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Item 7. Management’s Discussion and Analysis

2025-03-13 compared with 2024-03-12 · 130 added, 101 removed, 238 unchanged (49% of the section changed)

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Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, 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 I, Item 1A of this Annual Report on Form 10-K, 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.”

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Our two most advanced programs are in clinical development:

RLYB212, an anti-HPA-1a antibody for the prevention of FNAIT and RLYB116, an inhibitor of C5, with the potential to treat several diseases of complement dysregulation.

Both programs have completed Phase 1 clinical trials, and we currently plan to initiate a Phase 2 clinical trial of RLYB212 in the second half of 2024.

RLYB212, an anti-HPA-1a antibody for the prevention of FNAIT and RLYB116, an inhibitor of complement C5, with the potential to treat several diseases of complement dysregulation.

RLYB212 is currently in a Phase 2 clinical trial in pregnant women and we plan to initiate a confirmatory PK and PD study of RLYB116 in the second quarter of 2025.

Maternal Fetal Blood Disorders

RLYB212 is a monoclonal anti-HPA-1a antibody for the prevention of FNAIT, a potentially life-threatening rare hematological disease that impacts fetuses and newborns.

We have completed two RLYB212 clinical trials:

a Phase 1 first-in-human clinical trial and a Phase 1b proof of concept clinical trial.

The Phase 1 first-in-human clinical trial was a single-blind, placebo-controlled study that investigated the safety and PK of SC administration of RLYB212 in HPA-1a negative healthy participants.

The clinical trial included a single dose cohort and a multiple dose cohort.

In the multiple dose cohort, subjects received SC RLYB212 or placebo every 2 weeks for 12 weeks.

We are currently conducting a Phase 2 clinical trial of RLYB212 in pregnant women at higher risk for HPA-1a alloimmunization and FNAIT at sites across Europe.

The primary objective of this single-arm Phase 2 trial is to assess the PK and safety of RLYB212 with secondary objectives that include assessments of pregnancy and neonatal/infant outcomes, and the occurrence of emergent HPA-1a alloimmunization.

Subcutaneous administration of RLYB212 will be initiated by Gestational Week 16 and will continue every four weeks through parturition.

The Phase 2 trial is designed to enroll participants in three stages:

first with a sentinel pregnant woman, an initial Cohort 1 that will include three pregnant women, and a Cohort 2 that will include four pregnant women, for a total target enrollment of eight participants.

A data review for participants and infants is planned prior to the initiation of each cohort.

Following completion of this Phase 2 dose confirmation trial and consultation with regulatory authorities, we expect to initiate a Phase 3 registrational trial.

Both the U.S.

FDA and EMA have designated RLYB212 as an orphan drug.

Orphan drug designation offers certain incentives including tax credits, marketing exclusivity upon marketing approval, fee waivers, and the ability to interact with both agencies to receive specialized regulatory advice and assistance.

The Phase 2 trial follows completion of two RLYB212 clinical studies:

a Phase 1 first-in-human clinical study and a Phase 1b proof-of-concept clinical study.

The Phase 1 first-in-human clinical study was a single-blind, placebo-controlled study that investigated the safety and PK of SC administration of RLYB212 in HPA-1a negative healthy participants.

The clinical study included a single dose cohort and a multiple dose cohort.

In the multiple dose cohort, subjects received SC RLYB212 or placebo every two weeks for 12 weeks.

We reported results from the multi-dose cohort in the fourth quarter of 2023.

The data and our clinical pharmacology modeling predictions support a once monthly dosing regimen for the planned Phase 2 clinical trial.

In the first quarter of 2023, we announced RLYB212 achieved proof-of-concept in the Phase 1b trial.

In this trial, subcutaneous RLYB212 administration produced a dose-dependent, rapid and complete elimination of transfused HPA-1a positive platelets in HPA-1a negative subjects, with both dose groups meeting the pre-specified proof-of-concept criteria of ≥ 90% reduction in mean platelet elimination half-life.

The data and our clinical pharmacology modeling predictions support a once monthly dosing regimen for the Phase 2 clinical trial.

In the first quarter of 2023, we announced RLYB212 achieved proof-of-concept in the Phase 1b study.

In this study, SC RLYB212 administration produced a dose-dependent, rapid and complete elimination of transfused HPA-1a positive platelets in HPA-1a negative subjects, with both dose groups meeting the pre-specified proof-of-concept criteria of ≥ 90% reduction in mean platelet elimination half-life.

Mean platelet elimination half-life was 5.8 hours (0.09mg dose) and 1.5 hours (0.29mg dose) for RLYB212 compared to 71.7 hours for placebo.

In both Phase 1 trials, RLYB212 was well-tolerated with no reports of serious or severe adverse events.

Both the FDA and EMA have designated RLYB212 as an orphan drug.

Orphan drug designations offer certain incentives including tax credits, marketing exclusivity upon any approval, fee waivers, and the ability to interact with both agencies to receive specialized regulatory advice and assistance.

We recently engaged with the EMA in such a process in advance of our planned Phase 2 clinical trial.

We received feedback from the EMA and are now moving forward with our Clinical Trial Application to support conduct of the Phase 2 study in Europe.

Based on the data from the clinical and preclinical programs and following planned discussions with regulatory authorities, we expect to initiate a Phase 2 dose confirmation study for RLYB212 in the second half of 2024.

This study will be designed to confirm the RLYB212 dose regimen in expectant mothers at higher risk of FNAIT.

Following completion of the Phase 2 dose confirmation study and consultation with regulatory authorities, we expect to initiate a Phase 3 registrational study.

We are also conducting a prospective, non-interventional, multinational FNAIT natural history study.

This study is designed to screen up to 30,000 expectant mothers presenting at the Gestational Week 10 to 14 prenatal visit 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 these women.

Subject to discussion with regulatory authorities, we expect that data from this study will contribute to a control dataset for a future single-arm Phase 3 registrational study for RLYB212.

The FNAIT natural history study will also operationalize de novo the laboratory test paradigm for FNAIT risk and generate FNAIT laboratory test performance data that we plan to use for future regulatory discussions.

As of March 1, 2024 approximately 9,400 women have been screened in the study.

The Company expects screening for the natural history study to continue simultaneously with execution of the Phase 2 study.

In both Phase 1 studies, RLYB212 was observed to be generally well-tolerated with no reports of serious or severe adverse events.

We have a prospective, non-interventional, multinational natural history study.

This study is designed to screen expectant mothers presenting at gestational week 10 to 14 prenatal visit 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 these women.

An additional objective

of the FNAIT natural history study is to operationalize de novo the laboratory screening test paradigm for FNAIT risk and generate FNAIT laboratory test performance data for future regulatory discussions.

We recently transitioned screening activities from the natural history study to the Phase 2 clinical trial where sites will continue to collect natural history data in women who do not receive RLYB212.

We expect that natural history data from both the natural history study and the Phase 2 clinical trial will contribute historical control data to support a planned single-arm Phase 3 registrational clinical trial of RLYB212.

As of January 31, 2025, more than 14,300 pregnant women had been screened in this study.

In April 2024, we entered into the J&J Collaboration Agreement, pursuant to which we and J&J will support the development of complementary therapeutic approaches aimed at reducing the risk of FNAIT.

Under the J&J Collaboration Agreement, we will share certain aggregated, anonymized data with J&J, collected from the FNAIT natural history study and our RLYB212 Phase 2 clinical trial, where the Phase 2 data will be restricted to certain natural history data in support of the natural history study.

We also agreed to disseminate information to our FNAIT study sites related to J&J’s and its affiliates’ research and development of complementary therapeutic approaches aimed at reducing the risk of FNAIT.

Pursuant to the agreement, we received an upfront payment of $0.5 million from J&J.

In addition, we are eligible for payments upon the achievement of certain enrollment-related events, totaling up to $0.7 million.

We are also eligible to receive additional payments upon certain triggers related to the companies' FNAIT studies.

In addition, we received an equity investment of $6.6 million from Johnson & Johnson Innovation – JJDC, Inc.

See "Liquidity and Capital Resources - Sources of Liquidity" below.

In connection with the registration requirements and the restrictions on the sale or transfer of the common stock sold, we expect to recognize up to an additional $1.2 million of revenue.

Complement Dysregulation

We are also developing therapies that address diseases of complement dysregulation, including PNH, antiphospholipid syndrome and gMG.

RLYB116 is a novel, potentially long-acting, subcutaneously injected

inhibitor of C5 in development for the treatment of patients with complement-related diseases.

We are also developing therapies that address diseases of complement dysregulation, including PNH, APS and gMG.

RLYB116 is a novel, potentially long-acting, subcutaneously injected inhibitor of C5 in development for the treatment of patients with complement-related diseases.

RLYB114 is a pegylated C5 inhibitor in development for complement-mediated ophthalmic disorders.

We have completed a Phase 1 clinical trial in healthy participants that included the study of RLYB116 as a SAD and a MAD.

The SAD portion of the RLYB116 clinical trial included five cohorts with a dose ranging from 2mg up to 300mg.

Data from the SAD portion of the trial showed that all study participants that were administered a single 1 mL SC injection of 100 mg of RLYB116 (n=6) demonstrated a reduction in free C5 greater than 99% within 24 hours of dosing.

Subcutaneously administered RLYB116 in the SAD portion of the trial was observed to be generally well-tolerated at the 100 mg dose, with mild adverse events and no drug-related serious adverse events reported.

The MAD portion of the RLYB116 Phase 1 trial included an adaptive single-blind design with a 4-week treatment duration to evaluate the safety, tolerability, PK, and PD of RLYB116 with multiple dose SC administration.

The MAD portion of the trial included 4 cohorts:

Cohort 1 (weekly dosing of 100 mg), Cohort 2 (3 doses of 100 mg the first week followed by weekly dosing), Cohort 3 (150 mg weekly dosing reduced to 125 mg weekly dosing) and Cohort 4 (75 mg twice the first week followed by 100 mg twice per week) with post-treatment / study follow-up for 10 weeks.

In December 2023, we reported data from the MAD portion of the trial that demonstrated a 100 mg low volume (1 mL) once-a-week dose of subcutaneously administered RLYB116 achieved sustained mean reductions in free C5 of greater than 93%, including at Day 29 with measurement prior to the last dose.

We have completed a Phase 1 clinical study in healthy participants that included the study of RLYB116 as a SAD and a MAD.

The SAD portion of the RLYB116 clinical study included five cohorts with a dose ranging from 2mg up to 300mg.

Data from the SAD portion of the study showed that all study participants that were administered a single 1 mL SC injection of 100 mg of RLYB116 (n=6) demonstrated a reduction in free C5 greater than 99% within 24 hours of dosing.

Subcutaneously administered RLYB116 in the SAD portion of the study was observed to be generally well-tolerated at the 100 mg dose, with mild adverse events and no drug-related serious adverse events reported.

The MAD portion of the RLYB116 Phase 1 study included an adaptive single-blind design with a 4-week treatment duration to evaluate the safety, tolerability, PK, and PD of RLYB116 with multiple dose SC administration.

The MAD portion of the study included four cohorts:

Cohort 1 (weekly dosing of 100 mg), Cohort 2 (three doses of 100 mg the first week followed by weekly dosing), Cohort 3 (150 mg weekly dosing reduced to 125 mg weekly dosing) and Cohort 4 (75 mg twice the first week followed by 100 mg twice per week) with post-treatment / study follow-up for 10 weeks.

In December 2023, we reported data from the MAD portion of the study that demonstrated a 100 mg low volume (1 mL) once-a-week dose of subcutaneously administered RLYB116 achieved sustained mean reductions in free C5 of greater than 93%, including at Day 29 with measurement prior to the last dose.

The reduction from pre-treatment free C5 at 24 hours after the first dose of 100 mg was greater than 99%.

RLYB116 administered in the MAD portion of the trial as a 100 mg once-a-week dose was also observed to be generally well tolerated.

Based on the MAD data and additional work we have conducted with RLYB116, we believe that RLYB116 has the potential to be an effective treatment for patients with certain complement-mediated diseases, including gMG.

We have prioritized enhancements to the manufacturing process that are intended to improve tolerability at higher doses with a low injection volume and infrequent SC administration, thereby opening up the opportunity to treat a wider range of complement-mediated diseases in addition to gMG including PNH and antiphospholipid syndrome.

We expect the manufacturing work to be completed in the second half of 2024.

In February 2023, we entered into a collaboration with EyePoint and are using EyePoint’s proprietary technology for sustained intraocular drug delivery, with the initial focus on geographic atrophy, an advanced form of age-related macular degeneration that leads to irreversible vision loss.

Rallybio and EyePoint expect to provide an update on this collaboration in the first half of 2024.

RLYB116 administered in the MAD portion of the study as a 100 mg once-a-week dose was also observed to be generally well tolerated.

Based on the results of the RLYB116 Phase 1 trial, we conducted a series of biomarker characterization analyses.

These analyses indicate the RLYB116 assay used to measure free C5 in the Phase 1 trial overestimated the levels of free C5 by approximately ten-fold, indicating that RLYB116 produced greater complement inhibition than initially reported.

We now believe that RLYB116 has the potential to be an effective treatment for patients with a variety of complement-mediated diseases, including PNH, gMG and APS.

We also completed manufacturing process enhancements with a goal of further improving the tolerability of RLYB116.

Based on the results of enhanced analytical techniques, including mass spectrometry, these process enhancements have successfully further purified the RLYB116 drug substance.

As a result, we believe that RLYB116 will have a favorable tolerability profile at doses at and above those evaluated in the Phase 1 MAD trial.

We plan to initiate a RLYB116 confirmatory clinical PK/PD trial in the second quarter of 2025 to demonstrate improved tolerability as well as complete and sustained complement inhibition.

This single-blind MAD trial will evaluate a 4-week treatment duration that will include two cohorts of eight participants each.

current plan is that Cohort 1 will evaluate weekly dosing of 150 mg and Cohort 2 will evaluate weekly dosing of 225 mg with 10 weeks of follow-up after the conclusion of treatment.

Hematological Disorders

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The inhibition of MTP-2 significantly increases levels of hepcidin, decreases iron load and treats ineffective erythropoiesis.

We believe RLYB331 has the potential to address a significant unmet need for patients with severe anemia with ineffective red blood cell production or erythropoiesis and iron overload, such as polycythemia vera, beta thalassemia and a subset of myelodysplastic syndromes, amongst others.

Currently these patients are underserved by the existing standard of care.

We are continuing with preclinical activities to support the transition of RLYB331 into clinical development and expect to report data from this program in the first half of 2024.

In 2024, we re-engineered RLYB331 to extend its half-life and completed non-clinical studies that demonstrated favorable tolerability, dose-dependent PK, and sustained PD effects with RLYB332, a long-acting version of RLYB331.

These findings, which were presented in a poster at the 66th annual meeting of ASH, support the continued development of RLYB332 as a potentially best-in-class therapeutic for treating diseases of iron overload.

Metabolic Disorders

In collaboration with Exscientia, we are working toward the selection of a small molecule development candidate to advance into the clinic targeting an Ectonucleotide Pyrophosphatase/Phosphodiesterase 1 inhibitor for the treatment of patients with HPP.

We and Exscientia continue to work toward the selection of a small molecule development candidate to advance into the clinic targeting ENPP1 for the treatment of patients with HPP.

Proof of mechanism studies are in progress with a leading global HPP expert.

We plan to provide an update on the progress of the program in the second half of 2024.

Our collaboration with Exscientia on the discovery of a small molecule targeting an ENPP1 inhibitor for the treatment of HPP has continued after the acquisition of Exscientia by Recursion in 2024.

HPP is a rare, genetic disease characterized by mutations in the ALPL gene.

The ALPL gene provides instructions for making an enzyme called tissue-nonspecific alkaline phosphatase, which plays an important role in the growth and development of bones and teeth.

We believe that a small molecule inhibitor of ENPP1 has the potential to bring meaningful benefit to HPP patients.

In 2024, we presented data at the ASBMR from an early lead ENPP1 inhibitor, REV101, in a mouse model of later-onset HPP demonstrating a 30% reduction PPi, a key biomarker that is elevated in HPP and contributes to poor bone mineralization.

Together with Recursion, we also advanced REV102, an ENPP1 inhibitor for the treatment of patients HPP to position the molecule for additional preclinical development activities in 2025.

In December 2022, we entered into a strategic alliance to discover, develop, and commercialize novel antibody-based therapeutics for rare diseases.

This multi-year, multi-target collaboration will combine AbCellera’s antibody discovery engine with our clinical and commercial expertise in rare diseases to identify optimal clinical candidates with a goal of delivering therapies to patients.

The first program is focused on addressing the significant unmet therapeutic needs of patients with rare metabolic diseases.

Our Operations

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The net proceeds from the November 2022 follow-on offering were approximately $50.8 million, after deducting underwriting discounts and commissions and other offering costs.

In April 2024, we entered into the a securities purchase agreement with JJDC (the "JJDC Securities Purchase Agreement") pursuant to which we sold to JJDC, in an unregistered offering, 3,636,363 shares of our common stock at a price of $1.82 per share, which represents a 10% premium on the Company’s closing stock price on April 9, 2024, for aggregate gross proceeds of approximately $6.6 million, before deducting offering expenses.

We agreed, among other things, to file with the SEC a registration statement covering the resale of the shares, which we filed on May 10, 2024.

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $65.5 million.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the middle of 2026.

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.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026.

This estimate and our expectation to advance the preclinical and clinical development of RLYB212, RLYB116, REV102 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.”

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Our expenses will increase substantially over time if and as we:

▪ advance our planned Phase 2 clinical trial for RLYB212, our lead product candidate for our FNAIT program;

▪ advance our Phase 2 clinical trial for RLYB212;

▪ advance our FNAIT natural history study and any other studies to support our development program and related regulatory submissions for RLYB212;

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▪ hire additional clinical, scientific, and commercial personnel;

▪ acquire or in-license other product candidates or technologies;

▪ maintain, expand, and protect our intellectual property portfolio;

▪ acquire or in-license other product candidates or technologies;

▪ secure manufacturing sources and supply chain capacity sufficient to produce adequate quantities of our product candidates, including any product candidate for which we obtain regulatory approval;

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Components of Results of Operations

We do not have any product candidates approved for sale and have not generated any revenue from product sales.

Our collaboration and license revenue generated to date is related to data collection and data submission performance obligations pursuant to the two-year J&J Collaboration Agreement to facilitate the advancement of research into products to address unmet needs relating to FNAIT.

Pursuant to the J&J Collaboration Agreement, we received an upfront payment of $0.5 million from J&J for the information dissemination and data provision services under the agreement.

In addition, we are eligible for payments upon the achievement of certain

enrollment-related events, totaling up to $0.7 million.

We are also eligible to receive additional payments upon certain triggers related to the companies' FNAIT studies.

We evaluated the agreement and determined it was within the scope of the Accounting Standards Codification Topic 606, Revenue from Contracts with Customers .

We determined there were performance obligations as follows:

(1) Data collection & submission revenue – derived from Rallybio’s ongoing management of our studies including the maintenance of a minimum site footprint, the license to utilize, and timely, semi-annual submission of the anonymized data, in the required formats to J&J.

(2) Dissemination of J&J materials & participant revenue – derived from Rallybio’s dissemination of content, information or materials that are developed by J&J and related to the J&J-Sponsored Studies and are provided by Rallybio to staff at Rallybio study sites for the purpose of disseminating such content, information, or materials to provide to potential eligible participants regarding J&J’s independent study.

In April 2024, we also entered into the JJDC Securities Purchase Agreement.

Under the terms of the JJDC Securities Purchase Agreement, JJDC made an equity investment purchasing 3,636,363 shares of common stock with a par value of $0.0001 per share for a share purchase price of $1.82 per share which includes a 10% premium for an aggregate purchase price of $6.6 million.

The JJDC Securities Purchase Agreement contains provisions related to the registration of the shares and the restriction on the sale or transfer of the shares for a period of time.

We determined the J&J Collaboration Agreement and the JJDC Securities Purchase Agreement represented combined agreements.

In accordance with the Accounting Standards Codification Topic 606, Revenue from Contracts with Customers and the Accounting Standards Codification Topic 820, Fair Value Measurement , total consideration of $1.2 million for the shares of common stock from the JJDC Securities Purchase Agreement, which represents the premium of $0.7 million and discount for lack of marketability of $0.5 million, has been allocated to revenue and will be recognized over the two year expected performance period.

Operating Expenses

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Costs for certain activities are recognized based on an evaluation of the progress to completion of each specific contract using information and data provided to us by our vendors and analyzing the progress of our research studies or other services performed.

Significant judgments and estimates are made in determining the expenses incurred balances at the end of any reporting period.

Significant judgments and estimates are made in determining the expenses incurred at the end of any reporting period.

Our direct, external research and development expenses consist primarily of fees paid to outside consultants, CROs, CMOs and research laboratories in connection with our process development, manufacturing and clinical development activities.

Our direct external research and development expenses also include fees incurred under license and intellectual property purchase agreements.

Our direct external research and development expenses also include fees

incurred under license and intellectual property purchase agreements.

We track these external research and development costs on a program-by-program basis.

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The successful development of our product candidates is highly uncertain.

We plan to continue investing in our research and development activities for the foreseeable future as we continue the development of our product candidates and manufacturing processes and conduct discovery and research activities for our clinical

We plan to continue investing in our research and development activities for the foreseeable future as we continue the development of our product candidates and the related manufacturing processes and conduct discovery and research activities for our clinical programs.

We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development.

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Loss on Investment in Joint Venture

The Company recognizes its pro-rata share of losses in the joint venture with Exscientia on its consolidated statements of operations and comprehensive loss within the loss on investment in joint venture line item, with a corresponding change to the joint venture investment asset on the consolidated balance sheets for equity method investments for which it does not have a controlling interest in.

The Company recognizes its pro-rata share of losses in the joint venture with Recursion (as successor in interest to Exscientia) on its consolidated statements of operations and comprehensive loss within the loss on investment in joint venture line item, with a corresponding change to the joint venture investment asset on the consolidated balance sheets for equity method investments for which it does not have a controlling interest in.

Results of Operations

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(in thousands) 2024 2023 CHANGE

Collaboration and license revenue $ 636 $ — $ 636

Total revenue 636 — 636

Operating expenses:

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Net loss $ (57,775) $ (74,564) $ 16,789

Collaboration and license revenue was $0.6 million for the year ended December 31, 2024.

There was no collaboration and license revenue for the year ended December 31, 2023.

The increase of $0.6 million in 2024 as compared to 2023 was due to our entrance into the J&J Collaboration Agreement in the second quarter of 2024 and the recognition of revenue related to the collaboration performance obligations.

Operating Expenses

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RLYB116 4,841 8,791 (3,950)

RLYB114 180 2,116 (1,936)

RLYB331 2,418 967 1,451

Other program candidates 1,901 3,411 (1,510)

Asset acquisition IPR&D expense — 3,073 (3,073)

Other unallocated research and development costs

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Research and development expenses were $41.5 million for the year ended December 31, 2024, compared to $53.5 million for the year ended December 31, 2023.

The increase of $12.9 million was primarily due to:

▪ a $12.5 million increase in costs related to the development of RLYB212, primarily attributable to an increase in clinical development and manufacturing costs;

▪ a $1.5 million increase in costs related to the development of RLYB116, primarily attributable to an increase in clinical and other related development costs;

offset by a decrease in manufacturing costs;

▪ a $1.5 million increase in costs related to the development of RLYB331, primarily attributable to an increase in preclinical research and development and manufacturing costs;

▪ a $1.1 million increase in payroll and personnel-related expenses, including an increase of $1.1 million in non-cash share-based compensation expense.

These increases were partially offset by:

▪ a $3.1 million decrease in asset acquisition IPR&D expense related to the acquisition of the worldwide exclusive rights to Sanofi’s KY1066, now referred to as RLYB331 in the second quarter 2022.

We did not record any asset acquisition related IPR&D expense for the year ended December 31, 2023;

▪ a $1.9 million decrease in costs related to the development of RLYB114, primarily attributable to a decrease in preclinical research and development and manufacturing costs as compared to the year ended December 31, 2022.

We anticipate that our research and development expenses will decline given our recent decision to prioritize our portfolio and reduce our research and development headcount.

The decrease of $12.0 million was primarily due to:

▪ a $4.4 million decrease in costs related to the development of RLYB212, primarily attributable to a decrease in manufacturing and other related development costs;

which were partially offset by an increase in clinical costs;

▪ a $4.0 million decrease in costs related to the development of RLYB116, primarily attributable to a decrease in clinical and other related development costs;

which were partially offset by an increase in manufacturing costs;

▪ a $1.7 million decrease in payroll and personnel-related expenses, primarily related to the workforce reduction, effective March 6, 2024;

▪ a $1.5 million decrease in costs related to the development of other program candidates.

General and Administrative Expenses

General and administrative expenses were $19.6 million for the year ended December 31, 2024, compared to $25.4 million for the year ended December 31, 2023.

The decrease of $1.8 million is primarily related to a decrease in payroll and personnel-related costs and director and officer insurance premiums;

offset by increases in other general and administrative related expenses.

We anticipate that our general and administrative expenses related to providing administrative support to our research and development activities will slightly decline in the future in connection with our recent decision to prioritize our development portfolio.

The decrease of $5.8 million was primarily due to:

▪ a $3.7 million decrease in consulting fees, director and officer insurance premiums, professional fees and other related general and administrative expenses;

▪ a $2.1 million decrease in payroll and personnel-related costs, primarily related to the workforce reduction, effective March 6, 2024, in addition to lower ongoing headcount in 2024 as compared to 2023.

Total Other Income, Net

Total other income, net, for the year ended December 31, 2024 was $5.0 million compared to $6.4 million for the year ended December 31, 2023.

The increase in total other income of $4.1 million is primarily attributable to an increase in interest income from marketable securities.

The decrease in total other income of $1.4 million was primarily due to a decrease in interest income from marketable securities due to a lower excess cash balance.

Loss on Investment in Joint Venture

Loss on investment in joint venture for the year ended December 31, 2024 was $2.2 million compared to $2.0 million for the year ended December 31, 2023.

The increase in loss on investment in joint venture of $1.0 million is primarily attributable to an increase in REVI preclinical development costs.

The increase in loss on investment in joint venture of $0.2 million was primarily due to an increase in REVI development costs.

Liquidity and Capital Resources

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The Shelf was declared effective on August 15, 2022.

The Company also simultaneously entered into the Sales Agreement with Cowen.

The Company also simultaneously entered into a Sales Agreement (the "Sales Agreement") with Cowen and Company, LLC ("Cowen").

In accordance with the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time at prices through Cowen acting as our agent.

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As of December 31, 2024, the Company had not sold any shares of common stock pursuant to the Sales Agreement.

In November 2022, we completed a follow-on offering of approximately $54.8 million consisting of 5,803,655 shares of common stock, inclusive of 803,654 shares of common stock sold pursuant to the partial exercise of the underwriters' option to purchase additional shares at the price of $6.00 per share, and to certain investors in lieu of common stock, pre-funded warrants to purchase up to an aggregate of 3,333,388 shares of common stock at a price of $5.9999, which represents the per share public offering price for the shares less the $0.0001 per share exercise price for each pre-funded warrant.

The net proceeds from the November 2022 follow-on

offering were approximately $50.8 million, after deducting underwriting discounts and commissions and other offering costs.

lieu of common stock, pre-funded warrants to purchase up to an aggregate of 3,333,388 shares of common stock at a price of $5.9999, which represents the per share public offering price for the shares less the $0.0001 per share exercise price for each pre-funded warrant.

The net proceeds from the November 2022 follow-on offering were approximately $50.8 million, after deducting underwriting discounts and commissions and other offering costs.

In April 2024, we entered into a Securities Purchase Agreement with JJDC, pursuant to which we sold to JJDC in an unregistered offering, 3,636,363 shares of our common stock at a price of $1.82 per share, which represents a 10% premium on the Company’s closing stock price on April 9, 2024, for aggregate gross proceeds of approximately $6.6 million, before deducting offering expenses.

We agreed, among other things, to file with the SEC a registration statement covering the resale of the shares within 120 days following the closing of the offering.

We filed this registration statement on May 10, 2024.

As of December 31, 2024, we had $65.5 million of cash, cash equivalents and marketable securities.

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Funding Requirements

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the middle of 2026.

This estimate and our expectation to advance the 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.

Management has implemented cash preservation initiatives including conducting a prioritization of its research and development activities with a primary focus on RLYB212, reviewing certain discretionary expenses and managing the timing of other development activities.

However, we expect to incur significant expenses and operating losses in the foreseeable future as we advance our product candidates through clinical development, seek regulatory approval and pursue commercialization of any approved product candidates.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026.

This estimate and our expectation to advance the development of RLYB212, RLYB116, REV102 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.

We expect to incur significant expenses and operating losses in the foreseeable future as we advance our product candidates through clinical development, seek regulatory approval and pursue commercialization of any approved product candidates.

Because of the numerous risks and uncertainties, length of time and scope of activities associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the actual amount of funds we will require for development, approval and any approved marketing and commercialization activities.

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▪ the willingness of the FDA, EMA and other comparable foreign regulatory authorities to accept our clinical trial designs, as well as data from our completed and planned preclinical studies and clinical trials, as the basis for review and approval of RLYB212, RLYB116 and any other product candidates;

▪ the cost and timing of the manufacture and supply of non-clinical and clinical trial material for RLYB212, RLYB116 and our other product candidates;

▪ the cost and timing of the manufacture and supply of non-clinical and clinical trial material for RLYB212, RLYB116, REV102 and our other product candidates;

▪ the progress, timing and costs of the development by us or third parties of companion diagnostics, if required, for RLYB212 or any other product candidates, including design, manufacturing and regulatory approval;

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▪ the cost of making royalty, milestone or other payments under our current or any future in-license agreements;

▪ our ability to maintain our collaborations with Exscientia and AbCellera on favorable terms and establish new collaborations;

▪ our ability to maintain our collaborations with Recursion and AbCellera on favorable terms and establish any new collaborations;

▪ the extent to which we in-license or acquire additional product candidates or technologies;

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Net cash used in operating activities $ (49,282) $ (60,265)

Net cash provided by (used in) investing activities 27,658 (112,170)

Net cash provided by (used in) financing activities 143 51,078

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)

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During the year ended December 31, 2024, net cash used in operating activities was $49.3 million as compared to $60.3 million for the year ended December 31, 2023.

The increase in cash used in operating activities was primarily due to an increase in research and development expenses.

Our research and development expenses increased primarily due to the advancement of our RLYB212 and RLYB116 product candidates, the advancement of RLYB331 and an increase in payroll and personnel-related costs.

These research and development expenses were offset by a decrease in expenses related to IPR&D expenses associated with the acquisition of worldwide exclusive rights to Sanofi’s KY1066, now referred to as RLYB331 and research and development expenses related to the development of RLYB114 as compared to the year ended December 31, 2022.

The decrease in net cash used in operating activities was primarily related to a decrease in research and development and general and administrative activities and changes in working capital.

Investing Activities

Net cash provided by investing activities was $33.5 million for the year ended December 31, 2024 as compared to $27.7 million of net cash used in investing actives for the year ended December 31, 2023.

The increase in net cash provided by investing activities was primarily related to the proceeds from maturities of highly rated debt securities during the year ended December 31, 2023 as compared to the purchases of highly rated debt securities during the year ended December 31, 2022.

The increase of $5.8 million in net cash provided by investing activities was primarily related to proceeds of $84.4 million from maturities of highly-rated debt securities, partially offset by purchases of highly-rated debt securities of $48.9 million during the year ended December 31, 2024, as compared to proceeds from maturities of highly-rated debt securities of $138.3 million, partially offset by purchases of highly-rated debt securities of $108.4 million during the year ended December 31, 2023.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2024 was $5.2 million, representing proceeds from the issuance of common stock pursuant to the JJDC Securities Purchase Agreement, after deducting offering costs and accounting for the total consideration allocation related to the J&J Collaboration Agreement of $1.2 million.

Net cash provided by financing activities for the year ended December 31, 2023 was $0.1 million, representing the issuance of common stock under the 2021 Employee Stock Purchase Plan, offset by payments of offering costs related to our November 2022 follow-on offering.

Net cash provided by financing activities for the year ended December 31, 2022 was $51.1 million, primarily representing the net proceeds from our November 2022 follow-on offering, after deducting underwriting discounts and commissions and payments of other offering costs.

Contractual Obligations

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The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met.

We make estimates of our accrued expenses as of each balance sheet date

based on facts and circumstances known to us at that time.

We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time.

We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary.

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Share-Based Compensation

The Company accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation .

The Company accounts for share-based compensation in accordance with the Accounting Standards Codification 718, Compensation—Stock Compensation .

Generally, share-based compensation is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is recognized over the requisite service period, which is generally the vesting period.

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We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year.

We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less

than $700.0 million.

If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

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Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 “Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation” to our consolidated financial statements for the year ended December 31, 2023 appearing elsewhere in this Annual Report on Form 10-K.

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations and footnote disclosures is disclosed in Note 2 “Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation” to our consolidated financial statements for the year ended December 31, 2024 appearing elsewhere in this Annual Report on Form 10-K.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis