By John Vandermosten, CFA

NASDAQ:RANI

READ THE FULL RANI RESEARCH REPORT

On March 31^st, Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) reported 2024 results. Since the third quarter report, Rani has participated in multiple investor conferences, raised an additional $10 million and reported glucagon-like peptide-1 receptor (GLP-1) incretin triagonist data. Most importantly, Rani’s lead program, RT-114, produced favorable preclinical data demonstrating superior bioavailability compared to the underlying molecule’s subcutaneous results. In parallel, partner ProGen provided an update on their Phase I trial for PG-102 which is in the vanguard for the GLP-1/GLP-2 dual agonist program. The other significant area of interest is an anticipated deal with an established biopharmaceutical company which may include upfronts, milestones and royalties for Rani. In this vein, Rani conducted testing on behalf of an unnamed but significant biopharma, receiving $1.0 million in contract revenue and germinating a prospect in the process.

2024 Operational and Financial Results

Rani reported 2024 results in a press release and Form 10-K filing with the SEC on March 31^st. The company held a conference call following the release accompanied by a slide deck. For the year ending December 31^st, 2024, revenues were $1.0 million, operating expense was $54.3 million and net loss per share for Class A shareholders was ($1.05).

• Revenues of $1.0 million were recognized in the fourth quarter representing contract revenues with a customer vs. $0;
• Research and development expenses totaled $26.7 million, down 33% from $39.6 million mostly due to lower payroll. Third party services also fell meaningfully while facilities, materials and supplies decreased by about $1 million due to the timing of preclinical and clinical studies;
• General & Administrative expenses were $23.9 million, falling 10% from $26.5 million on lower compensation costs, reduction in third party services and decreased other costs including insurance premiums. This was offset by an increase in facility costs near the company’s headquarters;
• Rani recognized an impairment of $3.7 million related to the write down of construction in progress property and equipment vs. no impairment;
• Interest income was $1.8 million vs. $3.3 million due to lower cash balances;
• Non-controlling interest was ($26.6) million vs. ($33.9) million;
• Net loss for Class A shareholders was ($30.0) million vs. ($34.0) million or ($1.05) and ($1.33) per share.

As of December 31^st, 2024, cash and marketable securities totaled $27.6 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 $24.6 million. 2024 cash used in operations and for capital expenditures was ($35.8) million versus ($52.5) million for the prior year. In the fourth quarter of 2024, Rani sold securities to raise an additional $10 million in gross proceeds and repaid $5.0 million in debt. Management expects cash to be sufficient to support operations until 3Q:25.

RT-114 AND PG-102 Results

ProGen Collaboration Details

In June 2024, 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. Rani entered into a definitive agreement with ProGen to develop a new product designated RT-114, an oral dose of ProGen’s PG-102. The companies will equally share the costs of development of RT-114 and divide geographies between them. Details of the arrangement between the two companies can be found in the second quarter 2024 Form 10-Q.^[1]

Following the deal between Rani and ProGen, the partners have begun a development plan for the GLP-1/GLP-2 dual agonist. ProGen is conducting an ascending dose Phase I trial for PG-102 with the primary endpoints of safety and tolerability. Rani is advancing a head-to-head preclinical comparison of orally administered PG-102 using the RaniPill capsule (RT-114) to 16 healthy canines.

ProGen Clinical Trials

ProGen’s Phase I trial underway for PG-102 announced preliminary results for the repeat-dose portion (Phase Ic) of its Phase I study. The candidate produced an average weight loss in subjects (N=73) of 4.8% after five weeks of dosing. Subcutaneous PG-102 was well tolerated with subjects able to titrate to the target dose in one month. There were no treatment discontinuations. Additional data was presented at the Asian Association for the Study of Diabetes (AASD) which was held March 28^th to 30^th. Rani’s Senior Strategic Advisor, Jesper Høiland hypothesizes that the rapid titration may facilitate faster onset, shortening the time between initial administration and target weight loss. It is notable that the 4.8% average weight loss was achieved after five weeks compared to the four to five months required by approved GLP-1 agonists.^[2] ProGen is planning a Phase II study of PG-102 that will compare the candidate with placebo in obesity and Type 2 diabetes. Six sites in Korea have been identified and sites outside Korea are also being added.

Rani Preclinical Trials

Rani is running its preclinical study, delivering either a 12 mg dose of PG-102 using RaniPill (N=10) or subcutaneously (N=6). This is estimated to be equivalent to a 60 mg dose in humans. The study is evaluating endpoints including safety, tolerability and reliability of the RaniPill capsule as well as pharmacokinetics, which is serum concentration measured by enzyme-linked immunosorbent assay (ELISA). Body weight and food intake are also being measured.

Analysis of the data show that RaniPill was well tolerated with a safety profile comparable to subcutaneous delivery. RaniPill debris was excreted without sequelae in all dogs. Delivery success was 90% (9/10). RT-114 produced higher C_MAX, earlier T_MAX and relative bioavailability of 111% comparable to PG-102.

Weight loss was the same in both the RaniPill group and the subcutaneous group, both equal to a 6.7% reduction over the observation period. The subcutaneous group had a greater variability in weight loss results compared with RT-114.

designed as a multiple ascending dose study that will help identify the optimal dosing to be used in both ProGen’s next stage of work and to inform the appropriate dose levels for the RT-114 program. ProGen has shared the results from the Phase Ia study which is evaluating subcutaneous delivery of PG-102. The study tested four dosing schemes which produced no gastrointestinal (GI) side effects in the first three doses and 30% incidence of GI side effects in the highest dose.^[3] Additional data is expected in 2025. Rani must conduct a local toxicity study followed by the start of the Phase Ia clinical trials. RT-114 will be the subject of this 30-person open label safety study that will also examine pharmacokinetic and pharmacodynamic markers. Based on a preliminary view, a 15 mg and 30 mg pill will be compared to subcutaneous injection of 15 mg of PG-102 with each group evenly distributed. The study is expected to last from four to five months. A Phase Ic is also planned which will enroll 40 obese, non-diabetic subjects in another open label trial to examine PK and PD parameters. This study will look at repeat doses for four to seven weeks with a follow up. Trial duration is estimated at six to nine months with a start in 2025. The cost of the two Phase I studies is expected to range from $3 to $5 million with the costs split evenly between the partners.

A Phase IIa for obese patients providing 12 weeks of treatment is expected to follow the Phase I studies in 2026. Other studies will come later, including a pivotal study that will provide the data necessary for FDA and other regulatory body approval. Rani will be able to lean heavily on ProGen’s work to support this effort. Based on our understanding of the partners’ positions, we could see an FDA biologic license application (BLA) submission by 2029.

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^{[1] See .pdf page 38 which is the beginning of the Collaboration Agreement listed as Exhibit 10.1}

^{[2] Ryan, D.H., et al. Long-term weight loss effects of semaglutide in obesity without diabetes in the SELECT trial. Nature Medicine. May 2024. See Figure 1.}

^{[3] Stifel Conference, November 18, 2024}