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Rapport Therapeutics, Inc. (RAPP)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 reflected disciplined R&D execution and a fortified balance sheet: net loss of $17.5M, total operating expenses of $21.6M, and interest income of $4.1M, with $320.7M in cash, cash equivalents, and short-term investments (runway through end-2026) .
  • Operational guidance largely maintained for RAP-219 (focal epilepsy topline mid‑2025), with added specificity on MAD‑2 and PET toplines coming in Q1 2025; however, the DPNP Phase 2a IND was placed on FDA clinical hold (negative surprise) .
  • Strategic focus tightened: deferral of RAP‑199 investment to prioritize three RAP‑219 proof‑of‑concept trials (resource allocation clarity) .
  • Near‑term stock catalysts: resolution of the DPNP clinical hold, Q1 2025 MAD‑2/PET readouts, and mid‑2025 focal epilepsy Phase 2a topline; Board additions add experienced oversight for clinical and operational scaling .

What Went Well and What Went Wrong

What Went Well

  • Maintained momentum across RAP‑219 programs: Phase 2a focal epilepsy recruiting on track; MAD‑2 and PET trials progressing with Q1 2025 toplines targeted . “We are pleased with the progress we’re making with RAP‑219… have only strengthened our confidence in the pipeline‑in‑a‑product potential” — CEO Abraham N. Ceesay .
  • Strengthened governance: added seasoned biotech leaders (Perez, Sanchez, Silva, Young) to Board, enhancing drug discovery, neuroscience and operational expertise .
  • Liquidity and runway: ended Q3 with $320.7M in liquid assets; reiterated funding through end‑2026, supported by rising interest income ($4.1M Q3) .

What Went Wrong

  • FDA clinical hold: DPNP Phase 2a IND placed on hold pending protocol amendments—pushes timing and introduces regulatory risk (trial initiation timing TBD) .
  • Operating expense step‑up: total OpEx rose to $21.6M (vs $9.6M y/y) driven by clinical development and public company costs; G&A increased to $6.1M .
  • Higher quarterly cash burn: net cash used in operating activities rose vs prior year ($16.4M vs $5.4M), reflecting accelerated clinical execution .

Financial Results

MetricQ3 2023Q2 2024Q3 2024
Net Loss ($USD Millions)$8.709 $18.121 $17.537
EPS (Basic/Diluted) ($USD)$(5.70) $(1.70) $(0.50)
Total Operating Expenses ($USD Millions)$9.564 $20.800 $21.640
R&D Expense ($USD Millions)$7.580 $15.689 $15.543
G&A Expense ($USD Millions)$1.984 $5.111 $6.097
Interest Income ($USD Millions)$0.856 $2.679 $4.103
Liquidity DetailQ2 2024Q3 2024
Cash, Cash Equivalents & Short-term Investments ($USD Millions)$336.1 $320.7
Cash & Cash Equivalents ($USD Millions)$110.164 $39.314
Short-term Investments ($USD Millions)$225.975 $281.347
Operating Cash FlowQ3 2023Q2 2024Q3 2024
Net Cash Used in Operating Activities ($USD Millions)$5.424 $16.352 $16.415

Notes:

  • Company disclosed no product revenues to date (“have not generated any revenue”) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RAP‑219 MAD‑2 toplineQ1 2025MAD‑2 results expected 2H 2024 MAD‑2 completion Q4 2024; topline Q1 2025 Lowered/Delayed (to Q1 2025)
RAP‑219 PET toplineQ1 2025PET results expected 1H 2025 Topline Q1 2025 Narrowed timing (specific Q1 2025)
RAP‑219 Phase 2a (Focal Epilepsy) toplineMid‑2025Initiation on track Q3 2024; topline mid‑2025 Recruiting underway; topline mid‑2025 Maintained timeline; status updated
RAP‑219 Phase 2a (DPNP) initiation2H 2024 → TBDInitiate 2H 2024 IND on FDA clinical hold; timing update to come Lowered (clinical hold)
RAP‑219 Phase 2a (Bipolar mania) initiation2025Initiate in 2025 Plans to initiate in 2025 Maintained
RAP‑199 (TARPγ8 molecule)1H 2025 (Phase 1)Phase 1 expected to begin 1H 2025 Deferring further investment to prioritize RAP‑219 trials Lowered (deferred)
Cash runwayThrough end‑2026Through end‑2026 Through end‑2026 Maintained

Earnings Call Themes & Trends

Note: A Q3 2024 earnings call transcript could not be located in the document catalog or via search; themes below reflect the 8‑K press release and 10‑Q.

TopicPrevious Mentions (Q2 2024)Current Period (Q3 2024)Trend
R&D execution (RAP‑219)MAD‑2 initiated; PET initiated; Phase 2a epilepsy initiation on track MAD‑2/PET ongoing; Q1 2025 toplines; epilepsy Phase 2a recruiting Continued execution; more specific timelines
Regulatory/legalNo holds noted; pipeline expanding FDA clinical hold on DPNP IND; working to address protocol feedback New headwind (regulatory risk introduced)
Platform/pipeline strategyMulti‑indication “pipeline‑in‑a‑product” positioning Reaffirmed; prioritization of RAP‑219 across epilepsy, pain, bipolar; deferral of RAP‑199 Greater focus, resource discipline
Trial design/biomarkersUse of RNS “long episodes” as biomarker endpoint Expanded RNS biomarker narrative; conference presentations planned Strengthened biomarker-driven approach
Liquidity/fundingIPO completed; cash expected to fund through end‑2026 Runway reiterated; interest income support Stable funding outlook
Governance/leadershipBoard transition (Burrell) Four biotech leaders added to Board Enhanced governance depth

Management Commentary

  • “We are pleased with the progress we’re making with RAP‑219… strengthened our confidence in the pipeline‑in‑a‑product potential of RAP‑219” — Abraham N. Ceesay, CEO .
  • “We are pleased to welcome additional experienced biotech leaders to our board… well positioned for future success” — Steve Paul, MD, Founder and Chair .
  • Strategic focus: company is deferring RAP‑199 to concentrate resources on three RAP‑219 proof‑of‑concept trials .

Q&A Highlights

  • Earnings call transcript was not available; no Q&A details could be sourced. We will update this section if the transcript becomes available.

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue was unavailable due to data access limits and/or limited coverage for this newly public clinical-stage company. As a result, a beat/miss analysis versus consensus cannot be provided at this time.

Key Takeaways for Investors

  • Near‑term catalysts: resolution of the FDA clinical hold in DPNP and Q1 2025 topline data from MAD‑2 and PET trials; mid‑2025 focal epilepsy Phase 2a topline will be pivotal for de‑risking the epilepsy indication .
  • Execution remains on track in epilepsy and bipolar despite the DPNP setback; resource prioritization toward RAP‑219 should enhance probability of timely readouts .
  • Cash runway through end‑2026 provides strategic flexibility to navigate regulatory feedback and complete multiple proof‑of‑concept trials; rising interest income partially offsets OpEx .
  • Governance upgrade: Board additions with deep neuroscience and operational expertise are a tailwind for clinical development and scaling .
  • Watch OpEx trajectory: elevated R&D and G&A reflect public company costs and accelerated development; monitor cash burn and milestone timing for potential financing needs beyond stated runway .
  • Biomarker‑driven design (RNS long episodes) may facilitate efficient epilepsy efficacy assessment and supports the registrational strategy narrative .
  • Strategic clarity: deferring RAP‑199 reduces pipeline breadth short‑term but concentrates capital on the highest‑impact RAP‑219 trials, potentially improving capital efficiency .