Clinical-stage neuroscience biotech Rapport Therapeutics will seek about $122 million in net proceeds from its initial public offering, according to new securities paperwork outlining its Nasdaq ambitions.
The Boston-based startup plans to sell 8 million shares $RAPP between $16 and $18 apiece, according to a Monday morning SEC filing. At the midpoint, it would bag about $122 million. It also plans to secure another $16.7 million from a concurrent private placement.
Rapport would be the third neuroscience drug developer to go public this year following Contineum Therapeutics and Alto Neuroscience.
Abraham CeesayRapport’s planned float comes as pharmaceutical companies and venture capitalists steadily return to brain diseases by way of acquisitions and large financings, hoping to make the next blockbuster medicines for depression, schizophrenia or other CNS indications.
“Given still-high unmet medical need in neurodegenerative diseases and psychiatry, neuroscience remains an area of high activity,” Mizuho Securities analysts wrote in a May 28 note, summarizing their second annual summit for the therapeutic area. Recent big-name deals, like the multi-billion dollar Karuna and Cerevel exits, they wrote, “provide entrepreneurs additional reasons to invest in neuroscience company creation.”
At Rapport, the goal is to take former Johnson & Johnson small molecules through human testing for focal epilepsy, peripheral neuropathic pain and bipolar disorder. It could move into chronic pain and hearing disorders eventually, as well.
The lead asset, AMPA receptor negative allosteric modulator RAP-219, is slated to begin a Phase 2a on June 1. The study will test the in-licensed J&J tablet in adults with drug-resistant focal epilepsy. Rapport plans to devote $100 million to proof-of-concept studies of RAP-219, according to the Monday filing.
There are also plans to test a long-acting injectable version.
The 58-employee company isn’t in dire need of cash. At the time of a $150 million Series B last August, CEO Abraham Ceesay told Endpoints News the company expected to have runway into 2027, and at the end of March, the startup had $193 million in cash, equivalents and short-term investments. It devoted about $28 million to R&D in 2023, according to an SEC filing.
Rapport incubator Third Rock Ventures is the biotech’s biggest owner, holding 30%, according to the Monday filing. Other large Rapport investors include ARCH (14.1%), J&J Innovation (9.4%), Cormorant (6.6%), Fidelity (6.6%), Capital Research and Management Company (6.6%) and Sofinnova Venture Partners (5.2%).
Steve PaulThe company quickly raised back-to-back megarounds in 2023. It debuted with $100 million last March and followed that up with a $150 million Series B just five months later.
Leading the charge is Ceesay, who was previously president at Cerevel Therapeutics, a neuroscience drug developer being bought by AbbVie for $8.7 billion. His science chief is former J&J head of neuroscience David Bredt. Running the finances is Troy Ignelzi, who held the same CFO post at Karuna Therapeutics, where he worked with Rapport chair Steve Paul. Karuna was recently bought by Bristol Myers Squibb for $14 billion. Paul is also now chair at Seaport Therapeutics, another brain disease biotech backed by ARCH, Sofinnova and Third Rock.
Rapport’s debut could help warm the waters for a backlog of private biotechs, tallying in the dozens, that are lined up for their shot on Wall Street but are waiting for the optimal moment. This year started on a more sunny, hopeful note than 2023 but only a few biotech startups made it out the gates before prospects of interest rate cuts began to fizzle and the main industry index $XBI continued to oscillate in a fickle period for drug discovery and development shops.
Radiopharma company Telix Pharmaceuticals, which is listed on the main Australian exchange, is also seeking an American trading debut, as is SPAC-abandoner Aprinoia Therapeutics.