RAPT Therapeutics weakness creates a long-term opportunity - UBS

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RAPT Therapeutics weakness creates a long-term opportunity - UBS
Credit: © Reuters.

By Sam Boughedda

RAPT Therapeutics (NASDAQ: RAPT ) shares fell more than 25% on Tuesday, but UBS analysts believe the stock's weakness creates a long-term opportunity.

On Tuesday, RAPT reported fourth-quarter financials, and UBS spoke with the company's management after the release.

"New from today's release is topline data from the Ph2B of RPT193 in atopic dermatitis is now guided for mid-24 vs 2H23 previously, with the company citing slower than expected enrollment of patients due to the lack of an expected seasonal uptick. We see this as a meaningful update given investor focus on what had been the upcoming catalyst for '193 this year," wrote the analysts, who maintained a Buy rating and $61 price target on the stock.

The analysts said the firm noted the share price decrease following the results, which they think is "largely due to shifted timing of atopic derm catalyst," but there is no change in their view of the "program's fundamentals and potential opportunity of '193 if successful in atopic derm."

"We continue to see a large opportunity for a safe oral in atopic derm and see '193 as a highly promising agent based on what we've seen so far from Ph1b data (though early)," they added. "We see atopic derm data as a major catalyst for 2024, with significant upside potential in 2H24 if successful. Despite the delay, we have conviction in shares longer-term, with a market cap of ~$920M vs we estimate over $2B potential peak '193 sales if successful. The company ended the year with cash of ~$249M, which it expects to provide runway beyond the 2024 data read into mid-2025."

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