Usually, when a healthcare stock like Rapt Therapeutics (NASDAQ:RAPT) goes down, there are familiar reasons why. A drug doesn’t test well, the FDA passes on it, and things like this are fairly normal—if unpleasant—market outcomes. However, what happens when even setting up tests becomes difficult thanks to a lack of patient enrollment? That’s just what Rapt found out as the stock lost over 25% in Tuesday’s trading.
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Rapt notified investors about a problem with its phase 2b trial for its eczema treatment, known as RPT193. The problem is that topline results weren’t actually going to hit until sometime in the middle of next year thanks to an unexpected hiccup: finding patients willing to test the drug. This may end up being a problem for Rapt, as its cash runway is suspected to continue into mid-2025.
That’s actually farther out than was originally expected, but with phase 2b trials now not expected to conclude until mid-2024, these tests will have to go pretty close to just right in order for the company to survive. The fact that Rapt held $2 million in cash at Silicon Valley Bank (NASDAQ:SIVB) didn’t help matters, either.
Nevertheless, Rapt’s insiders are looking for a win. Not only is the insider confidence level signaling just north of Neutral, but they are also actively buying in. In the last three months, insiders bought a combined total of $12,400 worth of stock.
