Sonnet BioTherapeutics Pivots to Cryptocurrency with $888 Million Deal

Sonnet BioTherapeutics Holdings, Inc., a clinical-stage, oncology-focused biotechnology company, has announced a significant pivot in its business strategy. The company, known for its proprietary platform for biologic medicines of single-or bifunctional action, has entered into a definitive agreement for an $888 million business combination with Rorschach I LLC. This transformative deal will see Sonnet transition from a biotech firm to a cryptocurrency-focused entity, specifically forming a HYPE token treasury company.

The business combination involves Rorschach I LLC, a newly formed entity affiliated with Atlas. This strategic move is aimed at leveraging the potential of cryptocurrency and blockchain technology, marking a radical shift from Sonnet's traditional biotech operations. The new entity, to be named Hyperliquid Strategies Inc., will focus on the HYPE token, which is expected to drive future growth and innovation in the cryptocurrency space.

Sonnet's proprietary technology, Fully Human Albumin Binding (FHAB), has been a cornerstone of its biotech endeavors. FHAB utilizes a fully human single chain antibody fragment that binds to and hitch-hikes on human serum albumin for transport to target tissues, specifically designed to target tumor and lymphatic tissue. The company's lead program, SON-1010, or IL-12-FHAB, is in development for the treatment of solid tumors and ovarian cancer. SON-1010 is being evaluated in an ongoing Phase 1/2a study in combination with atezolizumab (Tecentriq) for the treatment of platinum-resistant ovarian cancer (PROC). Additionally, Sonnet is evaluating its second program, SON-1210, an IL12-FHAB-IL15 for solid tumors, and its SON-080 program, a low dose of rhIL-6 in development for Chemotherapy-Induced Peripheral Neuropathy (CIPN) and Diabetic Peripheral Neuropathy (DPN).

This strategic pivot to cryptocurrency reflects a broader trend in the biotech industry, where companies are exploring new avenues for growth and innovation. By forming a HYPE token treasury, Sonnet aims to capitalize on the burgeoning cryptocurrency market, which has seen significant interest and investment in recent years. The $888 million business combination is a testament to the company's confidence in this new direction and its potential to drive substantial value for shareholders.

The transformation of Sonnet into a cryptocurrency-focused entity is a bold move that underscores the company's commitment to staying at the forefront of technological advancements. While the biotech industry has traditionally been the company's domain, the shift to cryptocurrency represents a strategic decision to tap into a rapidly evolving and potentially lucrative market. The formation of Hyperliquid Strategies Inc. and its focus on the HYPE token will be closely watched by industry observers and investors alike, as the company navigates this new terrain.

Hyperliquid is a high-throughput layer-1 blockchain that supports onchain trading of perpetual futures and other financial primitives. The company aims to hold 12.6 million HYPE tokens, worth about $583 million when the agreement was made. In addition, it expects to have $305 million in cash, bringing its total value to $888 million. These funds will also be used to purchase more HYPE tokens in the future. With HSI’s creation, investors can gain indirect exposure to HYPE through equity markets, bridging traditional finance with blockchain infrastructure.

Sonnet’s new project is backed by prominent companies, including Atlas Merchant Capital, Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital and 683 Capital. The biotech company seems to be copying the playbook of the business intelligence firm-turned Bitcoin investor, Strategy, which provides indirect exposure to crypto through equity markets. In the press release, Paradigm co-founder Matt Huang said Hyperliquid has “broken out” as a crypto project with strong fundamentals. He said they see institutional demand for HYPE exposure, while the token is difficult to access in the United States. Meanwhile, Sonnet will continue to operate as a subsidiary under HSI’s umbrella. It’s expected to retain its ongoing clinical oncology assets.