Although its increasing cash burn does give us reason for pause, the other metrics we discussed in this article form a positive picture overall.
In particular, we think its revenue growth stands out as evidence that the company is well on top of its spending. It may already be apparent to you that we're relatively comfortable with the way RAPT Therapeutics is burning through its cash. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money. Since it has a market capitalisation of US$1.0b, RAPT Therapeutics' US$54m in cash burn equates to about 5.2% of its market value. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate). Many companies end up issuing new shares to fund future growth. Companies can raise capital through either debt or equity. There's no doubt RAPT Therapeutics seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth.
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