The sell-off marks a sharp reversal for the company, which had already seen its stock dip roughly 9% since the beginning of the year. Investors are reacting to the dilution inherent in the new offerings, even as the firm pushes ahead with its pipeline of neurological and psychiatric drug candidates.

The capital infusion follows a period of clinical momentum for the company. Just last week, Rapport reported positive results from a Phase 2 study of RAP-219, its lead candidate designed to treat adults with acute bipolar mania. The drug utilizes a specialized approach to neuroanatomical targeting, focusing on receptor-associated proteins expressed only in specific brain regions. The convertible notes associated with this financing package are slated to mature on December 1, 2032, unless they are converted, redeemed, or repurchased before that date.