Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) Q4 2022 Earnings Call Transcript

Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) Q4 2022 Earnings Call Transcript March 22, 2023

Operator: Hello, and welcome to Rani Therapeutics Fourth Quarter and Full Year 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are a in a listen-only mode. Following management’s prepared remarks, we’ll hold a Q&A session. To ensure that we have ample time to adjust everyone’s questions during the Q&A session, we’ll ask for a limit of one question and one follow-up question per person. As a reminder, this call is being recorded today Wednesday, March 22, 2023. I’d now like to turn the conference over to Laurence Watts of Gilmartin Group. Please go ahead, sir.

Laurence Watts: Thank you, operator. Joining us on the call today from Rani Therapeutics’ are Chief Executive Officer, Talat Imran; Chief Financial Officer, Svai Sanford and Chief Scientific Officer, Mir Hashim. During this call, management will make forward-looking statements that are subject to risks, uncertainties and assumptions such as but not limited to, those discussed in the risk factor section of the company’s filings with the Securities and Exchange Commissions including its annual report on Form 10-K and quarterly reports on Form 10-Q, which identify the specific factors that may cause actual events or results differ materially from those described in these forward-looking statements. These things may include without limitation statements regarding product development and clinical trials, product potential, device progress and performance, potential impact on patients, the regulatory environment, manufacturing progress, certain business strategies, capital resources or operating performance.

Actual results and the timing of events could differ materially from those projected in such forward-looking statements. With that, I’ll turn the call over to Talat Imran, Chief Executive Officer of Rani. Talat?

Talat Imran: Thank you, Laurence. Good afternoon everyone and thank you for joining our fourth quarter and full year 2022 financial results conference call. I’m delighted to share the highlights of Rani Therapeutics’ strong performance in 2022, during which the company achieved numerous milestone in the progression of its pipeline program and improvements in device performance. I would like to start by reviewing the important milestones that Rani achieved throughout the year. Last year, we made significant enhancements to the RaniPill platform highlighted by the unveiling of our high capacity RaniPill HC device and continued improvement in both the manufacturer and performance of our RaniPill GO device. In February of 2022, Rani announced the development of the RaniPill HC capable of administering 500% plus higher payloads than our standard RaniPill GO.

While the RaniPill GO is designed to deliver drugs with a daily dose of up to 3 milligrams, the RaniPill HC can potentially deliver up to 20 milligrams per pill. We are currently in preclinical studies with the RaniPill HC. Importantly, with this new device, we now have the potential to target a much larger market of molecules such as pembrolizumab, etanercept, trastuzumab and secukinumab. Concurrent with the development of the RaniPill HC, we have continued to make improvements in the development of the RaniPill GO, which is being utilized across our current internal development pipeline. We have progressed our manufacturing scale up and automation efforts and I’m happy to report that we are now capable of supporting a Phase 2 program in the second half of this year with our current manufacturing line.

We also plan to support three additional Phase 1 clinical studies of other pipeline programs concurrently in 2023. In addition, several but important improvements in our manufacturing processes resulted in our latest iteration of the RaniPill GO achieving a 92% drug delivery success rate in our recently completed Phase 1 study of RT-102. Beyond the improvement in device performance, the Phase 1 study of RT-102 met all of its endpoints. RT-102 delivered PTH with 300% to 400% higher bioavailability for 20 micrograms and 80 micrograms of PTH respectively when compared to 20 micrograms of Forteo delivered via subcutaneous injection. In addition, RT-102 was well tolerated and no serious adverse events were reported in the study. Of the few minor adverse events reported, all were deemed mild to moderate and resolved on their own.

The Phase 1 study results add to our robust and growing body of data supporting the safety and performance of the RaniPill. We are very pleased with the favorable safety profile demonstrated by the RaniPill Capsule to-date. We have now dosed nearly 100 human subjects in clinical studies with no serious adverse events to report. As we plan for the initiation of our first Phase 2 clinical trial in the second half of 2023, I would like to remind everyone about our recent interactions with the FDA particularly the feedback received during our pre-IND meeting for RT-102. Based on guidance from the FDA, we believe that the 505(b)(2) pathway is suitable for RT-102, our PTH analog program. We appreciate the interactions we have had to-date with regulators and will continue to take their input into account as we progress our development programs.

Photo by Emin BAYCAN on Unsplash

Turning to the development of RT-111, we were pleased to recently announce our partnership with Celltrion. Under this partnership, Celltrion will exclusively supply to Rani, the ustekinumab biosimilar drug substance, CT-P43 required for RT-111. Rani has been granted an exclusive license to use CT-P43 in the development and commercialization of RT-111. And Celltrion in turn has been granted the right of first negotiation to acquire worldwide rights to RT-111 following a Phase 1 clinical trial. We believe our partnership with Celltrion, a leader in biosimilars and biologics manufacturing, validates the strength of our RaniPill oral drug delivery platform. We are delighted to be working with Celltrion and look forward to potentially broadening our partnership overtime.

Lastly, before I turn it over to Mir Hashim to cover our preclinical and clinical data in more detail, I would like to remind you of our anticipated near-term milestone, which include initiating a Phase 2 clinical trial with RT-102 in the second half of 2023 and initiating 3 additional Phase 1 studies with pipeline molecules, RT-105 containing an adalimumab biosimilar, RT-110 containing PTH for hyperparathyroidism and RT-111 containing Celltrion’s ustekinumab biosimilar. With that, let me now turn the call over to Mir Hashim, to discuss our preclinical and clinical updates in more detail. Mir?

Mir Hashim: Thank you, Talat, and thank you everyone for joining us. Let me begin by highlighting some of the updates we have provided for RT-102, which is being developed for the treatment of osteoporosis. RT-102 is the RaniPill capsule containing PTH 1-34 also known as Teriparatide. As you all know, we initiated a Phase 1 clinical study of RT-102 in Australia in March of 2022 and released top line data for Part 1 of the study in August and Part 2 of the study in December of 2022. In Part 1 of the study, we evaluated the safety, tolerability, reliability and pharmacokinetics of RT-102 in healthy adult female volunteers at a single dose of either 20 micrograms or 80 micrograms. In Part 2 of the study, the same parameters were evaluated with repeat dosing of RT-102 at 20 micrograms for up to 7 days.

In Part 01, 15 subjects received RT-102 at a dose of 20 micrograms, while 14 subjects received RT-102 at a dose of 80 micrograms. A controlled group of 10 participants received a single 20 microgram subcutaneous injection of Forteo, which is the commercial formulation of Teriparatide approved for subcutaneous administration. RT-102 was well tolerated in both those groups and delivered PTH with bioavailability estimated to be up to three- to- four-fold higher than that of subcutaneous Forteo. There were no serious adverse events reported in the study at any dose. Now in Part 2 of the study, 10 healthy female volunteers, five of whom were postmenopausal received RT-102 20 micrograms once daily for seven consecutive days. On the seventh day, complete pharmacokinetic profiles of RT-102 were obtained for each subject.

We again observed that RT-102 was generally well-tolerated with no serious adverse events noted during the study. And in fact, none of the participants withdrew from the study due to any adverse event related to the RaniPill capsule. The bioavailability of RT-102 was high relative to subcutaneous Forteo, again confirming the data from Part 1 of the study. And importantly, as Talat indicated earlier, the overall reliability or success rate of RT-102 delivery was 92%. Additionally, we were also pleased to have received preliminary feedback and guidance from the FDA on RT-102 development plans. Overall for RT-102, we are enthusiastic about the progress we have made so far and we believe that the safety, reliability and pharmacokinetic data that we collected through both parts of the Phase 1 study support the initiation of a Phase 2 trial of RT-102 in osteoporosis, which we anticipate beginning in the second half of 2023.

Now beyond the RT-102 program, we are also pleased with our ongoing progress in the development of RT-111, a RaniPill capsule containing ustekinumab biosimilar for the treatment of inflammatory conditions. And we look forward to the initiation of a Phase 1 study for RT-111 later this year. We believe that RT-111 has the potential to make a real difference for patients by providing them with an oral alternative to the current injectable standard-of-care. Overall, we are delighted with the ongoing clinical and preclinical development of our pipeline programs, advancements in our core programs reiterate our commitment to delivering the RaniPill Capsule as an effective oral alternative that could change the treatment paradigm for the millions of patients currently taking injections for their chronic disease conditions.

Now I will turn it over to Svai to go over the financial results for the fourth quarter and year end 2022. Svai?

Svai Sanford: Thank you, Hashim, and good afternoon, everyone. In addition to the financial results summarized in our press release that was issued earlier today, I will briefly share some key financial highlights on this call. You can also find additional information on our Form 10-K for the year ended December 31, 2022. Cash, cash equivalents and marketable security as of December 31, 2022 totaled $98.5 million compared to $117.5 million as of December 31, 2021. Without additional financing we expect the current cash, cash equivalents and marketable securities to sufficiently fund our operation to mid-2024. Research and development expenses for the fourth quarter and full year 2022 were $10.4 million and $36.6 million respectively, compared to $7.4 million and $26.5 million for the same period in 2021 respectively.

General and administrative expenses for the three months and 12 months ended December 31, 2022 were $7.1 million and $26.8 million respectively compared to $5.9 million and $27.8 million for the same periods in 2021 respectively. Lastly, our net loss for the fourth quarter and full year 2022 was $17.3 million and $63.3 million respectively compared to $13.3 million and $53.1 million for the same periods in 2021 respectively. Excluding non-cash charges, primarily equity based compensation expense, the non-GAAP net loss was $13.3 million for the fourth quarter and $47.8 million for the full year 2022 compared to $10 million and $28.8 million for the same periods in 2021 respectively. This concludes my remark on the financial results. And I will now turn the call back over to Talat for closing comments.

Talat?

Talat Imran: Thank you, Svai. In closing, we are very pleased with our progress so far and look forward to maintaining our momentum in 2023. From a clinical perspective, 2023 is really going to be a year of execution for Rani and we believe that the potential milestones I have laid out could be transformative for our company. We look forward to the initiation of our Phase 2 clinical trial in RT-102 in the second half of 2023, our first Phase 2 trial as well as the initiation of three additional Phase 1 studies with pipeline molecules RT-105, RT-110 and RT-111. We have built a world class leadership team at Rani and I would like to thank everyone at the company for their efforts this past year and so far in 2023. I’d also like to thank all of our stakeholders for your continued support of Rani and for helping us move closer to our vision of making oral biologics a reality. With that, I will now open the call up for questions. Operator?

See also 18 Most Selling Phone Brands in the World and 16 Largest Pest Control Companies in USA.

Q&A Session

Operator: Our first question comes from the line of Brandon Folkes with Cantor. Your line is open.

Brandon Folkes: Hi, thanks for taking my questions and congratulations on all the progress in 2022. Maybe just firstly from me, when you sat down with the FDA, did they provide any color in terms of the safety database they may require for the RaniPill device in light of the 505(b)(2) pathway? I’ll stop there and ask a follow-up.

Talat Imran: Sure. Brandon, good to hear from you. Thank you for your question. They did not in the context of the RT-102 program, but we have had prior interactions with the FDA, where the database size was about 2,000 deployments, 40 subjects over eight weeks. It turns out that in this Phase 2, we will reach thereabouts or maybe a little bit higher. So I think we’re hopefully going to be answering that question for them as well, where we’ve decided to do it essentially concurrent with the data that we’re generating around the efficacy and biomarkers with the RT-102 program.

Brandon Folkes: Great. Thanks. And then maybe just a follow-up to that. How should we think about the size of the Phase 1 trial that you’re running in 2023, and then similarly on the RT-102 Phase 2 trial? And then maybe just focusing in on the RT-111, is that just going to be a normal Phase 1 trial or any nuances we should pay attention to there just given the Celltrion option post that? Thank you.

Talat Imran: Sure. So they will look very similar to the single dose portion of the RT-102 Phase 1. So it will be on the order of 15 to 20, maybe a little bit more in terms of the number of subjects. These are healthy volunteers, single dose. We may test with RT-111 couple of different doses just to see what the dose response curves look like similar to what we did with RT-102. But I think you framed it well. It’s going to look very, very similar. It’s become, I don’t want to say cookie cutter. Whenever you go into the clinic it’s work and you have to take it very seriously. But I think we’ve gotten relatively good at putting these together and conducting them. And I guess one last point around the Celltrion relationship. I think the expectation is similar data to what we generated with RT-102 should be sufficient to get us completed with the Phase 1 and then to the option period.

Brandon Folkes: Great. We look forward to seeing that data. And again, congrats on all the progress over the last segments.

Talat Imran: Thank you so much.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Geoff Meacham with Bank of America. Your line is open.

Hao Shen: Good afternoon. This is Hao, calling in for Geoff Meacham, and thank you for the question. So I think maybe go back to the RT-102 multiple dose trial. I think you have the sales delivery for most of patients happen in day 1 and day 2. So I just wanted to doublecheck if then any interventions happened once patients miss the sales delivery of joining that spin up?

Talat Imran: Hi, Hao. And to answer your question, no, there was no intervention, and we don’t expect there to be any. There will be some mixed doses, but we manage that through — in the case of RT-102 having significantly higher bioavailability. And if you recall from our PD preclinical study showing faster bone growth than we saw with the subcutaneous. And when you get to monoclonal antibodies on this dose here, there will be a wash because of the long half-life of the drug. And in terms of when they happened, it was completely random. I think the point is there were so few failures in that study that you can kind of look at it and say that maybe there were more at the beginning, but we don’t think it was anything more than just random chance.