Rallybio is headed into a mid-stage trial with enough cash to last it through 2026, but biotech's down market has made the company's journey difficult.

For a small rare disease company with a treatment in the clinic, the toughest challenge isn't necessarily the science. Often, it's having enough resources to reach the finish line.

At Rallybio, a biotech with an early-stage candidate for fetal and neonatal alloimmune thrombocytopenia, a rare disease caused by incompatibility between blood platelets in expecting mothers and their unborn child, financing has been a difficult part of the puzzle.

"The only currency a biotech company has is the story they tell," said Steve Uden, CEO and co-founder of Rallybio. "We don't have profit and loss -- it's all around being able to explain what you're trying to do and the impact you're trying to have."

Rallybio has faced a few tough decisions recently, from switching out its lead treatment candidate in 2023 to cutting almost half its workforce earlier this year to extend its cash runway into mid-2026.

But Uden and fellow co-founder Martin Mackay, who serves as Rallybio's executive chairman, are committed to bringing their treatment to patients despite the challenging investment climate. And the leaders, both of whom previously served at rare disease company Alexion, believe a small company approach is the way to get there.

While biotech funding isn't at the same levels as a few years ago, the two see rare disease as an area where medical need can overcome financial hesitancy.

"So long as scientists are driving for solutions, the money will come. Sometimes we have to ride a storm or two," Mackay said.

The disease that Rallybio's lead candidate addresses has a decades-old predecessor that's considered one of the most successful medical interventions of the 20th century. In fact, many people haven't even heard of Rh disease -- red blood cell incompatibility between mother and child -- which once killed about 10,000 newborns a year in the U.S., because a vaccine developed in the 1960s has been so effective at preventing it.

Rallybio wants to do the same for the platelet version of the disease, abbreviated as FNAIT, which is rare but can also be fatal and has no approved therapy. The company, which got its start in 2018, is approved to begin a mid-stage trial after prioritizing a monoclonal antibody candidate last year.

Also in the company's pipeline is an early-stage antibody for complement dysregulation, which includes diseases like paroxysmal nocturnal hemoglobinuria, refractory generalized myasthenia gravis and relapsing neuromyelitis optica spectrum disorder.

Uden and Mackay focused on rare diseases during their time at Alexion, but thought they'd be more effective striking out on their own. (In 2020, Alexion was bought by AstraZeneca for $39 billion.)

"The thing that stood out from our time at Alexion was that when you get into rare disease, the impact you have is huge," Uden said. "Where biotechs and startups fit in is continuing to quickly drive innovation, which then allows larger companies to do what they're really good at, which is ensuring patients [will] get access."

But the turmoil of the biotech market in the past few years has made the journey tough, Mackay said.

"What we need to do is get a bit more savvy around the business side of biotech and only ride the storms but be able to attract investment during difficult times," Mackay said.

Investors' interest in rare diseases has ebbed and flowed. Uden said he has seen funding dry up in the last few years alongside the overall biotech market.

"The biggest challenge that we've faced has been financing the company," Uden said, pointing to a general issue that arises with rare diseases -- they're not well known. "It's not something that everybody has heard of. If you're developing a checkpoint inhibitor in oncology, most people have heard of that, but in rare diseases it's different."

Still, Uden and Mackay are hopeful there may be a turnaround coming.

"It will come back," Mackay said. "We've seen companies give up on areas like rheumatoid arthritis and obesity in the past because they were difficult targets, but look at them now."

"We cannot be oblivious to the market, which is cyclical, but we can believe in the fundamental need that is out there and the dynamic science and understanding of biology that is the focus of our company," he added.