Sonnet Biotherapeutics to Merge with Rorschach I LLC in a Blockbuster $888 Million Deal Shifting Focus to Crypto Treasury Management

• Why Is a Biotech Firm Merging With a Crypto Entity?
• The $888 Million Breakdown: Tokens, Cash, and Strategic Vision
• Executive Shuffle: From Biotech to Blockchain
• Funding Mechanics: PIPEs, Convertibles, and That 98.8% Ownership Shift
• Regulatory Hurdles and the 2025 Timeline
• What This Means for Crypto’s Institutional Adoption
• FAQs: Sonnet-Rorschach Merger Unpacked

In a move that’s sending shockwaves through both biotech and crypto circles, NASDAQ-listed Sonnet Biotherapeutics has announced an $888 million merger with Rorschach I LLC—a special purpose entity backed by heavyweight crypto investors. The deal, expected to close in late 2025 pending approvals, will transform Sonnet into Hyperliquid Strategies Inc. (HSI), a crypto treasury management firm overseeing a $583 million token treasury and $305 million in cash. The transaction brings together Wall Street veterans, crypto-native investors, and biotech expertise in what could become a blueprint for corporate pivots into Web3.

Why Is a Biotech Firm Merging With a Crypto Entity?

When I first saw the headline, I’ll admit I did a double-take—biotech and crypto aren’t exactly common bedfellows. But this isn’t just another meme-stock pivot. The merger represents a calculated move by Sonnet to leverage its public market presence (NASDAQ: SONN) while gaining access to Rorschach’s crypto-native infrastructure. Post-merger, the combined entity will focus on managing Hyperliquid’s Layer 1 blockchain token treasury, with existing biotech assets like SON-1010 continuing under HSI’s umbrella. It’s the financial equivalent of a gene-splicing experiment, and Wall Street is watching closely.

The $888 Million Breakdown: Tokens, Cash, and Strategic Vision

Let’s unpack the numbers that make this deal tick:

• Token Treasury: 12.6 million Hyperliquid tokens (worth ~$583M at current prices)
• Cash Reserves: $305 million from private investors
• Valuation: Combined $888 million enterprise value

The investor consortium reads like a who’s-who of crypto finance—Paradigm, Galaxy Digital, and Pantera Capital are all onboard. What’s fascinating is how they’re structuring this: the cash will be used to acquire additional tokens, essentially creating one of the largest protocol-owned treasuries in crypto. According to TradingView data, Hyperliquid’s token has shown unusual stability for a LAYER 1 asset, which likely appealed to Sonnet’s board.

Executive Shuffle: From Biotech to Blockchain

The leadership changes tell their own story. Bob Diamond—yes,former Barclays CEO—is stepping in as Chairman, while Atlas Merchant Capital’s David Schamis will helm HSI as CEO. In a press conference, Schamis emphasized the “differentiated value proposition” of combining public market access with crypto-native yield strategies. Meanwhile, Sonnet’s existing biotech team will operate as a subsidiary, with two legacy directors joining an expanded board that now includes Eric Rosengren, former Boston Fed President. Talk about a revolving door between TradFi and DeFi!

Funding Mechanics: PIPEs, Convertibles, and That 98.8% Ownership Shift

Here’s where it gets technical (but stay with me):

1. $5.5M Private Placement: Closed immediately with accredited investors via non-voting convertible preferred shares
2. $2M Convertible Notes: Issued in June 2025, rolling into the same equity structure

The brutal math for existing Sonnet shareholders? They’ll own just 1.2% post-merger, with Rorschach and new investors controlling 98.8%. Chardan Capital’s involvement as exclusive financial advisor suggests this was always intended as a reverse takeover—a backdoor listing for Hyperliquid’s ecosystem. As someone who’s covered SPAC deals, this has all the hallmarks of a carefully orchestrated capital markets maneuver.

Regulatory Hurdles and the 2025 Timeline

Don’t pop the champagne yet—the deal isn’t expected to close until H2 2025. Between now and then:

• Shareholder votes (always unpredictable with retail-heavy biotech stocks)
• SEC scrutiny of the token treasury structure
• Potential CFTC oversight given the yield-generation strategies

The S-4 filing (when it drops) will be mandatory reading for crypto-law wonks. Interestingly, Greenberg Traurig—a firm known for crypto regulatory work—is advising Rorschach, while Sonnet tapped Lowenstein Sandler’s biotech specialists. This legal yin-yang reflects the deal’s hybrid nature.

What This Means for Crypto’s Institutional Adoption

Beyond the headlines, this merger signals three seismic shifts:

1. Public Markets as On-Ramps: NASDAQ-listed entities becoming crypto asset holders
2. Protocol-Owned Liquidity 2.0: Treasury strategies moving beyond DAO governance
3. Biotech’s Cash Burn Problem: SPAC-style pivots becoming lifelines for struggling life sciences firms

As a BTCC analyst noted off-record, “When Galaxy and Paradigm back a public company holding nine-figure token reserves, it legitimizes crypto treasuries as an asset class.” Still, the proof will be in HSI’s quarterly filings—can they deliver APY that justifies the hype?

Token valuations sourced from CoinGlass; equity data from TradingView.

FAQs: Sonnet-Rorschach Merger Unpacked

What happens to Sonnet’s biotech operations post-merger?

SON-1010 and select assets will continue as an HSI subsidiary, but most R&D pipelines will be sunsetted.

How does the $888M valuation break down?

$583M in Hyperliquid tokens + $305M cash from PIPE investors at closing.

Why is Bob Diamond involved in a crypto deal?

The Atlas Merchant Capital co-founder has been quietly building crypto exposure since 2022 through SPAC structures.

When will the ticker change occur?

Expected Q3 2025 if shareholders approve, with the new symbol likely “HYPR” or similar.