Financial Performance - For the three months ended June 30, 2024, the company reported a net loss of $18.1 million, compared to a net loss of $6.4 million for the same period in 2023 [121]. - The company recorded a net loss of $40.8 million for the six months ended June 30, 2024, compared to a net loss of $12.6 million in 2023, indicating a substantial increase in losses [155]. - The company has not generated any revenue since its inception in February 2022 and expects to incur significant operating losses in the foreseeable future [163]. - Total operating expenses for the six months ended June 30, 2024, were $37.9 million, up from $11.8 million in 2023, representing a $26.1 million increase [155]. - Net cash used in operating activities was $34.0 million for the six months ended June 30, 2024, compared to $11.4 million in 2023, indicating a significant increase in cash outflow [165]. Cash and Investments - As of June 30, 2024, the company had an accumulated deficit of $86.2 million and cash, cash equivalents, and short-term investments of $336.1 million [122]. - As of June 30, 2024, the company had cash and cash equivalents of $110.2 million and short-term investments of $226.0 million [163]. - The company believes its existing cash and cash equivalents will fund operations through the end of 2026 [125]. - The company expects its existing cash resources to fund operating expenses and capital expenditures through at least 12 months from the issuance of the financial statements, potentially until the end of 2026 [166]. Research and Development - The company is on track to initiate a Phase 2a trial for RAP-219 in adult patients with drug-resistant focal epilepsy in Q3 2024, with topline results expected in mid-2025 [118]. - The company has identified RAP-199, another TARPg8 targeted molecule, and plans to initiate a Phase 1 trial in the first half of 2025 [118]. - Research and development expenses increased to $15.7 million for the three months ended June 30, 2024, compared to $4.7 million for the same period in 2023, representing an increase of $11.0 million [148]. - The increase in research and development expenses included a $3.2 million rise in RAP-219 program costs, primarily due to clinical trial start-up costs and contract manufacturing [149]. - The company anticipates substantial increases in research and development expenses as it advances RAP-219 through clinical development and hires additional personnel [137]. Agreements and Collaborations - The company has a master services agreement with NeuroPace, which includes a payment of up to $3.7 million for services related to the Phase 2a clinical trial of RAP-219 [134]. - The company has entered into a licensing agreement with Janssen Pharmaceutical NV, which includes potential milestone payments of up to $76 million for development and $40 million for sales related to TARPg8 products [128]. - An upfront payment of $1.0 million was made to Janssen Pharmaceutical NV, with potential milestone payments totaling up to $141.0 million for product development and sales [170]. - During the six months ended June 30, 2024, the company recognized $0.6 million in research and development expenses related to services from NeuroPace [171]. Operating Expenses - General and administrative expenses rose to $5.1 million for the three months ended June 30, 2024, up from $1.9 million in the same period in 2023, marking an increase of $3.2 million [150]. - The increase in general and administrative expenses was driven by a $2.5 million rise in workforce expenses due to increased headcount and compensation-related costs [151]. - General and administrative expenses increased to $9.7 million for the six months ended June 30, 2024, from $3.2 million in 2023, reflecting a $6.5 million rise due to increased workforce and consulting costs [159]. Future Outlook - The company expects its expenses and operating losses to increase substantially as it continues clinical trials and expands its pipeline [122]. - Future funding requirements will depend on various factors, including the progress of product candidates like RAP-219 and associated clinical trials [167]. - The company expects to incur additional costs related to compliance with Nasdaq and SEC requirements as it continues to operate as a public company [142]. - The company cannot predict when material net cash inflows will commence from sales or licensing of its product candidates due to uncertainties in drug development [139]. - The company expects to finance cash needs through equity offerings, debt financings, or collaborations, but may face challenges in raising additional funds [169]. Tax and Accounting - The company has recorded a full valuation allowance against its net deferred tax assets, indicating uncertainty in utilizing deferred tax assets [146]. - As of June 30, 2024, the company had federal net operating loss carryforwards of approximately $6.0 million and state net operating loss carryforwards of approximately $1.6 million [147]. - The company has not experienced material changes to its critical accounting policies and estimates during the six months ended June 30, 2024 [172]. - The company has elected not to "opt out" of the extended transition period for new accounting standards, which may affect comparability with other public companies [173].
Rapport Therapeutics, Inc.(RAPP) - 2024 Q2 - Quarterly Report