NEW YORK — There’s a seismic shift that happens often in biotechnology investing.

As a company advances a drug through testing, its backers naturally get more excited. Enthusiasm builds and builds until, if all goes as planned, the drug secures approval. It’s at this point that some investors pull back, doubtful about the company’s ability to market its new product. This pattern is so prevalent that “sell the launch” has become a well-known phrase in the industry.

Neuroscience, though, is a research area that has shown this mindset isn’t always correct. Biohaven, Alkermes, Intra-Cellular Therapies, Axsome Therapeutics and Acadia Pharmaceuticals are just some of the developers that successfully commercialized therapies for neurological or psychiatric disorders. Paul Matteis, an analyst at Stifel, has said that “one thing we've learned over the last handful of years ... is that these markets are actually addressable by even small companies launching their first drug.”

Rapport Therapeutics is looking to join those ranks. Formed in 2023, through a collaboration between Third Rock Ventures and Johnson & Johnson’s strategic venture capital arm, Rapport is developing what could be a first-of-its-kind epilepsy medication. The company recently started enrolling patients in a late-stage program focused on a certain type of seizure.

While results won’t come for a few years, CEO Abraham Ceesay said Rapport is “fully prepared” to, by itself, take on the challenge of selling “RAP-219.” In a wide-ranging interview, BioPharma Dive spoke to Ceesay about the strategy behind choosing epilepsy as a lead indication, how Rapport built its investor syndicate, as well as what the company sees as worthwhile partnerships.

The following conversation has been edited and condensed for clarity.

BIOPHARMA DIVE: Your lead program targets one member, “gamma-8,” of a family of nervous system proteins known as TARPs. Why build a company around that specifically, versus other TARPs or even different classes of seizure-associated proteins?

CEESAY: Seizures are basically an excitatory process — overexcitation in certain synapses — and the field knows that one of the most important neurotransmitters in the brain is glutamate, which is regulated by the AMPA receptor. The AMPA receptor is validated in treating epilepsy; there is an approved drug, parampanel, the brand name of which is Fycompa, and that is a pan-AMPA antagonist, so it is inhibiting AMPA receptors ubiquitously throughout the brain.

The challenge, as with all anti-seizure medications, is that when you’re targeting various receptors ubiquitously, you're ultimately interacting with areas of the brain that aren't relevant in controlling seizures.

TARPs are proteins associated with AMPA receptors, and the novelty is that this family all have distinct geographic distribution. Lo and behold, the TARPγ8 version is only expressed in the brain exactly where seizures both originate and propagate.

So if we're able to modulate AMPA receptors in only that region, we can control seizures. But by not interacting with receptors in other areas of the brain, we believe we could deliver efficacy while dialing out all of the tolerability issues associated with traditional anti-seizure medications.

In neuroscience, sometimes the “dirtiest” drugs are also the most effective. Is there evidence that specifically inhibiting TARPγ8 will be enough to compete with what's available, in terms of efficacy?

CEESAY: Yes. When you're looking at indications that have less definition in terms of the biologic target or, in some cases, less genetic data to support — like pain as well as neuropsychiatric conditions — those are the areas where these “dirty” drugs have shown effects. It’s really hard to point, mechanistically, to exactly what's driving the effect.

Seizures are really different. It's very clearly understood what channels are going to impact the neurotransmitters that are ultimately going to slow down that excitatory process. So I think we had a really good understanding that if we can have a selective and potent drug that is going to inhibit the AMPA receptor via TARPγ8, we could have a drug.

Ultimately, all of that is early biology, early preclinical translation. But what I will say about epilepsy: one of the beauties of drug development here is that, when you look at all fields of neuroscience, epilepsy has the strongest preclinical translation.

What’s given you confidence that your lead program can hit this sweet spot?

CEESAY: Our Phase 2 results released last year.

We enrolled focal epilepsy patients, but the difference in our trial versus traditional trials is that these patients also had implantable neurostimulation devices that constantly record electrographic activity in the brain. So, we were able to not only measure the gold standard, which is the reduction of clinical seizures — and those are what patients actually recall and write down in a book — but also corroborate all of those reductions with an objective electrographic biomarker.

That gave us real conviction we have a drug.

As you said, epilepsy is one of the few neurological areas that has strong biomarkers. When your team was getting Rapport off the ground, was the choice to first target seizures a cognizant, strategic one, or was it more so following promising data that just so happened to be in epilepsy?

CEESAY: I've had experiences across several kinds of company builds, and, in neuroscience, one of the things you really have to push yourself on is: What is the lead indication that is really going to establish the foundation of the company?

Our feeling was we could leverage this lead program in a very efficient manner that would allow us to ultimately take more risk on the early-stage pipeline. Because a lot of the other indications that we're going to be working on are traditional CNS [diseases] that do not have the luxury of a biomarker or translatability.

Your Phase 2 study reported a 78% reduction from baseline in clinical seizure frequency over an eight-week period. Is that roughly the benchmark for what you’d deem a successful result in late-stage testing?

CEESAY: It is not. We feel the Phase 2 results should translate. But as we powered and designed the Phase 3 study, we didn't [do it] around that effect size. We powered the study around a smaller effect size. That’s always the smart thing to do, to be a bit more conservative as you go into Phase 3 and give your drug the best shot at success.

You also have to think about, for a condition like epilepsy, the FDA is very interested in requisite safety exposures. We need a bit larger of a sample size to ensure that we get those.

What do you think investors are hoping to see from those studies?

CEESAY: What you see with very effective drugs in this space, and novel anti-seizure medications, is a 30% to 40% placebo-adjusted reduction in seizures. And the placebo rate in these studies is anywhere from 10% to 20%. What that tells you is you want to see anywhere from 40% to 50% reduction in clinical seizures on the treatment arm. That's exactly how we've powered our studies.

Speaking of biotech investors, they’ve been particularly prudent over the last few years. They're hyperfocused on what companies are spending, what they're doing. How often are you checking in with your bigger backers? And have the conversations changed at all this year, given biotech has recently seen a little bit sunnier skies?

CEESAY: Investors, appropriately so, have a much higher level of discretion in this current cycle than they did coming right out of COVID. Then, there was not much discretion applied to the funding of companies. I think we all felt the pain and we've learned from that.

My approach in raising capital is that I'm always thinking about my investor syndicate — not only for the capital I need to raise, but what I'm preparing for the next iteration of this company. Have I built a syndicate that really understands the vision, believes in the science and is going to be there in all of those subsequent rounds?

Lawyers who work on biotech M&A have warned startup teams to be really mindful of the size and composition of their boards. Is that something you thought about considerably as you went through your private funding rounds?

CEESAY: I think I take a bit of a different approach, which is going to work with some investors and not work with others.

Building a biotech in today's era, you should be thinking about the board you need in 12 months versus the board that you need today. With Rapport, we were very aggressive early on building a strong independent board.

Do we have investor representation? We do. And investors are great on your board. But what you need as an effective public company is … a strong independent board that’s really supportive of how we want to operate and of the capital allocation decisions we make.

What investors are most interested in is capital allocation. That's where there's been some lessons learned. If we go back to the really frothy markets post-COVID, there was capital allocated because there was so much of it — building really big offices, spreading yourselves too thin across many programs. My approach, whether it's frothy times or more restrictive times, is just being unbelievably intentional about capital allocation.

One way to spread costs and risks is collaborations. How do you view partnerships? Are they essential to you and Rapport? Are you actively trying to do them? Or is the thinking: if they come, great, but that’s not our focus?

CEESAY: We really want to be able to control our destiny.

If we seek a partnership, we want to do that with a very specific strategic intent, versus, “We need to partner because we need the capital,” or, “We need to partner because we need the know-how to be able to execute a program.” Coming to a partnership from a position of strength is such an important mindset in a growing biotech organization.

With our lead program, one thing we really thought about is: How can we bring the most efficiency and quality to our Phase 3 program? One area we really looked at is that all of the countries included in global development programs have, historically, excluded China.

China has a very large population. There are many patients living with focal seizures there — could we [find] a partner that would be able to commercialize, eventually, the asset in China, but also open up China as a region to add to our global development program.

That's a win-win collaboration. It brings an asset to China for a partner that sees a lot of value in this target, but it also is really helping us as we think about the global development program. So that's kind of how we think about partnerships right now.

How do you feel, if all goes well with RAP-219, launching this product yourselves rather than teaming up with a bigger pharma? Is that something you’re braced to do?

CEESAY: It is. You look at neuroscience, and I think it actually has proven where emerging biotech can be very successful as a commercial entity.

When you look at epilepsy, it’s an indication that is very feasible for a biotech of our size to be able to scale up and launch. Bipolar mania extends that a little bit, because it's a broader opportunity as you think about calling on psychiatrists versus just neurologists and epileptologists. But it is something that we are fully prepared to do.