Neuro biotech Rapport builds investor confidence with $150M Series B, giving it optionality for IPO

Just five months after emerging with $100 million to test former Janssen neuroscience programs, Rapport Therapeutics is back with another nine-figure raise to take its lead small molecule through mid-stage trials.

The California and Massachusetts biotech disclosed a $150 million Series B on Wednesday morning. The quick, back-to-back financing rounds are reminiscent of the fast-paced funding heyday of 2021. The company’s lead program, RAP-219, is currently in a healthy volunteer study, and the drug developer hopes to start two Phase II trials of the asset next year — one for treatment-resistant epilepsy and the other for a yet-to-be-selected psychiatry indication, CEO Abraham Ceesay told Endpoints News.

Rapport now has runway into 2027, and as the industry’s optimism heats up, the startup has plenty of optionality on where to go next, Ceesay said. He noted the Series B could be viewed “like a crossover round” given the public and private pools that its backers, like lead investor Cormorant Asset Management, play in.

“Being opportunistic about public market opportunities is definitely something that we’re considering,” Raymond Kelleher, a new Rapport board member and managing director at Cormorant, said in an interview. The startup hasn’t committed yet “as to whether the next round would be public or private,” he said, noting “part of it will depend on how the market climate evolves over the next year or year-plus.”

Raymond Kelleher

The investment marks the first deployment from Cormorant’s fifth private healthcare fund, Kelleher said. The neurologist also runs a lab at Harvard Medical School and Massachusetts General Hospital. Two stealth-stage Alzheimer’s biotechs, iNeuro Therapeutics and Paros Bio, are based on research out of his lab.

It’s also the fourth, nine-figure Series B disclosed this month in biotech land, following AI drug discoverer Genesis Therapeutics’ $200 million round, Abcuro’s $155 million backing for a rare muscle disease, and Alltrna’s $109 million for a new class of RNA drugs.

Rapport started as a Big Pharma carve-out on a mission to hit specific neuroanatomical regions implicated in neurological disorders without impacting other parts of the body that would cause unwanted side effects. Third Rock Ventures took note of precision neuroscience programs out of Johnson & Johnson’s Janssen last year and launched Rapport with $100 million in March to develop new drugs based on receptor-associated proteins, or RAPs.

Other backers include Fidelity, Goldman Sachs, Logos Capital, Perceptive Advisors, Sofinnova Investments, Surveyor Capital, T. Rowe Price funds, ARCH Venture Partners and Johnson & Johnson Innovation. Sofinnova’s James Healy also joined the board in conjunction with the new capital.

After the Phase I study wraps up, the San Diego and Boston biotech will look to start two proof-of-concept trials next year. The psychiatry indication will be selected by year’s end, Ceesay said, noting it could be in an area like bipolar depression. The biotech is sifting through preclinical assessments to determine the exact indication, the CEO noted.

Both programs will have data about 12 to 18 months after they’re initiated, Ceesay said. He joined Rapport from another neuroscience biotech, Cerevel Therapeutics. Steve Paul, the chief scientific officer of Karuna Therapeutics who’s launched the likes of Sage and Voyager, chairs the board.

Rapport is entering an exciting time for the field, with a few recent approvals, near-time regulatory submissions and late-stage programs kicking off. Sage and Biogen recently received FDA approval for their postpartum depression med — although a rejection for the same drug as a major depressive disorder treatment sank Sage’s shares earlier this month. Karuna hopes to market a new type of schizophrenia treatment in the second half of next year, if it gets approved following regulatory submission this quarter. Meanwhile, heavily-funded Neumora is launching a trio of Phase III trials in depression.

Additions to Rapport’s management will be revealed “in very short order,” Ceesay said. The current C-suite includes scientific chief David Bredt (former Janssen neuro leader), chief medical officer Brad Galer (who held the same post at Zogenix) and development head Swamy Yeleswaram (ex-Incyte VP). The startup currently employs about two dozen people and will end the year with close to 40 workers, the CEO added.

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