Sonnet BioTherapeutics Inc.  stock surged Monday amid high trading volume following news of a transformative business combination with Rorschach I, backed by Atlas Merchant Capital and Paradigm.

The deal will create Hyperliquid Strategies Inc., a public cryptocurrency treasury company holding around 12.6 million HYPE tokens—worth $583 million—plus $305 million in cash, for a total assumed value of $888 million.

The new entity will remain Nasdaq-listed under a new ticker and be led by Bob Diamond (Chairman) and David Schamis (CEO). Major crypto investors including Galaxy Digital, Pantera Capital, and D1 Capital are participating. Sonnet will become a subsidiary of Hyperliquid Strategies, continue biotech R&D (e.g., SON-1010), and raise $5.5 million via private placement.

Shareholders will receive a contingent value right (CVR) tied to Sonnet's legacy biotech assets, which remain open to partnership deals.

In April, Sonnet BioTherapeutics ( SONN ) released safety results of SON-1010 (IL12-FHAB) at the highest dose combined with atezolizumab in the Phase 1b/2a trial in adult patients with advanced solid tumors or platinum-resistant ovarian cancer (the SB221 study).

Based on feedback from a formal evaluation by the Safety Review Committee (SRC) for the SB221 study, the study can now advance to the expansion phase.

This phase will study the preliminary effect of the combination at the MTD before proceeding to a Phase 2a randomized comparison with the standard of care.

Price Action: SONN stock is up 151% at $12.98 at the last check on Monday.

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