The results were positive, and the stock plunged.
Exactly on the day of the drop, we identified an insider purchase by the company's CFO, and alongside the insider purchase, a large investment house raised the target to the highest price in the stock's history...
We delved into this story: $RAPP
Note the order of events:
On October 20, Rapport announced that its new drug met the primary endpoint of a Phase 2 trial in bipolar disorder mania.
The next day, the stock fell by about 14.7%,
On the same day, without waiting a second, Troy Ignelzi, the company's CFO, made an insider purchase of 5,500 shares at an average price of $26.10, about $143,550 from his personal funds.
This increased his holding by about 55%.
And here it gets interesting: that same morning, Jones Trading raised the target from $50 to $82, about 227% above the close.
This is the largest target change we have recorded for the stock, out of 21 analysts covering the stock.
According to analyst Justin Walsh, the drug could become "an entire pipeline in one product."
Investment firm Guggenheim also raised its price target that day, from $65 to $70, and the day before, BTIG raised it to $89.
So what does Rapport do?
It is developing one drug, RAP-219, for brain diseases; for focal epilepsy, it is already in two Phase 3 trials, and now bipolar mania is joining it.
Let's look at the trial numbers:
253 patients with acute mania, three weeks hospitalized, and an improvement of 3.1 points above placebo on the mania scale, without any serious side effects.
The company plans a meeting with the FDA in the first quarter of 2027.
The market expected a larger gap and sold; the CFO, the person who knows the company from the inside, saw the same results and entered.
At the end of June, there was about $436.1 million in cash, and according to the company's guidance, it is sufficient until the second half of 2029.
(There were also insider sales; CEO Abraham Ceesay and COO Cheryl Gault sold shares worth about $936,000 in September and October, but all sales were according to pre-defined trading plans)
What else is unusual here?
This is the only insider purchase we have recorded at the company since the beginning of September, and it came on the day of the stock's big decline.
What made the CFO buy his own stock on the day the market sold its stock?
We are following this