Executive Summary / Key Takeaways

• Rani Therapeutics is pioneering oral delivery of biologics via its RaniPill platform, aiming to replace painful injections with a convenient pill, addressing significant unmet patient preference.
• The RaniPill technology, including the high-capacity HC version, has demonstrated promising preclinical and early clinical results, achieving bioavailability comparable to subcutaneous injections for various molecules, including monoclonal antibodies and incretins.
• A key strategic focus is the high-value obesity market, with lead program RT-114 (oral GLP-1/GLP-2 dual agonist) showing bioequivalence and comparable weight loss to the injectable version in preclinical studies, with a Phase 1 trial planned for mid-2025.
• Despite technological promise and strategic direction, Rani faces a critical liquidity challenge, with existing cash projected to fund operations only until early August 2025, raising substantial doubt about its ability to continue as a going concern.
• The company's ability to advance its pipeline, including initiating pivotal trials or scaling manufacturing, is contingent on securing substantial additional funding, which is the paramount factor for investors to monitor.

The Quest to End Painful Injections: Rani's Oral Biologics Platform

Rani Therapeutics is built upon a singular, ambitious mission: to transform the administration of injectable biologics and drugs into convenient oral pills. For millions of patients managing chronic conditions like diabetes, autoimmune disorders, and obesity, regular injections are a significant burden, impacting adherence and quality of life. Rani's proprietary RaniPill capsule platform is designed to address this fundamental patient need, offering a potential paradigm shift in drug delivery.

The core of Rani's technology is an innovative robotic pill engineered to safely traverse the acidic environment of the stomach via a proprietary enteric coating. Once it reaches the small intestine, where the pH is higher, the outer shell dissolves, activating an internal mechanism. A self-inflating balloon creates localized pressure, enabling a dissolvable micro needle to deliver the drug payload directly into the intestinal wall, where it is rapidly absorbed into the bloodstream, bypassing first-pass metabolism. The deflated device is then safely excreted.

This drug-agnostic platform has demonstrated remarkable versatility, showing high bioavailability comparable to subcutaneous injection for 19 different molecules in preclinical studies. Across three completed Phase 1 clinical trials involving 146 subjects and over 200 administered pills, the RaniPill has been well tolerated with no serious adverse events reported.

Rani has developed two key configurations: the RaniPill GO, optimized for drug doses up to 3mg in microtablet form, and the RaniPill HC (High Capacity), designed to deliver larger payloads up to 200µL in liquid form. The RaniPill HC is particularly significant as it opens the door to orally delivering higher-dose biologics, including many monoclonal antibodies currently administered via injection. Preclinical studies with the RaniPill HC have shown successful delivery of antibodies like adalimumab and promising results with incretins. The company is also investing in vertically integrated manufacturing and automation, aiming for a pilot line capable of producing thousands of pills per day, with a long-term goal of scaling to 50,000-100,000 pills per day per line with a CMO partner to support future commercialization. This manufacturing strategy is intended to provide rapid iteration, quality control, and IP protection, though it requires substantial future capital investment.

Strategic Focus and Pipeline Advancement

Rani's pipeline strategy is centered on leveraging the RaniPill platform to create differentiated oral therapies in high-value markets, particularly obesity and immunology. While the RaniPill GO has shown promise with peptides like PTH (RT-102) and an ustekinumab biosimilar (RT-111), the recent focus has heavily shifted towards the RaniPill HC and the burgeoning obesity market.

The lead program currently driving the narrative is RT-114, a co-development with ProGen Co., Ltd. (TICKER:KOSDAQ:096300) for weight management. RT-114 combines ProGen's GLP-1/GLP-2 dual agonist (PG-102) with the RaniPill HC. This partnership involves equally shared development costs and future operating profits/losses. Recent preclinical data for RT-114 announced in March 2025 were highly encouraging, demonstrating bioequivalence to subcutaneous PG-102 with a relative bioavailability of 111%. The study also showed comparable pharmacokinetic profiles and weight loss in canines, notably with less variability observed with the oral RT-114 compared to the subcutaneous version. Management believes RT-114 has the potential to be a first-in-class oral GLP-1/GLP-2 dual agonist, offering a potentially differentiated profile with favorable tolerability and preservation of lean body mass, targeting less frequent, potentially weekly oral dosing. A Phase 1 clinical trial for RT-114 is planned for initiation in mid-2025.

Another promising obesity program utilizing the RaniPill HC is RT-116, an oral formulation of semaglutide. Preclinical data released in February 2025 demonstrated comparable bioavailability, pharmacokinetics, and weight loss to subcutaneous semaglutide administration and was well tolerated. While currently a discovery program with no immediate clinical trial plans, this data further validates the platform's capability for incretin delivery and highlights the potential for a once-weekly oral semaglutide at a dose similar to the injectable, which could offer significant patient convenience compared to existing daily oral options.

Beyond obesity, Rani continues to pursue opportunities in immunology. The RT-111 program, an oral ustekinumab biosimilar developed in partnership with Celltrion (TICKER:KRX:068270), yielded positive Phase 1 results showing 84% bioavailability compared to subcutaneous administration. This marked the first clinical evidence of oral delivery of a monoclonal antibody with such high bioavailability, validating the platform's potential for larger molecules. The partnership with Celltrion includes a right of first negotiation for commercial rights after Phase 1. Other programs like RT-105 (adalimumab biosimilar with Celltrion), RT-102 (PTH for osteoporosis), and RT-110 (PTH for hypoparathyroidism) are also in the pipeline, though prioritization has shifted towards RT-114 due to capital constraints. A recent research agreement with Chugai (TICKER:TYO:4519) to evaluate the RaniPill for their antibodies further underscores the platform's broad applicability and potential for future partnerships.

Competitive Positioning in a Landscape of Injectables and Orals

Rani operates within a competitive landscape dominated by large pharmaceutical companies like Novo Nordisk (NVO), Eli Lilly (LLY), Pfizer (PFE), and Johnson & Johnson (JNJ), who command significant market share in areas like obesity, diabetes, and immunology with their established injectable biologic portfolios. These companies benefit from vast R&D resources, global distribution networks, and robust profitability (e.g., NVO and LLY boast gross margins exceeding 80% and operating margins above 25%, generating billions in free cash flow, starkly contrasting with Rani's current negative margins and cash burn).

Rani's core competitive advantage lies in its unique RaniPill technology, which directly addresses the significant patient aversion to injections. Market research indicates a strong preference for oral alternatives, even for infrequent injectable regimens. This technological differentiation offers the potential for improved patient compliance, a critical factor in managing chronic diseases. Unlike existing oral therapies for biologics or peptides, which often require high doses (hundreds of milligrams) and frequent administration (daily), potentially burdening supply chains and increasing costs, Rani's platform aims to deliver injectable-like doses (milligrams) with comparable bioavailability, potentially enabling less frequent dosing (e.g., weekly for RT-114/RT-116). This could offer a significant advantage over current oral competitors and even differentiate from established injectables on convenience and potentially tolerability or onset of effect, as suggested by preclinical data for RT-114.

While Rani's technology is innovative and potentially disruptive, it faces significant challenges in competing with the scale, financial strength, and established market presence of its larger rivals. Rani's current financial position limits its ability to independently fund large-scale clinical trials or rapidly build commercial infrastructure. Its operational scale is significantly smaller, potentially leading to higher manufacturing costs compared to the efficiencies achieved by large pharma. The company is also exposed to supply chain risks, particularly for drug substances sourced internationally, which could be impacted by trade policies.

Rani's strategy of pursuing partnerships (like those with ProGen and Celltrion) is crucial for mitigating these disadvantages, providing access to funding, drug substances, clinical development expertise, and potential commercialization pathways. By focusing on creating "biobetters" with differentiated dosing or potentially improved profiles (e.g., RT-114's potential for better body composition), Rani aims to carve out valuable niches rather than directly competing on price alone like traditional biosimilars. However, the success of this strategy hinges on demonstrating clinical efficacy and safety in humans and securing favorable partnership terms.

Financial Performance and the Urgent Capital Need

Rani Therapeutics remains a clinical-stage company with limited revenue generation and has incurred recurring losses and negative cash flows since inception. For the three months ended March 31, 2025, the company reported a net loss of $12.7 million, contributing to an accumulated deficit of $110.2 million. Operating expenses totaled $12.2 million in Q1 2025, a decrease from $14.0 million in Q1 2024, primarily due to lower compensation costs and reduced third-party services, reflecting ongoing cost containment efforts. Research and development expenses specifically decreased by $1.0 million in Q1 2025. Contract revenue, generated from evaluation services for a customer, was $0.2 million in Q1 2025, a modest increase from zero in the prior year period, but not a significant revenue stream.

As of March 31, 2025, Rani's cash, cash equivalents, and marketable securities totaled $15.9 million. The company's operations continue to consume cash, with net cash used in operating activities amounting to $8.1 million in Q1 2025. While net cash provided by investing activities was positive ($18.2 million) due to maturities of marketable securities, and net cash used in financing activities ($3.7 million) reflected debt repayment, the overall cash position remains constrained.

Based on its available cash resources and current operating plan, management has explicitly stated that there is substantial doubt regarding the company's ability to continue as a going concern for a period of one year from the issuance date of its Q1 2025 financial statements (May 13, 2025). Furthermore, the company anticipates that its existing capital resources will not be sufficient to meet operating and liquidity needs beyond early August 2025. This critical financial situation means that Rani's existing capital is insufficient to initiate any pivotal clinical trials or fully fund the development of its pipeline and manufacturing scale-up.

Outlook, Risks, and the Path Forward

Rani's outlook is heavily dependent on its ability to secure substantial additional funding. The company expects to continue incurring losses and negative operating cash flows for the foreseeable future as it advances its platform and product candidates. The planned initiation of the RT-114 Phase 1 trial in mid-2025 is a key near-term catalyst, but further clinical development, particularly moving into larger and more costly later-stage trials, requires significant capital beyond the current resources.

Management is actively pursuing strategic financing opportunities, including equity offerings (such as through its ATM facility), collaboration or licensing agreements, and debt financing. However, the availability and terms of such financing are uncertain, particularly given the current market conditions and the explicit going concern disclosure.

The most significant risk facing Rani is its ability to raise sufficient capital to continue operations and fund its development programs. Failure to secure funding could force the company to delay, reduce, or terminate development programs, make workforce reductions, or potentially cease operations altogether. The company also faces risks related to its Nasdaq listing, having received notice of non-compliance with the minimum market value requirement and potentially facing delisting for failing the minimum bid price requirement. Delisting would severely impact stock liquidity and the ability to raise capital. Additional risks include the inherent uncertainties of clinical trials, regulatory approval processes, manufacturing scale-up challenges, intellectual property protection, and potential impacts from international trade policies on its supply chain.

The investment thesis for Rani hinges on the successful development and commercialization of its oral delivery platform, particularly the RaniPill HC and lead programs like RT-114. The technology holds the potential to disrupt large, established markets dominated by injectable therapies by offering a highly desired oral alternative with comparable bioavailability. However, the immediate and overwhelming challenge is the critical need for capital. The company's ability to execute its strategic vision and unlock the value of its technology is directly tied to its success in securing financing in the very near term.

Conclusion

Rani Therapeutics possesses a potentially transformative technology in the RaniPill platform, offering a compelling solution to the long-standing challenge of delivering injectable biologics orally. Early preclinical and clinical data, particularly the recent results for oral monoclonal antibodies and incretins like RT-114 and RT-116, underscore the platform's technical viability and potential to create differentiated products in high-value markets like obesity. The strategic focus on these areas, coupled with a partnership model, positions Rani to capitalize on the significant patient preference for oral therapies and challenge the dominance of injectable treatments. However, the promising technological narrative is currently overshadowed by a critical financial reality. With existing cash projected to last only until early August 2025 and substantial doubt about its ability to continue as a going concern, Rani faces an urgent need for significant additional funding. For investors, the immediate future of Rani Therapeutics is less about the long-term potential of its innovative technology and more about the company's ability to successfully navigate the immediate capital challenge and secure the resources necessary to continue its journey towards bringing oral biologics to market.