Maintaining Hold Rating on RAPT Therapeutics Amid Clinical Uncertainties and Financial Outlook

H.C. Wainwright analyst Ram Selvaraju has reiterated their neutral stance on RAPT stock, giving a Hold rating today.

Ram Selvaraju has given his Hold rating due to a combination of factors surrounding RAPT Therapeutics. The primary concern hinges on the resolution of the clinical hold placed on zelnecirnon, RAPT’s drug candidate previously in Phase 2 trials for atopic dermatitis (AD) and asthma. This hold was instituted following a case of liver failure potentially linked to the drug. Although the liver toxicity was only observed in one out of approximately 350 treated individuals, this has introduced significant uncertainty into the drug’s development pathway. RAPT’s decision to close and unblind the Phase 2 trials to gather data for future regulatory discussions, despite the lack of statistically significant results, factors into the Hold rating as the full impact on the drug’s timeline and eventual market entry remains unclear.
Financially, RAPT Therapeutics reported a narrower net loss than anticipated for the first quarter of 2024 and possesses sufficient capital to fund operations into mid-2025. However, the uncertainty regarding clinical holds on zelnecirnon casts doubt on the potential value inflection points during this period. Selvaraju’s Hold rating reflects the absence of a clear path forward for zelnecirnon’s clinical testing and the risks associated with its development, market penetration, and potential approval. These uncertainties have prompted a cautious approach, pending more definitive information on the drug’s future prospects.

In another report released today, Barclays also downgraded the stock to a Hold with a $4.00 price target.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

RAPT Therapeutics (RAPT) Company Description:

Rapt Therapeutics, Inc. operates as a clinical stage immunology-based biopharmaceutical company. It focuses on discovering, developing and commercializing oral small molecule therapies for patients in oncology and inflammatory diseases.. The company was founded in 2015 and is headquartered in South San Francisco, CA.