Financial Performance - The company has not generated any revenue from product sales since its inception in February 2022 and has incurred significant operating losses, with net losses of $26.9 million and $17.5 million for the three months ended September 30, 2025 and 2024, respectively[146][150]. - The net loss for the three months ended September 30, 2025, was $26.925 million, compared to a net loss of $17.537 million for the same period in 2024, indicating a $9.388 million increase in losses[177]. - Net loss for the nine months ended September 30, 2025, was $77.7 million, compared to a net loss of $58.3 million in 2024, an increase of $19.4 million[183]. - Interest income decreased to $3.061 million for the three months ended September 30, 2025, down from $4.103 million in 2024, a decline of $1.042 million[177]. - Other income decreased to $3.1 million for the three months ended September 30, 2025, down from $4.1 million in 2024, primarily due to reduced interest income from lower cash and investment balances[179]. Cash and Financing - As of September 30, 2025, the company had raised aggregate gross proceeds of $711.9 million from financings and had cash, cash equivalents, and short-term investments of $513.0 million, excluding restricted cash[149]. - The company completed an underwritten public offering in September 2025, raising approximately $269.4 million in net proceeds after deducting offering costs[149]. - Net cash provided by financing activities was $270.5 million for the nine months ended September 30, 2025, primarily from the September 2025 Offering[195]. - The company believes its existing cash and cash equivalents will fund operations into the second half of 2029[153]. - The company expects its cash and cash equivalents will be sufficient to fund operating expenses and capital expenditures for at least the next 12 months[197]. Research and Development - The company plans to initiate an open-label long-term safety trial for RAP-219 by the end of 2025, with preliminary results expected in the second half of 2026[142]. - The Phase 2a trial of RAP-219 in drug-resistant focal onset seizures met its primary and secondary endpoints, demonstrating a statistically significant reduction in clinical seizures compared to baseline[142]. - The company is developing a long-acting injectable formulation of RAP-219 to improve patient adherence and expand clinical utility across indications[144]. - The Investigational New Drug application for a Phase 2 trial of RAP-219 for diabetic peripheral neuropathic pain is on clinical hold pending additional information requested by the FDA[143]. - Research and development expenses increased to $22.3 million for the three months ended September 30, 2025, compared to $15.5 million for the same period in 2024, representing a $6.7 million increase[177]. - The increase in research and development expenses included a $3.1 million rise in RAP-219 program costs, driven by clinical trial costs for the Phase 2a trial and open-label long-term safety trial[178]. - The company expects research and development expenses to increase substantially as it advances RAP-219 through clinical development and pursues regulatory approval[164]. - Research and development expenses rose to $64.5 million for the nine months ended September 30, 2025, compared to $43.7 million in 2024, marking an increase of $20.8 million[184]. - The RAP-219 program costs increased by $12.0 million, driven mainly by clinical trial costs for various Phase 2 trials[184]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $29.986 million, up from $21.640 million in 2024, reflecting an increase of $8.346 million[177]. - Total operating expenses for the nine months ended September 30, 2025, were $86.6 million, up from $59.5 million in 2024, reflecting a $27.1 million increase[183]. - General and administrative expenses increased to $7.7 million for the three months ended September 30, 2025, up from $6.1 million in the same period of 2024, representing a $1.6 million increase[179]. - The company anticipates that general and administrative expenses will increase due to hiring additional personnel and compliance-related costs associated with being a public company[170]. Collaborations and Agreements - The company has a collaboration agreement with Janssen Pharmaceutical NV, which includes potential milestone payments of up to $76.0 million for development and $40.0 million for sales of TARPg8 products[157]. - The company made a non-refundable payment of $1.0 million to Janssen and an additional option fee of $4.0 million, with potential milestone payments totaling up to $141.0 million for product development and sales[203]. - The company has entered into a master services agreement with NeuroPace Inc., which includes a payment of up to $5.3 million over approximately four years for services related to the RAP-219 clinical trials[161]. - Cumulative expenses incurred under the NeuroPace agreement amount to $3.4 million through September 30, 2025, with a total payment commitment of up to $5.3 million over four years[204]. Future Outlook and Risks - The company expects its expenses and operating losses to increase substantially as it continues clinical trials and research activities[151]. - The company anticipates substantial increases in expenses related to ongoing preclinical studies and clinical trials, with funding needs dependent on various factors[199]. - The company may need to raise additional capital through equity offerings or debt financings, which could dilute ownership interests and impose restrictions on operations[199]. - Future minimum operating lease payments under non-cancelable leases amount to $14.0 million, with a weighted average remaining lease term of 4.8 years[200][202]. - The company has recorded a full valuation allowance against its net deferred tax assets, indicating uncertainty about the realization of these assets[175]. - As of December 31, 2024, the company had federal net operating loss carryforwards of approximately $13.7 million and state net operating loss carryforwards of approximately $12.0 million[174]. Accounting and Compliance - The company has not experienced material changes to its critical accounting policies and estimates during the nine months ended September 30, 2025[207]. - 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[208][209]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[211].
Rapport Therapeutics, Inc.(RAPP) - 2025 Q3 - Quarterly Report