Q4 2023 Rani Therapeutics Holdings Inc Earnings Call
Participants
Kiki Patel; IR; Gilmartin Group LLC
Talat Imran; CEO; Rani Therapeutics LLC
Arvinder Dhalla; Vice President - Clinical Development; Rani Therapeutics LLC
Svai Sanford; Chief Financial Officer; Rani Therapeutics LLC
Olivia Breyer; Analyst; Cantor Fitzgerald
Edward Nash; Analyst; Canaccord Genuity
Julian Harrison; Analyst; BTIG
John Vandermosten; Analyst; Zacks
Presentation
Operator
Welcome to the Rani therapeutics, both fourth quarter and full year 2023 financial results and corporate update conference call. At this time, all participants are in a listen only mode. (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 Keith Patel at Gilmartin Group. Please go ahead.
Kiki Patel
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 and 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?
Talat Imran
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 radical 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 Ronnie 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 one trial using our running pill technology.
And then finally, Safi 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 one results for RT-111, an orally administered seeking I-Mab 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 in Adama 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 one 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 I-Mab 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 sorry, attic 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 adalimumab, our biosimilar for the RT-105 program in the middle of last year. This was the first announced partnership for a program involving the Rani pill eight c., 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 radical HCC.
In a preclinical study. Preclinical study track the serum concentrations of aducanumab following the oral administration of the enteric-coated Ronnie pill, eight c. capsule containing 11 milligrams of Humira or at Ilim I-Mab to for canine models. The radical AC successfully delivered at Ilim I-Mab in all subjects. Further, we have completed preclinical studies with additional antibody and peptide molecules in the right people, etc.
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 writing pill can make an impact is the obesity market. In December 2023, Ronnie announced preclinical data demonstrating that the TransEnterix delivery of an incretin Tri agonists of GLP-1, GIP, and glucagon solicited rapid weight loss in an animal study.
Preclinical data supported the potential for the Ronnie pill platform to enable oral delivery of multiple obesity treats considering the obesity market is expected to exceed 100 billion by 2030. We are highly enthusiastic about the potential for our running pill 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 to discuss our clinical update in more detail.
Arvinder Dhalla
Thank you, Bill, and good afternoon, everyone. My name is Arlinda Darla. I am VP of Clinical Development at Ronny therapeutics. I'm delighted to provide a high-level overview of the exciting data from our Phase one study with RT-111 showing for the first time oral delivery of a monoclonal antibody, the other Army pills.
This was a single center open label Phase 1 study of RT001, 11 conducted in Australia. The study evaluated the safety, tolerability and pharmacokinetics of RT001 11 in healthy volunteers.
The study enrolled 20 participants each in RT001 one 11 0.5 milligram and 0.75 milligram dose groups and 15 participants in a Stelara 0.5 milligram subcutaneous injection group in this study, RD. one 11 delivered a stick and I'm a biosimilar in a dose proportional manner.
The AUCs for the two 0.5 milligram groups were quite comparable, resulting in a bioavailability of 84%. We are running out of administration compared to the subcu group. In addition, oral RP1 11 demonstrated a higher C-max and have shown or T max compared to stick and I-Mab deliver by subcu injection.
Moving on to safety and tolerability are the one 11 was well tolerated by all participants in the two RT001 11 groups and no serious adverse events were observed in the study. There was no meaningful difference in the incidence of antidrug antibodies.
The other running out of delivery compared to Stelara subcu injection. Additionally, no participants reported difficulties swallowing that only pills and capsules are imminent passed from all parties. And overall, we are very pleased with the data that are running tests delivered was to get them a biosimilar antibody in healthy volunteers without any serious adverse events. And there's 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 was the loss of a 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 a Tesla and subject to have shown lower passing 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 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 survive Sandford, our Chief Financial Officer, to review our financials. Thank you.
Svai Sanford
Thank you, our vendor. 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 31st, 2023.
Now turning to our balance sheet, cash, cash equivalents and marketable securities. As of December 31st, 2023 totaled $48.5 million compared to $98.5 million as of December 31st, 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 operation 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 31st, 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 one clinical study for RT. one 11 and significantly advance development of the Romaco AC, which is expected to be ready for clinical studies 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.
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 EUR9.8 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 noncash 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 plot.
Talat Imran
Thank you, survive. 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 variety pill over 230 times in human subjects in three clinical studies without observing any serious adverse events related to the platform. The radical 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 Ronnie 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?
Question and Answer Session
Operator
Thank you. (Operator Instructions)
Olivia Breyer, Cantor Fitzgerald.
Olivia Breyer
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 the partners versus moving forward with the RT-111 program alone.
And then I've got a quick follow-up on obesity. Thanks.
Talat Imran
Yes, great questions, 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, I think which we would be excited to do given the color that Arvin there provided, we would look to bring in additional capital to support the program through a through a Phase two repeat dose study to show the higher Apache score in the first 12 weeks.
You have -- I apologize. Was there a follow-up question to that?
Olivia Breyer
Yes, a quick follow-up question, and then I've got a question on obesity, but I'm can you comment on whether or not they've officially opted in because I think there was that window has passed, right? That was at the end of February, if I'm not mistaken?
Talat Imran
That's correct. I cannot comment on, unfortunately.
Olivia Breyer
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?
Talat Imran
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. And 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 GLPGIP. 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 Ronnie's technology is that it's for our perspective future proof, whether it's, as you know, muscle preservation drugs or combinations thereof, this is an oral auto-injector, swallow the auto-injector. So it doesn't really matter. I think we've demonstrated this now over 15 drugs preclinically in three Phase ones. It doesn't really matter what you put in a running till we should be able to deliver it with bioavailability. That's similar to an injection.
Olivia Breyer
Okay, great. Thank you, guys. Appreciate it. Thank you.
Operator
Edward Nash, Canaccord Genuity.
Edward Nash
Hi, good afternoon, guys, and thanks for taking my question. Wanted to know that one oh two is going to be entering Phase two this year. Could you maybe just talk a little bit about the size of that trial and design?
Talat Imran
Absolutely. I'll turn that over to Arvinder. Was there another question? but that's okay. Great. Arvinder, there maybe you can jump in and provide the color on RT. wanted to change that.
Arvinder Dhalla
And so we're planning to do enrolled 25 subjects per arm, and we plan to have two groups in the study, one for RT. one and two and one for we'll be using for tail as a comparator. And the study is done of eight weeks of duration. And we're just going to look at the biomarkers that because as they correlate quite well with the of BMD.
Edward Nash
Okay.
Would that be the only Phase two that you would need to do before moving into a bigger trial, we would need to do a bigger trial.
Arvinder Dhalla
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.
Edward Nash
Got it. Okay. Perfect. Thank you.
Talat Imran
Thanks, Ed.
Operator
Julian Harrison, BTIG.
Julian Harrison
Thank you for taking my questions. On the obesity front. I'm wondering if you could talk more about how PK advantages enabled by Randy pill could maybe translate to potential benefit on efficacy, tolerability or both in the context of increasing base therapies and then maybe beyond increasing base therapies. I'm curious if you've given any thought to some of the emerging classes in obesity such as insulin analogs, activin receptor ligand traps, the CB1 inhibitors as an example?
Talat Imran
Absolutely. Hi, Julian. So in terms of PK safety efficacy. And I would also add COGS in there, if I can add in terms of efficacy, the drugs work really well. So I don't think changing the benchmark unless you change the breadth, 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 that I think it was Eli Lilly with their majority data. They put out a time-based course of when the AE.s 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 runny pill. If you move to daily dosing in the induction phase, similar to what we're thinking about doing in the early goings of RT. one 11 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 GLP-2, is there 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 running pill.
There's tremendous interest in the obesity space to use the running pill by 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 200 x 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 runny pill that can take an injectable dose and get injectable efficacy with dosing schedules.
As I said, that you can't do with it and with a small molecule approach with an oral.
Julian Harrison
Very helpful. Thank you.
Talat Imran
Yes, absolutely.
Operator
John Vandermosten, Zacks.
John Vandermosten
All right. Thank you.
And hello, good afternoon. Starting out with a question on just assuming that Celltrion signs a deal with you and then funds one one one, how will your focus shift for the rest of your pipeline if that happens?
Talat Imran
It's a good question.
I mean, we've been talking about OBC 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, I'm making a selection there, and that would be a place to invest capital. And then there's our Tier one oh five. 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 TNF-alpha oral in perhaps a once a week pill is something that we're thinking about in that in that space would be a really exciting product, I think, yes, as we think about money pill and kind of getting to the later stages of manufacturing stages.
John Vandermosten
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 four clinical stage product?
Talat Imran
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 running pill 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, and that can deliver in the low thousands of pills per day.
And the goal is to have this ready for our Phase three studies. We don't need it for the Phase ones and Phase twos. 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 with a CD or a CMO partner that does mass scale production and scale that up so that we can make 50 or 100,000 barrels per day per line, which is what we'll need to do in order to commercialize any of these products.
John Vandermosten
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 12 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?
Talat Imran
Right.
I think that there's a couple of points here. The first is that everyone in 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, as and not just our industry, but the health care industry writ 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 Humira for their Chimera biosimilar and which one had uptake. It 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, Ronny 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 our Q1 11, as an example, getting better near term efficacy, faster, Pasi scores and then potentially even elevating in the maintenance phase as Arvin their reference of 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 a profound, we think, in and of itself. So I think as it relates to Ronnie, that's kind of how we look at this, whether there's more whether there's fewer, it doesn't really impact our strategy.
John Vandermosten
Okay, great. Thanks a lot. Appreciate it.
Talat Imran
Thanks, John.
Operator
(Operator Instructions)
I'm showing no further questions. I would now like to turn the call back over to Talat for closing remarks.
Talat Imran
Thank you, gentlemen. 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.
Operator
And this concludes today's conference call. Thank you for participating. You may now disconnect.
