Sonnet ditches biotech dreams to anchor a $583m HYPE token reserve

Sonnet BioTherapeutics is no longer just a cancer drug developer. Its $888 million merger will place it among the largest HYPE holders, blurring the lines between traditional finance and decentralized protocols in a high-stakes treasury experiment.

According to a July 14 press release, Nasdaq-listed biotech firm Sonnet BioTherapeutics has agreed to an $888 million business combination with Rorschach I LLC, a newly formed entity backed by Atlas Merchant Capital and Paradigm, to pivot into a crypto treasury strategy.

The deal, expected to close later this year, will create Hyperliquid Strategies Inc. (HSI), a publicly traded entity holding 12.6 million Hyperliquid (HYPE) tokens (worth $583 million) and $305 million in cash, positioning it as one of the largest corporate holders of Hyperliquid’s native asset. Heavyweight investors, including Galaxy Digital, Pantera Capital, and former Boston Fed President Eric Rosengren, are backing the move.

Inside Sonnet’s high-stakes crypto reinvention

The deal hinges on two key components: $583 million worth of HYPE tokens (12.6 million at current prices) and $305 million in fresh capital, which Hyperliquid Strategies Inc. (HSI) will use to accumulate additional tokens. This positions HSI as one of the largest single holders of HYPE, a strategic reserve that could influence the token’s liquidity and market dynamics.

The structure is telling: Rorschach’s backers, including Atlas Merchant Capital and Paradigm, will control 98.8% of HSI post-merger, leaving Sonnet’s existing shareholders with just 1.2%. For a Nasdaq-listed entity, this near-total ownership shift is virtually unprecedented.

According to the press release, HSI will enter a Sponsor Advisory Agreement with Rorschach to integrate HYPE into its treasury strategy, suggesting plans beyond passive accumulation.

Upon closing, Bob Diamond, the former Barclays CEO and Atlas co-founder, will chair the board of HSI. David Schamis, Atlas CIO, will take the CEO post. They’ll be joined by a new CFO and at least one notable addition: Eric Rosengren, former president of the Boston Fed.

The revamped board blends traditional finance pedigree with regulatory acumen, a clear signal that the team understands the scrutiny that comes with bringing crypto assets into a public company framework.

Meanwhile, the biotech arm isn’t disappearing; it’s being siloed. Sonnet will operate as an HSI subsidiary, continuing work on SON-1010 (its lead oncology drug) while jettisoning other assets. Shareholders will receive Contingent Value Rights, a consolation prize tying payouts to future biotech milestones. But with 98.8% control going to new investors, the message is clear: Sonnet’s future is crypto, not cancer.