Rani Therapeutics Holdings, Inc. (RANI) Earnings Call Transcript & Summary

Good afternoon. Welcome to Needham's Annual Healthcare Conference. I'm Serge Belanger, one of the health care analysts at Needham. And we're happy to have this afternoon for our next session, Rani Therapeutics. We have a lot of team members here. I think the CEO, Talat Imran, will give us -- will introduce his colleagues as well as give us an overview of the company. We'll then proceed to some Q&A. And for those listening online, you do have the option to submit questions through the portal. We'll be checking that as we proceed with the Q&A portion. So I'll hand it over to Talat to -- with the overview.

Great. Thank you so much, Serge, and thank you to Needham for allowing us the opportunity to present at the conference. I'm going to pull up the deck now, and hopefully, you're able to see this. Does that look good?

Yes, looks great.

Okay, great. So -- to get started, I'll just -- quick intro on myself, and I'll give a little background on our -- my team members who joined me here. I'm the -- my name is Talat Imran. I'm the CEO of Rani Therapeutics. Background is in venture capital. I joined Rani as the CEO last summer, just prior to helping take the company public. And previously, I served as Head of Strategy at Rani. Mir Hashim, our CSO, is joining today's presentation and he'll go through some of our preclinical and clinical data. And Svai Sanford, our CFO, will be on as well -- or is on as well to answer any questions around our financial plan. So I'm going to jump right into it and start with the corporate summary. Rani Therapeutics is a clinical-stage biotech, and we're taking injectable biologics and turning them into pills. This is not a new idea. There have been many attempts that preceded us. We characterize them primarily as chemistry-based approaches where excipients are added to the biologic. Typically, in the past, it was peptides to enhance absorption or avoid the degradation that's inherent with trying to dose a biologic orally or got evolved to break down biologic material into nutrition so that you don't absorb a virus, for instance, through your gut and it's very good at doing so. So the prior attempts had absorption rates or bioavailability on the order of 1% or less with commensurately high variability which isn't really a recipe to get products approved. We've taken a completely orthogonal approach, which I'll walk you through in subsequent slides. As I mentioned, we are a clinical-stage company. We completed one Phase I with octreotide, RT-102, in 2019. And we're back in the clinic now as of March of '22 with PTH(1-34) for the treatment of osteoporosis. We have some other exciting updates to share, and we'll do that through the course of the presentation. So I think framing is helpful because what we're doing is so different than what many of you may be used to seeing in a traditional biotech. But the reason that this is such a big issue is that patients -- it says here patients prefer pills. I would say patients detest injectables. That's what this market research has shown. We had a third-party survey commissioned, and we asked about 100 subjects per -- for Simponi to the right. And I think it was 250 or more in each of these categories for Lantus and Humira. Would you rather take a daily pill or your current injection regimen? And as you can see here, there are injection regimens from daily, all the way to once every 6 months. And what's fascinating at least for us is that even for a drug like Prolia, which is a dosed once every 6 months, 76% of those patients said they'd rather take a pill every single day. So there's an enormous pull, if you will, towards oral, but there really aren't any alternatives in the market or virtually none, and in most biologic categories, none. So this is all academic, of course, if you can't actually solve the problem and deliver a biologic orally. I'm going to walk you through how we are addressing this. So hopefully, you can see the animation. I'll walk us through it here. So here, you're going to see a patient swallow a RaniPill capsule. I'll pause here. It has a -- the capsule has a pH-sensitive enteric coating on it that doesn't dissolve until you get to a pH of about 6 or 6.5 and stay there for a sustained period of time. The stomach has a pH of between 1 and 4, so the capsule will bounce around unharmed in the stomach and then ultimately exit into the gut. When the capsule gets to the upper jejunum portion of the small intestines, it dissolves, which you'll see here. And it exposes a little plastic bag. And on the right side of that bag is an olive color disc. This disc is a dissolvable pinch valve that separates the bag into 2 compartments. And on either side of the valve are 2 reactants, potassium bicarbonate and citric acid, which are essentially Alka-Seltzer. And when the valve dissolves, they mix together and they produce CO2 gas, which is the energy source for this swallowable auto-injector. So that little plastic bag is actually a deflated balloon. The balloon expands due to the CO2 gas. I'll pause again. The balloon is longer than it is tall. So it's self-orients along the axis of the intestine. So that's important because inside of the balloon is a syringe and inside of that syringe is a needle or a dart. And this is made of a dissolvable polymer. It's also hollow. You can't see it here, but there's micro tablet of whatever drug we want to deliver inside of the lumen of the needle. When the balloon gets a sufficient pressure, this piston here inserts the needle into the wall of the small intestines. There are no sharp pain receptors in the gut, so you don't feel the injection. And we have confirmed this in our first Phase I, and hopefully, we'll show that again with our -- the one we're currently in. And the balloon itself immediately deflates and is passed out. The only thing that's left behind, in fact, is the needle itself. Now you can see it in the see-through view. The needle material is dissolvable. It dissolves in less than 10 minutes, and then the drug micro tablet is taken up immediately thereafter. So as I said, this is really a swallowable auto-injector injecting through the gut instead of subcutaneously, and it's why we're getting the kind of data that we're getting. I'm sure there are a lot of questions on this. Happy to answer them when we get through to the Q&A portion. So what are the implications of this? I think, first and foremost, it's that -- our approach is completely agnostic to payload. We have demonstrated in a preclinical setting the delivery of multiple peptides, monoclonal antibodies and even a large protein. And we're getting -- because it's an injection, we're getting absorption rates that rival a subcutaneous injection. We also have, at this point, over 160 issued or allowed patents and another 100 in process. We've really pioneered this concept of a swallowable auto-injector, injecting anywhere along the gastrointestinal tract. The first-generation RaniPill could deliver up to 3 milligrams, and that enables a number of drugs to be delivered. But we're excited to share a breakthrough. We mentioned this in a press release earlier this year that we have developed a high-capacity version of the RaniPill, the RaniPill HC, that can deliver up to 20 milligrams of drug. So it's a 6.5-plus fold increase in the capacity in one of these pills, and that means that virtually all monoclonal antibodies that are delivered for immunology, many that are used in oncology and many proteins and antibodies that are used for rare disease applications would potentially fit in RaniPill. So we're very, very excited about this and the implications. In terms of what we're working on right now, our current pipeline, I mentioned octreotide and PTH for OP. We are focused on drugs that are well characterized, already approved and off patent for our internal program development. We didn't want to layer drug risk on top of our platform development risk. And so that's been the strategy there. There are, obviously, as you can tell from this technology many opportunities for collaboration in a number of indications. We expect to be doing that in the future, but our primary focus is on our internal pipeline. And as a newly public company, one of the things that I'm really excited about with this is that there's a real opportunity here for steady cadence of catalyst events to come out of these programs. We're planning 2 Phase Is for this year, 2 Phase Is for next year, and we'll layer in a repeat dose study and Phase II potentially in 2023. So with that, I'm going to turn it over to our CSO, Mir Hashim, to walk you through our preclinical and clinical experience.

Thank you, Talat. So let me start by summarizing our preclinical and clinical experience to date, which is shown here on the slide. Preclinically, we have tested 10 molecules. Our main model that we use is awake dogs, although we have used anesthetized juvenile pigs in the past. And we have taken 4 antibodies, 5 peptides, 1 large protein, as Talat indicated, through these studies. And in all of these studies, we have found -- and these are single and repeat dose studies, found no serious events to date and consistently high bioavailability comparable to parenteral injections. On the clinical side, we have assessed 3 molecules in clinical studies, in healthy volunteers. The first of this, the RaniPill platform-only study, and the second study listed here, the Phase I study with RT-101, these are actually published and this publication came out last year and is available. But I'll take you through the highlights of those findings. And the Phase I study with RT-102, our treatment for osteoporosis is under way. In addition, we have done 3 studies in humans using a very clever approach to mimic the RaniPill route of administration using injections directly into the intestinal wall with these approved drugs because as Talat indicated, we are working with approved drugs and using an endoscopic approach. And I'll share some of these data with you. This really enables us to further get an early read on what the PK is going to look like before we actually embark on the full Phase I study. So here, let me start by summarizing for you the first study that we did in humans back in 2018. In this, the device did not contain a drug or a needle. Our objective here was to really get an idea of the safety and tolerability of the device, and also we wanted to see if food would have any effect on the deployment and functionality of the device. And we had 2 groups, fed and versus fasted. We found to our gratification that there were no issues whatsoever. All subjects were able to swallow the pill, able to pass the capsule remnants, importantly had no sensation during deployment, and there was no difference in the deployment times between the fed and the fasted groups. Armed with these data, we proceeded to actually do a full-fledged Phase I study with our first lead molecule, RT-101, which is the RaniPill containing octreotide. The dose of the drug was about 100 micrograms, but we have 3 treatment arms, and this was our first study and they all were identical in every respect to 3 arms, except that we had RaniPill device balloons that were of incremental sizes, small or medium and the large. We wanted to see which one would give us the best success rates. And so that was a separate objective. So the primary objective was the safety and tolerability, and the secondary objective in a small group of these subjects, we did a full PK profile alongside IV in order to gauge the exact bioavailability of the drug that was delivered by the RaniPill capsule. Our Phase I primary end points were fully met. The subjects had no difficulty swallowing. The remnants passed out as predicted. Very importantly, there was no sensation whatsoever on needle deployment and injection as we had predicted because there are no sharp pain receptors in the gut. And so this was -- all our primary end points objectives were met. No adverse events noted. The secondary objective was also very well met. As you can see here from this picture, this is a graph showing the full pharmacokinetic profile of the RaniPill, and it's in order to gauge bioavailability. We ran an IV arm, which is the -- how absolute bioavailability is calculated. And you can see that we obtained absolute bioavailability of 65%. And this is again for context, others before us have managed to get at best 1% or less and that too with small peptides. So as I indicated, we have generated additional data in humans using some of the pipeline drugs. And this is an approach that we figured out that because we are able to reach endoscopically into the gut wall and inject the drugs, we were able to get the pharmacokinetics of these delivered by the RaniPill route of administration. So in the very first slide, we'll show you how this actually shows the validation of this technique. What you're looking at here in purple are the data that we generated from the Phase I study that I just showed you. And overlaid on that are the jejunal wall injection data with Sandostatin, which is the approved octreotide formulation, and you can see how they are sitting on top of each other. The other point I would like to actually note here is that our RaniPill contained the RT-101, the -- our modified drug with our solid dose formulation. And what it tells you also is that despite all of that changes, it is identical to the commercial formulation. Here are some more examples. Here is peptide, exenatide, that was again delivered through the endoscopic approach. In this case, it does a crossover design. The same 5 subjects, after a washout period, received -- the IJ stands for intrajejunal injection. And you can see the PK profiles are very, very similar and comparable. And last, but not least, here's 2.5 milligrams of -- and there's a reason why it's 2.5 milligrams, I'll tell you, of Humira being delivered endoscopically in humans. And you can see that there are subtle differences in the absorption profiles. Early phases, but overall, they are very, very similar, the PK profiles. And we've found this consistently for long half-life drugs. They rival the subcu route in terms of bioavailability. And this, we actually determined in a dog study. The canine model is a very good predictive model. And in the next slide, I'll show you this -- completion of this whole equation was done here in the canine model. We are repeating the 2.5 milligrams of the adalimumab dose here. And the reason why it was 2.5 milligrams, as I indicated, is now we're using the RaniPill to deliver this. These are animals that were given the oral RaniPill, all swallowed, and we tracked them for 14 days. And you can see the bioavailability is very, very similar, if not identical, about 50%. And the IV curve is, again, simply to determine the absolute bioavailability. And while we are on the subject for adalimumab, we -- if you recall, we just recently announced the -- our next version of the RaniPill, high-capacity RaniPill, we call it RaniPill HC, and here you see the demonstration of its capability. We used this to deliver 18 milligrams of adalimumab, and you can see the curve there. And below that, are the curves of 2.5 milligrams and 5 milligrams that we had generated earlier with the current RaniPill, which has a top capacity of 3 milligrams, the 5 milligrams we obtained by giving 2 pills to the animals. And you can see a very nice dose proportional increase and very linear progression in the pharmacokinetics. And here, now I'm going to highlight a couple more of our product line projects, RT-102 and RT-110. Both of these utilize the truncated version of parathyroid hormone, PTH(1-34), but it's used in 2 very different indications, osteoporosis and hypoparathyroidism and they might as well be 2 different drugs, the way they are formulated and delivered. In the case of osteoporosis, what you need is what's shown on the right data that we obtained in the pig, a very short steep rise pulse and then it has to leave the system very rapidly. This is the pulse that gives the bone growth. If you get a long tail, you'll actually get calcium resorption away from the bone. So this -- we are pleased that we are able to replicate this profile beautifully with our RaniPill. In the case of hypoparathyroidism, what is needed is exactly the opposite. You need a sustained long exposures, 24x7 exposure, and for that we are developing a long-acting formulation that will provide those exposures for the treatment hypoparathyroidism. So now as Talat indicated, currently, we are in the midst of the next Phase I study. This is our lead RT-102 program for osteoporosis and happy to report these -- the study design is shown here on the slide. We are looking at 55 healthy women volunteers who will look at various doses of the RT-102, a dose range or 20 to 80 micrograms, and we have initiated the study. Several subjects have already been successfully dosed, and we expect the top line readouts in the other half of this year -- later half of the year. So I will turn it back to Talat.

Yes. Thank you, Hashim. I appreciate it. So I'm going to just wrap up with a couple of slides here. We get a lot of questions around our regulatory strategy and what is the regulatory regime for a product like this. It is a combination product with the primary mode of action being the drug. So virtually all of the programs that we currently have under development will go to SEDAR. These are in the path, whether it's a 505(b)(2) or BLA, will depend on which drug and the size of the molecule. So indications are with a drug like octreotide, it will likely be a 505(b)(2). In addition to our drug clinical studies, we are also running device-only studies to demonstrate the safety and tolerability of the platform, irrespective of the drug being delivered. And those will go into a master file that will be referenceable by our drug programs. So that's what the plan is here. This is part of the reason we have started with the drugs that are well characterized and already approved so that we can make use of the safety data and have a good sense of what the dosing should be so we can move as quickly as possible. Ultimately, this will look similar, whether it's a life cycle management or a follow-on versus a new chemical entity, though those programs will take longer as NCEs do. And just to wrap up here, as a reminder of our near-term milestones. As Hashim mentioned, we have the RT-102 program readout planned for the second half of this year. We're planning on running a second Phase I with growth hormone for the treatment of growth hormone deficiency, 2 more Phase I next year. And we will be going back to the FDA later this year with our RT-102 program to get some clarity on what a Phase II would look like, and we'll obviously update everyone once we have that guidance. In terms of our cash position, we have cash all the way through the end of 2023. So we're in a great position from that perspective. And we may raise money again later this year after we have a data readout with RT-102, for instance. So with that, I'm going to stop and turn it back over to Serge.

Great. Well, thanks for the overview. Clearly, this is a very nifty and unique technology and drug delivery platform. Can you talk a little bit about the -- how the FDA -- well, how they laid down the regulatory and development pathway for your products? So do you expect that you never really have to run kind of typical prospective Phase III program for any of these molecules or products?

When you say prospective, you mean -- sorry, go ahead.

Typically, the FDA required 2 separate Phase III trials.

Yes. Okay.

It sounds like it's little abbreviated path here because it's more of a bioequivalent pathway than what we typically see, right?

That's correct. We would -- the typical 2 Phase III, for these particular drugs, should not be the case. We are -- for some of the drugs, we will have to run a Phase III and there may be an efficacy end point. In other cases, we may potentially be able to push for bioequivalency. You could see with RT-102, the PK curves look virtually identical. We need to demonstrate that in humans, but I will caution that this is a novel route of administration. So the expectation -- our expectation is the FDA will have some questions around that. But this is nowhere near a full-blown new chemical entity development program. There's lots of safety questions that have been answered already for these drugs.

Okay. And then between 101 and 102, should we think of these -- these are going to be products going to be dosed on an oral basis -- oral daily basis, is that how we should think about it?

That's a great question. Yes. Sorry, go ahead. Was there another one?

I'll let you answer that.

Okay. So if you recall, the patient preference slide that I had at the beginning of the deck, we actually ask -- we only put one row in there, but we ask patients would you rather a pill every day, 1 pill per cycle, a week's worth of pills depending on their current injection regimen. And they didn't care. The net-net of it was that daily dose is fine. And from a PK perspective, it is really ideal because one of the things that's lost, this is not just preference or convenience, with monoclonal antibodies, in particular, that are infrequently dosed, the longer the time interval between doses, the higher the peak to trough variability is. And with a daily oral, you can either tune it so that you get a higher average concentration if you want that for efficacy or a lower average concentration to avoid AEs. So there's a real benefit to daily dose. And from our research, the patients have no problem with it.

Got it. So the new high-capacity pill that you recently unveiled, would that also be a once-daily product or it allows you to address molecules that are larger peptides, larger antibodies?

Yes. The expectation is even that will be daily dose. You are correct in the implication that there are a number of the smaller drugs -- smaller dosed drugs, I should say, that you could fit all of like a week-long half-life drug in a single pill. But the utility, I think, for the patient in most cases, is best served by doing it in a daily dose.

Got it. And then I think you mentioned you're expecting a readout later this year. I assume this is the Phase I for the 102 program?

That's correct. Exactly.

And what would you view a positive outcome for that study when it reads out?

Sure. If we're testing multiple doses between 20 micrograms and 80 micrograms, and we want to see some similarity between that and the subcutaneous control. If we're demonstrating that and we've done some other work on potentially the PD effects in a preclinical setting, that combined story should give us a lot of confidence and hopefully investors as well on how this program would look into a Phase II or a Phase III.

And the next step would be similar to 101, a repeat dose study would follow?

That's correct. That's the plan. Yes.

And well, I guess, the repeat dose study that's getting underway later this year for 101, just maybe describe the -- I'm sure you won't give the details until it actually launches, but maybe just give us some broad outlines of what that study looks like?

Yes. So just to clarify, the repeat dose study that's sort of the gate there with the RT-101 is going to be the study without a drug in it. So we will do a device platform only. What we're doing with RT-101 in the meantime is we are reformulating the octreotide into a sustained release, as Mir Hashim, our CSO, was mentioning with RT-110, which is a sustained release version of our RT-102. We're doing a similar thing with RT-101 so that the product profile looks more like Sandostatin LAR.

Okay. And then you talked a little bit about the DIP, obviously, running on technology. And I assume there'll be IP for each individual product as a method of use or other composition?

Yes. So we have filed patents on the combination of our platform and specific drugs and the PK profiles that you can achieve with that. We've -- many of those have been issued. And then, of course, there's the patent protection of the platform itself, which -- it's not easy to do this. So that affords a lot of not only differentiation but protection.

Obviously, this is a platform, I think, that outside partners would be very interested in. I think you mentioned there's 2 existing partnerships for programs that are at the preclinical stage, I believe?

That's correct. So those are with Novartis and Changchun GeneScience, correct.

And the plan is to continue expanding that aspect of the company strategy?

Absolutely. And particularly now that we have the RaniPill HC, there are many, many more drugs and just by virtue of what those drugs are a number of them are still on patent. The inbound interest we're getting around these is really -- it's dramatically gone up because of the RaniPill HC. And I think we're looking at whether it's life cycle management, novel products and even some additional categories beyond proteins, peptides, antibodies looking at oligonucleotides as an example, mRNA therapies, these have been some of the inbound interest that we've gotten that I think will take seriously.

Well, like I said earlier, I think this is a really exciting and unique technology. So we look forward to seeing the additional clinical results later this year. So I want to thank you for spending time with us this afternoon. I think it was a great overview.

Yes. I really appreciate it, Serge. Thank you on behalf of the team for the time and for all the questions. Great.