Rani Therapeutics IPO: $73M to Fuel Clinical Trials

Rani Therapeutics Launches Publicly, Pioneering Oral Drug Delivery

Rani Therapeutics, a company headquartered in San Jose, California, initiated trading on the stock market on Friday, marking a significant step in its mission to develop an oral alternative to injectable medications.

IPO Details and Market Context

Initial projections, as detailed in the company’s S-1 filings, anticipated share pricing between $14 and $16. However, the stock ultimately debuted at approximately $11 per share. The initial public offering successfully generated around $73 million for Rani Therapeutics.

This launch occurs during a period of heightened activity in the therapeutic IPO landscape. A substantial 71 biotechnology firms went public in 2020. Furthermore, 59 companies had already completed IPOs by 2021, with numerous others poised to follow, including Rani Therapeutics, with eight biotech companies expected to begin trading on July 30th alone.

Focus on Innovation and Clinical Progress

Despite the broader IPO environment, Rani Therapeutics remains “laser focused” on its own advancements, according to CEO Talat Imran. The decision to pursue a public offering was significantly influenced by promising results from a phase I study, providing early indications that the RaniPill, the company’s core product, could progress into clinical trials.

Imran stated, “We are already conducting studies in humans and are demonstrably on course to realize oral biologics. This represents a dynamic and distinctive market within the life science sector, and we are enthusiastic about leading innovation in this field.”

How the RaniPill Works

The RaniPill is a capsule engineered to deliver medications traditionally administered through injections. The pill’s functionality relies on a series of key steps.

Initially, the pill is coated with a material that resists degradation in the stomach’s acidic environment. Upon reaching the small intestine, this coating dissolves, triggering the inflation of a small, internal balloon. Following inflation, medication is delivered via a microneedle, which is designed to dissolve after drug administration. Finally, the remaining balloon material is eliminated through the body’s natural digestive processes, as outlined in the company’s S-1 filing.

This entire process is contained within a capsule that visually resembles a standard gel capsule.

Patient Preference for Oral Administration

Evidence suggests that patients often favor oral medications over injections for certain conditions. For instance, research involving cancer patients has highlighted a preference for oral therapies compared to routine injections. However, this preference isn't universal.

Some patients may prefer long-acting injectable medications to frequent pill consumption, particularly in the context of HIV treatment. Nevertheless, it is generally acknowledged that injections are not always a comfortable experience. A 2019 review and meta-analysis encompassing 35 studies revealed that between 20% and 30% of young adults experience a fear of needles, potentially leading to avoidance of necessary medical treatments or vaccinations.

Targeted Medications

Rani Therapeutics is currently developing capsules for FDA-approved drugs that are commonly administered via injection. These include:

• Octreotide for acromegaly or gastrointestinal neuroendocrine tumors (NETs)
• TNF-alpha inhibitors for psoriatic arthritis
• Parathyroid hormone (PTH) for osteoporosis
• Human growth hormone (HGH) for HGH deficiency
• Parathyroid hormone for hypothyroidism

Clinical Trial Progress and Future Plans

The most advanced product in the company’s pipeline is the octreotide-delivering pill (RT-101), which underwent a phase I clinical trial involving 62 participants. Results from the trial, partially reported in the S-1 filing, demonstrated 65% bioavailability of octreotide, comparable to that achieved through injection. This indicates the potential for effective drug delivery via the pill, although these findings are preliminary.

The company intends to initiate two additional Phase I studies next year, focusing on PTH for osteoporosis and human growth hormone. Further studies on the remaining drugs in development are planned for 2023.

Validating the RaniPill Platform

The overarching objective is to validate the RaniPill platform independently of specific drug formulations. Rani Therapeutics is pursuing an Investigational Device Exemption (IDE) from the FDA, which would enable clinical testing of the RaniPill without a drug component. This study will assess the safety of the product with repeated dosing and is scheduled to commence next year.

Imran emphasized, “While we will continue to generate data with drugs, as we intend to develop them, it’s crucial to establish the platform’s inherent safety and tolerability.”

Experienced Leadership

The company’s leadership team possesses a proven track record of success in the biotechnology sector.

Rani Therapeutics was founded in 2012 by Mir Imran, a serial entrepreneur with a history of successful exits and acquisitions of medical device companies. In 1985, Imran pioneered an implantable cardiac defibrillator through his first venture, Intec Systems, which was subsequently acquired by Eli Lilly. He has since launched 20 medical device companies, with 15 achieving either an IPO or acquisition.

Financial Performance and Funding

Currently, Rani Therapeutics’ financial reports indicate substantial losses. Net losses for 2019 and 2020 amounted to $26.6 million and $16.7 million, respectively. As of March 2021, the company reported a deficit of $119.6 million.

To date, the company has secured approximately $211.5 million in funding, excluding the proceeds from the recent IPO. Rani Therapeutics intends to allocate the $73 million raised during the IPO to support the IDE study and further clinical trials.