Rani Therapeutics Holdings Inc
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
RANI$0.55+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-06.
0000950170-24-053548
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091793
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 98 current paragraphs.
65 unchanged; 17 reworded; 13 added; 5 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
As of June 30, 2024, our cash, cash equivalents and marketable securities totaled $30.9 million. In July 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional investor relating to the issuance and sale of: (i) 2,800,000 shares of its Class A common stock, (ii) pre-funded warrants to purchase 446,753 shares of Class A common stock, (iii) Series A common warrants, which accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,246,753 shares of Class A common stock and (iv) Series B common warrants, which accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,246,753 shares of Class A common stock (the “Offering”). The aggregate gross proceeds from the Offering were approximately $10.0 million, before deducting placement agent fees and other offering expenses payable by us, and excluding potential proceeds, if any, from the exercise of the pre-funded warrants, Series A common warrants and Series B common warrants issued in the Offering.
Current report
Pipeline Update
Current report
In June 2024, we entered into a definitive agreement (“ProGen Agreement”) with ProGen, Co., Ltd. (“ProGen”) for the co-development and commercialization of RT-114, an oral RaniPill capsule containing ProGen’s PG-102, a GLP-1/GLP-2 dual agonist, for the treatment of obesity. Under the terms of the ProGen Agreement, we and ProGen agree to share responsibilities for the development and commercialization of RT-114 worldwide, including a 50/50 cost and revenue share arrangement. We have exclusive rights to lead development and commercialization of RT-114 in the United States, Europe, Canada and Australia, and ProGen has exclusive rights to lead development and commercialization in the rest of the world. Each party has certain rights to sublicense in its territories. We are designated to lead operationally in conducting preclinical and development activities through the Phase 1 program, which is expected to initiate in 2025. As part of the ProGen Agreement, there was no upfront payment or financial exchange between the companies.
Current report
In January 2023, we entered into a License and Supply Agreement with Celltrion Inc. (“Celltrion”) under which we receive a license and supply of Celltrion’s ustekinumab biosimilar for development and commercialization of RT-111 worldwide, subject to a right of first negotiation for Celltrion following completion of a Phase 1 clinical trial that meets its primary endpoint(s). RT-111 is a RaniPill capsule containing our proprietary formulation of an ustekinumab biosimilar. In February 2024, we reported the data for the Phase 1 clinical trial with RT-111 in Australia. The study met all its endpoints, RT-111 was well tolerated and delivered ustekinumab biosimilar with high bioavailability. No serious adverse events were reported in the study. We provided topline data from the study to Celltrion pursuant to the License and Supply Agreement. Celltrion’s right of first negotiation under the License and Supply Agreement has expired.
Current report
Comparison of the six months ended June 30, 2024 and 2023
Current report
Research and Development Expenses
Current report
The decrease of $7.1 million in research and development expenses in the six months ended June 30, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $4.6 million due to reduction in workforce, $2.0 million reduction in third-party services and $0.4 million reduction in materials and supplies due to the timing of certain preclinical and clinical studies.
Current report
General and Administrative Expenses
Current report
The decrease of $1.2 million in general and administrative expenses in the six months ended June 30, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $1.5 million due to reduction in workforce and $0.3 million reduction in other costs, offset by an increase in facility costs of $0.5 million due to the lease in Fremont, California.
Current report
Other Income (Expense), Net
Current report
In July 2024, we entered into the Securities Purchase Agreement with an institutional investor relating to the Offering. The aggregate gross proceeds from the Offering were approximately $10.0 million, before deducting placement agent fees and other offering expenses payable by us, and excluding potential proceeds, if any, from the exercise of the pre-funded warrants, Series A common warrants and Series B common warrants issued in the Offering.
Current report
Pursuant to the terms of the Securities Purchase Agreement, until 60 days following the closing of the Offering, we have agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Class A common stock or common stock equivalents, or file or amend any registration statement or prospectus, other than as necessary to maintain the registration of the securities offered hereby. We have further agreed not to enter into an agreement involving any new variable rate transactions until six months following the closing of the Offering, subject to certain exceptions.
Current report
Pursuant to the terms of the Securities Purchase Agreement, until 60 days following the closing of the Offering, we agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Class A common stock or common stock equivalents, or file or amend any registration statement or prospectus, other than as necessary to maintain the registration of the securities offered in the Offering. We further agreed not to enter into an agreement involving any new variable rate transactions until six months following the closing of the Offering, subject to certain exceptions. These restrictions could prevent us from raising additional capital that we might otherwise be able to raise.
Removed paragraphs (5)
Previous report
RT-111 Update
Previous report
In February 2024, we announced positive topline results from a Phase 1 study of RT-111, the RaniPill capsule containing ustekinumab biosimilar which is being developed for the potential treatment of inflammatory conditions. The study met all of its endpoints and RT-111 was generally well tolerated with no serious adverse events noted. In the study, RT-111 orally delivered 0.5 mg and 0.75 mg of our proprietary formulation of ustekinumab biosimilar with high bioavailability. There was no meaningful difference in incidence of anti-drug antibodies in the groups receiving RT-111 compared to the group that received STELARA® (ustekinumab) via subcutaneous injection.
Previous report
Lease
Previous report
In November 2023, Rani LLC and BKM South Bay 240, LLC (“Landlord”) entered into the Standard Industrial/Commercial Multi-Tenant Lease - Net (the “Lease”). Pursuant to the terms of the Lease, we are leasing approximately 33,000 square feet of space in Fremont, California, which is part of a two-building project (the “Project”).
Previous report
The initial term of the Lease commenced in February 2024, and the duration of the initial term is 63 months. Subject to certain conditions, we have an option to renew the Lease for one additional 5-year term at the then-prevailing market rate. The monthly base rent for the initial term of the Lease is approximately $95,000 per month, subject to a 4% increase each year. We are also responsible for the payment of additional rent to cover our share of common area operating expenses, including taxes, insurance, utilities, and repair and maintenance of the premises and common areas of the Project.
Reworded paragraphs (17)
Previous wording
The following discussion contains references to calendar year 2023 and the three months ended March 31, 2024 and 2023, respectively, which represents the condensed consolidated financial results of Rani Therapeutics Holdings, Inc. (the "Company") and its subsidiary, Rani Therapeutics, LLC (“Rani LLC”) for the year ended December 31, 2023 and the three months ended March 31, 2024 and 2023, respectively. Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” and “Rani” and similar references refers to the Company and its consolidated subsidiary.
Current wording
The following discussion contains references to calendar year 2023 and the three and six months ended June 30, 2024 and 2023, respectively, which represents the condensed consolidated financial results of Rani Therapeutics Holdings, Inc. (the "Company") and its subsidiary, Rani Therapeutics, LLC (“Rani LLC”) for the year ended December 31, 2023 and the three and six months ended June 30, 2024 and 2023, respectively. Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” and “Rani” and similar references refers to the Company and its consolidated subsidiary.
Previous wording
As of March 31, 2024, our cash, cash equivalents and marketable securities totaled $39.6 million. We expect to continue to incur losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. Our existing capital resources, including the net proceeds from our initial public offering in 2021 (“IPO”) and term loans we received under a loan and security agreement and related supplement (the “Loan Agreement”) with Avenue Venture Opportunities Fund, L.P (the “Lender”), will not be sufficient to enable us to initiate any pivotal clinical trials. We will need to raise substantial additional funds in the future in order to complete the development of the RaniPill platform, to complete the clinical development of our product candidates and seek regulatory approval thereof, to expand our manufacturing capabilities, to further develop the RaniPill HC device and to commercialize any of our product candidates. We may seek to raise capital through equity offerings or debt financings, collaboration agreements, or other arrangements with other companies, or through other sources of financing.
Current wording
We expect to continue to incur losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. Our existing capital resources, including the net proceeds from the recently completed Offering, our initial public offering in 2021 (“IPO”) and term loans we received under a loan and security agreement and related supplement (the “Loan Agreement”) with Avenue Venture Opportunities Fund, L.P (the “Lender”), will not be sufficient to enable us to initiate any pivotal clinical trials. We will need to raise substantial additional funds in the future in order to complete the development of the RaniPill platform, to complete the clinical development of our product candidates and seek regulatory approval thereof, to expand our manufacturing capabilities, to further develop the RaniPill HC device and to commercialize any of our product candidates. We may seek to raise capital through equity offerings or debt financings, collaboration agreements, or other arrangements with other companies, or through other sources of financing.
Previous wording
The decrease of $2.1 million in research and development expenses in the three months ended March 31, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $1.6 million due to reduction in workforce and $0.4 million reduction in third-party service costs.
Current wording
The decrease of $5.0 million in research and development expenses in the three months ended June 30, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $2.9 million due to reduction in workforce, $1.6 million reduction in third-party services and $0.4 million reduction in materials and supplies due to the timing of certain preclinical and clinical studies.
Previous wording
The decrease of $0.4 million in general and administrative expenses in the three months ended March 31, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $0.2 million due to reduction in workforce and $0.2 million reduction in other costs.
Current wording
The decrease of $0.8 million in general and administrative expenses in the three months ended June 30, 2024, as compared to the same period in 2023, was primarily attributed to lower compensation costs of $1.3 million due to reduction in workforce, offset by an increase in facility costs of $0.4 million due to the lease in Fremont, California.
Previous wording
The increase of $0.4 million in other expense, net, in the three months ended March 31, 2024, as compared to the same period in 2023, was primarily attributed to a decrease in interest income of $0.3 million from our investment in marketable securities and an increase interest expense of $0.1 million from our debt.
Current wording
The increase of $0.9 million in other expense, net, in the six months ended June 30, 2024, as compared to the same period in 2023, was primarily attributed to a decrease in interest income of $0.8 million from our investment in marketable securities and an increase interest expense of $0.1 million from our debt.
Previous wording
We have incurred recurring losses and negative cash flows from operations since inception, including net loss of $14.8 million for three months ended March 31, 2024. As of March 31, 2024, we had an accumulated deficit of $80.4 million and for three months ended March 31, 2024, had negative cash flows from operations of $9.4 million. As of March 31, 2024, our cash, cash equivalents and marketable securities totaled $39.6 million. We expect to continue to incur losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. Our existing capital resources, including the net proceeds from our IPO and term loans we received under the Loan Agreement, will not be sufficient to enable us to initiate any pivotal clinical trials. Based on our available cash resources and current operating plan, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our financial statements for the three months ended March 31, 2024 are issued. If we are unable to continue as a going concern, we may have to cease operations and liquidate our assets. We may receive less than the value at which those assets are carried on our condensed consolidated financial statements, and investors may lose all or a part of their investment.
Current wording
We have incurred recurring losses and negative cash flows from operations since inception, including net loss of $28.1 million for six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $87.2 million and for six months ended June 30, 2024, had negative cash flows from operations of $18.4 million. As of June 30, 2024, our cash, cash equivalents and marketable securities totaled $30.9 million. We expect to continue to incur losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. Our existing capital resources, including the net proceeds from our IPO and term loans we received under the Loan Agreement, will not be sufficient to enable us to initiate any pivotal clinical trials. Based on our available cash resources and current operating plan, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our financial statements for the six months ended June 30, 2024 are issued. If we are unable to continue as a going concern, we may have to cease operations and liquidate our assets. We may receive less than the value at which those assets are carried on our condensed consolidated financial statements, and investors may lose all or a part of their investment.
Previous wording
In November 2023, we committed to a plan for strategic prioritization of our programs, expansion of our manufacturing and streamlining of our business operations to support potential near-term value drivers and long-term growth (the “Restructuring”). The Restructuring included a reduction of our workforce by approximately 25%. As a result of the Restructuring, we estimate that we will incur approximately $0.3 million in costs of which nearly all are cash expenditures related to severance and half of which has been incurred to date. We expect the Restructuring to be substantially completed by the end of the second quarter of 2024. The estimates of costs that we expect to incur in connection with the Restructuring and the timing thereof are subject to a number of assumptions and actual results may differ materially from estimates. We may also incur other charges or cash expenditures not currently contemplated in connection with the Restructuring due to unanticipated events that may occur, including in connection with the implementation of the Restructuring.
Current wording
In November 2023, we committed to a plan for strategic prioritization of our programs, expansion of our manufacturing and streamlining of our business operations to support potential near-term value drivers and long-term growth (the “Restructuring”). The Restructuring included a reduction of our workforce by approximately 25%. As a result of the Restructuring, we incurred $0.3 million in costs of which nearly all are cash expenditures related to severance. The Restructuring was substantially completed by the end of the second quarter of 2024.
Previous wording
In August 2022, we entered into the Loan Agreement with the Lender. The Loan Agreement provides for term loans (the “Loans”) in an aggregate principal amount up to $45.0 million. A Loan of $30.0 million was committed at closing, with $15.0 million funded immediately and $15.0 million available to be drawn between October 1, 2022 and December 31, 2022, which was drawn in December 2022. The remaining $15.0 million of Loans is uncommitted and is subject to certain conditions, which may not occur, and approval by the Lender. The Loan Agreement also contains various covenants and restrictive provisions. There have been no material adverse events in connection with the Loan Agreement and the substantial doubt regarding our ability to continue as a going concern does not currently constitute a material adverse event under the terms of the Loan Agreement. As of March 31, 2024, we were in compliance with all applicable debt covenants under the Loan Agreement.
Current wording
In August 2022, we entered into the Loan Agreement with the Lender. The Loan Agreement provides for term loans (the “Loans”) in an aggregate principal amount up to $45.0 million. A Loan of $30.0 million was committed at closing, with $15.0 million funded immediately and $15.0 million available to be drawn between October 1, 2022 and December 31, 2022, which was drawn in December 2022. The remaining $15.0 million of Loans is uncommitted and is subject to certain conditions, which may not occur, and approval by the Lender. The Loan Agreement also contains various covenants and restrictive provisions. There have been no material adverse events in connection with the Loan Agreement and the substantial doubt regarding our ability to continue as a going concern does not currently constitute a material adverse event under the terms of the Loan Agreement. The Loan principal is repayable in equal monthly installments beginning September 2024 extendable to March 2025 under certain conditions, which the Company has determined to be not probable as of June 30, 2024. As of June 30, 2024, we were in compliance with all applicable debt covenants under the Loan Agreement.
Previous wording
Our existing capital resources, including the net proceeds from our IPO and Loans, will not be sufficient to enable us to initiate any pivotal clinical trials. We will need to raise substantial additional funds in the future in order to complete the development of the RaniPill platform, to complete the clinical development of our product candidates and seek regulatory approval thereof, to expand our manufacturing capabilities, to further develop the RaniPill HC device and to commercialize any of our product candidates.
Current wording
Notwithstanding the sharing of development costs for the RT-114 program under the ProGen Agreement, our existing capital resources, including the net proceeds from our IPO, Loans and the Offering, will not be sufficient to enable us to initiate any pivotal clinical trials with respect to any of our product candidates. We will need to raise substantial additional funds in the future in order to complete the development of the RaniPill platform, to complete the clinical development of our product candidates and seek regulatory approval thereof, to expand our manufacturing capabilities, to further develop the RaniPill HC device and to commercialize any of our product candidates.
Previous wording
our ability to realize savings from any restructuring plans or cost-containment measures we have implemented or additional measures we may implement; and
Current wording
our ability to realize savings from any restructuring plans or cost-containment measures we may implement; and
Previous wording
As of March 31, 2024, we had cash and cash equivalents and marketable securities of $39.6 million, compared to $48.5 million as of December 31, 2023. Based on our available cash resources and current operating plan, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our financial statements for the three months ended March 31, 2024 are issued. Our existing capital resources, including the net proceeds from our IPO and Loans, will not be sufficient to fund our projected operating requirements for a twelve-month period from the issuance of our financial statements.
Current wording
As of June 30, 2024, we had cash and cash equivalents and marketable securities of $30.9 million, compared to $48.5 million as of December 31, 2023. Based on our available cash resources and current operating plan, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our financial statements for the six months ended June 30, 2024 are issued. Our existing capital resources, including the net proceeds from our IPO and Loans, will not be sufficient to fund our projected operating requirements for a twelve-month period from the issuance of our financial statements.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2023 was $12.2 million, which was primarily attributable to a net loss of $16.8 million and net accretion and amortization of investments in marketable securities of $0.7 million, partially offset by stock-based compensation expense of $4.4 million and non-cash depreciation and amortization expense of $0.2 million. Additionally, there was an increase in accrued expenses and other current liabilities of $0.3 million and a decrease in prepaid expenses and other current assets of $0.3 million for the three months ended March 31, 2023.
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 was $18.4 million, which was primarily attributable to a net loss of $28.1 million and net accretion and amortization of investments in marketable securities of $0.6 million, partially offset by the stock-based compensation expense of $8.0 million and depreciation and amortization expense of $0.5 million. Additionally, there was a decrease of $1.2 million in prepaid expenses and other current assets and an increase in accrued expenses and other current liabilities of $0.7 million for the six months ended June 30, 2024.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 was $9.4 million, which was primarily attributable to a net loss of $14.8 million and net accretion and amortization of investments in marketable securities of $0.3 million, partially offset by the stock-based compensation expense of $3.9 million and depreciation and amortization expense of $0.2 million. Additionally, there was a decrease of $0.5 million in prepaid expenses and other current assets and an increase in accrued expenses and other current liabilities and accounts payable of $0.9 million and $0.2 million for the three months ended March 31, 2024, respectively.
Current wording
Net cash used in operating activities for the six months ended June 30, 2023 was $24.5 million, which was primarily attributable to a net loss of $35.5 million and net accretion and amortization of investments in marketable securities of $1.2 million, partially offset by stock-based compensation expense of $9.6 million and depreciation and amortization expense of $0.4 million. Additionally, there was an increase in accrued expenses and other current liabilities of $1.7 million and decreases in prepaid expenses and other current assets of $0.9 million and accounts payable of $0.4 million for the six months ended June 30, 2023.
Previous wording
For the three months ended March 31, 2024, net cash provided by investing activities was $10.3 million, which primarily consisted of $20.4 million in proceeds from maturities of marketable securities partially offset by $10.0 million in purchases of marketable securities.
Current wording
For the six months ended June 30, 2024, net cash provided by investing activities was $16.8 million, which primarily consisted of $38.6 million in proceeds from maturities of marketable securities partially offset by $21.6 million in purchases of marketable securities.
Previous wording
For the three months ended March 31, 2023, net cash provided by investing activities was $4.1 million, which primarily consisted of $23.0 million in proceeds from maturities of marketable securities partially offset by $18.6 million and $0.3 million in purchases of marketable securities and property and equipment, respectively.
Current wording
For the six months ended June 30, 2023, net cash provided by investing activities was $4.9 million consisting of $58.0 million in proceeds from maturities of marketable securities partially offset by $52.5 million and $0.6 million in purchases of marketable securities and property and equipment, respectively.
Previous wording
For the three months ended March 31, 2024, net cash provided by financing activities was $0.1 million in proceeds from employee stock purchase plan.
Current wording
For the six months ended June 30, 2024, net cash provided by financing activities was $0.3 million, which primarily consisted of the issuance of common stock under employee stock purchase plan.
Previous wording
For the three months ended March 31, 2023, net cash provided by financing activities was de minimis.
Current wording
For the six months ended June 30, 2023, net cash provided by financing activities was de minimis.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The increase of $0.5 million in other expense, net, in the three months ended June 30, 2024, as compared to the same period in 2023, was attributed to a decrease in interest income of $0.5 million from our investment in marketable securities.
Current report — wording carried from elsewhere
The following table summarizes our results of operations (in thousands):
Current report — wording carried from elsewhere
The following table reflects our research and development costs by nature of expense (in thousands):