RAPP

Business Context and Reporting Period

Rapport Therapeutics, Inc. (RAPP) is a clinical-stage biotechnology company focused on developing precision medicines for neurological and psychiatric disorders using its proprietary RAP (Receptor Associated Protein) technology platform. The reporting period covers the fiscal year ended December 31, 2025. The company is an emerging growth company and a smaller reporting company, incorporated in Delaware, with headquarters in Boston, Massachusetts, and a laboratory in San Diego, California.

Key Financial Metrics

Note: The company has no debt obligations as of December 31, 2025. Liquidity is supported by cash and short-term investments sufficient to fund operations into the second half of 2029.

Material Changes vs. Prior Period

• Increased Net Loss: Net loss increased by $33.2 million (42%) year-over-year, driven primarily by higher R&D and G&A expenses.
• R&D Expense Growth: R&D expenses rose by $33.9 million, primarily due to a $19.1 million increase in costs for the lead candidate RAP-219 (Phase 2a trial, open-label safety trial, and Phase 3 start-up costs) and a $10.9 million increase in personnel-related costs.
• G&A Expense Growth: G&A expenses increased by $8.2 million, largely due to a $7.5 million increase in workforce expenses (salaries and stock-based compensation) and public company compliance costs.
• Capital Raise: In September 2025, the company completed an underwritten public offering, raising net proceeds of approximately $269.4 million, significantly bolstering its cash position compared to the prior year.
• Interest Income: Interest income increased by $1.5 million to $13.6 million due to higher cash balances and prevailing interest rates.

Guidance, Outlook, and Management Commentary

Clinical Progress and Outlook

• RAP-219 (Focal Onset Seizures): In September 2025, the company announced positive topline results from its Phase 2a proof-of-concept trial, meeting primary and secondary endpoints with statistically significant reductions in long episodes and clinical seizures. In December 2025, the FDA provided feedback supporting advancement into two Phase 3 trials, with initiation expected in Q2 2026.
• RAP-219 (Bipolar Mania): A Phase 2 proof-of-concept trial is currently enrolling, with topline results expected in the first half of 2027.
• RAP-219 (PGTCS): The company plans to initiate a Phase 3 trial for Primary Generalized Tonic-Clonic Seizures in the first half of 2027.
• Long-Acting Injectable (LAI): IND-enabling activities for an LAI formulation of RAP-219 are underway, with initial PK results expected in 2027.
• Discovery Programs: The company is advancing two discovery-stage nAChR programs: RAP-641 (chronic pain/migraine) and an alpha-9/alpha-10 modulator (hearing/vestibular disorders).

Risks and Contingencies

• Capital Requirements: The company expects to continue incurring significant losses and will require additional funding to support operations beyond 2029. Failure to raise capital could force delays or reductions in development programs.
• Regulatory Risks: Success depends on obtaining regulatory approval for product candidates, which is uncertain. The company previously faced a clinical hold on its diabetic peripheral neuropathic pain (DPNP) IND, which was lifted in December 2025, though the program is currently deferred to prioritize other assets.
• Third-Party Dependence: The company relies on third-party contract manufacturers and CROs. It also relies on NeuroPace for data collection in its FOS trials.
• Intellectual Property: The company depends on in-licensed IP from Janssen Pharmaceutical NV, subject to milestone payments and royalties.

Key Facts for Investor Verification

• Cash Runway: Verify the company's assertion that $490.5 million in cash and investments is sufficient to fund operations into the second half of 2029, considering the accelerated burn rate associated with initiating Phase 3 trials.
• Phase 3 Trial Initiation: Monitor the timeline for the initiation of the two Phase 3 trials for RAP-219 in FOS, targeted for Q2 2026, as delays could impact the funding runway.
• Strategic Collaboration: Note the subsequent event (March 6, 2026) where the company entered a collaboration with Tenacia Biotechnology for RAP-219 in Greater China, including a $20 million upfront payment and potential milestones up to $308 million.
• Stock-Based Compensation: Review the impact of stock-based compensation ($18.9 million in 2025) on future dilution and expense recognition.
• Regulatory Feedback: Confirm the specific requirements and timelines provided by the FDA during the end-of-Phase 2 meeting in December 2025.