RAPP · Rapport Therapeutics
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $32.82
Note written ·
Price against the kill line
20.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $32.82, on record since 11 November 2026. The shares are down 46.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $32.82, the 50-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 0.0
- Operating margin (%)
- −121.1
- Free cash flow, four quarters ($M)
- −121
- Net cash, cash less debt ($M)
- 395
- Free-cash-flow yield (%)
- −7.8
All filed numbers
What Rapport Therapeutics reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 0.0 | — | — |
| first filed | 0.0 | — | — |
| first filed | 20.0 | — | −121.1 |
| first filed | 0.0 | — | — |
| first filed | 0.0 | — | — |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: −151 | −40.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +25.9 |
| Operating cash flow ($M) | −121 |
| Capital spending ($M) | 0.3 |
| Free cash flow ($M) | −121 |
| Cash and short-term investments ($M) | 395 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 395 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 0.2 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 391 |
| Market value ($M) | 1,550 |
| Enterprise value, market value plus net debt ($M) no debt reported | 1,155 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 4.0 |
| Free-cash-flow yield (%) | −7.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.2% of shares outstanding sold short, 11.8 days of average trading to cover, −4.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $22.0M | $4.5M |
| 12 monthsfrom | $22.0M | $47.2M |
The thesis
Rapport Therapeutics' drug RAP-219 has cleared the bipolar-mania trial with a 3.1-point gain over placebo, short of the 4-point bar management called clinically meaningful. The October financing removed the funding question: the company says cash lasts through the end of 2029. The 4 November 2026 third-quarter report and the fourth-quarter 2026 open-label seizure data decide whether tolerability concerns spread beyond mania.
The shares closed at $25.96 on 10 November 2026 (adjusted daily close), up from $22.50 on 28 October 2026 but 50.6% below the $52.50 52-week high. The story is well known: the trial result, the financing and the quarterly report are all public, and analysts reset their targets on 5 November 2026 and 6 November 2026. What remains is clinical evidence on safety and the FDA's view of the Phase 3 design.
Bullish and bearish views on Rapport Therapeutics, Inc.
The bull case on Rapport Therapeutics, Inc. (RAPP), in brief: cash now covers the Phase 3 plan. The bear case: the result missed management's own bar.
Bull case
- Cash now covers the Phase 3 plan. Rapport reported $395.0M in cash, equivalents and short-term investments at 30 September 2026. It estimated $815.4M as of 3 November 2026 after about $420.7M of October offering and November sales proceeds (unaudited, 4 November 2026 release). The company guides cash through the end of 2029.
- The quarterly loss was narrower than expected. Rapport reported a third-quarter 2026 loss of $0.84 a share on 4 November 2026, against a $1.19 loss estimate in company news. The net loss was $40.2M, and research and development expense was $34.3M.
- The primary endpoint was met. The 20 October 2026 release reported a 3.1-point placebo-adjusted improvement on the Young Mania Rating Scale at Week 3 (p=0.045) in 253 adults. The company reported no severe or serious adverse events over the treatment period.
- Targets remain far above the price. After the report, Guggenheim lowered its target to $66 on 5 November 2026 and UBS lowered its target to $64 on 6 November 2026, both keeping Buy ratings. Wells Fargo lowered its target to $47 and kept Overweight on 5 November 2026.
- Late-stage programs have dates. The company plans a Phase 3 trial in primary generalized tonic-clonic seizures in the first half of 2027. Two Phase 3 bipolar-mania trials are planned for the second half of 2027.
Bear case
- The result missed management's own bar. The 3.1-point gap is 0.9 points under the 4-point threshold stated on 23 September 2026. The FDA end-of-Phase 2 meeting for bipolar mania is expected in the first quarter of 2027.
- Tolerability looks weaker than placebo. Adverse-event discontinuations were 3.2% on RAP-219 versus 0.8% on placebo (company release, 20 October 2026). TIKR reported agitation at 16.7% versus 9.4%.
- Three firms cut targets after the quarter. Guggenheim, UBS and Wells Fargo all lowered targets between 5 November 2026 and 6 November 2026. Guggenheim's prior target was $70 and Wells Fargo's was $50.
- Share and debt claims both grew. The company closed offerings on 2 November 2026 that included 9,761,905 shares at $21.00 plus 2.25% convertible senior notes due 2032. The release does not give the note principal. BiopharmaWatch's closing report put the notes at $172.5M.
- The company sold stock into the rebound. Rapport said it sold about $10M of common stock in November 2026 through its at-the-market program at $25.05 a share.
Price setup
The shares closed at $29.57 on 15 October 2026, $25.33 on 26 October 2026, $22.50 on 28 October 2026 and $25.96 on 10 November 2026 (adjusted daily closes and the SEC prospectus supplement). The 14-day relative strength index (a 0–100 momentum gauge) is 52.5. The shares have fallen 45.2% over three months.
The $21.00 offering price sits below the last close, and the $29.57 close of 15 October 2026 sits above it. The $52.50 52-week high is the far reference. Thin volume means single sessions have moved the shares by high single digits or more.
Catalysts ahead
- Q4 2026 (company guided): Initial data from the RAP-219 open-label long-term safety extension in focal onset seizures. Gives the first safety and durability read on the program carrying the most Phase 3 weight, and tests whether tolerability concerns spread beyond mania.
- Q1 2027 (company guided): FDA end-of-Phase 2 meeting for RAP-219 in bipolar mania. Sets how large a treatment gap the pivotal trials must show after a 3.1-point result.
- 1H 2027 (company guided): Start of a Phase 3 trial in primary generalized tonic-clonic seizures. First pivotal program, funded by cash the company guides through the end of 2029.
What would change the view
A daily close above $32.82, the 50-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
Rapport trades with small and mid-sized clinical-stage neuroscience and seizure-drug developers. A single molecule drives four programs, so a safety signal in one indication carries into the others. Financing-sensitive biotech indexes also affect it, because the company has just completed a large equity and convertible raise.
The evidence, claim by claim (8)
- Cash, equivalents and short-term investments were $395.0M at 30 September 2026; the company estimated $815.4M at 3 November 2026 (unaudited) including about $420.7M of offering and at-the-market proceeds, with runway guided through the end of 2029. Rapport Q3 2026 financial results release · as of
- Q3 2026 net loss was $40.2M ($0.84 a share); R&D expense was $34.3M versus $22.3M in Q3 2025; G&A was $9.8M. Rapport Q3 2026 financial results release · as of
- Q3 EPS of $(0.84) compared with a $(1.19) estimate. Company news headline · as of
- Rapport closed public offerings including 9,761,905 shares at $21.00; aggregate net proceeds of the October offerings and concurrent private placement were about $410.7M. Company news 2 November 2026; Q3 2026 release · as of
- Rapport sold about $10M of common stock under its at-the-market program at $25.05 a share in November 2026. Q3 2026 financial results release · as of
- Guggenheim lowered its target to $66 (Buy); Wells Fargo lowered its target to $47 (Overweight). Analyst rating news · as of
- UBS maintained Buy and lowered its target to $64. Analyst rating news · as of
- RAP-219 showed a 3.1-point placebo-adjusted YMRS improvement at Week 3 (p=0.045) in 253 adults; adverse-event discontinuations were 3.2% versus 0.8% on placebo. Rapport topline press release · as of
Sources
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