratory test performance data for future regulatory discussions.

Reorganization

Prior to the IPO, the Company was a 100% owned subsidiary of Rallybio Holdings, LLC ("Rallybio Holdings"), a Delaware limited liability company which was incorporated in Delaware on March 22, 2018 and Rallybio Holdings held 100% of the outsta