Rani Therapeutics Holdings Inc (RANI) 2023 Q4 法說會逐字稿

Welcome to the Rani Therapeutics fourth-quarter and full-year 2023 financial results and corporate update conference call. (Operator Instructions)

As a reminder, this call is being recorded today, Wednesday, March 20, 2024. I would now like to turn the conference call over to Kiki Patel at Gilmartin Group. Please go ahead.

Thank you, operator. Joining us on the call today from Rani Therapeutics are Chief Executive Officer, Talat Imran; VP of Clinical Development, Arvinder Dhalla; and Chief Financial Officer, Svai Sanford.

During this conference 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 Factors section of the company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K, and quarterly reports on Form 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements.

These statements may include, without limitation, statements regarding product development and clinical trials, product potential, market sizes, platform progress, platform potential, certain business strategies, capital resources, financing plans, or operating performance.

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

Thank you. I'm delighted to share the highlights of Rani Therapeutics' strong performance in 2023, during which the company achieved numerous milestones in the development of its pipeline programs and high-capacity oral delivery device.

Rani Therapeutics is a clinical-stage biotech company that has developed a platform technology for the oral administration of biologics, with bioavailability comparable to subcutaneous injection.

The RaniPill platform is designed to address any therapeutic area where biologics are used. Our current focus is on immunology and endocrinology with discovery efforts underway in obesity, and other therapeutic areas and drug modality.

During today's call, I will start by reviewing the important milestones that Rani has achieved throughout the past year. Then Arvinder will provide her perspective on the recent data we shared last month on RT-111. We are highly encouraged by this data, and this is now our third successfully completed Phase 1 trial using our RaniPill technology.

And then finally, Svai will provide an update on our financial position for the fourth quarter and full year 2023. I will now begin the call by highlighting one of our biggest achievements over the past year, and that is our positive Phase 1 results for RT-111, an orally administered ustekinumab biosimilar. As a reminder, that ustekinumab biosimilar used in RT-111 program is supplied by Celltrion, a global biopharmaceutical company.

Rani and Celltrion entered into a long-term supply agreement at the beginning of 2023. This partnership was expanded to include an adalimumab biosimilar in the middle of 2023. In both cases, Celltrion has the right of first negotiation to acquire commercial rights to each program after the completion of the respective Phase 1 studies.

Last month, we announced positive results of the completed Phase one trial for RT-111. We were very excited by those results, as RT-111 achieved high bioavailability in humans. In addition, it was well-tolerated with no serious adverse events.

We believe this is a large potential opportunity as currently seeking ustekinumab is only available as a subcutaneous injection, and is marketed in the United States by Janssen as Stelara for the treatment of moderate to severe plaque psoriasis, active psoriatic arthritis, moderate to severe Crohn's disease, and moderate to severe ulcerative colitis, all of which have large unmet medical needs for an oral treatment.

As for the potential commercial opportunity, sales for Stelara were approximately $7 billion in the United States and approximately $10.9 billion worldwide in 2023.

Moving on to our additional programs, Rani announced a second deal with Celltrion for an adalimumab biosimilar for the RT-105 program in the middle of last year. This was the first announced partnership for a program involving the RaniPill HC, our high-capacity device that is designed to deliver up to 200 microliters of liquid payload with high bioavailability.

Last fall, Rani announced successful oral delivery of Humira by the RaniPill HC in a preclinical study. The p reclinical study track the serum concentrations of adalimumab following the oral administration of the enteric-coated RaniPill HC capsule containing 11 milligrams of Humira, or adalimumab, to four canine models.

The RaniPill HC successfully delivered adalimumab in all subjects. Further, we have completed preclinical studies with additional antibody and peptide molecules in the RaniPill HC. Overall, we are pleased with the progress we have made to date with our high capacity pill, as we believe this will be at the forefront of our clinical development programs moving forward.

And finally, another potential area we believe our RaniPill can make an impact is the obesity market. In December 2023, Rani announced preclinical data demonstrating that the transenteric delivery of an incretin triagonist of GLP-1, GIP, and glucagon, solicited rapid weight loss in an animal study.

Preclinical data supported the potential for the RaniPill platform to enable oral delivery of multiple obesity treatments. Considering the obesity market is expected to exceed $100 billion by 2030, we are highly enthusiastic about the potential for our RaniPill to make an impact in this therapeutic area.

Overall, we believe that the progress we have made in 2023 reflects our commitment to our vision of making oral biologics a reality across a wide variety of indications.

With that, let me now turn the call over to Arvinder Dhalla to discuss our clinical update in more detail.

Thank you, Talan. Good afternoon, everyone. My name is Arvinder Dhalla. I am VP of Clinical Development at Rani Therapeutics. I'm delighted to provide a high-level overview of the exciting data from our Phase 1 study with RT-111 showing for the first time, oral delivery of a monoclonal antibody via the RaniPill.

This was a single center open label Phase 1 study of RT-111 conducted in Australia. The study evaluated the safety, tolerability, and pharmacokinetics of RT-111 in healthy volunteers.

The study enrolled 20 participants each in RT-111's 0.5 milligram and 0.75 milligram dose groups, and 15 participants in a Stelara 0.5 milligram subcutaneous injection group. In this study, RT-111 delivered ustekinumab biosimilar in a dose proportional manner.

The AUCs for the two 0.5 milligram groups were quite comparable, resulting in a bioavailability of 84% via Rani route of administration compared to the subcu group. In addition, oral RT-111 demonstrated a higher C-max and a stronger T-max compared to ustekinumab delivered by subcu injection.

Moving on to safety and tolerability, RT-111 was well tolerated by all participants in the two RT-111 groups, and no serious adverse events were observed in the study. There was no meaningful difference in the incidence of antidrug antibodies via the Rani route of delivery compared to Stelara subcu injection.

Additionally, no participants reported difficulties swallowing the RaniPills, and capsules remnants passed from all participants. Overall, we are very pleased with the data that our RaniPill delivered ustekinumab biosimilar antibody in healthy volunteers without any serious adverse events and with high bioavailability.

With RT-111, we aim to have a product that is highly differentiated as compared to other oral and injectable options currently being commercialized or in development. Whilst Stelara was disruptive when launched, its [path to 75] scores early in the treatment are not as high as more recent entrants. This is something we intend to address with the differentiated loading dose regimen for RT-111.

The reason loading dose is critical is that new psoriasis patients typically start therapy in the middle of a serious flare-up, which justifies the use of a biologic. Ultimately though most patients will transition to maintenance dosing, and after review, we believe there is a potential to improve on Stelara here as well.

We plan to explore a dosing regimen that begins with a 30-day daily loading dose, followed by just three pills at the beginning of each month for maintenance. Furthermore, currently approved oral therapies like Otezla and [sujikju] have shown lower PASI 75 scores as compared to the more recent injectable biologics.

Newer oral therapies have the potential to improve outcomes. However, those require, or are being studied for, daily or twice-daily dosing. Therefore, we believe that RT-111 has the potential to provide patients with the efficacy of a monoclonal antibody with a dosing schedule that has not been achieved by other oral therapies.

Now I would like to pass the call over to Svai Sandford, our Chief Financial Officer, to review our financials. Thank you.

Thank you, Arvinder. In addition to our financial results summarized in the press release that was issued earlier today, I will briefly share some key financial highlights on this call. You can also find additional information in our Form 10-K for the year ended December 31, 2023.

Now turning to our balance sheet. Cash, cash equivalents and marketable securities as of December 31, 2023 totaled $48.5 million compared to $98.5 million as of December 31, 2022. We expect the current cash cash equivalents, and marketable securities to be sufficient to fund our operations into 2025.

We recognize the need to raise additional capital to support our operations for 2025 and beyond. We plan to raise additional capital through equity offering, debt financing, and potential non-dilutive licensing fees from pharma partners.

For our operating results for the fourth quarter and year ended December 31, 2023, research and development expenses for the fourth quarter and full year of 2023 were $7.6 million and $39.6 million respectively, compared to $10.4 million and $36.6 million for the same periods in 2022, respectively.

We have sufficiently manage our operating costs, and even with the challenge of limited capital during 2023, we successfully completed the Phase 1 clinical study for RT-111, and significantly advance development of the RaniPill HC, which is expected to be ready for clinical study in the second half of this year.

General and administrative expenses for the fourth quarter and full year 2023 were $5.8 million and $26.5 million, respectively, compared to $7.1 million and $26.8 million for the same periods in 2022, respectively. The G&A expenses for the full year 2023 decreased by $0.3 million compared to the prior year due to our cost containment measures, and it includes noncash expenses of approximately $12.9 million for the full year 2023 compared to $9.8 million in 2022, which is primarily stock-based compensation.

Net loss for the fourth quarter and full year 2023 was $14.1 million and $67.9 million, respectively, compared to $17.3 million and $63.3 million for the same periods in 2022, respectively. Net loss includes non-cash stock-based compensation expense of $4.5 million for the fourth quarter and $19.0 million for the full year 2023, compared to $4.5 million and $15.8 million for the same periods in 2022 respectively.

That concludes the financial section, and I will turn the call back over to Talat for closing comments. Talat?

Thank you, Svai. Overall, I am exceptionally pleased by the results of our RT-111 study that Arvinder reviewed earlier. To our knowledge, this is the first clinical evidence of oral delivery of a monoclonal antibody with such high bioavailability. We believe these results provide validation that our platform can transform injectable large molecules into convenient oral pills.

In addition, we are proud to announce that we have now dosed the RaniPill over 230 times in human subjects in three clinical studies without observing any serious adverse events related to the platform. The RaniPill platform has the potential to combine the efficacy, specificity, and long half-life of a monoclonal antibody with the convenience and dosing flexibility of a pill.

The combination of the two could create products that we believe are, as of now, impossible to replicate with any other oral formulation. Rani intends to identify additional opportunities where there is a potential to create better products in terms of efficacy, safety, and/or dosing schedule as compared to the originator.

In closing, we are proud to 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 2024. 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?

(Operator Instructions)

Olivia Breyer, Cantor Fitzgerald.

Hey, good afternoon, guys. Thank you for the question. What are you guys with respect to negotiating the terms of the development path forward with Celltrion? And how are you thinking about cost sharing with a partners versus moving forward with the RT-111 program alone?

And then I've got a quick follow-up on obesity. Thanks.

Yes, great questions. Hi Olivia. So in terms of the negotiations, they're ongoing. There's not much I can say about that. We're in the middle of it. And if we were to go this alone versus doing it with a partner like Celltrion, I think in the case of a partnership, we would expect the costs to be borne by the partner going forward.

And if we were to do this by ourselves, which we would be excited to do given the color that Arvinder provided, we would look to bring in additional capital to support the program through a Phase 2 repeat dose study to show the higher PASI score in the first twelve weeks.

You have -- I apologize. Was there a follow-up question to that?

Yes, a quick follow-up question, and then I've got a question on obesity. But can you comment on whether or not they've officially opted in? Because I think that window has passed, right? That was at the end of February, if I'm not mistaken?

That's correct. I cannot comment on that, unfortunately.

Okay. And then on obesity, how big of a strategic priority is that program at this point? And just considering some of the recent developments in that space, where do you think your pill could realistically fit into that commercial market?

Yes, absolutely. So it is one of the highest priorities for us as a company, and we've been working on this for years now. Looking at potential opportunities, I think I've said publicly what we would like to do is create -- like we're doing with RT-111 -- a dosing schedule that would be very difficult to replicate with any other oral technology while getting the same kind of discontinuation rates and safety efficacy profile of the injectables.

And so to that end, we're looking at maybe one generation ahead technologies that are showing even better tolerability than the first generation strictly in the GLP, GIP, incretin drugs. And looking at dosing schedules, it could be once a month or once every couple of weeks.

And so that's the plan and the strategy around it, and it is a top priority for us. And I think what's exciting about Rani's technology is that it's broad perspective, future proof. Whether it's, as you know, muscle preservation drugs or combinations thereof, this is an oral auto-injector -- swallow auto-injector.

So it doesn't really matter. I think we've demonstrated this now over 15 drugs preclinically in three Phase 1's. It doesn't really matter what you put in a RaniPill, we should be able to deliver it with bioavailability that's similar to an injection.

Okay, great. Thank you, guys. Appreciate it. Thank you.

Edward Nash, Canaccord Genuity.

Hi, good afternoon, guys, and thanks for taking my question. Now that RT-102 is going to be entering Phase 2 this year, could you maybe just talk a little bit about the size of that trial and design?

Absolutely. I'll turn that over to -- I'm sorry, was there another question?

Oh, no. That's it.

Okay, great. Arvinder, maybe you can jump in and provide the color on RT-102?

Yes, sure, Talat. And so we're planning to do enroll 25 subjects per arm, and we plan to have two groups in the study, one for RT-102, and one we'll be using for tail as a comparator. And the study is of eight weeks of duration. And we're just going to look at the biomarkers as they correlate quite well with the of BMD.

Okay. Would that be the only Phase 2 that you would need to do before moving into a bigger trial?

No we would need to do a bigger trial. This is just sort of a dose-finding proof-of-concept type of study that we wanted to do before we do a bigger study.

Got it. Okay. Perfect. Thank you.

Thanks, Ed.

Julian Harrison, BTIG.

Hi. Thank you for taking my questions. On the obesity front, I'm wondering if you could talk more about how PK advantages enabled by RaniPill could maybe translate to potential benefit on efficacy, tolerability, or both, in the context of incretin-based therapies?

And then maybe beyond incretin-based therapies, I'm curious if you've given any thought to some of the emerging classes in obesity? Such as amylin analogs, activin receptor ligand traps, CB1 inhibitors as an example?

Absolutely. Hi, Julian. So in terms of PK safety efficacy -- and I would also add COGS in there, if I can -- in terms of efficacy, the drugs work really well. So I don't think changing the benchmark, unless you change the incretins you put into the pill or into the injectable are going to make a material difference based on the modality.

But safety and tolerability, there is a potential there. I think it was Eli Lilly with their Mounjaro data, they put out a time-based course of when the AEs popped up in patients, and it was right when they were getting a new dose. So at the beginning of a new cycle, it seemed like there was a spike in AEs that showed up.

So with the RaniPill, if you move to daily dosing in the induction phase, similar to what we're thinking about doing in the early goings of RT-111 for a patient, you can smooth those curves out so that the peaks and troughs go away, and you have a more linear progression in the escalation of the dose.

And while we don't have the data yet, we'll have to run a study with one of those drugs to find out. We feel like based on on the literature, that there's a potential to improve the tolerability of an incretin-based therapy.

So that brings us to kind of your second question, which is you look at amylin-based therapies, GLP-1's, GLP-2's, there are other things that are on the horizon or maybe right here right now showing much better tolerability, and so that's top of mind for us when we think about selecting a partner and a program to bring onto the RaniPill.

There's tremendous interest in the obesity space to use the RaniPill by a number of potential partners. And the the thing for us is to find something that works today, and will be competitive tomorrow when we're in trials, and obviously when we get to commercial.

And then finally, I think it maybe dovetails with what I just said, we are absolutely looking at the next generation. We're going to take a portfolio approach to obesity. I don't think there's going to be one drug that can address the entire $100 billion category.

And I think you'll see over time, and all of you, as analysts, will do this, you'll start to bifurcate this into subcategories of patients maybe with lower weight loss requirements, but maybe they have other adverse events.

There's the people who will self-pay. And then there's the morbidly obese, where you're competing maybe with a Roux-en-Y or gastric sleeve. And then finally, finally, I should say, I mentioned COGS. I think that what some companies are doing to make oral therapies while they generate great data, they have to increase the dose by 200x compared to an injectable.

And there's a COGS issue with that, that may be a cause in production, and it's just a waste of drug when there's so many patients that want to get onto these therapies. So I'm skeptical of those in the near term, maybe the production issues will be solved over the next four or five years, but I have a feeling that as much as we can produce as an industry of these obesity drugs, there will be patients who want to take them.

So I think there's a really good fit in this market for a RaniPill that can take an injectable dose and get injectable efficacy with dosing schedules, as I said, that you can't do with a small molecule approach with an oral.

Very helpful. Thank you.

Yes, absolutely. Thank you for the questions.

John Vandermosten, Zacks.

All right. Thank you and hello, Talan. Good afternoon. Starting out with a question on just assuming that Celltrion signs a deal with you, and then funds RT-111, how will your focus shift for the rest of your pipeline if that happens?

It's a good question. I mean, we've been talking about obesity assets. So it's hard to describe something that we don't have in the pipeline right now. But I think we are putting a lot of focus on making a selection there, and that would be a place to invest capital.

And then there's RT-105. Humira remains a very popular drug amongst clinicians and patients, and despite the biosimilars coming into the market, there's just not a lot of differentiation there.

So bringing a TNF-alpha oral in perhaps a once a week pill is something that we're thinking about in that space would be a really exciting product, I think.

Yes. As we think about RaniPill and kind of getting to the later stages -- manufacturing stages -- I know you guys were working on some some automated processes for manufacturing. How is that coming along? And will you be using that for clinical stage product?

Yes, great question.

We do need to automate, and we've made incredible strides over the last year. We have a fully dedicated in-house automation team that's taking every step of the manufacturing process for the RaniPill, and turning it into something that doesn't require an operator, that's fully automated, and then ultimately will string all of those pieces of equipment together to make a fully automated end to end line.

As I said, we've made good progress. We're shooting for a demonstration, or pilot line, that can deliver in the low thousands of pills per day. And the goal is to have this ready for our Phase 3 studies.

We don't need it for the Phase 1s and Phase 2s. We have the capacity already to support those studies, but we would like to have that in place. And then, of course, be able to work with a CD or a CMO partner that does mass scale production, and scale that up so that we can make 50,000 or 100,000 pills per day per line, which is what we'll need to do in order to commercialize any of these products.

Okay. And one more, if I may. I was doing some research on biosimilars, and I was just looking at the rate of new biosimilars that are out there. I think there were about nine approved in the last twelve months.

What do you think about the environment for more biosimilars to come? You know, it started off pretty slowly about a decade ago, especially in the US. What are your thoughts about this and kind of the maybe legislative environment for accelerated growth of biosimilars?

Right, I think that there's a couple of points here. The first is that everyone from congress to patients, clinicians, payers, should want biosimilars. Because exclusivity from patents is good because it allows for innovation, but you don't want to keep prices for an old drug high artificially forever. So we need biosimilars.

But we also need to, I think, and not just our industry, but the healthcare industry at large, needs to look at at rebates, how things are paid for. And I think the Amgen example of the two prices they gave for their Humira biosimilar and which one had uptake, says a lot about how the PBM and payer market works, or doesn't work, if I can say that.

I think that there's going to be more biosimilars coming in, but the only thing they can compete on is price. And you also see like Humira, or AbbVie making Humira unbranded, that could play well with patients and clinicians. It's really hard to say.

What I love about Rani is that we're not going to be playing even though we may use a biosimilar as our drug substance in our final drug product. We're not a biosimilars company. We're making novel products out of making biobetters, if you will, or novel products out of a biosimilar.

So dosing schedules are different. We're shooting for -- with RT-111, as an example -- getting better near term efficacy, faster PASI scores, and then potentially even elevating in the maintenance phase as Arvinder referenced the efficacy, we think there's some potential there.

So we're really looking for those opportunities, not just doing a one for one replacement where it's just a pill, though, that is profound, we think, in and of itself. So I think as it relates to Rani, that's kind of how we look at this. Whether there's more whether there's fewer, it doesn't really impact our strategy.

Okay, great. Thanks, Talat. Appreciate it.

Thanks, John.

(Operator Instructions)

I'm showing no further questions. I would now like to turn the call back over to Talat for closing remarks.

Thank you, Justin. This concludes our fourth-quarter and full-year 2023 financial results and corporate update conference call. Thank you again, everyone, for joining us this afternoon.

This concludes today's conference call. Thank you for participating. You may now disconnect.