RAPT Therapeutics(RAPT) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited financial statements for Q1 2025 show a reduced net loss of $17.2 million and decreased total assets, primarily due to lower R&D expenses and cash used in operations Condensed Balance Sheets Total assets decreased to $187.6 million by March 31, 2025, from $240.3 million at year-end 2024, mainly due to reduced cash and a $35.0 million license fee payment Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $60,257 | $169,735 | | Marketable securities | $119,019 | $61,320 | | Total current assets | $183,196 | $235,236 | | Total assets | $187,570 | $240,325 | | Liabilities & Equity | | | | License fees payable | $0 | $35,000 | | Total current liabilities | $8,678 | $48,351 | | Total liabilities | $10,198 | $50,421 | | Total stockholders' equity | $177,372 | $189,904 | Condensed Statements of Operations and Comprehensive Loss The company reported a net loss of $17.2 million for Q1 2025, a significant reduction from $30.5 million in Q1 2024, driven by lower R&D expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $12,042 | $24,781 | | General and administrative | $7,223 | $7,737 | | Total operating expenses | $19,265 | $32,518 | | Loss from operations | ($19,265) | ($32,518) | | Net loss | ($17,165) | ($30,521) | | Net loss per share, basic and diluted | ($0.08) | ($0.79) | Condensed Statements of Cash Flows Net cash used in operating activities increased to $52.4 million in Q1 2025, primarily due to a $35.0 million license fee payment, resulting in a $109.5 million net decrease in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($52,414) | ($27,084) | | Net cash (used in) provided by investing activities | ($57,064) | $15,887 | | Net cash provided by financing activities | $0 | $9,036 | | Net decrease in cash and cash equivalents | ($109,478) | ($2,161) | Notes to Condensed Financial Statements Notes detail business, liquidity, and accounting policies, highlighting the cessation of the zelnecirnon program, focus on RPT904, and $179.3 million in cash deemed sufficient for 12 months - The company's lead drug candidate is RPT904 for allergic diseases, and its oncology candidate is tivumecirnon, while development of zelnecirnon for inflammatory disease ceased in November 2024[23] - Management believes current cash, cash equivalents, and marketable securities totaling $179.3 million are sufficient to fund operations for at least 12 months from the 10-Q filing date[24][25] - In November 2024, the company repriced 3.9 million stock options, resulting in $1.6 million of incremental stock-based compensation expense to be recognized over vesting and retention periods[53][56] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic shift to RPT904 and tivumecirnon after discontinuing zelnecirnon, noting a $17.2 million Q1 2025 loss, 51% lower R&D, and sufficient liquidity for 12 months Overview RAPT is a clinical-stage biopharmaceutical company focused on inflammatory and immunological diseases, with lead candidate RPT904 and oncology candidate tivumecirnon, following the cessation of the zelnecirnon program - The lead drug candidate is RPT904, a monoclonal antibody designed to bind free IgE for allergic diseases, licensed from Jemincare in December 2024[60][61] - The oncology candidate, tivumecirnon, a CCR4 antagonist, is partnered with Hanmi for development in Korea and Greater China, with RAPT seeking a partner for other territories[62] - Development of zelnecirnon ceased in November 2024 following a clinical hold by the FDA in February 2024 due to a serious adverse event of liver failure in a patient[63] Results of Operations Total operating expenses decreased 41% to $19.3 million in Q1 2025, primarily driven by a 51% reduction in R&D expenses due to the zelnecirnon program termination Comparison of Operations (in thousands) | Expense Category | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $12,042 | $24,781 | ($12,739) | (51)% | | General and administrative | $7,223 | $7,737 | ($514) | (7)% | | Total operating expenses | $19,265 | $32,518 | ($13,253) | (41)% | External R&D Expenses by Program (in thousands) | Program | Q1 2025 | Q1 2024 | $ Change | | :--- | :--- | :--- | :--- | | RPT904 | $1,063 | $0 | $1,063 | | Zelnecirnon | $188 | $7,841 | ($7,653) | | Tivumecirnon | $1,272 | $2,157 | ($884) | - The primary driver for the $12.8 million decrease in R&D expenses was the reduction in development costs for zelnecirnon ($7.7 million) and associated personnel costs ($3.6 million)[81] Liquidity and Capital Resources As of March 31, 2025, the company held $179.3 million in cash and equivalents, sufficient for 12 months, but anticipates needing substantial additional capital for future development - As of March 31, 2025, the company had $179.3 million in cash, cash equivalents, and marketable securities[85] - The company believes its current cash position is sufficient to fund operations for at least the next 12 months from the filing date[86] - Future capital requirements depend on numerous factors, including the progress of clinical trials, manufacturing costs, and potential licensing activities[87] Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," RAPT Therapeutics, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk because it qualifies as a "smaller reporting company"[99] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[100] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[101] PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any legal proceedings that would materially adversely affect its financial condition or operations - Management believes there are currently no pending claims or actions that would have a material adverse effect on the company's results of operations, financial condition, or cash flows[103] Risk Factors The company faces extensive risks, including potential drug candidate failure, significant financial losses, reliance on third-party manufacturing, intense competition, and evolving data privacy regulations - The company's drug candidates may fail or suffer delays in clinical development, as exemplified by the zelnecirnon program's cessation in 2024 due to a serious adverse event, with no guarantee other candidates will not face similar issues[107][108] - The company has a history of net losses ($631.7 million accumulated deficit as of March 31, 2025) and expects to incur significant losses for the foreseeable future, requiring substantial additional funding to continue operations[114][130] - RAPT relies on third parties for manufacturing and supply, including a sole source (Jemincare) for the initial supply of RPT904, which exposes the company to supply chain risks[141][149] - The business is subject to stringent and evolving data privacy and security laws (e.g., GDPR, HIPAA, state laws), and any failure to comply could result in significant penalties, litigation, and reputational harm[251][253][254] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds during the reporting period - None[298] Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None[299] Mine Safety Disclosures This item regarding mine safety disclosures is not applicable to the company's operations - Not applicable[300] Other Information There is no other material information to report for the period - None[303] Exhibits The report includes various exhibits, such as the Inducement Plan, related agreement forms, and officer certifications, with some documents incorporated by reference - Exhibits filed with this report include the company's Inducement Plan and officer certifications (31.1, 31.2, 32.1)[305]