Welcome to Rani Therapeutics Fourth Quarter and Full Year 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a Q&A session. To ensure we have ample time to address everyone's questions during the Q&A session, we would ask for a limit of one question and one follow-up question per person. As a reminder, this call is being recorded today, Wednesday, March 20, 2024. 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 factor section of 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 events or results to differ materially from those described in these forward-looking statements. These statements may include, without limitation, remarks regarding product development and clinical trials, product potential, market sizes, platform progress, 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'll turn the call over to Talat Imran, Chief Executive Officer of Rani Therapeutics. Talat?

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 a subcutaneous injection. The RaniPill 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 modalities. During today's call, I will start by reviewing the important milestones that Rani has achieved over 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 1 trial using our RaniPill technology. Finally, Svai 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, which is our positive Phase 1 results for RT-111, an orally administered ustekinumab biosimilar. As a reminder, the ustekinumab biosimilar used in our RT-111 program is supplied by Celltrion, a global biopharmaceuticals company. Rani and Celltrion entered into a long-term supply agreement at the beginning of 2023. This partnership was expanded to include an adalimumab 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 1 studies. Last month, we announced positive results of the completed Phase 1 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 ustekinumab 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 psoriatic 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 an adalimumab biosimilar for the RT-105 program in the middle of last year. This was the first announced partnership for a program involving the RaniPill HC, 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 via the RaniPill HC in a preclinical study. The preclinical study tracked the serum concentrations of adalimumab following the oral administration of the enteric-coated RaniPill HC capsule containing 11 mg of Humira or adalimumab to four canine models. The RaniPill HC successfully delivered adalimumab in all subjects. Further, we have completed preclinical studies with additional antibody and peptide molecules in the RaniPill HC. 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. Another potential area we believe our RaniPill can make an impact is the obesity market. In December 2023, Rani announced preclinical data demonstrating that the transenteric delivery of an incretin triagonist of GLP-1, GIP, and glucagon elicited rapid weight loss in an animal study. Preclinical data supported the potential for the RaniPill platform to enable oral delivery of multiple obesity treatments. Considering the obesity market is expected to exceed $100 billion by 2030, we are highly enthusiastic about the potential for our RaniPill 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 Dhalla to discuss our clinical updates in more detail.

Thank you, Talat. Good afternoon everyone. My name is Arvinder Dhalla. I am VP of Clinical Development at Rani Therapeutics. I'm delighted to provide a high-level overview of the exciting data from our Phase 1 study with RT-111, showing for the first time oral delivery of a monoclonal antibody via the RaniPill. This was a single center, open label, Phase 1 study of RT-111 conducted in Australia. The study evaluated the safety, tolerability, and pharmacokinetics of RT-111 in healthy volunteers. This study enrolled 20 participants each in RT-111 0.5 mg and 0.75 mg dose groups and 15 participants in a STELARA 0.5 mg subcutaneous injection group. In this study, RT-111 delivered ustekinumab biosimilar in a dose proportional manner. The AUCs for the two 0.5 mg groups were quite comparable, resulting in a bioavailability of 84% via the Rani route of administration compared to the subcutaneous group. In addition, oral RT-111 demonstrated a higher Cmax and a shorter Tmax compared to ustekinumab delivered by subcutaneous injection. Furthermore, currently approved oral therapies like Otezla and SOTYKTU have shown lower PASI 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 with 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 Svai Sanford, our Chief Financial Officer, to review our financials. Thank you.

Thank you, Arvinder. 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 31, 2023. Now, turning to our balance sheet, cash, cash equivalents, and marketable securities as of December 31, 2023, totaled $48.5 million, compared to $98.5 million as of December 31, 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 operations for 2025 and beyond. We plan to raise additional capital through equity offerings, debt financing, and potential non-dilutive licensing fees from pharma partners. For our operating results for the fourth quarter and year ended December 31, 2023, research and development expenses for the fourth quarter and full year 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 managed our operating costs, and even with the challenge of limited capital during 2023, we successfully completed the Phase 1 clinical study for RT-111 and significantly advanced development of the RaniPill HC, 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. The 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 non-cash expenses of approximately $12.9 million for the full year 2023 compared to $9.8 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. The net loss includes non-cash, stock-based compensation expense of $4.5 million for the fourth quarter and $19 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.

Thank you, Svai. 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 RaniPill over 230 times in human subjects in three clinical studies without observing any serious adverse events related to the platform. The RaniPill 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 Rani 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.

Thank you. Our first question comes from Olivia Brayer from Cantor Fitzgerald. Your line is now open.

Hey, good afternoon, guys. Thank you for the question. Where 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 a partner versus moving forward with the RT-111 program alone? And then I've got a quick follow-up on obesity. Thanks.

Yes. Great questions, Hi, Olivia. So in terms of the negotiations, they are 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. If we were to do this by ourselves, I think we would be excited to do so, given the color that Arvinder provided. We would look to bring in additional capital to support the program through a Phase 2 repeat dose study to show the higher PASI scores in the first twelve weeks. I apologize. I'm sorry. Do you have a follow-up question to that?

Yes, a quick follow-up question, and then I've got a question on obesity. But can you comment on whether or not they've officially opted in? Because I think that window has passed. That was at the end of February, if I'm not mistaken?

That's correct. I cannot comment on that, unfortunately.

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?

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 while getting the same kind of discontinuation rates and safety efficacy profile of the injectables. To that end, we're looking at maybe one generation ahead technologies that are showing even better tolerability than the first generation, strictly GLP and GIP incretin drugs, and looking at dosing schedules that could be once a month or once every couple of weeks. So that's the plan and strategy around it, and it is a top priority for us. What's exciting about Rani's technology is that it's, from our perspective, future-proof, whether it's muscle preservation drugs or combinations thereof. This is an oral auto-injector, a swallowable auto-injector. It doesn't really matter. I think we've demonstrated this now over 15 drugs pre-clinically and three Phase 1s. It doesn't really matter what you put in a RaniPill. We should be able to deliver it with bioavailability that's similar to an injection.

Okay, great. Thank you, guys. I appreciate it.

Thank you.

Hi. Good afternoon, guys, and thanks for taking my question. Now that 102 is going to be entering Phase 2 this year, could you maybe just talk a little bit about the size of that trial and design?

Absolutely. I'll turn that over to. Sorry, Ed, was there another question?

No, that's it.

Okay, great. Arvinder, maybe you can jump in and provide the color on RT-102?

Yes. Sure, Talat. So we're planning to enroll about 25 subjects per arm, and we plan to have two groups in the study, one for RT-102 and one we'll be using for a tail as a comparator. The study is of eight weeks of duration, and we're just going to look at the biomarkers as they correlate quite well with the BMD.

Okay, would that be the only Phase 2 that you would need to do before moving into a bigger trial?

No, we would need to do a bigger trial. 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.

Got it. Okay, perfect. Thank you.

Thanks, Ed.

Hi. So, in terms of PK safety, efficacy, and I would also add COGS in there, if I can. In terms of efficacy, the drugs work really well. So I don't think changing the benchmark, unless you change the 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. I think it was Eli Lilly with their Mounjaro data. They put out a time-based course of when the AEs 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 RaniPill, if you move to daily dosing in the induction phase, similar to what we're thinking about doing in the early goings of RT-111 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. 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 the literature, that there's a potential to improve the tolerability of an incretin-based therapy. That brings us to your second question, which is, you look at Amylin-based therapies, GLP-1, GLP-2s. There are 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 RaniPill. There's tremendous interest in the obesity space to use the RaniPill by a number of potential partners. 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. Finally, I think 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. 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. 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'll be patients who want to take them. So I think there's a really good fit in this market for a RaniPill that can take an injectable dose and get injectable efficacy with dosing schedules that, as I said, you can't do with a small molecule approach with an oral. Very helpful, thank you.

Yes, absolutely. Thank you for the questions.

All right, thank you and hello, Talat. Good afternoon. Starting out with a question on just assuming that Celltrion signs a deal with you and funds 111, how will your focus shift for the rest of your pipeline if that happens?

It's a good question. I mean, we've been talking about obesity 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 on making a selection there, and that would be a place to invest capital. There’s RT-105. 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-α oral in, perhaps a once a week pill is something that we're thinking about in that space would be a really exciting product, I think.

Yes. As we think about RaniPill and kind of getting to later stages, manufacturing stages, I know you guys were working on some automated processes for manufacturing. How's that coming along? And will you be using that for a clinical stage product?

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 RaniPill and turning it into something that doesn't require an operator that's fully automated and then, ultimately, we'll 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 that can deliver in the low thousands of pills per day, and the goal is to have this ready for our Phase 3 studies. We don't need it for the Phase 1s and Phase 2s. 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 CMO partner that does mass-scale production and scale that up so that we can make 50,000 or 100,000 pills per day per line, which is what we'll need to do in order to commercialize any of these products.

Okay. And one more, if I may. I was doing some research on biosimilars, and 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? It started off pretty slowly about a decade ago, especially in the U.S. What are your thoughts about this and kind of the maybe legislative environment for accelerated growth of biosimilars?

I believe there are a few key points to address. First, it's important for everyone—from Congress to patients, clinicians, and payers—to support biosimilars. While patent exclusivity fosters innovation, it shouldn't lead to perpetually high prices for older drugs. There is a clear need for biosimilars, and the broader healthcare industry must evaluate rebates and payment structures. The example of Amgen’s pricing for their Humira biosimilar illustrates the complexities of the pharmacy benefit manager and payer landscape. More biosimilars are on the horizon, but their competition will primarily be based on price. Additionally, AbbVie is marketing Humira in an unbranded manner, which might resonate well with patients and clinicians, though that's uncertain. At Rani, our approach is distinct; even if we incorporate a biosimilar in our final drug product, we aren't a biosimilars company. Instead, we're developing novel products or "biobetters," with different dosing schedules. For instance, with RT-111, we aim for improved near-term efficacy and faster PASI scores, with the potential for enhanced results during the maintenance phase, as Arvinder mentioned. We are focused on these opportunities rather than simply providing a direct replacement. Ultimately, whether more or fewer biosimilars enter the market won’t significantly influence our strategy.

Okay, great. Thanks a lot. I appreciate it.

Thanks, John.

Thank you. I am showing no further questions. I would now like to turn the call back over to Talat for closing remarks.

Thank you, Justin. 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.

This concludes today’s conference call. Thank you for participating. You may now disconnect.