Rapport (RAPP) Q2 Net Loss Widens 47%

Key Points

• GAAP net loss increased to $26.7 million in Q2 2025, driven by higher research and development spending and public company costs.

• The RAP-219 Phase 2a epilepsy trial is fully enrolled and remains on track for topline data in September 2025.

• Cash reserves totaled $260.4 million as of Q2 2025, projected to fund operations through the end of 2026, with no current revenue streams.

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Rapport Therapeutics (NASDAQ:RAPP), a neuroscience-focused biotechnology company, reported its second-quarter 2025 results on August 7, 2025. Net loss was $26.7 million, compared to $18.1 million in the prior year period, primarily due to higher clinical development expenses and public company operating costs. Research and development expense was $22.7 million, reflecting pipeline advancement. The company has no revenue, as its programs remain in clinical stages. Earnings per share were $(0.75), less negative than the consensus estimate of $(0.81). Management confirmed that a key Phase 2a epilepsy trial is fully enrolled and on track for results in September 2025. The period’s results align with expectations for a biotech company pushing clinical progress, but the growing net loss and increased cash burn will be important to watch as key milestones approach.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Strategic Focus

Rapport Therapeutics develops targeted therapies for central nervous system (CNS) disorders. Its lead program, RAP-219, is designed to modulate specific brain receptors with the goal of reducing seizures, treating mood disorders, and addressing neuropathic pain. The company relies on clinical trial progress as its main driver, with no products yet on the market. Current business priorities focus on advancing RAP-219 through clinical studies in focal epilepsy and bipolar disorder.

The main engine for growth lies in clinical trial execution and managing costs as it pursues approval for RAP-219. Product development is essential for future revenues. Strategic partnerships, such as those with Janssen and NeuroPace, provide valuable expertise and data for its studies. Execution on clinical timelines, successful regulatory navigation, and maintaining adequate cash flow are the key success factors at this stage.

Quarter in Review: Financial and Pipeline Progress

The quarter was defined by continued investment in the pipeline, especially for RAP-219. Research and development expense (GAAP) rose to $22.7 million, up from $15.7 million in Q2 2024. This increase, combined with higher general and administrative expense of $6.8 million (from $5.1 million a year ago), drove the total net loss to $26.7 million. Operating cash flow was negative, with net cash used in operations reaching $25.1 million.

Clinically, the company reached a major step: its RAP-219 Phase 2a trial in drug-resistant focal onset seizures (a form of epilepsy hard to control with existing treatments) is now fully enrolled. The study uses intracranial electroencephalography (iEEG) in partnership with NeuroPace’s RNS System -- an implantable device that tracks abnormal brain activity -- to measure “long episodes” and seizure reduction. The company expects topline safety and efficacy data in September 2025. A safety update for the trial (as of June 2025) showed only mild or moderate treatment-related events, with no serious adverse events reported and three discontinuations out of 64 participants.

The company also started enrolling patients in a Phase 2 trial of RAP-219 for bipolar mania, expanding the uses for its lead compound. Results for this study are currently expected in the first half of 2027. However, its diabetic peripheral neuropathic pain (DPNP) program for RAP-219 remains paused, as the U.S. Food and Drug Administration (FDA) requested additional information and trial design changes late in 2024. No timeline for resolution is yet set, and an update is expected in 2025. This clinical hold highlights the regulatory risks that come with advancing new treatments.

No new advanced pipeline programs or major partnership announcements were made this period. However, exploratory efforts to develop molecules for chronic pain and hearing disorders, targeting certain brain receptors called nicotinic acetylcholine receptors, are progressing in the background. There was no reported revenue, consistent with the company’s focus on clinical development rather than product sales at this time. Cash reserves stood at $260.4 million as of Q2 2025, which management expects will last through the end of 2026, allowing completion of the epilepsy trial’s main readout.

Outlook and Guidance

Company management reaffirmed that its current cash balance should cover funding needs through 2026, with no change in this guidance. No revenue outlook or near-term commercial milestones are projected, consistent with pre-commercial biotech operations. The most important upcoming event will be the September 2025 data from the RAP-219 Phase 2a trial in epilepsy, which could shape the company's valuation and strategic direction.

Looking ahead, investors should stay focused on the RAP-219 epilepsy trial results, progress toward addressing the FDA’s concerns on the DPNP program, operating expense trends, and any new partnership activity. Until the company brings a product to market or secures additional business development, the primary value drivers will continue to be clinical trial outcomes and cash management. RAPP does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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