Biotech Company on Nasdaq Decides to Wholeheartedly Invest in Digital Asset HYPE Token, Placing Sizable Treasury Stake in Cryptocurrency
Sonnet BioTherapeutics Transforms into Crypto Treasury Company, Forming Hyperliquid Strategies Inc.
Sonnet BioTherapeutics, a company previously focused on oncology biotech, has undergone a radical transformation, pivoting into the cryptocurrency sector. This shift, formalized through an $888 million business combination with Rorschach I LLC, a newly formed crypto entity backed by major institutional investors, marks the birth of Hyperliquid Strategies Inc. (HSI), a publicly traded crypto treasury company focused on the Hyperliquid (HYPE) token.
Background:
Sonnet, known for its proprietary FHAB platform, decided to abandon its core biotech business model. The company will retain limited involvement in its biotech assets, maintaining contingent value rights linked to remaining drug candidates, while planning to divest most non-core assets. This move was driven by the strategic intent to gain exposure to digital assets, particularly the HYPE token, which ranks as the 13th-largest cryptocurrency by market capitalization as of mid-2025.
Strategic Intent:
The merged entity, renamed Hyperliquid Strategies Inc., will hold approximately 12.6 million HYPE tokens valued at around $583 million, alongside $305 million in cash. The combination creates a dual-asset treasury structure designed to enhance liquidity, strategic purchasing power, and investor confidence in the HYPE token. The new firm will operate as a public crypto treasury company listed on Nasdaq, with new crypto investors controlling 98.8% of the business, leaving legacy biotech shareholders with 1.2% equity but also contingent rights related to remaining biotech assets.
Prominent crypto investors will lead the company. Bob Diamond, co-founder and CEO of Atlas Merchant Capital, will serve as Chairman, and David Schamis, Atlas CIO and co-founder, will become CEO. The rationale behind this pivot includes filling a market gap—HYPE tokens are difficult to access in the U.S.—offering institutional investors regulated exposure to this digital asset. This strategic shift positions HSI as a novel crypto asset management company that pursues institutional-grade digital asset treasury management with the goal of supporting the HYPE token’s market dynamics and fostering long-term value.
Expanded Leadership:
Two independent directors from Sonnet will also join the board of HSI. Additionally, Eric Rosengram, former President of the Boston Federal Reserve, will join the board, bringing valuable financial expertise to the company.
Continued Biotech Operations:
Sonnet's legacy biotech operations will continue under the HSI umbrella as a wholly owned subsidiary. A Contingent Value Right (CVR) will be issued to shareholders tied to the biotech assets.
Investor Support:
The transaction is backed by major institutional investors like Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital. $2 million in convertible notes will be converted at the time of the transaction. To support this transition, Sonnet raised $5.5 million via a private placement of convertible preferred shares and warrants.
This strategic repositioning from biotech drug development to becoming a publicly traded entity focused on managing a large treasury of Hyperliquid blockchain tokens aims to capitalize on institutional demand and the growing prominence of the HYPE cryptocurrency. HSI aims to turn into a leading model for crypto-native treasury management in the public markets.
- Sonnet BioTherapeutics, originally focused on oncology biotech, has reinvented itself as Hyperliquid Strategies Inc. (HSI), a crypto treasury company, following an $888 million business combination with Rorschach I LLC.
- The merged entity will hold approximately 12.6 million HYPE tokens, making it a significant player in the cryptocurrency market, ranking as one of the top 13 cryptocurrencies by market capitalization.
- Hyperliquid Strategies Inc. will leverage its dual-asset treasury structure to enhance liquidity, strategic purchasing power, and investor confidence in the HYPE token.
- HSI will be operated as a public crypto treasury company listed on Nasdaq, with new crypto investors controlling the majority of the business.
- The company's leadership will be spearheaded by Bob Diamond and David Schamis, prominent figures in the crypto industry, while maintaining two independent directors from Sonnet and adding Eric Rosengram to the board.
- As a part of this transformation, Sonnet's legacy biotech operations will continue as a wholly owned subsidiary of HSI, with a Contingent Value Right issued to shareholders tied to the biotech assets.
- The strategic shift towards digital assets has garnered support from major institutional investors such as Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital, who have collectively backed the transition.
- By capitalizing on institutional demand and the growing prominence of the HYPE cryptocurrency, HSI aspires to become a leading model for crypto-native treasury management in the public markets.
