SCHEDULE: Sofinnova Funds Drop Below 5% Stake in Rapport Therapeutics

Sofinnova Venture Partners XI and related entities, including Dr. James I. Healy, reported a decrease in their beneficial ownership of Rapport Therapeutics, Inc. common stock to below 5% due to dilution from the Issuer's recent share sales.

Summary

• Sofinnova Venture Partners XI, L.P. (SVP XI), Sofinnova Management XI, L.P. (SM XI LP), Sofinnova Management XI, L.L.C. (SM XI LLC), Dr. James I. Healy, and Dr. Maha Katabi (collectively, the Reporting Persons) filed an Amendment No. 1 to their Schedule 13D.
• The amendment reflects that the Reporting Persons ceased to be beneficial owners of more than five percent (5%) of Rapport Therapeutics, Inc.'s Common Stock on September 11, 2025.
• This decrease in ownership percentage is attributed to dilution caused by the Issuer's sales of additional shares of its Common Stock since the original Schedule 13D filing.
• As of the event date, SVP XI, SM XI LP, SM XI LLC, and Dr. Katabi beneficially owned 1,863,327 shares, representing 4.0% of the class.
• Dr. James I. Healy beneficially owned 1,947,579 shares, representing 4.2% of the class, which includes shares held by SVP XI and other Sofinnova-managed funds (Apex SP, Alpha SP, Pinnacle LP), plus 4,822 shares held directly.
• The percentage ownership calculations are based on 46,113,062 shares of Common Stock outstanding immediately after an offering by the Issuer, as reported in its Form 424B5 filed on September 10, 2025.
• Reporting Persons hold their securities for investment purposes and may acquire, retain, or sell shares based on market conditions and the Issuer's prospects.
• SVP XI and Dr. Healy are subject to a 180-day lock-up agreement from the IPO prospectus date (June 7, 2024).
• SVP XI holds demand and piggyback registration rights under an Amended and Restated Investor Rights Agreement.
• Dr. Healy, as a director, has an Indemnification Agreement with the Issuer.
• SVP XI also has certain registration rights for shares acquired in a private placement if they cannot be sold under Rule 144 after one year.

Sentiment

Score: 6

Explanation: The filing is primarily a factual disclosure of a change in beneficial ownership due to dilution, which is a neutral event. The continued holding of shares for investment purposes by a prominent venture capital firm, and a director's stock option grant, suggest a moderately positive underlying sentiment regarding the company's prospects, despite the reduced percentage stake.

Positives

• The Reporting Persons' continued investment in Rapport Therapeutics, Inc. indicates ongoing confidence in the company's long-term prospects.
• Dr. James I. Healy, a managing member of Sofinnova Management XI, L.L.C. and Sofinnova Synergy GP, LLC, also serves as a director of Rapport Therapeutics, Inc., aligning his interests with the company's success.

Negatives

• The decrease in beneficial ownership below the 5% threshold, while due to dilution from the Issuer's share sales, means the Reporting Persons no longer hold a significant reportable stake, which could be interpreted as a reduced influence or commitment, although the filing states the shares are held for investment purposes.

Risks

• The value of the Common Stock held by Reporting Persons is subject to market fluctuations and the Issuer's business performance.
• The lock-up agreement restricts the sale of shares by SVP XI and Dr. Healy for 180 days, potentially limiting liquidity during that period.

Future Outlook

Reporting Persons hold their securities for investment purposes and may, from time to time, acquire additional Common Stock, retain, or sell portions of their holdings in the open market or privately negotiated transactions. Any future actions will depend on factors such as Common Stock price levels, general market and economic conditions, ongoing evaluation of the Issuer's business, financial condition, operations, prospects, and alternative investment opportunities.

Industry Context

This filing is a standard disclosure of a change in beneficial ownership, reflecting the natural dilution that occurs when a publicly traded company issues additional shares. For biotechnology companies like Rapport Therapeutics, Inc., capital raises are common to fund research, development, and clinical trials. The continued investment by Sofinnova, a prominent venture capital firm specializing in life sciences, suggests ongoing belief in the company's potential, even as their percentage ownership decreases due to the company's growth and capital activities.

Comparison to Industry Standards

• The beneficial ownership disclosure is a standard regulatory requirement for investors whose stake crosses certain thresholds. The decrease below 5% due to dilution from the Issuer's share sales is a common occurrence for early-stage investors in growth companies, particularly in the biotech sector where companies frequently raise capital.
• The lock-up agreement for SVP XI and Dr. Healy is a standard practice in IPOs, ensuring stability in the stock price post-offering by preventing early sales by significant pre-IPO shareholders. This is comparable to agreements seen in IPOs of other biotech firms like Moderna (MRNA) or BioNTech (BNTX) during their early public phases.
• The Investor Rights Agreement, granting registration rights, is typical for venture capital investors, allowing them avenues to liquidate their holdings in the future, similar to agreements held by major investors in companies such as Ginkgo Bioworks (DNA) or Recursion Pharmaceuticals (RXRX).

Corporate Governance

Related Party Transactions

• Dr. James I. Healy, a managing member of SM XI LLC and Synergy GP, is also a director of Rapport Therapeutics, Inc. His beneficial ownership includes shares from funds managed by Sofinnova entities where he holds managing roles.
• Dr. Healy received 4,822 shares of Common Stock as part of a pro rata distribution from Sofinnova Synergy Master Fund LP on August 11, 2025.

Stakeholder Impact

• Shareholders: The dilution of Sofinnova's stake indicates that new shares were issued, potentially impacting existing shareholders' proportional ownership. However, the capital raised from these sales could fund company operations and growth.
• Investors: Provides transparency regarding the ownership structure and the investment intentions of a significant venture capital firm. The continued holding for investment purposes may signal confidence.
• Management: The grant of a stock option to Dr. Healy, a director, aligns his incentives with the company's long-term performance.

Next Steps

• Dr. Healy's stock option for 21,850 shares will vest upon the earlier of June 17, 2026, or the date of the next Annual Meeting of Stockholders of the Issuer, subject to his continued service.
• SVP XI has certain registration rights for shares acquired in the private placement, which can be exercised if the shares cannot be sold without restriction under Rule 144 after the one-year anniversary of the Form S-1 Registration Statement's effectiveness.

Key Dates

Recommendation

This filing is a routine regulatory update indicating a change in beneficial ownership due to dilution from the Issuer's share sales, rather than a divestment. It does not contain new information about the company's operational performance, strategic direction, or financial health that would warrant a 'buy' or 'sell' recommendation. The continued investment by Sofinnova, a specialized life sciences VC, suggests a long-term view. Therefore, a 'hold' recommendation is appropriate as the filing itself does not present a catalyst for significant price movement or a change in investment thesis, but rather confirms an expected outcome of capital raising activities.

Keywords

Rapport Therapeutics, Sofinnova, Schedule 13D/A, Beneficial Ownership, Dilution, Common Stock, Venture Capital, Biotechnology, Investment, SEC Filing