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On Thursday, UBS analyst Eliana Merle revised the price target for Rapt Therapeutics stock, listed on (NASDAQ:RAPT), to $1.00, down from the previous target of $2.00. The firm’s rating remains Neutral. According to InvestingPro data, the stock currently trades at $0.89, with analyst targets ranging from $2.00 to $10.00, suggesting potential upside despite recent challenges. The company’s stock has experienced significant volatility, declining over 80% in the past year. The adjustment follows a comprehensive review and the incorporation of RAPT’s recent in-licensing agreement for RPT904/JYB1904 into UBS’s financial model.
Merle’s commentary detailed the significance of RAPT’s acquisition of RPT904/JYB1904, a half-life extended anti-IgE omalizumab/Xolair "bio-better" from Jemincare, for territories excluding China, Macau, Hong Kong, and Taiwan. Omalizumab is currently approved for various conditions, including food allergy, chronic spontaneous urticaria (CSU), asthma, and chronic rhinosinusitis. The new ’904 can be administered less frequently than omalizumab, potentially every eight or twelve weeks.
The company plans to initiate a Phase 2b trial for food allergy in the second half of 2025, with expectations for top-line data in the first half of 2027. Concurrently, Jemincare is conducting Phase 2 studies in China for asthma and CSU, with results anticipated in the second half of 2025 and the first half of 2026, respectively. RAPT management will decide on the development path for CSU indication based on the outcomes of Jemincare’s studies, which could lead to a Phase 2b or Phase 3 study starting in the second half of 2026.
RAPT ended the first quarter with approximately $179 million in cash, which management believes should sustain the company through the Phase 2b food allergy trial outcomes for ’904. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with a strong current ratio of 21.11, though it’s quickly burning through cash reserves. The in-licensing of ’904 is deemed crucial for RAPT’s pipeline, and the food allergy market is seen as a significant opportunity, potentially affecting around 17 million patients in the U.S., with RAPT estimating over 3 million of those as severe cases. Get access to 10+ additional ProTips and comprehensive financial analysis with InvestingPro. However, Merle noted that more data is essential to de-risk and better define the addressable population for ’904.
In addition to ’904, RAPT also has tivumecirnon/FLX475 for oncology in its pipeline and is open to partnerships, which UBS believes could provide additional upside. Following the announcement of the in-licensing agreement, RAPT shares initially surged by approximately 100%, but they have since returned to levels prior to the news. Despite the near-term challenges, UBS sees the potential for ’904 to offer a longer-term opportunity, contingent on forthcoming data to bolster confidence in the product. Based on InvestingPro’s Fair Value analysis, RAPT currently appears undervalued, though investors should note the company’s Fair financial health score and negative EBITDA of -$121.71M in the last twelve months. For deeper insights into RAPT’s valuation and growth potential, including exclusive ProTips and comprehensive financial metrics, explore the full Pro Research Report available on InvestingPro.
In other recent news, RAPT Therapeutics has been the focus of attention due to its strategic licensing agreement with Shanghai Jemincare Pharmaceutical (TADAWUL:2070) Co., Ltd. This agreement grants RAPT exclusive rights, excluding certain regions, to develop and commercialize the clinical-stage drug RPT904. In return, Jemincare received a $35 million upfront license fee and could potentially earn up to $672.5 million in milestone payments, along with royalties on future net sales outside Greater China. H.C. Wainwright & Co. has maintained its Buy rating on RAPT Therapeutics, setting a price target of $10.00, reflecting confidence in the company’s clinical development strategy. The analyst from H.C. Wainwright emphasized the potential of RPT904, particularly with plans to begin a Phase 2b clinical trial for food allergies in the latter half of 2025. Jemincare is also advancing with Phase 2 clinical trials for JYB1904 in China, targeting asthma and chronic spontaneous urticaria (CSU), which may influence RAPT’s clinical approach to CSU. These developments highlight RAPT’s focus on advancing RPT904 as a potentially improved therapeutic option.
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