RAPT Therapeutics Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

RAPT Therapeutics (Nasdaq: RAPT) reported financial results for Q2 2024. Key points include:

- Net loss of $27.7 million in Q2 2024, up from $25.3 million in Q2 2023
- R&D expenses increased to $22.6 million in Q2 2024 from $21.6 million in Q2 2023
- G&A expenses remained unchanged at $6.7 million for both Q2 2024 and Q2 2023
- Cash and equivalents of $114.8 million as of June 30, 2024
- Workforce reduction of 40% (47 people) announced on July 16, 2024

The company continues to analyze data from Phase 2 trials of zelnecirnon in atopic dermatitis and asthma, which were closed early due to FDA clinical holds in February.

Positive

• Maintained stable G&A expenses at $6.7 million in Q2 2024
• Substantial cash position of $114.8 million as of June 30, 2024
• Implemented cost-saving measures through 40% workforce reduction

Negative

• Net loss increased to $27.7 million in Q2 2024 from $25.3 million in Q2 2023
• R&D expenses rose to $22.6 million in Q2 2024 from $21.6 million in Q2 2023
• Early closure of Phase 2 trials for zelnecirnon due to FDA clinical holds
• Expected to incur $0.9 million in restructuring charges due to workforce reduction

Insights

Financial Analyst

RAPT Therapeutics' Q2 2024 results reveal concerning trends. The company's net loss widened to $27.7 million, up from $25.3 million in Q2 2023. R&D expenses increased slightly to $22.6 million, primarily due to higher costs related to zelnecirnon development. The cash position of $114.8 million is worrisome, especially considering the recent FDA clinical holds on key trials.

The 40% workforce reduction announced post-quarter end is a significant cost-cutting measure, indicating financial strain. This restructuring, while necessary, may impact the company's ability to advance its pipeline. Investors should closely monitor RAPT's cash burn rate and potential need for additional financing in the near term.

Medical Research Analyst

The closure of RAPT's two Phase 2 trials for zelnecirnon in atopic dermatitis and asthma due to FDA clinical holds is a major setback. The company's focus on analyzing existing data rather than progressing trials suggests potential safety concerns or efficacy issues. This situation could significantly delay the development timeline for zelnecirnon, RAPT's lead candidate.

The lack of progress updates on tivumecirnon and early-stage programs, coupled with reduced R&D spending in these areas, raises questions about the overall health of RAPT's pipeline. The upcoming data analysis from the halted trials will be important in determining the future direction of the company's research efforts and potential for success in the inflammatory disease and oncology spaces.

SOUTH SAN FRANCISCO, Calif., Aug. 08, 2024 (GLOBE NEWSWIRE) -- RAPT Therapeutics, Inc. (Nasdaq: RAPT), a clinical-stage, immunology-based therapeutics company focused on discovering, developing and commercializing oral small molecule therapies for patients with significant unmet needs in inflammatory diseases and oncology, today reported financial results for the second quarter and six months ended June 30, 2024.

“We continue to analyze the data from our two Phase 2 trials of zelnecirnon (RPT193) in atopic dermatitis and asthma, which we closed prior to completing enrollment following the clinical holds placed by the FDA in February,” said Brian Wong, President and CEO. “We anticipate that our analysis of the data will be completed this quarter.”

Financial Results for the Second Quarter and Six Months Ended June 30, 2024

Second Quarter Ended June 30, 2024

Net loss for the second quarter of 2024 was $27.7 million, compared to $25.3 million for the second quarter of 2023.

Research and development expenses for the second quarter of 2024 were $22.6 million, compared to $21.6 million for the same period in 2023. The increase in research and development expenses was primarily due to higher development costs related to zelnecirnon, as well as increased expenses for personnel, consultants, facilities and non-cash stock-based compensation, partially offset by decreases in development costs related to tivumecirnon and early-stage programs as well as lab supplies costs.

General and administrative expenses for each of the second quarter of 2024 and 2023 were $6.7 million, respectively. General and administrative expenses were unchanged as increased expenses for personnel and non-cash stock-based compensation were offset by decreases in expenses for consultants and insurance premiums.

Six Months Ended June 30, 2024

Net loss for the second quarter of 2024 was $58.2 million, compared to $54.6 million for the second quarter of 2023.

Research and development expenses for the six months ended June 30, 2024 were $47.4 million, compared to $47.2 million for the same period in 2023. The increase in research and development expenses was primarily due to increased expenses for personnel, consultants, facilities and non-cash stock-based compensation, partially offset by decreases in development costs related to zelnecirnon, tivumecirnon, early-stage programs and lab supplies costs.

General and administrative expenses for the six months ended June 30, 2024 were $14.4 million, compared to $12.7 million for the same period in 2023. The increase in general and administrative expenses was primarily due to increased expenses for personnel, non-cash stock-based compensation and facilities, partially offset by decreases in expenses for consultants and insurance premiums.

As of June 30, 2024, the Company had cash and cash equivalents and marketable securities of $114.8 million.

On July 16, 2024, the Company’s board of directors approved a reduction of the Company’s workforce to conserve cash resources. The workforce reduction affected 47 people, or approximately 40% of the Company’s headcount. The Company estimates that it will incur approximately $0.9 million in restructuring charges in connection with the workforce reduction, consisting of cash-based expenses related to employee severance payments, benefits and related costs. The Company expects that the execution of the workforce reduction and the majority of the cash payments related to the restructuring will be substantially completed by the end of the third quarter of 2024.

About RAPT Therapeutics, Inc.

RAPT Therapeutics is a clinical-stage, immunology-based therapeutics company focused on discovering, developing and commercializing oral small molecule therapies for patients with significant unmet needs in inflammatory diseases and oncology. Utilizing its proprietary discovery and development engine, the Company is developing highly selective small molecules designed to modulate the critical immune drivers underlying these diseases. RAPT has discovered and advanced two unique drug candidates, zelnecirnon (RPT193) and tivumecirnon (FLX475), each targeting C-C motif chemokine receptor 4 (CCR4), for the treatment of inflammation and cancer, respectively. The Company is also pursuing a range of targets that are in the discovery stage of development.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimates,” “expects,” “will” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These statements relate to future events and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future performances or achievements expressed or implied by the forward-looking statements. Each of these statements is based only on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties. Forward-looking statements include, but are not limited to, statements about the Company’s expectations concerning the clinical holds of its Phase 2 trials of zelnecirnon, including its investigation of the incident, its analysis of the data from the unblinded trials and the timing thereof, its ability to resolve issues to the FDA’s satisfaction and the availability of updates concerning such process, statements regarding the workforce reduction and estimated costs associated with that reduction, and other statements that are not historical fact. Many factors may cause differences between current expectations and actual results, including unexpected or unfavorable safety or efficacy data observed during clinical studies, preliminary data and trends that may not be predictive of future data or results or that may not demonstrate safety or efficacy or lead to regulatory approval, the inability to resolve issues related to the clinical holds on the Phase 2 trials of zelnecirnon to the FDA’s satisfaction and to ultimately resume such trials, clinical trial site activation or enrollment rates that are lower than expected, unanticipated or greater than anticipated impacts or delays due to macroeconomic conditions (including the long-term impacts of ongoing overseas conflicts, inflation, higher interest rates and other economic uncertainty), changes in expected or existing competition, changes in the regulatory environment, the uncertainties and timing of the regulatory approval process and the sufficiency of RAPT’s cash resources. Detailed information regarding risk factors that may cause actual results to differ materially from the results expressed or implied by statements in this press release may be found in RAPT’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2024 and subsequent filings made by RAPT with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. RAPT disclaims any obligation to update these forward-looking statements, except as required by law.

RAPT Media Contact:
Aljanae Reynolds
areynolds@wheelhouselsa.com

RAPT Investor Contact:
Sylvia Wheeler
swheeler@wheelhouselsa.com

RAPT THERAPEUTICS INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share per share data) (Unaudited)
		Three Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
		2024				2023				2024				2023
Operating expenses:
Research and development			22,640				21,642				47,421				47,216
General and administrative			6,690				6,722				14,427				12,710
Total operating expenses			29,330				28,364				61,848				59,926
Loss from operations			(29,330	)			(28,364	)			(61,848	)			(59,926	)
Other income, net			1,667				3,084				3,664				5,375
Net loss		$	(27,663	)		$	(25,280	)		$	(58,184	)		$	(54,551	)
Other comprehensive income (loss):
Foreign currency translation loss			—				(655	)			—				(655	)
Unrealized gain (loss) on marketable securities			(37	)			136				(150	)			501
Total comprehensive loss		$	(27,700	)		$	(25,799	)		$	(58,334	)		$	(54,705	)
Net loss per share, basic and diluted		$	(0.71	)		$	(0.66	)		$	(1.50	)		$	(1.42	)
Weighted average number of shares used in computing net loss per share, basic and diluted			38,866,760				38,328,741				38,748,214				38,304,758

RAPT THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
		June 30, 2024				December 31, 2023
Assets		(Unaudited)				(1)
Current assets:
Cash and cash equivalents		$	37,077			$	47,478
Marketable securities			77,761				111,384
Prepaid expenses and other current assets			5,658				2,920
Total current assets			120,496				161,782
Property and equipment, net			1,933				2,448
Operating lease right-of-use assets			4,304				5,228
Other assets			447				3,871
Total assets		$	127,180			$	173,329
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	2,716			$	5,176
Accrued expenses			9,487				14,103
Operating lease liabilities, current			2,568				2,448
Other current liabilities			30				109
Total current liabilities			14,801				21,836
Operating lease liabilities, non-current			3,159				4,458
Total liabilities			17,960				26,294
Commitments
Stockholders’ equity:
Preferred stock			—				—
Common stock			3				3
Additional paid-in capital			652,130				631,611
Accumulated other comprehensive gain (loss)			(47	)			103
Accumulated deficit			(542,866	)			(484,682	)
Total stockholders’ equity			109,220				147,035
Total liabilities and stockholders’ equity		$	127,180			$	173,329

(1) The consolidated balance sheet for December 31, 2023 has been derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

FAQ

What was RAPT Therapeutics' net loss in Q2 2024?

RAPT Therapeutics reported a net loss of $27.7 million for the second quarter of 2024.

How much cash and equivalents did RAPT have as of June 30, 2024?

As of June 30, 2024, RAPT Therapeutics had cash and cash equivalents and marketable securities of $114.8 million.

What percentage of workforce reduction did RAPT Therapeutics announce in July 2024?

On July 16, 2024, RAPT Therapeutics announced a workforce reduction affecting 47 people, or approximately 40% of the company's headcount.

Why did RAPT Therapeutics close its Phase 2 trials of zelnecirnon early?

RAPT Therapeutics closed the Phase 2 trials of zelnecirnon in atopic dermatitis and asthma prior to completing enrollment due to clinical holds placed by the FDA in February.