Rani Therapeutics
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Rani Therapeutics’ $73M IPO will fund upcoming clinical trials
Rani Therapeutics, a San Jose-based company developing a pill to replace medical injections, went public on Friday.
According to S-1 filings, shares were estimated to price between $14 and $16 last week. On Friday, shares debuted slightly lower, around $11. Rani raised about $73 million in its debut.
Rani’s debut comes amidst a flurry of IPO activity in therapeutics. In 2020, 71 biotech companies went public. Already in 2021, 59 companies have IPO’ed, and even more are on the way. On July 30 alone, eight biotech companies were expected to begin trading, including Rani Therapeutics.
Rani Therapeutics, is, as founder Mir Imran puts it, “laser focused” on itself, rather than the IPO activity around it. The decision to go public was partially bolstered by the results of a phase I study — early evidence that the RaniPill, the company’s flagship product, could be brought into the clinic.
“We are already in humans, and clearly on a strong path to make oral biologics [a] reality. This is a hot and unique market for life science direction and we’re excited to be driving innovation in this area,” Imran tells TechCrunch.
Rani Therapeutics’ flagship product is RaniPill, essentially, a capsule designed to deliver medicines that would usually be delivered via injections. TechCrunch covered the pill in more detail here, but it works according to a few basic steps.
The pill is covered by a coating resistant to stomach acid. Once the pill enters the small intestine, the coating dissolves, allowing for a small balloon to inflate. Once that small balloon inflates, medication is delivered by a microneedle (which dissolves after the drug is administered). Then, the rest of the balloon is “excreted through normal digestive processes,” per the company’s S-1 filing.
This whole process occurs in a pill that, on the outside, looks like a gel capsule.
There is evidence for some conditions suggesting patients prefer oral drugs to injections: for example, studies on cancer patients have illuminated patient preference for oral therapies rather than regular injections. That’s not the case for every condition. Some patients show preference to long-acting medicines delivered via injection rather than having to take lots of pills (this is the case for some HIV patients).
However, it’s fair to say that needles aren’t exactly pleasant. A 2019 review and meta analysis of 35 studies found that between 20% and 30% of young adults are afraid of needles, a fear that can lead some people to avoid medical treatments or vaccines.
Rani Therapeutics has been developing capsules for drugs that have already been approved by the FDA, but are often administered via regular injections. They include:
- Octreotide for acromegaly or neuroendocrine tumors in the GI tract (NETs)
- TNF-alpha inhibitors for psoriatic arthritis
- Parathyroid hormone (PTH) for osteoporosis
- Human growth hormone (HGH) for HGH deficiency
- Parathyroid hormone for hypothyroidism
The product furthest along in the research cycle is the pill developed to administer octreotide (called RT-101), which was tested in a phase I clinical trial on 62 participants. The trial results, partially reported in the S-1 filing, showed 65% bioavailability of the octreotide drug, compared to an injection. That suggests that the pills can get the drugs into the body efficiently, though these results are early.
Next year, the company plans to initiate two additional Phase I studies on PTH for osteoporosis, and human growth hormone. Studies on the rest of the drugs in the pipeline are scheduled for 2023.
Ultimately, the company’s goal is to validate the RaniPill independently of specific drugs. The company is pursuing an Investigational Device Exemption (IDE), which would allow the company to test RaniPill in a clinical study without a drug involved. This study aims to establish how safe the product is for repeated dosing, and is slated to begin next year.
“I think we want to continue to generate data with drugs, because we will be making drugs. But nonetheless, it’s important to establish what the platform’s safety and tolerability is,” said Imran. So that’s quite important as well.”
The company’s leadership does have a track record of successful exits in the biotech space.
Rani Therapeutics was founded in 2012 by Mir Imran, who has already overseen several exits and acquisitions of medical device companies. In 1985, Imran developed an implantable cardiac defibrillator as part of his first company, Intec Systems, which was later acquired by Eli Lilly. Since, he has started 20 medical device companies, of which 15 have either IPOed or been acquired.
However, for now, Rani Therapeutics financials report significant losses. Net losses for 2019 and 2020 totaled $26.6 million and $16.7 million, respectively. As of March 2021, the company was running a deficit of $119.6 million.
In total, the company has raised about $211.5 million in funding since inception, without counting cash generated from today’s IPO. Rani Therapeutics has plans to use the $73 million raised during the IPO to fund the IDE study and pursue additional clinical trials.
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How Rani Therapeutics’ robotic pill could change subcutaneous injection treatment
A new auto-injecting pill might soon become a replacement for subcutaneous injection treatments.
The idea for this so-called robotic pill came out of a research project around eight years ago from InCube Labs — a life sciences lab operated by Rani Therapeutics Chairman and CEO Mir Imran, who has degrees in electrical and biomedical engineering from Rutgers University. A prominent figure in life sciences innovation, Imran has founded more than 20 medical device companies and helped develop the world’s first implantable cardiac defibrillator.
In working on the technology behind San Jose-based Rani Therapeutics, Imran and his team wanted to find a way to relieve some of the painful side effects of subcutaneous (or under-the-skin) injections, while also improving the treatment’s efficacy. “The technology itself started with a very simple thesis,” said Imran in an interview. “We thought, why can’t we create a pill that contains a biologic drug that you swallow, and once it gets to the intestine, it transforms itself and delivers a pain-free injection?”
Rani Therapeutics’ approach is based on inherent properties of the gastrointestinal tract. An injecting mechanism in their pill is surrounded by a pH-sensitive coating that dissolves as the capsule moves from a patient’s stomach to the small intestine. This helps ensure that the pill starts injecting the medicine in the right place at the right time. Once there, the reactants mix and produce carbon dioxide, which in turn inflates a small balloon that helps create a pressure difference to help inject the drug-loaded needles into the intestinal wall. “So it’s a really well-timed cascade of events that results in the delivery of this needle,” said Imran.
Despite its somewhat mechanical procedure, the pill itself contains no metal or springs, reducing the chance of an inflammatory response in the body. The needles and other components are instead made of injectable-grade polymers, that Imran said has been used in other medical devices as well. Delivering the injections to the upper part of the small intestine also carries little risk of infection, as the prevalence of stomach acid and bile from the liver prevent bacteria from readily growing there.
One of Imran’s priorities for the pill was to eliminate the painful side effects of subcutaneous injections. “It wouldn’t make sense to replace them with another painful injection,” he said. “But biology was on our side, because your intestines don’t have the kind of pain sensors your skin does.” What’s more, administering the injection into the highly vascularized wall of the small intestine actually allows the treatment to work more efficiently than when applied through subcutaneous injection, which typically deposits the treatment into fatty tissue.
Imran and his team have plans to use the pill for a variety of indications, including the growth hormone disorder acromegaly, diabetes and osteoporosis. In January 2020, their acromegaly treatment, Octreotide, demonstrated both safety and sustained bioavailability in primary clinical trials. They hope to pursue future clinical trials for other indications, but chose to prioritize acromegaly initially because of its well-established treatment drug but “very painful injection,” Imran said.
At the end of last year, Rani Therapeutics raised $69 million in new funding to help further develop and test their platform. “This will finance us for the next several years,” said Imran. “Our approach to the business is to make the technology very robust and manufacturable.”
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