NASDAQ:RANI
READ THE FULL RANI RESEARCH REPORT
Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) reported second quarter 2024 results on August 6th, 2024 with the ProGen agreement standing out as the most important event since our last quarterly update. Additionally, Rani has participated in scientific and investor conferences and raised additional funding while continuing discussions with prospective partners for its pipeline.
Our focus is on the development plans for the pipeline which includes RT-114, RT-111 and Rani Pill HC. We think that an oral option for delivering biologics is an attractive alternative to infusion and Rani’s solution is an elegant and effective way to implement it. It is a method of administration that could dramatically impact the biologics space for sponsors, patients and providers. Results from the RT-111 Phase I trial showed 84% bioavailability for the RaniPill (RP) relative to subcutaneous Stelara. These impressive results for an oral option are sure to attract the attention of many large biopharmaceutical firms as there are no other oral options for delivering biologics that provide bioavailability similar to infusion.
Second Quarter 2024 Operational and Financial Results
Rani reported 2Q:24 results in a press release and Form 10-Q filing with the SEC on August 6, 2024. The company did not hold a conference call. For the quarter ending June 30, 2024, revenues were zero matching prior year amounts. Operating expense was $12.5 million and net loss per share for Class A shareholders was ($0.26).
➢ Research and development expenses totaled $6.1 million, down 45% from $9.7 million mostly due to lower payroll. Lower compensation cost was a result of the workforce reduction announced in November. Other year over year reductions were related to third-party service costs and materials and supplies expense;
➢ General & Administrative expenses were $6.4 million, falling 11% from $7.2 million on account of lower compensation and other costs partially offset by higher facility costs;
➢ Net interest and other expense totaled ($0.8) million compared to ($0.4) million on lower interest income;
➢ Non-controlling interest was ($6.6) million vs. ($9.4) million;
➢ Net loss for Class A shareholders was ($6.8) million vs. ($9.3) million or ($0.26) and ($0.37) per share.
As of June 30, 2024, cash and marketable securities totaled $30.9 million. This amount compares to the $48.5 million balance held at the end of 2023. Long-term debt was held on the balance sheet at $29.5 million. 2Q:24 cash used in operations and for capital expenditures was ($9.1) million versus ($12.6) million for the comparable period in the prior year. For the first six months of the year, cash burn was ($18.5) million vs. ($25.0) million in 1H:23.
Rani will need additional capital in the next year. Rani’s CFO has previously specified equity, debt and licensing agreements from pharmaceutical partners as the most likely sources. In July and after the end of the second quarter, the company raised $10 million gross and it may further tap into the remaining $15 million on a loan agreement if certain milestones are met. Rani is party to a controlled equity sales agreement which allows the company to conduct at the market (ATM) equity sales.
Capital Raise
Rani executed a small capital raise in July, offering equity to add a gross $10 million to its coffers. The deal included the sale of 2.8 million shares of Class A common stock and 446,753 prefunded warrants to buy Class A common stock. Each share or prefunded warrant carried two common warrants, Series A and Series B. 3.25 million Series A warrants were issued with an exercise price of $3.08 per share and an expiration 18 months after the date of issuance. 3.25 million Series B warrants were also attached to each share or prefunded warrant with an exercise price of $3.08 and an expiration 5 and one-half years after the date of issuance. The offering closed in the last week of July with Maxim Group serving as the placement agent for the offering.
Conference Participation
Since the report of first quarter earnings in early May, Rani has participated in several scientific and investor conferences. We list the details below.
➢ Digestive Disease Week
o May 18 – 21, 2024 in Washington D.C.
o Oral presentation
▪ An Orally Administered Robotic Pill (RP) Reliably and Safely Delivers an Ustekinumab Biosimilar RT-111 with High Bioavailability Relative to Subcutaneous (SC) Ustekinumab in Healthy Human Participants
▪Presented by Jacques Van Dam, MD, PhD
o Poster Session
▪ Orally-Administered Ustekinumab Biosimilar RT-111 Delivered Via a Robotic Pill Yields Bioavailability Comparable to Subcutaneous Injection in Canines
▪ Presented by Kyle Horlen, DVM
ProGen Collaboration Details
On June 24th, Rani announced a collaboration with ProGen Co., Ltd. to develop an oral obesity treatment combining ProGen’s FC Fusion protein conjugated GLP-1/GLP-2 dual agonist PG-102 with Rani’s Rani Pill HC. The press release describing the deal was followed by a conference call held the morning of June 24th, 2024. Rani has entered into a definitive agreement with this South Korean firm to develop a new product designated RT-114. RT-114 is an oral dose of ProGen’s PG-102, a GLP-1/GLP-2 dual agonist for treatment of obesity. The companies will equally share the costs of development and divide geographies between them. Details of the arrangement between the two companies can be found in the most recent Form 10-Q.1
Rani and ProGen’s collaboration seeks to advance a GLP-1/GLP-2 dual agonist for the treatment of obesity. While GLP-1 agonists have been thoroughly discussed in recent years there are other less well-known incretin hormones that are involved in intestinal growth and function. GLP-2s are less well publicized but offer several complementary benefits to GLP-1 agonists for weight loss. Rani is looking beyond the approved generation of therapy to a new one that will address existing drawbacks including side effects and loss of muscle mass. The collaboration agreement between the two companies will develop the Rani Pill high capacity (HC) capsule containing ProGen’s PG-102 for weight management. The 50/50 worldwide revenue and cost share effort will initially focus commercialization on major markets. No initial payments will be made between the parties. Rani holds rights to commercialize in the United States, Europe, the United Kingdom, Canada and Australia. ProGen holds rights for all other areas, most importantly, Asia. Each party can sublicense in its territories. ProGen will manufacture the drug substance and Rani will manufacture the Rani Pill drug product.
The agreement with ProGen does not prevent Rani from pursuing other obesity and diabetes collaborations or partnerships. Management has ongoing contact with undisclosed prospects and a deal could be announced at any time not only for this category but others as well.
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1. See .pdf page 38 which is the beginning of the Collaboration Agreement listed as Exhibit 10.1
