Barclays starts RAPT Therapeutics at overweight, cites dermatitis drug (update)

Barclays initiated coverage of RAPT Therapeutics (NASDAQ:RAPT) with an overweight rating, citing the company drug candidate RPT193 for atopic dermatitis, or AD.

The bank's base case for the stock assumes a 2028 launch of the product, which is in Phase 2 clinical testing, with peak sales of $1.7B in 2035. The bank estimated the product's probability of gaining market approval at 70%, according to a note dated June 15.

Barclays said that while it expects Sanofi (SNY) and Regeneron's (RGEN) Dupixent to remain the "dominant go-to option" for AD treatment, it sees opportunity for RPT193 based on its "compelling" mechanism of action, large and growing total addressable market, and that it is an oral rather than injectable medication.

The bank also cited a Phase 2 data readout expected in mid-2024 as a key catalyst for the stock.

"We believe a positive readout in mid-2024 would be the significant value-unlocking event," wrote Barclays analysts in their note. "The current investor sentiment shows a high level of doubt, but we expect a commensurately scaled RAPT share price reaction from a positive readout."

Barclays's price target for the stock is $35.

More on RAPT:

Rapt Therapeutics Investor Presentation -slideshow

Rapt stock slumps ~25% as enrollment woes delay timeline for eczema trial of RPT193