What's Going On With RAPT Therapeutics Stock On Wednesday?

Tuesday, the FDA verbally notified RAPT Therapeutics Inc RAPT that a clinical hold has been placed on the company’s Phase 2b trial of zelnecirnon (RPT193) in atopic dermatitis and its Phase 2a trial in asthma. 

The shares closed at $6.87 on Tuesday, sharply down from $25.97 at Friday’s close.

Wednesday, RAPT Therapeutics shares are trading higher on a rebound amid increased volatility in the stock, which sold off yesterday after the clinical trial setback.

RAPT shares are trading on a strong session volume of 11.01 million, compared to an average volume of 628.843K, as per data from Benzinga Pro.

However, certain analysts downgraded RAPT Therapeutics after the trial setback:

HC Wainwright downgraded RAPT Therapeutics from Buy to Neutral, noting that the FDA clinical hold creates zelnecirnon uncertainty. 

• The analyst also highlights that while the liver failure was only deemed potentially related to the therapy, liver toxicity was only observed in this patient out of approximately 350 individuals treated with the drug to date, shedding some important context on the prevalence of liver-related issues.
•  The Phase 2b trial of zelnecirnon in atopic dermatitis was previously scheduled to report data in mid-2024. 
•  The HC Wainwright analyst expresses uncertainty about the potential outcomes if the clinical hold is lifted in the future. Specifically, it is unclear whether RAPT Therapeutics can resume the trial or if additional clinical requirements are needed to proceed with zelnecirnon, given the abrupt pause during the program.
•  Additionally, the analyst anticipates that RAPT Therapeutics may have to specify the degree of compromise in the Phase 2b trial. If the trial is considered unrecoverable, there could be a significant delay of over a year in resuming clinical development.

Leerink Partners downgraded RAPT Therapeutics from Outperform to Market Perform and announced a price target of $10.

Cantor Fitzgerald downgraded RAPT Therapeutics from Overweight to Neutral.

Barclays maintained the Overweight rating on the stock but lowered the price target from $35 to $13.

JP Morgan downgraded RAPT Therapeutics from Overweight to Neutral and cut the price target from $35 to $15.

Price Action: RAPT shares are up 27.9% at $8.79 on the last check Wednesday.

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