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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 TC. 

Rani Therapeutics’ flagship product is RaniPill, essentially, a capsule designed to deliver medicines that would usually be delivered via injections. TC 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.