A healthcare holding company in Newark, New Jersey, Rafael Holdings backs early-stage drug and medical-device ventures, with its lead therapy Trappsol® Cyclo™ in late-stage trials for the rare Niemann-Pick type C1 disease and the FDA-cleared VECTR System for ligament-release surgery. It was spun off in 2018 from IDT Corporation, the telecom run by Howard Jonas. Its name comes from the Hebrew for "God heals" — fitting for a company built around medicines.
Rafael Holdings' Q3 net loss narrowed to $4.2M as a $3.7M gain on debt settlements offset a 62% rise in R&D spending for its lead drug trial.
The company's cash burn accelerated as it funded a pivotal Phase 3 trial. fell 50.6% to $0.2 million, and the net loss narrowed to $4.2 million, aided by a $3.7 million non-cash gain from settling Cornerstone , while R&D expenses rose 62% to $4.9 million for the Trappsol® Cyclo™ study. The company is now a clinical-stage bet on a single trial, with $30.5 million in cash to reach the finish line.
Key takeaways
The consolidated net loss narrowed to $4.2 million from $4.8 million a year ago, as a $3.7 million gain on the settlement of Cornerstone Pharmaceuticals' and convertible notes offset a $1.9 million increase in R&D expense.
Healthcare R&D expenses rose 62% to $4.9 million, driven by $2.5 million in new spending on the Cyclo Therapeutics subsidiary's Phase 3 clinical trial for Trappsol® Cyclo™.
fell 50.6% to $0.2 million, and the Infusion Technology reported zero revenue after the March 2025 sale of Day Three Labs' manufacturing assets effectively wound down the segment.
Section summaries
Management's Discussion and Analysis
Rafael Holdings' Q3 FY2026 net loss narrowed to $4.2M, driven by a $3.7M gain on debt settlements and a surge in R&D spending for Trappsol® Cyclo™.
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Consolidated net loss attributable to Rafael Holdings improved 12% to $4.2M for the quarter, aided by a $3.7M gain on settlement of Cornerstone's and convertible notes.
Healthcare R&D expenses jumped 62% to $4.9M in Q3, primarily due to $2.5M in new spending from Cyclo's Trappsol® Cyclo™ Phase 3 clinical trial.
Cash and equivalents fell 19.3% sequentially to $30.5 million, with $21.6 million used in operations over the first nine months of the fiscal year, though management stated the balance is sufficient to fund obligations for at least the next 12 months.
The company is focusing resources on the Trappsol® Cyclo™ program while evaluating strategic options for other holdings, including the LipoMedix investment and the Cornerstone CPI-613 program, which carries an $89.9 million asset on the balance sheet.
What changed
The Q2 FY2026 summary flagged a $7.5 million quarterly cash burn rate and asked how long the $37.8 million balance could last; this quarter, cash fell a further $7.3 million to $30.5 million, and the nine-month operating cash outflow reached $21.6 million, up from $5.4 million in the prior-year period.
The Q2 FY2026 summary noted the Infusion Technology was effectively wound down; this quarter, the segment reported zero , confirming the exit from that business.
The Q2 FY2026 summary highlighted the $89.9 million asset for Cornerstone's CPI-613 program as a watch item; this quarter, the company stated it is evaluating strategic options for the program, but no was recorded.
What to watch
The 96-week final results from the Phase 3 TransportNPC trial for Trappsol® Cyclo™, which will determine whether the lead program can support a regulatory filing for Niemann-Pick Disease Type C1.
The quarterly operating cash burn rate, which reached $7.3 million this quarter, to assess how long the $30.5 million cash balance can sustain operations before a financing is required.
Any of the $89.9 million asset related to Cornerstone's CPI-613 program, given that the company is now evaluating strategic options for the asset and its carrying value depends entirely on future clinical success.
Any financing or capital raise activity, given that the company is funding an active Phase 3 clinical program with a cash balance that has declined by $22.3 million over the first nine months of the fiscal year.
Infusion Technology fell to $0 after Day Three sold assets and licensed its Unlokt™ technology in March 2025, eliminating segment revenue.
Cash and equivalents dropped 42% since July 2025 to $30.5M, with $21.6M used in operations over nine months, though management deems this sufficient for the next 12 months.
The company is focusing resources on its core asset, Trappsol® Cyclo™, while evaluating strategic options for other holdings like LipoMedix and Cornerstone.
Quantitative and Qualitative Disclosures About Market Risk
about Market Risks FOREIGN CURRENCY RISK Revenue from tenants located in Israel represented 42% and 41%of our consolidated revenues for the nine months ended April 30, 2026 and 2025, respectively. The entirety of these revenues is in currencies other than the U.S. Dollar. Our fo…
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about Market Risks
FOREIGN CURRENCY RISK
Revenue from tenants located in Israel represented
42% and 41%of our consolidated revenues for the nine months ended April 30, 2026 and 2025, respectively. The entirety of these revenues
is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion
of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations
in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign
currency exchange rate changes at the end of each reporting period is generally not material.
Legal proceedings disclosure is presented in Note 18 to our Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
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Legal proceedings disclosure is presented in Note
18 to our Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.