Rani Therapeutics falls short of IPO projections with $73M for robotic biologic pill

While raking in $73 million for an initial public offering isn’t exactly a tough pill to swallow, it does clock in quite a bit below the $100 million Rani Therapeutics originally planned to earn in its public debut.

The California-based company made its Nasdaq debut on July 30 under the ticker symbol RANI. The share price started at $11 per share, bringing in approximately $73.3 million for the proffered 6,666,667 shares.

After two full days as a public company, by the close of trading on August 3, the share price had dropped to $10.70.

Those numbers are well below those outlined in a prospectus Rani filed with the SEC on July 26. At the time, the company was hoping to offer the same number of shares at a price between $14 and $16, which would’ve brought in just over $100 million at the midpoint.

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Still, Rani’s IPO proceeds will go to good use. It plans to use the new wave of financing to advance clinical trials of its eponymous robotic capsule, which is designed to allow drugs normally delivered by needle or IV to instead be taken orally.

The RaniPill is about the size of a standard fish oil or calcium tablet. Once swallowed, its protective coating begins to dissolve in the small intestine, exposing microneedles that deliver doses of biologic drugs directly through the intestine walls into the bloodstream.

Rani completed the first in-human safety study of the pill in early 2019. Results of that study showed that participants were unable to feel the microneedles deploy and that they successfully passed the rest of the capsule within four days of ingestion—all with no differences reported between patients that took the pill with food and those who did so on an empty stomach.

Since then, Rani has begun clinical trials using the capsule to actually deliver medications to the bloodstream. First up was a phase I study of the RaniPill’s ability to orally administer octreotide, which is normally delivered via injection to treat high levels of excess growth hormone and diarrhea caused by certain types of tumors.

In that study of 58 healthy volunteers in Australia, each dose of octreotide was shown to achieve bioavailability of more than 70%, meaning the majority of each dose had entered the bloodstream and was able to perform its assigned tasks. That’s a rate comparable to that of standard injections of the drug.

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Elsewhere in Rani’s pipeline are plans to use the RaniPill to deliver biologics for psoriatic arthritis, osteoporosis, type 2 diabetes and more. The company is also aiming to receive the FDA’s blessing to begin clinical trials of the device in the U.S.

Those efforts will be boosted not only by its recent public offering but also by the impressive venture funding the former Fierce 15 honoree racked up in the years leading up to its Nasdaq debut.

As a private company, Rani raised more than $200 million to support the development of the RaniPill and subsequent animal and human trials of the capsule. Most recently, in December 2020, the company closed a series E round totaling $69 million.